information) and decreased proceeds from the exercise of employee stock options during fiscal 2009. In addition, financing activities provided cash in fiscal 2008 as a result of our issuance of $5.0 billion of long-term senior notes in April 2008 and certain commercial paper issuances, net of commercial paper repayments.



Fiscal 2008 Compared to Fiscal 2007:   Net cash provided by financing activities in fiscal 2008 increased in comparison to cash used for financing activities in fiscal 2007 due to the issuance of $5.0 billion of long-term senior notes, additional proceeds from the exercise of employee stock options and decreased spending on stock repurchases, and were partially offset by $1.4 billion of net repayments of short-term commercial paper notes.

 

Free cash flow:   To supplement our statements of cash flows presented on a GAAP basis, we use non-GAAP measures of cash flows on a trailing 4-quarter basis to analyze cash flows generated from our operations. We believe free cash flow is also useful as one of the bases for comparing our performance with our competitors. The presentation of non-GAAP free cash flow is not meant to be considered in isolation or as an alternative to net income as an indicator of our performance, or as an alternative to cash flows from operating activities as a measure of liquidity. We calculate free cash flows as follows:

 

Long-Term Customer Financing:   We offer certain of our customers the option to acquire our software products and service offerings through separate long-term payment contracts. We generally sell contracts that we have financed on a non-recourse basis to financial institutions. We record the transfers of amounts due from customers to financial institutions as sales of financial assets because we are considered to have surrendered control of these financial assets. In fiscal 2009, 2008 and 2007, $1.4 billion, $1.1 billion and $891 million or approximately 19%, 15% and 15%, respectively, of our new software license revenues were financed through our financing division.

 

Recent Financing Activities:   In recent years, we have issued long-term senior notes to fund our acquisitions and for general corporate purposes. During fiscal 2009, we repaid $1.0 billion of senior notes that matured in May 2009. As of May 31, 2009, we have $10.2 billion of senior notes outstanding, including $1.0 billion that matures in May 2010. We have also, on occasion, issued short-term commercial paper notes in recent years pursuant to our commercial paper program to assist with the short-term financing for certain of our acquisitions and for other general corporate purposes. Typically, we have repaid these liabilities within 12 months or less from their issuance date. We also have entered into certain revolving credit agreements to back-stop any commercial paper notes we may issue and for other general corporate purposes. As of May 31, 2009, we have no commercial paper notes or amounts under our credit agreements outstanding. If we issue commercial paper notes in the future, we would most likely use our revolving credit agreements as a back-stop to these notes and we therefore consider that we have a total