reasonable levels. 
Inventory Analysis 
Inventories are valued at  the lower of cost or market, using the 
last-in, first-out (LIFO) method for U.S. inventories and the 
average cost method for foreign inventories.  Management uses 
an inventory turnover ratio to monitor and evaluate inventory.  
Management calculates this ratio on an annual as wel l as a 
quarterly basis and uses inventory valued at cu rrent costs.  The 
annualized inventory turnover (using current costs ) for the period 
ended June 30, 2012 was 4.6 versus 4.7 at J une 30, 2011.  We 
believe our inventory turnover ratio in fiscal 2013 will remain 
similar to the fiscal 2012 levels. 
  
 
4 
 
Income tax expense as a percent of income before taxes was 
36.7% for fiscal 2011 and 37.2% for fiscal 2010.  The net 
decrease in the effective tax rate reflects higher income levels 
earned in fiscal 2011 in foreign jurisdictions which have a lower 
overall statutory rate than the U.S . as well as the reversal of a 
valuation allowance no longer necessary.  These factors were 
offset somewhat by provision made for U.S. income tax on a 
portion of undistr ibuted earnings not considered permanently 
reinvested in our Canadian subsidiaries.   
As a result of the factors addressed above, net income for fiscal 
2011 increased $30.9 million or 46.8% from fiscal year 2010.  
Net income per share increased at a comparable rate. 
The number of Company associates was 4,640 at June 30, 2011 
and 4,468 at June 30, 2010.  The net associate increase year-
over-year was attributable primarily to acquisitions (net increase 
of 239 associates), partially offset by hea dcount reductions in pre-
existing operations. 
LIQUIDITY AND CAPITAL RESOURCES 
Our primary source of capital is cash flow from operations, 
supplemented as necessary by bank borrowings or other sources 
of debt.  At June 30, 2012 and June 30, 2011, we had no 
outstanding borrowings.  Management expects that our existing 
cash, cash equivalents, funds available under the revolving credit 
facility, cash provided from operations, and the use of operati ng 
leases will be sufficient to finance normal working  capital needs 
in each of the countries we operate in, payment of dividends, 
acquisitions, investments in properties, facilities and equipment, 
and the purchase of additional Company common stock.  
Management also believes that additional long-term debt and 
line of credit financing could be obtained based on the 
Company’s credit standing and financial strength. 
The Company’s working capital at June 30, 2012 was $435.6 
million compared to $404.2 million at June 30 , 2011.  The 
current ratio was 2.9 to 1 at J une 30, 2012 and at June 30, 2011. 
The Executive Organization and Compensation Committee of the 
Board of Directors froze participant benefits (credited service and 
final average earnings) and entry into the SERP effective 
December 31, 2011.  This action constituted a plan curtailment, 
resulting in a reduction of postemployment benefits of $8.9 
million and deferred tax assets of $3.4 million in the consolidated 
balance sheet. 
Net Cash Flows 
The following table is included to aid in review of Applied’s 
statements of consolidated cash flows; all amounts are in 
thousands. 
 Year Ended June 30, 
Net Cash Provided by (Used in): 2012  2011   2010 
Operating Activities  $ 90,422   $ 76,842   $ 184,324  
Investing Activities (39,434 )  (47,887 )  (6,784 ) 
Financing Activities (60,816 )  (116,523 )  (30,514 ) 
Exchange Rate Effect (2,822 )  2,883   1,109  
(Decrease) Increase in Cash  
and Cash Equivalents  $ (12,650 )  $ (84,685 )  $ 148,135  
In the last two fiscal years, and typical during periods of sales 
expansion, a portion of cash generated from operations is 
invested in working capital, particularly receivables and inventory.  
The most significant factor in the spike in 2010 operating cash 
flows related to the fiscal 2010 inventory management program