United Stationers Inc. provides a reconciliation of non-GAAP financial measures, specifically net capital spending. For 2005, net capital spending was $48.2 million, up from $13.4 million in 2004. This increase was primarily due to $16.9 million in capitalized software costs in 2005 compared to $3.7 million in 2004. Management believes presenting net capital spending internally and to readers provides a useful measure of investing activities that includes capitalized software costs.

1. United Stationers Inc. and Subsidiaries
Reconciliation of Non-GAAP Financial Measures
Net Capital Spending
(in thousands)
For the Three Months Ended For the Twelve Months Ended Forecast
December 31, December 31, Year Ending
2005 2004 2005 2004 2006
Net cash used in investing activities $ 9,424 $ 9,031 $ 154,787 $ 9,719 $ N/A
Acquisitions 1,676 -- (123,530) -- N/A
Net cash used in investing activities
before the impact of acquisitions $ 11,100 $ 9,031 $ 31,257 $ 9,719 $ N/A
Capital expenditures $ 11,134 $ 9,064 $ 31,313 $ 19,722 $ N/A
Proceeds from the disposition of
property, plant and equipment (34) (33) (56) (10,003) N/A
Net cash used in investing activities
before the impact of acquisitions 11,100 9,031 31,257 9,719 N/A
Capitalized software 2,452 1,475 16,961 3,659 N/A
Net capital spending $ 13,552 $ 10,506 $ 48,218 $ 13,378 $ 48,000
Note: Net capital spending is provided as an additional measure of investing activities. The company’s accounting policy
is to include capitalized software in “Other Assets.” Generally Accepted Accounting Principles require that “Other
Assets” be included on the cash flow statements under the caption “Net Cash Provided by Operating Activities.”
Internally, the company measures cash used in investing activities including capitalized software. Management believes
that it is helpful to provide readers of its financial statements with this same information.