Dell 2009 Annual Report Download - page 44

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Table of Contents
The following table contains a summary of our Consolidated Statements of Cash Flows for the past three fiscal years:
Fiscal Year Ended
January 29, January 30, February 1,
2010 2009 2008
(in millions)
Net change in cash from:
Operating activities $ 3,906 $ 1,894 $ 3,949
Investing activities (3,809) 177 (1,763)
Financing activities 2,012 (1,406) (4,120)
Effect of exchange rate changes on cash and cash equivalents 174 (77) 152
Change in cash and cash equivalents $ 2,283 $ 588 $ (1,782)
Operating Activities — Cash flows from operating activities were $3.9 billion during Fiscal 2010 compared to $1.9 billion during Fiscal
2009 and $3.9 billion during Fiscal 2008. For Fiscal 2010, the increase in operating cash flows was primarily led by the improvement of
our cash conversion cycle, specifically through operational improvements related to our vendor programs, the effects of which were
partially offset by the decrease in net income and growth in financing receivables. In Fiscal 2009, the decrease in operating cash flows
from Fiscal 2008 was primarily led by the deterioration of our cash conversion cycle, slower growth in deferred service revenue, and a
decrease in net income. Our negative cash conversion cycle combined with revenue growth typically results in operating cash generation
in excess of net income. See "Key Performance Metrics" below for additional discussion of our cash conversion cycle.
Investing Activities — Cash used in investing activities during Fiscal 2010 was $3.8 billion as compared to cash provided of $177 million
during Fiscal 2009, and $1.8 billion cash used by investing activities during Fiscal 2008. Investing activities consist of the net of
maturities and sales and purchases of investments; net capital expenditures for property, plant, and equipment; and net cash used to fund
strategic acquisitions. Cash used to fund strategic acquisitions, net of cash acquired, was approximately $3.6 billion during Fiscal 2010,
primarily related to the acquisition of Perot Systems, compared to $176 million during Fiscal 2009 and $2.2 billion during Fiscal 2008. In
Fiscal 2009 as compared to Fiscal 2008, lower cash flows from operating activities and lower yields on investments resulted in lower net
proceeds from maturities, sales, and purchases. In Fiscal 2008, we re-invested a lower amount of our proceeds from the maturity or sales
of investments to build liquidity for share repurchases and for cash payments made in connection with acquisitions.
Financing Activities — Cash provided by financing activities during Fiscal 2010 was $2.0 billion as compared to cash used of
$1.4 billion during Fiscal 2009 and $4.1 billion in Fiscal 2008. Financing activities primarily consist of proceeds and repayments from
the issuance of long-term debt, the issuance of common stock under employee stock plans, the issuance of long-term debt and the
repurchase of our common stock. The year-over-year increase in cash provided by financing activities was mainly due to the reduction of
our share repurchase program from Fiscal 2009.
During Fiscal 2010, we issued $1.5 billion principal amount of senior term notes, which was comparable to Fiscal 2009. Due to the
overall strength of our financial position, we believe that we will have adequate access to capital markets. We intend to maintain the
appropriate debt levels based upon cash flow expectations, the overall cost of capital, cash requirements for operations, and discretionary
spending, including for acquisitions and share repurchases.
We have a $1.5 billion commercial paper program with supporting $1.5 billion senior unsecured revolving credit facilities, enabling us to
obtain favorable short-term borrowing rates. During Fiscal 2010, we issued commercial paper with original maturities both greater than
and less than 90 days. We continue to be active in the commercial paper market by issuing short-term borrowings to augment our
liquidity as needed. We ended Fiscal 2010 and Fiscal 2009 with $496 million and $100 million in outstanding commercial paper,
respectively. Our $500 million credit facility expires on April 2, 2010, and our $1.0 billion credit facility expires on June 1, 2011. We
intend to enter into a
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