Invacare 2011 Annual Report Download - page 56

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CASH FLOWS
Cash flows provided by operating activities were $99,078,000 in 2011, compared to $122,207,000 in the
previous year. The decline in operating cash flows in 2011 was primarily attributable to an increase in net
working capital assets specifically inventories, as well as declines in current assets and other long-term liabilities.
Cash flows used for investing activities were $65,263,000 in 2011, compared to $30,617,000 in 2010. The
increase in cash used was primarily attributable to acquisitions of $42,430,000 in the IPG segment in 2011.
Cash flows required by financing activities in 2011 were $47,082,000, compared to cash flows required of
$77,634,000 in 2010. The decrease in cash used was primarily attributable to reduced debt repayment partially
offset purchases of treasury stock.
During 2011, the company generated free cash flow of $80,603,000 compared to free cash flow of
$104,890,000 in 2010. The decrease is due primarily to an increase in net working capital assets and increased
purchases of property and equipment. Free cash flow is a non-GAAP financial measure that is comprised of net
cash provided by operating activities, excluding net cash impact related to restructuring activities, less net
purchases of property and equipment, net of proceeds from sales of property and equipment. Management
believes that this financial measure provides meaningful information for evaluating the overall financial
performance of the company and its ability to repay debt or make future investments (including acquisitions,
etc.).
The non-GAAP financial measure is reconciled to the GAAP measure as follows (in thousands):
Twelve Months Ended
December 31,
2011 2010
Net cash provided by operating activities ....................................... $99,078 $122,207
Plus: Net cash impact related to restructuring activities ............................ 3,621 —
Less: Purchases of property and equipment—net ................................. (22,096) (17,317)
Free Cash Flow ........................................................... $80,603 $104,890
CONTRACTUAL OBLIGATIONS
The company’s contractual obligations as of December 31, 2011 are as follows (in thousands):
Payments due by period
Total
Less than
1 year 1-3 years 3-5 years
More than
5 years
4.125% Convertible Senior Subordinated Debentures
due 2027 ................................. $ 22,492 $ 571 $ 1,143 $ 1,143 $ 19,635
Revolving Credit Agreement due 2015 ............ 268,779 9,872 11,249 247,658 —
Operating lease obligations ..................... 69,373 22,711 27,876 12,014 6,772
Capital lease obligations ....................... 11,037 1,578 2,921 2,837 3,701
Purchase obligations (primarily computer systems
contracts) ................................. 7,893 3,823 3,073 997 —
Product liability .............................. 21,748 3,468 8,838 4,220 5,222
Supplemental Executive Retirement Plan .......... 27,879 391 2,068 2,640 22,780
Other, principally deferred compensation .......... 10,043 106 260 396 9,281
Total ....................................... $439,244 $ 42,520 $ 57,428 $ 271,905 $ 67,391
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