On December 31, 2004,
our working capital from continuing operations was $142.6 million,
compared to $30.4 million on December 31, 2003. The working capital increased
primarily as a result of an increase of $77.3 million, in the aggregate, in
cash, cash equivalents and short-term investments, as well as an increase of
$14.2 million in inventories and the reduction of $18.5 million in short term
bank credit.
We have
financed our operations through cash generated from operations, including the
proceeds from the sale of SDP’s business in January 2004 which generated, in
the aggregate, approximately $262 million in cash. Cash, cash equivalents, short-term
investments and a restricted deposit at December 31, 2004 were
$160.6 million and short-term bank debt (including current maturities of
long-term loans) totaled $34.4 million compared to $83.3 million and
$51.9 million, respectively, at December 31, 2003. The increase in
cash, cash equivalents and short-term investments is attributable primarily to the
sale of SDP’s business to Kodak, which was partially off-set by the $118
million used in the cash distribution and self tender offer. Bank debt due beyond one year totaled $8.8
million at the end of 2004, compared to $6.6 million in 2003 (see Item 5F
below).
44
Cash Flows
We had negative net cash
used in operations in 2004. The net cash flow used in operations in 2004 was
approximately $10.3 million, compared to approximately $6.2 million in
2003 (and $4.4 million of positive operating cash flow in 2002). The negative
cash flows from operations was due primarily to an increase in inventory
related to changes in market demand and changes in the inventory structure
(increase in demand for high-end systems).
Our investment
activities consist primarily of investments and redemptions of short-term bank
deposits and U.S. government securities. In 2004, $177.8 million was generated from investment
activities (excluding $4.7 million of reduction in restricted deposit) compared
to $47.5 million that was generated from investment activities (excluding $3.4
million of restricted deposit) in 2003 and $17.0 million used in investment activities
in 2002 (excluding $20.2 million of restricted deposit). The increase in cash
generated from investment activities in 2004 is related primarily to cash
generated from the sale of SDP’s business and the follow-on investments
and redemptions of short-term bank deposits and U.S. government securities.
The increase in cash generated from investment activities in 2003 is related
primarily to $54 million generated from the sale of Creo shares in June and
August 2003. Major uses of cash for investing activities during 2004 included
investments in group companies and in fixed assets.
Net cash used
in financing activities in 2004 was approximately $133.7 million, consisting
mainly of $118 million used in the cash distribution and tender offer and a
further $16.6 million used for repayments of long and short term loans. Net
cash used in financing activities in 2003 was approximately $9.7 million,
consisting mainly of the repayment of $18.8 million note we issued to Creo,
which was offset by Scitex Vision’s borrowings under its credit facilities. Net
cash generated from financing activities in 2002 was approximately $4.5
million.
In sum, the
net cash flow (cash and cash equivalents) increase in 2004 amounted to $85.9
million.
The ability of our
subsidiaries to transfer funds to us in the form of cash dividends is generally
subject to restrictions imposed by the corporation laws of the respective
jurisdiction in which they are incorporated. For example, our Israeli
subsidiaries and group companies may not pay dividends unless they meet
specified criteria or, in certain cases, only with the approval of the court.
We do not believe that such restrictions or any other restrictions imposed by
law on our subsidiaries have had or are expected to have any material adverse
impact on our ability to meet our cash obligations.
Capital
Expenditures
Capital
expenditures in fixed assets in 2002, 2003, and 2004 were approximately $10.3
million, $3.3 million and $1.9 million, respectively. Our capital expenditures
by way of equity and convertible debt investments in our group companies (other
than our consolidated subsidiaries) in 2002, 2003 and 2004 were approximately
$3.5 million, $15.5 million and $0.6 million, respectively. There are
commitments for IT projects and upgrading the ERP system the in SV in total
amount of approximately $2.6 million in 2005.
Credit
Facilities
As of December 31, 2004,
Scitex Vision’s borrowings under its revolving lines of credit and long-term
loans for working capital and investments purposes from banks in Israel
amounted to $41.9 million, bearing interest ranging from LIBOR +1.0% to
LIBOR +2.25%, partially linked to the dollar and partially to the Euro. As of
June 20, 2005, the principal amount outstanding under these credit lines
amounted to $42.5 million. These credit lines are secured by a floating charge
on Scitex Vision’s assets and by approximately $13 million of restricted
deposits. Under these credit lines, Scitex Vision is required to adhere to
certain financial and other restrictive covenants such as equity level,
profitability and financial ratios and restriction on payment of dividends. In
the past, Scitex Vision failed to meet certain of these covenants but was able
to cure such default following negotiations with the banks and by raising
additional funds from us and other shareholders of Scitex Vision. However, we
cannot assure you that Scitex Vision will be successful in satisfying these
covenants in the future.
45
Most of the
short-term bank credit of Scitex Vision is also in dollars, generally at
variable rates linked to LIBOR. This includes a short-term bank loan
denominated in dollars and bearing interest at a rate of LIBOR + 1.0% to LIBOR
+ 2.25% per annum (as of December 31, 2004, 3.63% to 4.88%, respectively) in
the amount of approximately $16.4 million. Scitex Vision also has in place
other short-term banks loans denominated in Euros and bearing interest of one
month LIBOR + 1.75% to LIBOR + 2.0% per annum (as of December 31, 2004, 4.0% to
4.25%, respectively) in the aggregate amount of approximately 10.5 million
Euros (representing $14.4 million based on the exchange rate between the Euro
and the dollar as of December 31, 2004).
See Item 5F
below.
Tax Audits
In Israel, we have received,
or are considered to have received, final tax assessments through the 1999 tax
year.
In partial settlement of an
audit by the Internal Revenue Service (IRS) of our U.S. subsidiaries for the
years 1992 through 1996, we consented to a “partial assessment” by the IRS for
approximately $10.6 million of federal taxes on certain agreed upon issues. In
June 2002, we received a notice from the IRS assessing $29.6 million of
additional federal income taxes for the years 1992 through 1996. In August
2002, we appealed the proposed additional assessment and in February 2004
reached a settlement with the IRS, whereby we agreed to an assessment of $5.9
million of additional federal income taxes for these years (rather than $29.6
million as initially proposed by the IRS, excluding interest accrued thereon). We
had previously established balance sheet reserves on account of this audit
which turned out to be sufficient, and, as noted above, we had already made advance payments to the IRS
of $21.5 million on account of this audit until the end of 2003. Accordingly,
we paid as a final additional cash cost of the IRS audit (taking into
consideration the full federal tax assessment, state taxes and interest
thereon, and after application of the $21.5 million advance payment), an amount
of approximately $11.6 million. In December 2004, as a result of the conclusion
of the 1992–1996 IRS audit, we filed amended federal tax returns for the years
1994, 1995 and 1997, requesting a refund of $7.8 million of federal taxes. To
date, the IRS has not responded to our request. Due to the existing uncertainty
surrounding the outcome of this request, this amount is not included in our
consolidated financial statements included in this Annual Report.
In late 2002, we received a
demand from the Israeli Tax Authority (ITA) to make a tax payment of
approximately $2.6 million related to an assessment of an intracompany sale of
shares that was effected during 1996 reflecting a much higher valuation to the
transaction than the one established by us. In March 2004, we reached an
agreement with the ITA, pursuant to which we paid approximately $30,000 in full
settlement of this demand.
In
April 2003, Scitex Vision International, our indirect majority owned
subsidiary, received a notice from the ITA assessing approximately $6.5 million
(including interest and linkage to the Israeli Consumer Price Index) of Israeli
income taxes for the years 1995 through 2000. The dispute related primarily to
the interpretation of the benefits to which Scitex Vision is entitled under the
Law for the Encouragement of Capital Investments, 1959, and the deduction of
certain expenses. Scitex Vision International appealed the proposed assessment
and, in January 2004, reached a settlement with the ITA, whereby it agreed to
pay approximately $1.8 million in 24 monthly installments commencing April 2004
in full settlement of the ITA audit for these years as well as for 2001.
In mid-2001,
Scitex Vision International filed an application for an advance ruling by Hong
Kong’s Inland Revenue Department (IRD). In general, this application sought the
IRD’s agreement that Scitex Vision International’s sales outside of Hong Kong
will be exempt from tax in Hong Kong and that sales within Hong Kong will be
subject to a lower tax rate. During 2003, the IRD declined the application. Thereafter, Scitex
Vision International sold the local subsidiary and ceased the
relevant activity in Hong Kong. Scitex Vision International
believes that due to current balance sheet reserves, it is not necessary at
this time to establish additional reserves relating to this matter in Hong
Kong.
46
In
addition, we are
undergoing a tax audit in Europe and the tax consequences in Israel of the Creo
transaction are still to be determined with the tax authorities. While we
believe that we established sufficient reserves for these matters, additional
payments may be required at the conclusion of these matters. It is not possible
to predict at this time whether and when any eventual payments will be made.
Outlook for 2005
In 2005, we expect our
majority owned subsidiary, Scitex Vision, to generate cash from its operations.
Our investment activities, which may include investments in group companies,
earnout payments for past acquisitions and investments in capital assets, are
expected to be higher than the amount of cash generated by our operating cash
flow. As described elsewhere in this Annual Report, in June 2004 we paid
approximately $28 million in consideration for the shares purchased by us in
the self tender offer and approximately $90 million was paid to our
shareholders in July 2004 as part of the cash distribution. As a result, our
shareholders’ equity and cash balance has decreased by the same amount. Our
management believes that existing cash and short-term investments together with
available credit lines and funds generated from operations of subsidiaries will
be sufficient to meet operating requirements in the year 2005. We may also
continue to invest in our subsidiaries and group companies, and in other new
companies.
E
FFECTIVE
C
ORPORATE
T
AX
R
ATE
Israeli
companies are generally subject to corporate tax on their taxable income at the rate of 35% for the 2004 tax year, 34% for
the 2005 tax year, 32% for the 2006 tax year and 30% for the 2007 tax year and
to capital gains tax at a rate of 25% for capital gains derived after January
1, 2003 (other than with respect to gains
deriving from the sale of listed securities). However, the manufacturing
facilities in Israel of some of our group companies have been granted Approved
Enterprise status under the Law for the Encouragement of Capital Investments,
1959. Consequently, these facilities are eligible for tax benefits. The tax
benefit is afforded for seven years from the year the relevant facility first
earns taxable income, but no later than 12 years from the first year of
operating or 14 years from the year in which the approval was granted. Subject
to compliance with applicable requirements, the income derived from these
Approved Enterprise facilities will be fully tax-exempt during the first two
years of the seven-year tax benefit, and will be subject to a reduced tax rate
of a maximum of 25% during the remaining five years, but in any event not later
than 2006 regarding Approved Enterprise facilities that are already approved
and effective. The actual tax rate will depend upon the percentage of
non-Israeli holders of the share capital of these companies.
In 2004, we do
not expect to have taxable income at Scitex, the parent company.
See below
under “Item 10E – Taxation” and in Note 12 to our consolidated financial
statements for more information on our income taxes.
The above benefits are
conditioned upon our fulfillment of conditions stipulated by the Law for the
Encouragement of Capital Investments, the regulations promulgated thereunder
and the instruments of approval for the specific investments in Approved
Enterprises. If we fail to comply with these conditions, our benefits may be
canceled and we may be required to refund the amount of the benefits received,
in whole or in part. See above under the caption “Tax Audits” regarding a
settlement of a dispute with the Israeli tax authority in this respect.
M
ARKET
R
ISK
For
information on our market risk and the use of financial instruments for hedging
purposes, see below under “Item 11 – Quantitative and Qualitative Disclosures
About Market Risk.”
47
G
RANTS
FROM THE
O
FFICE
OF THE
C
HIEF
S
CIENTIST
The Government of Israel
encourages research and development projects through the Office of Chief
Scientist of the Israeli Ministry of Industry, Trade and Labor, or the Office
of the Chief Scientist, pursuant to the Law for the Encouragement of Industrial
Research and Development, 1984, and the regulations promulgated thereunder,
commonly referred to as the R&D Law. Grants received under such programs
are repaid through a mandatory royalty based on revenues from products
incorporating know-how developed with the grants. This government support is
condition upon the participant’s ability to comply with certain applicable
requirements and conditions specified in the Office of the Chief Scientist’s
programs and with the provisions of the R&D Law.
Under the R&D Law,
research and development programs that meet specified criteria and are approved
by the research committee of the Office of the Chief Scientist are eligible for
grants of up to 50% of certain approved expenditures of such programs, as
determined by the research committee of the Chief Scientist. In exchange, the
recipient of such grants is required to pay the Office of the Chief Scientist
royalties from the revenues derived from products incorporating know-how
developed within the framework of each such program or derived from such
program (including ancillary services in connection with such program), usually
up to an aggregate of 100% of the dollar-linked value of the total grants
received in respect of such program, plus interest. The royalty rates
applicable to the programs maintained by our Israeli subsidiaries and group
companies range from 3% to 5%.
The R&D
Law generally requires that the product developed under a program be
manufactured in Israel. However, upon the approval of the Chief Scientist, some
of the manufacturing volume may be performed outside of Israel, provided that
the grant recipient pays royalties at an increased rate, which may be
substantial, and the aggregate repayment amount is increased up to 300% of the
grant, depending on the portion of the total manufacturing volume that is
performed outside of Israel. Effective April 1, 2003, the R&D Law also
allows for the approval of grants in cases in which the applicant declares that
part of the manufacturing will be performed outside of Israel or by non-Israeli
residents and the research committee is convinced that doing so is essential
for the execution of the program. This declaration will be a significant factor
in the determination of the Office of Chief Scientist whether to approve a
program and the amount and other terms of benefits to be granted. For example,
the increased royalty rate and repayment amount will be required in such cases.
The R&D
Law also provides that know-how developed under an approved research and
development program may not be transferred to third parties in Israel without
the approval of the research committee. Such approval is not required for the
sale or export of any products resulting from such research or development. The
R&D Law further provides that the know-how developed under an approved
research and development program may not be transferred to any third parties
outside Israel.
In March 2005,
an amendment to the R&D Law was approved by Israel’s Parliament, which
amendment is intended to make the R&D Law more compatible with the global
business environment by, among other things, relaxing restrictions on the
transfer of manufacturing rights outside Israel and on the transfer of
OCS-funded know-how outside of Israel. As described above, currently, the law
permits the Office of the Chief Scientist to approve the transfer of
manufacturing rights outside Israel, in exchange for payment of higher
royalties. The amendments further permits (1) the Office of the Chief
Scientist, among other things, to approve the transfer of manufacturing rights
outside Israel in exchange for an import of different manufacturing into Israel
as a substitute, in lieu of increased royalties, and (2) under certain
circumstances and subject to the Office of the Chief Scientist’s prior
approval, the transfer outside Israel of know-how that has been funded by
Office of the Chief Scientist, generally in the following cases: (a) the grant
recipient pays to the Office of the Chief Scientist a portion of the
consideration paid for such funded know-how (according to certain formulas), or
(b) the grant recipient receives know-how from a third party in exchange for
its funded know-how, or (c) such transfer of funded know-how arises in
connection with certain types of cooperation in research and development
activities. This amendment will come into effect on June 7, 2005. To our
knowledge, the Israeli government intends to amend the royalty regulations
promulgated under the R&D Law to reflect this amendment. This amendment to
the regulations may also include an update to the royalty rates.
48
The R&D
Law imposes reporting requirements with respect to certain changes in the
ownership of a grant recipient. The law requires the grant recipient and its
controlling shareholders and interested parties to notify the Office of the
Chief Scientist of any change in control of the recipient or a change in the
holdings of the means of control of the recipient that results in a non-Israeli
becoming an interested party directly in the recipient and requires the new
interested party to undertake to the Office of the Chief Scientist to comply
with the R&D Law. In addition, the rules of the Office of the Chief
Scientist may require prior approval of the Office of the Chief Scientist or
additional information or representations in respect of certain of such events.
For this purpose, “control” is defined as the ability to direct the activities
of a company other than any ability arising solely from serving as an officer
or director of the company. A person is presumed to have control if such person
holds 50% or more of the means of control of a company. “Means of control”
refers to voting rights or the right to appoint directors or the chief
executive officer. An “interested party” of a company includes a holder of 5%
or more of its outstanding share capital or voting rights, its chief executive
officer and directors, someone who has the right to appoint its chief executive
officer or at least one director, and a company with respect to which any of
the foregoing interested parties owns 25% or more of the outstanding share
capital or voting rights or has the right to appoint 25% or more of the
directors. Since Scitex currently participates in these programs solely
through its subsidiaries and some of its group companies, we do not believe
that any non-Israeli who becomes a holder of 5% or more of our outstanding
shares is required to comply with the aforesaid notification and undertaking
requirements.
The funds available for
Office of the Chief Scientist grants out of the annual budget of the State of
Israel were reduced in 1998, and the Israeli authorities have indicated in the
past that the government may further reduce or abolish Office of the Chief
Scientist grants in the future. Even if these grants are maintained, we cannot
presently predict what would be the amounts of future grants, if any, that we
(or our Israeli affiliated companies) might receive.
We recorded grant
participation from the Office of the Chief Scientist totaling approximately
$0.7 million in 2002, $0.5 million in 2003 and $0.6 million in 2004. Pursuant
to the terms of these grants, Scitex Vision and Jemtex are obligated to pay
royalties in the range of 3% to 5% of revenues derived from sales of products
funded with these grants.
However, a portion of the
grants to Scitex Vision are from the MAGNET program that does not bear any
royalties. As a member of the Digital Printing Consortium, some of the grants
that Scitex Vision received from the Office of the Chief Scientist were
pursuant to the “MAGNET” program – a program for research and development of
generic technologies within a consortium of commercial companies and academic
institutions. In this program, the effective rate of the grants is up to 66% of
the expenses and there is no obligation to pay any royalties. However, the
MAGNET program requires Scitex Vision to cross license certain technology
developed in connection with such program to the other members of the
consortium.
As of December 31, 2004, our
contingent liability to the Office of the Chief Scientist in respect of grants
received was approximately $7.0 million, compared to $4.2 million as of
December 31, 2003. The increase is due primarily to the consolidation of Jemtex
in our financial statements and, consequently, the inclusion of Jemtex’s
contingent liability to the Office of the Chief Scientist.
C.
RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.
Scitex’s research and
development efforts, through its subsidiaries, are focused on the development
of new products and technologies, as well as enhancing the quality and
performance relative to price of our existing products, reducing manufacturing
costs and upgrading and expanding our product line through the development of
additional features and improved functionality.
Our research and development
activities primarily consist of over 95 employees, most of them in Scitex
Vision’s operations in Israel. In addition, a high proportion of the employees
of our group companies are engaged in research and development.
49
We, through our
subsidiaries, have taken advantage of royalty-bearing grants in the form of
participations in industrial research provided by the Government of Israel. The
following table shows the amounts and relative percentages of total research
and development expenditures and the royalty-bearing participations therein,
for the years indicated:
Year Ended
December 31,
2004
2003
2002
(Dollars
in thousands)
Total expenditure incurred
$
13,043
10.2
%
(1)
$
11,537
11.2
%
(1)
$
7,761
9.1
%
(1)
Less royalty-bearing participations, from the Government of
Israel
(3)
$
594
4.6
%
(2)
$
467
4.1
%
(2)
$
701
9.0
%
(2)
Net expenditure
$
12,449
9.7
%
(1)
$
11,070
10.8
%
(1)
$
7,060
8.2
%
(1)
(1)
Percentage indicates the
ratio of the relevant item to total revenues from continuing operations.
(2)
Percentage indicates the
ratio of the participations to total research and development expenditure
incurred (as shown).
(3)
See Note 14g to our
consolidated financial statements included in this Annual Report. For further
information regarding the Office of the Chief Scientist of the Israeli
Ministry of Industry, Trade and Labor, see “Item 5B – Liquidity and Capital
Resources–Grants from the Office of the Chief Scientist.”
As of the end of 2004, we,
principally through Scitex Vision, own, license or otherwise have rights in
over 80 issued patents and 79 patent applications pending in the
United States and elsewhere. As part of the SDP transaction in January 2004, we
assigned to Kodak approximately 324 issued patents and 197 pending
patent applications relating to our high-speed digital printing business. In
addition, a number of issued patents and pending applications are held by our
other group companies. We also claim proprietary rights in various technology
and trade secrets relating to our products and operations. We also hold a
number of trademarks and service marks in the United States and elsewhere,
including for the name Scitex and the
Scitex
logo.
See also “Item 4–Business
Overview–Intellectual Property and Proprietary Rights.”
D.
TREND INFORMATION
—
General.
The deterioration of the global economy
starting in the second half of 2001 has resulted in a decline of
advertisement spending and consequently a slowdown of capital investments in
the digital printing market in which we operate. Since 2003, we identified a
moderate improvement in the general market for commercial printers equipment
and, in the past year, specifically in certain countries in Latin America,
Africa and Asia Pacific. However, we are unable to predict the duration of
this trend or the extent of any impact that it may have on our results of operations.
—
Industry.
The printing industry underwent
substantial changes over the recent years. Analog, labor intensive processes,
characterized by high setup costs and long production runs, are being
replaced by digital processes in both the preparation of data for printing
(preprint) and in the actual printing process (digital print). The printing
industry, which historically has grown at GDP rates, experienced strong
growth in revenue and profitability in the years up until the middle of 2001,
fueled mainly by increased advertising spending. Since then, and particularly
following the events of September 11, 2001, there was a substantial slowdown
in activity in this industry, demonstrated by slower replacement of equipment
and reduced capital equipment purchases, and there is no assurance that the
strong capital spending experienced in the industry through the middle of
2001 will return. However, since 2003, and specifically in 2004, we
identified a moderate improvement in the general market for commercial
printers equipment, including in the wide format printing systems segment in
which we operate. However, we are unable to predict the duration of this
trend or the extent of any impact that it may have on our results of
operations.
50
Digital
printing growth is driven by the demand for shorter lead times for printed products,
variability and personalization of output, and the savings derived from elimination of
obsolescence and inventory related costs. We believe these trends will continue and even
strengthen as the market gets accustomed to new processes and cost-efficiency paradigms.
In general, most digital printing application areas have seen moderate growth rates over
the last few years partly due to digital processes replacing analog ones and partly due
to new print products and applications being developed such as wide and super wide format
printing on various types of substrates.
Recently,
we learned about several transactions, including the acquisition of Vutek Inc., one of
our main competitors in the super-wide format market, by Electronics For Imaging, Inc.
(EFI), and the acquisition of Inca Digital Printers, one of our competitors in the
digital flatbed market, by Dainippon Screen Mfg. Co. Ltd. We are not certain whether
these transactions indicate a trend of consolidation in the industry, noting that we
believe that the market is fragmented on the customer side and the system manufacturers’ side.
—
Revenue outlook.
We have seen revenues from our continuing
operations increase in 2004 at a 25% rate reaching approximately $128.2
million and, in 2003, at a 20% rate (reaching approximately $103 million). We
believe that, subject to general market conditions over which we have no
control, we should be able to maintain moderate growth in our revenues in
2005.
—
Composition of revenue.
In 2004, we derived approximately 39% of
our revenues from services and supplies, compared to 41% in 2003 and 38% in
2002. Our growing installed base is
expected to contribute to the growth of our recurring revenues from services
in 2005, a trend which may be offset by reduction in revenues from our
supplies business, which is currently characterized by a very competitive
arena with eroding prices. Due to these conflicting trends as well as numerous
factors beyond our control, we cannot predict at this time the composition of
revenue in 2005.
—
Gross margins.
Our gross margins, which depend primarily
on product and revenue mix, improved in 2004 compared to 2003, from 38.6% to
44.6% (40.7% in 2002). Subject to
unexpected market developments and competition, we believe that in 2005 we
can maintain our gross margins comparable to 2004, primarily through sale of
products that carry a higher margin than our current offerings, cost
reduction programs and lower equipment manufacturing costs. We are
proactively working on reducing the costs of production through cost
engineering methods and outsourcing.
—
Other.
Consistent with past practice, we intend to continue to explore strategic
alternatives relating to our holdings, including a possible initial public
offering, and possible dispositions or acquisitions. There is no assurance
that any of these alternatives will be pursued or, if one is pursued, the
terms on which it would occur. As previously announced, we are engaged in
preliminary negotiations for the possible sale of our holdings in Scitex
Vision, our remaining principal operating subsidiary. There is no assurance
if, when or on what terms such a transaction will take place.
We are not a
party to any off-balance sheet arrangements that have or are reasonably
likely to have a current or future material effect on our financial
condition, changes therein, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources.
The table
below summarizes, as of December 31, 2004, our following contractual
obligations to third parties for the periods indicated:
Payments Due By Period (in
$ millions)
Contractual Obligations
Total
Less than 1
Year
1-3
Years
3-5
Years
More than 5 Years
Long-term
debt
$
14,899
$
3,557
$
7,234
$
4,108
–
Operating
leases (facilities and vehicles)
17,045
2,452
3,983
3,158
7,452
Total contractual cash obligations
$
31,944
$
6,009
$
11,217
$
7,266
$
7,452
As to our
royalty obligations and outstanding guarantees as at December 31, 2004, see
Note 10 to our consolidated financial statements included in this Annual
Report.
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