Pallet-Management-Services - AFM

Cash fl ows
| FINANCIAL REPORTING | MANAGEMENT’S DISCUSSION AND ANALYSIS |
US $ in thousands 2006 2005
Cash and cash equivalents, beginning of period 60,968 64,365
Operating cash flows:
Cash generated from continuing operations, excluding
the cash flow effect of changes in working capital and income tax payments 86,694 95,482
Cash flow effect of changes in working capital 5,588 (138)
Operating cash flows of continuing operations, prior to income tax payments 92,282 95,344
Income taxes paid (3,108) (2,739)
Operating cash flows of continuing operations 89,174 92,605
Operating cash flows of discontinued operations (1,422) (1,648)
87,752 90,957
Investing cash flows:
Capital expenditures of continuing businesses, including cash paid for acquired assets (101,300) (83,947)
Capital expenditures of discontinued operations – (63)
(101,300) (84,010)
Proceeds from sale of property, plant and equipment – 190
Proceeds from sale of discontinued operations – 8,274
(101,300) (75,546)
Financing cash flows:
Principal payments of long-term debt (187) (247)
Net interest paid (17,733) (9,394)
Net payments of finance lease obligations (5,204) (3,435)
Net proceeds from use of working capital facility 3,500 –
Net payments for treasury share buyback (3,838) –
Proceeds from exercise of stock options 925 1,103
(22,537) (11,973)
Effect of exchange rate changes on cash and cash equivalents 2,454 (6,835)
Cash and cash equivalents, end of period 27,337 60,968
IFCO SYSTEMS’ continuing operations provided
US $92.3 million of cash flows during 2006, as compared to
US $95.3 million during 2005. The variance is the result of
several factors:
Our continuing operations’ net profi t after the net effect of
all non-cash adjustments, net fi nance costs and income tax
payments, but prior to consideration of cash fl ow changes
in working capital, generated US $86.7 million of positive
cash fl ow in 2006, a decrease of 9.2% compared to 2005.
For further explanations, see Group Financial Highlights and
Segment Reporting.
Our continuing operations’ working capital accounts generated
US $5.6 million in cash in 2006, as compared to a net use of
cash of US $0.1 million in 2005.
Our continuing operations’ capital expenditures, which are
primarily for RPCs, increased to US $101.3 million from
US $83.9 million in 2005, primarily the result of the acquisition
of the CHEP USA RPC assets. Excluding this acquisition, capital
expenditures decreased by 7.1% to US $78.0 million in 2006 as
compared to 2005.
The Company’s cash and cash equivalents decreased by
US $33.6 million to US $27.3 million as of December 31, 2006
from US $61.0 million as of December 31, 2005, mainly due
to the funding of the acquisition price of the CHEP USA RPC
assets.
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