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These excerpts taken from the WDC 10-K filed Aug 20, 2008. Operating
Activities
Net cash provided by operating activities during 2008 was
$1.4 billion as compared to $618 million for 2007 and
$368 million for 2006. Cash flow from operations consists
of net income, adjusted for non-cash charges, plus or minus
working capital changes. This represents our principal source of
cash. Net cash provided by changes in working capital was
$22 million for 2008 as compared to $78 million and
$207 million used to fund working capital for 2007 and
2006, respectively.
Our working capital requirements primarily depend upon the
effective management of our cash conversion cycle, which
measures how quickly we can convert our products into cash
through sales. The following table summarizes the cash
conversion cycle for the three years ended 2008:
The decrease in the cash conversion cycle for 2008 was primarily
due to our days in inventory (“DIOs”), which increased
by 7 days from 2007. This increase was primarily due to an
increase in our inventory
on-hand as a
result of our acquisition of Komag, which requires us to hold
precious metals to be used in the production of recording media.
The 1 day increase in days sales outstanding
(“DSOs”) is primarily a result of changes in customer
mix.
From time to time, we modify the timing of payments to our
vendors. We make these modifications primarily to manage our
vendor relationships and to manage our cash flows, including our
cash balances. Generally, we make the payment modifications
through negotiations with or by granting to or receiving from
our vendors payment term accommodations.
Operating Activities Net cash provided by operating activities during 2008 was $1.4 billion as compared to $618 million for 2007 and $368 million for 2006. Cash flow from operations consists of net income, adjusted for non-cash charges, plus or minus working capital changes. This represents our principal source of cash. Net cash provided by changes in working capital was $22 million for 2008 as compared to $78 million and $207 million used to fund working capital for 2007 and 2006, respectively. Our working capital requirements primarily depend upon the effective management of our cash conversion cycle, which measures how quickly we can convert our products into cash through sales. The following table summarizes the cash conversion cycle for the three years ended 2008:
The decrease in the cash conversion cycle for 2008 was primarily due to our days in inventory (“DIOs”), which increased by 7 days from 2007. This increase was primarily due to an increase in our inventory on-hand as a result of our acquisition of Komag, which requires us to hold precious metals to be used in the production of recording media. The 1 day increase in days sales outstanding (“DSOs”) is primarily a result of changes in customer mix. From time to time, we modify the timing of payments to our vendors. We make these modifications primarily to manage our vendor relationships and to manage our cash flows, including our cash balances. Generally, we make the payment modifications through negotiations with or by granting to or receiving from our vendors payment term accommodations. This excerpt taken from the WDC 10-K filed Aug 28, 2007. Operating
Activities
Net cash provided by operating activities during 2007 was
$618 million as compared to $368 million during 2006
and $421 million for 2005. Cash flow from operations
consists of net income, adjusted for non-cash charges, plus or
minus working capital changes. This represents our principal
source of cash. Net cash used to fund working capital was
$78 million for 2007 as compared to $207 million for
2006 and net cash provided by changes in working capital of
$89 million for 2005.
Our working capital requirements depend upon the effective
management of our cash conversion cycle, which measures how
quickly a company can convert its products into cash through
sales. The following table summarizes the cash conversion cycle
for the three years ended 2007:
The increase in the cash conversion cycle for 2007 was primarily
due to our days sales outstanding (“DSOs”), which
increased by six days from 2006. This increase was primarily due
to the discontinuance of an early pay program with one of our
larger customers and increasing sales to branded products’
customers and other customers who have longer payment terms.
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From time to time, we modify the timing of payments to our
vendors. We make these modifications primarily to manage our
vendor relationships and to manage our cash flows, including our
cash balances. Generally, we make the payment modifications
through negotiations with or by granting to or receiving from
our vendors’ payment term accommodations.
This excerpt taken from the WDC 10-K filed Nov 20, 2006. Operating
Activities
Net cash provided by operating activities during 2006 was
$402 million as compared to $461 million during 2005
and $190 million for 2004. Cash flow from operations
consists of net income, adjusted for non-cash charges, plus or
minus working capital changes. This represents our principal
source of cash. Net cash used to fund working capital was
$173 million for 2006 as compared to net cash provided by
changes in working capital of $129 million for 2005 and net
cash used to fund working capital of $88 million for 2004.
Our working capital requirements depend upon the effective
management of our cash conversion cycle, which measures how
quickly a company can convert its products into cash through
sales. The following table summarizes the cash conversion cycle
for the three years ended 2006:
The change in the cash conversion cycle for 2006 was primarily
due to increased inventory levels compared to 2005. In addition
to the cash conversion cycle, cash flows from operating
activities were negatively impacted by prepayments to suppliers,
incentive compensation, and a legal settlement payment of
$24 million. The improvement in the cash conversion cycle
for 2005 compared to 2004 was primarily due to better alignment
in the timing of our inventory build and sales schedules. Cash
flows from operating activities for 2004 were impacted by the
payment of a $45 million litigation settlement.
From time to time, we modify the timing of payments to our
vendors. We make these modifications primarily to manage our
vendor relationships and to manage our cash flows, including our
cash balances. Generally, we make the payment modifications
through negotiations with or by granting to or receiving from
our vendors payment term accommodations.
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