UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 Form 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2008
 Or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from               to               .
 Commission file number 1-5964
 
 IKON OFFICE SOLUTIONS, INC.
 (Exact name of registrant as specified in its charter)
 OHIO(State or other jurisdiction of 
incorporation or organization)
    
    23-0334400(I.R.S. Employer
Identification No.)70 Valley Stream Parkway 
Malvern, Pennsylvania(Address of principal executive offices)
    
    19355(Zip Code)
 Registrants telephone number, including area code:
(610) 296-8000
 
  þ o
  Large accelerated filer þAccelerated filer oNon-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company o o þ




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##### 



INDEX
 Page No.CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS.
    
    
    3PART I  FINANCIAL INFORMATIONITEM 1.
    
    CONSOLIDATED FINANCIAL STATEMENTSCONSOLIDATED BALANCE SHEETS  JUNE 30, 2008 AND SEPTEMBER 30, 2007 (UNAUDITED)
    
    
    4CONSOLIDATED STATEMENTS OF INCOME  THREE AND NINE MONTHS ENDED JUNE 30, 2008 AND 2007 (UNAUDITED)
    
    
    5CONSOLIDATED STATEMENTS OF CASH FLOWS  NINE MONTHS ENDED JUNE 30, 2008 AND 2007 (UNAUDITED)
    
    
    6NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
    
    
    7-20ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    21-34ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    35ITEM 4.
    
    CONTROLS AND PROCEDURES
    
    
    35PART II  OTHER INFORMATIONITEM 1.
    
    LEGAL PROCEEDINGS
    
    
    36ITEM 1A.
    
    RISK FACTORS
    
    
    36ITEM 2.
    
    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES
    
    
    36ITEM 3.
    
    DEFAULTS UPON SENIOR SECURITIES
    
    
    36ITEM 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    36ITEM 5.
    
    OTHER INFORMATION
    
    
    36ITEM 6.
    
    EXHIBITS
    
    
    36SIGNATURES
   2




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##### 



FORWARD-LOOKING STATEMENTS
   
    
    conducting operations in a competitive environment and a changing industry;
    
    existing or future supplier relationships;
    
    our lease program relationships with General Electric Capital Corporation (GE);
    
    our ability to execute on our strategic priorities;
    
    our One Platform Conversion and our infrastructure and productivity initiatives;
    
    new technologies;
    
    economic, legal and political issues associated with our international operations; and
    
    our ability to maintain effective internal control over financial reporting.
  3




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##### 



PART I  FINANCIAL INFORMATION
 
 Item 1.
    
    Consolidated Financial Statements
 
 IKON OFFICE SOLUTIONS, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands)
 June 30, 2008
    
    
    September 30, 2007AssetsCash and cash equivalents
    
    $
    106,533
    
    
    $
    349,237Accounts receivable, net
    
    
    558,438
    
    
    
    552,776Lease receivables, net
    
    
    81,559
    
    
    
    84,207Inventories
    
    
    277,523
    
    
    
    287,503Prepaid expenses and other current assets
    
    
    35,139
    
    
    
    35,025Income taxes receivable
    
    
    3,149
    
    
    
    Deferred taxes
    
    
    45,717
    
    
    
    48,167Total current assets
    
    
    1,108,058
    
    
    
    1,356,915Long-term lease receivables, net
    
    
    254,015
    
    
    
    251,776Equipment on operating leases, net
    
    
    58,052
    
    
    
    72,052Property and equipment, net
    
    
    148,504
    
    
    
    154,218Deferred taxes
    
    
    24,591
    
    
    
    18,144Goodwill
    
    
    1,336,444
    
    
    
    1,333,249Other assets
    
    
    89,480
    
    
    
    84,354Total Assets
    
    $
    3,019,144
    
    
    $
    3,270,708LiabilitiesCurrent portion of corporate debt
    
    $
    3,851
    
    
    $
    16,798Current portion of non-corporate debt
    
    
    58,277
    
    
    
    51,077Trade accounts payable
    
    
    272,789
    
    
    
    263,657Accrued salaries, wages and commissions
    
    
    99,264
    
    
    
    93,052Deferred revenues
    
    
    105,743
    
    
    
    109,796Income taxes payable
    
    
    
    
    
    
    15,240Other accrued expenses
    
    
    121,589
    
    
    
    129,323Total current liabilities
    
    
    661,513
    
    
    
    678,943Long-term corporate debt
    
    
    575,369
    
    
    
    576,199Long-term non-corporate debt
    
    
    174,889
    
    
    
    181,334Other long-term liabilities
    
    
    153,600
    
    
    
    128,211Commitments and contingencies (Note 10)Shareholders EquityCommon stock, no par value
    
    
    1,066,018
    
    
    
    1,058,104Retained earnings
    
    
    968,743
    
    
    
    912,974Accumulated other comprehensive income
    
    
    128,898
    
    
    
    132,189Cost of common shares in treasury
    
    
    (709,886
    )
    
    
    (397,246
    )Total Shareholders Equity
    
    
    1,453,773
    
    
    
    1,706,021Total Liabilities and Shareholders Equity
    
    $
    3,019,144
    
    
    $
    3,270,708Supplemental InformationShares of common stock authorized
    
    
    300,000
    
    
    
    300,000Shares of common stock issued
    
    
    149,310
    
    
    
    149,310Treasury stock
    
    
    55,654
    
    
    
    31,740Shares of common stock outstanding
    
    
    93,656
    
    
    
    117,570
 See notes to consolidated financial statements.
 4




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##### 



IKON OFFICE SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(in thousands, except per share data)
 Three Months Ended
    
    
    Nine Months EndedJune 30
    
    
    June 302008
    
    
    2007
    
    
    2008
    
    
    2007RevenuesEquipment
    
    $
    444,320
    
    
    $
    447,727
    
    
    $
    1,291,603
    
    
    $
    1,317,650Customer service and supplies
    
    
    346,840
    
    
    
    345,927
    
    
    
    1,041,408
    
    
    
    1,037,164Managed and professional services
    
    
    210,648
    
    
    
    203,372
    
    
    
    627,580
    
    
    
    593,852Rental and fees
    
    
    32,319
    
    
    
    31,954
    
    
    
    96,803
    
    
    
    101,938Other
    
    
    16,351
    
    
    
    16,036
    
    
    
    50,339
    
    
    
    53,0321,050,478
    
    
    
    1,045,016
    
    
    
    3,107,733
    
    
    
    3,103,636Cost of RevenuesEquipment
    
    
    332,930
    
    
    
    339,116
    
    
    
    957,415
    
    
    
    989,209Customer service and supplies
    
    
    196,739
    
    
    
    193,113
    
    
    
    601,487
    
    
    
    590,034Managed and professional services
    
    
    148,821
    
    
    
    146,911
    
    
    
    449,109
    
    
    
    433,374Rental and fees
    
    
    7,203
    
    
    
    8,344
    
    
    
    22,336
    
    
    
    26,739Other
    
    
    10,538
    
    
    
    10,574
    
    
    
    32,685
    
    
    
    35,201696,231
    
    
    
    698,058
    
    
    
    2,063,032
    
    
    
    2,074,557Gross ProfitEquipment
    
    
    111,390
    
    
    
    108,611
    
    
    
    334,188
    
    
    
    328,441Customer service and supplies
    
    
    150,101
    
    
    
    152,814
    
    
    
    439,921
    
    
    
    447,130Managed and professional services
    
    
    61,827
    
    
    
    56,461
    
    
    
    178,471
    
    
    
    160,478Rental and fees
    
    
    25,116
    
    
    
    23,610
    
    
    
    74,467
    
    
    
    75,199Other
    
    
    5,813
    
    
    
    5,462
    
    
    
    17,654
    
    
    
    17,831354,247
    
    
    
    346,958
    
    
    
    1,044,701
    
    
    
    1,029,079Selling and administrative
    
    
    291,848
    
    
    
    293,373
    
    
    
    886,337
    
    
    
    874,790Restructuring benefit (charge)
    
    
    1,051
    
    
    
    
    
    
    
    (5,561
    )
    
    
    Operating income
    
    
    63,450
    
    
    
    53,585
    
    
    
    152,803
    
    
    
    154,289Loss from the early extinguishment of debt
    
    
    5,702
    
    
    
    
    
    
    
    5,702
    
    
    
    Interest income
    
    
    992
    
    
    
    2,473
    
    
    
    4,273
    
    
    
    8,872Interest expense
    
    
    15,537
    
    
    
    12,860
    
    
    
    45,814
    
    
    
    37,842Income before taxes on income
    
    
    43,203
    
    
    
    43,198
    
    
    
    105,560
    
    
    
    125,319Taxes on income
    
    
    11,123
    
    
    
    14,132
    
    
    
    36,018
    
    
    
    38,463Net income
    
    $
    32,080
    
    
    $
    29,066
    
    
    $
    69,542
    
    
    $
    86,856Basic Earnings Per Common ShareNet income
    
    $
    0.34
    
    
    $
    0.23
    
    
    $
    0.69
    
    
    $
    0.69Diluted Earnings Per Common ShareNet income
    
    $
    0.34
    
    
    $
    0.23
    
    
    $
    0.69
    
    
    $
    0.68Cash dividends per common share
    
    $
    0.04
    
    
    $
    0.04
    
    
    $
    0.12
    
    
    $
    0.12
 See notes to consolidated financial statements
 5




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##### 



IKON OFFICE SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
 Nine Months Ended June 302008
    
    
    2007Cash Flows from Operating ActivitiesNet income
    
    $
    69,542
    
    
    $
    86,856Additions (deductions) to reconcile net income to net cash provided by operating activities:Depreciation
    
    
    54,692
    
    
    
    52,002Amortization
    
    
    797
    
    
    
    806Other non-cash items
    
    
    2,627
    
    
    
    1,712Loss on disposal of property and equipment
    
    
    1,002
    
    
    
    628Provision for losses on accounts and lease receivable
    
    
    5,491
    
    
    
    4,131Restructuring charge
    
    
    5,561
    
    
    
    Provision for deferred income taxes
    
    
    16,646
    
    
    
    10,147Stock based compensation expense
    
    
    7,917
    
    
    
    7,039Excess tax benefits from stock based payments arrangements
    
    
    (265
    )
    
    
    (1,586
    )Pension expense
    
    
    3,277
    
    
    
    1,730Loss from the early extinguishment of debt
    
    
    5,702
    
    
    
    Changes in operating assets and liabilities:(Increase) decrease in accounts receivable
    
    
    (11,203
    )
    
    
    5,050(Increase) decrease in finance lease receivables *
    
    
    (2,652
    )
    
    
    7,821Decrease (increase) in inventories
    
    
    10,459
    
    
    
    (96,760
    )Increase in prepaid expenses and other assets
    
    
    (7,283
    )
    
    
    (4,738
    )Increase in accounts payable
    
    
    7,783
    
    
    
    685Decrease in deferred revenue
    
    
    (3,091
    )
    
    
    (14,784
    )Payments related to restructuring plans
    
    
    (1,699
    )
    
    
    Decrease in accrued expenses
    
    
    (8,701
    )
    
    
    (37,637
    )Contributions to pension plans
    
    
    (2,689
    )
    
    
    (4,514
    )Decrease in income taxes payable
    
    
    (6,120
    )
    
    
    (1,718
    )Other
    
    
    
    
    
    
    (7
    )Net cash provided by operating activities
    
    
    147,793
    
    
    
    16,863Cash Flows from Investing ActivitiesExpenditures for property and equipment
    
    
    (26,816
    )
    
    
    (23,366
    )Expenditures for equipment on operating leases
    
    
    (16,897
    )
    
    
    (17,118
    )Proceeds from the sale of property and equipment and equipment on operating leases
    
    
    8,398
    
    
    
    7,952Proceeds from life insurance
    
    
    3,915
    
    
    
    4,781Other
    
    
    (4,417
    )
    
    
    (1,251
    )Net cash used in investing activities
    
    
    (35,817
    )
    
    
    (29,002
    )Cash Flows from Financing ActivitiesRepayment of other borrowings
    
    
    (5,788
    )
    
    
    (54
    )Debt issuance costs
    
    
    (3,920
    )
    
    
    Debt modification costs
    
    
    
    
    
    
    (16,430
    )Corporate debt  issuances
    
    
    151,780
    
    
    
    Corporate debt  repayments
    
    
    (170,840
    )
    
    
    (1,255
    )Non-corporate debt  issuances
    
    
    20,680
    
    
    
    158,244Non-corporate debt  repayments
    
    
    (18,782
    )
    
    
    (166,211
    )Dividends paid
    
    
    (12,131
    )
    
    
    (15,141
    )Proceeds from stock option exercises
    
    
    1,586
    
    
    
    16,858Excess tax benefits from stock based payments arrangements
    
    
    265
    
    
    
    1,586Purchase of treasury shares
    
    
    (316,988
    )
    
    
    (99,873
    )Net cash used in financing activities
    
    
    (354,138
    )
    
    
    (122,276
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    (542
    )
    
    
    7,467Net decrease in cash and cash equivalents
    
    
    (242,704
    )
    
    
    (126,948
    )Cash and cash equivalents at beginning of year
    
    
    349,237
    
    
    
    414,239Cash and cash equivalents at end of period
    
    $
    106,533
    
    
    $
    287,291Supplemental cash flow information:Cash paid for income taxes
    
    $
    28,896
    
    
    $
    28,672Cash paid for interest on corporate and non-corporate debt
    
    $
    50,653
    
    
    $
    42,222Non-cash investing and financing activities:Property and equipment acquired under capital leases
    
    $
    2,858
    
    
    $
    10,029
 See notes to consolidated financial statements.
 
 *
    
    See Note 14 for further discussion regarding a change in cash flow presentation relating to our lease receivables. 6




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##### 



IKON OFFICE SOLUTIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 1. BASIS OF PRESENTATION
    2. RECENT ACCOUNTING STANDARDS
 Determination of the Useful Life of Intangible Assets Goodwill and Other Intangible Assets Business Combinations
 7




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##### 



Disclosures about Derivative Instruments and
Hedging Activities Accounting for Derivative Instruments and Hedging Activities
 Business Combinations
 Non-controlling Interests in Consolidated
Financial Statements
 The Fair Value Option for Financial Assets and
Financial Liabilities  Including an Amendment of FASB Statement No. 115
 Fair Value Measurements Effective Date of FASB Statement No. 157,
 3. ACCOUNTING FOR STOCK BASED COMPENSATION
 Stock Options
   8




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##### 



WeightedAverageShares
    
    PriceOutstanding at September 30, 2007
    
    
    7,656
    
    
    $
    11.60Granted
    
    
    1,456
    
    
    
    12.48Exercised
    
    
    190
    
    
    
    8.35Cancelled
    
    
    636
    
    
    
    21.17Outstanding at June 30, 2008
    
    
    8,286
    
    
    $
    11.10Exercisable at June 30, 2008
    
    
    6,302
    *
    
    $
    10.41
 
 *
    
    4,608 of the 6,302 options exercisable at June 30, 2008 have an exercise price that is lower than
the closing price of the Companys stock on June 30, 2008.    Three Months Ended June 30
    
    
    Nine Months Ended June 302008
    
    
    2007
    
    
    2008
    
    
    2007Expected dividend yield (1)
    
    
    1.7
    %
    
    
    1.0
    %
    
    
    1.3
    %
    
    
    1.0
    %Expected volatility rate (2)
    
    
    33.8
    %
    
    
    25.2
    %
    
    
    29.0
    %
    
    
    24.7
    %Expected lives (3)
    
    5.0 years
    
    5.0 years
    
    5.0 years
    
    5.0 yearsRisk-free interest rate (4)
    
    
    3.0
    %
    
    
    4.5
    %
    
    
    3.5
    %
    
    
    4.5
    %
 
 (1)
    
    Dividend yield assumption is based on the Companys history and expectation of future
dividend payouts.(2)
    
    The expected volatility rate is determined using historical price observations at regular
intervals since April 1, 2004, which reflects our current business model by utilizing the date
at which we sold our U.S. leasing business, April 1, 2004, as the historical starting point.(3)
    
    The expected life of employee stock options is based on both historical exercise pattern and
from calculating an expected term from the option date to full exercise for the options
granted.(4)
    
    Risk-free interest rate assumption is based upon the interest rates published by the Federal
Reserve for U.S. Treasury Securities with a five-year life.  9




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##### 



Options Outstanding
    
    
    Options ExercisableWeighted-
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Weighted-Number
    
    
    Weighted-
    
    
    Average
    
    
    
    
    
    
    Number
    
    
    Weighted-
    
    
    AverageOutstanding
    
    
    Average
    
    
    Remaining
    
    
    Aggregate
    
    
    Exercisable
    
    
    Average
    
    
    Remaining
    
    
    AggregateRange of
    
    at June 30,
    
    
    Exercise
    
    
    Contractual
    
    
    Intrinsic
    
    
    at June 30,
    
    
    Exercise
    
    
    Contractual
    
    
    IntrinsicExercise Prices
    
    2008
    
    
    Price
    
    
    Life
    
    
    Value
    
    
    2008
    
    
    Price
    
    
    Life
    
    
    Value$2.50   5.40
    
    
    512
    
    
    $
    3.31
    
    
    7.2 years
    
    $
    4,080
    
    
    
    512
    
    
    $
    3.31
    
    
    7.2 years
    
    $
    4,0805.41  7.95
    
    
    856
    
    
    
    7.18
    
    
    
    3.6
    
    
    
    3,510
    
    
    
    856
    
    
    
    7.18
    
    
    
    3.6
    
    
    
    3,5107.96  11.25
    
    
    3,748
    
    
    
    10.42
    
    
    
    6.1
    
    
    
    3,217
    
    
    
    3,240
    
    
    
    10.46
    
    
    
    5.9
    
    
    
    2,66811.26  13.70
    
    
    1,991
    
    
    
    12.80
    
    
    
    6.7
    
    
    
    
    
    
    
    877
    
    
    
    11.70
    
    
    
    4.0
    
    
    
    13.71  33.50
    
    
    1,179
    
    
    
    16.60
    
    
    
    5.0
    
    
    
    
    
    
    
    817
    
    
    
    16.64
    
    
    
    3.7
    
    
    
    8,286
    
    
    $
    11.10
    
    
    5.9 years
    
    $
    10,807
    
    
    
    6,302
    
    
    $
    10.41
    
    
    5.1 years
    
    $
    10,258
  Stock Awards
    4. INCOME TAXES
 Accounting for Uncertainty in Income
Taxes
    10




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##### 



5. GOODWILL
  IKON North
    
    
    IKONAmerica
    
    
    Europe
    
    
    TotalGoodwill at September 30, 2007
    
    $
    964,517
    
    
    $
    368,732
    
    
    $
    1,333,249Translation adjustment
    
    
    (329
    )
    
    
    1,285
    
    
    
    956Acquisitions
    
    
    500
    
    
    
    1,739
    
    
    
    2,239Goodwill at June 30, 2008
    
    $
    964,688
    
    
    $
    371,756
    
    
    $
    1,336,444
  6. EARNINGS PER COMMON SHARE
  Three Months Ended
    
    
    Nine Months EndedJune 30
    
    
    June 302008
    
    
    2007
    
    
    2008
    
    
    2007Numerator:Numerator for basic & diluted
earnings per common share  net
income
    
    $
    32,080
    
    
    $
    29,066
    
    
    $
    69,542
    
    
    $
    86,856Denominator:Denominator for basic
earnings per common share 
weighted average common
shares
    
    
    93,889
    
    
    
    124,818
    
    
    
    100,453
    
    
    
    126,131Effect of dilutive securities:Employee stock awards
    
    
    468
    
    
    
    748
    
    
    
    376
    
    
    
    711Employee stock options
    
    
    137
    
    
    
    997
    
    
    
    238
    
    
    
    1,178Dilutive potential common shares
    
    
    605
    
    
    
    1,745
    
    
    
    614
    
    
    
    1,889Denominator for diluted earnings
per common share  adjusted
weighted average common shares
    
    
    94,494
    
    
    
    126,563
    
    
    
    101,067
    
    
    
    128,020Basic earnings per common share
    
    $
    0.34
    
    
    $
    0.23
    
    
    $
    0.69
    
    
    $
    0.69Diluted earnings per common share
    
    $
    0.34
    
    
    $
    0.23
    
    
    $
    0.69
    
    
    $
    0.68
   7. DEBT
  11




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##### 



8. SHARE REPURCHASES
  9. COMPREHENSIVE INCOME
  Three Months Ended
    
    
    Nine Months EndedJune 30
    
    
    June 302008
    
    
    2007
    
    
    2008
    
    
    2007Net income
    
    $
    32,080
    
    
    $
    29,066
    
    
    $
    69,542
    
    
    $
    86,856Foreign currency translation adjustments
    
    
    2,098
    
    
    
    20,797
    
    
    
    (4,610
    )
    
    
    42,281Gain on derivative financial instruments
    
    
    1,871
    
    
    
    
    
    
    
    1,320
    
    
    
    Total comprehensive income
    
    $
    36,049
    
    
    $
    49,863
    
    
    $
    66,252
    
    
    $
    129,137
 10. CONTINGENCIES
 Environmental and Legal
  12




---



##### 



Other Contingencies
    13




---



##### 



11. SEGMENT REPORTING
  *CorporateIKON North
    
    
    IKON
    
    
    andAmerica
    
    
    Europe
    
    
    Eliminations
    
    
    TotalThree Months Ended June 30, 2008Revenues:Equipment
    
    $
    371,118
    
    
    $
    73,202
    
    
    $
    
    
    
    $
    444,320Customer service and supplies
    
    
    296,906
    
    
    
    49,934
    
    
    
    
    
    
    
    346,840Managed and professional services
    
    
    198,522
    
    
    
    12,126
    
    
    
    
    
    
    
    210,648Rental and fees
    
    
    30,849
    
    
    
    1,470
    
    
    
    
    
    
    
    32,319Other
    
    
    
    
    
    
    16,351
    
    
    
    
    
    
    
    16,351Total revenues
    
    
    897,395
    
    
    
    153,083
    
    
    
    
    
    
    
    1,050,478Cost of Revenues:Equipment
    
    
    283,598
    
    
    
    49,332
    
    
    
    
    
    
    
    332,930Customer service and supplies
    
    
    160,945
    
    
    
    35,794
    
    
    
    
    
    
    
    196,739Managed and professional services
    
    
    137,904
    
    
    
    10,917
    
    
    
    
    
    
    
    148,821Rental and fees
    
    
    6,928
    
    
    
    275
    
    
    
    
    
    
    
    7,203Other
    
    
    
    
    
    
    10,538
    
    
    
    
    
    
    
    10,538Total cost of revenues
    
    
    589,375
    
    
    
    106,856
    
    
    
    
    
    
    
    696,231Gross Profit:Equipment
    
    
    87,520
    
    
    
    23,870
    
    
    
    
    
    
    
    111,390Customer service and supplies
    
    
    135,961
    
    
    
    14,140
    
    
    
    
    
    
    
    150,101Managed and professional services
    
    
    60,618
    
    
    
    1,209
    
    
    
    
    
    
    
    61,827Rental and fees
    
    
    23,921
    
    
    
    1,195
    
    
    
    
    
    
    
    25,116Other
    
    
    
    
    
    
    5,813
    
    
    
    
    
    
    
    5,813Total gross profit
    
    
    308,020
    
    
    
    46,227
    
    
    
    
    
    
    
    354,247Selling and administrative
    
    
    233,544
    
    
    
    37,858
    
    
    
    20,446
    
    
    
    291,848Restructuring benefit
    
    
    (1,051
    )
    
    
    
    
    
    
    
    
    
    
    (1,051
    )Operating income
    
    
    75,527
    
    
    
    8,369
    
    
    
    (20,446
    )
    
    
    63,450Loss from the early extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    5,702
    
    
    
    5,702Interest income
    
    
    
    
    
    
    
    
    
    
    992
    
    
    
    992Interest expense
    
    
    
    
    
    
    
    
    
    
    15,537
    
    
    
    15,537Income before taxes on income
    
    $
    75,527
    
    
    $
    8,369
    
    
    $
    (40,693
    )
    
    $
    43,203
 *CorporateIKON North
    
    
    IKON
    
    
    andAmerica
    
    
    Europe
    
    
    Eliminations
    
    
    TotalThree Months Ended June 30, 2007Revenues:Equipment
    
    $
    387,858
    
    
    $
    59,869
    
    
    $
    
    
    
    $
    447,727Customer service and supplies
    
    
    301,895
    
    
    
    44,032
    
    
    
    
    
    
    
    345,927Managed and professional services
    
    
    189,043
    
    
    
    14,329
    
    
    
    
    
    
    
    203,372Rental and fees
    
    
    29,869
    
    
    
    2,085
    
    
    
    
    
    
    
    31,954Other
    
    
    
    
    
    
    16,036
    
    
    
    
    
    
    
    16,036Total revenues
    
    
    908,665
    
    
    
    136,351
    
    
    
    
    
    
    
    1,045,016Cost of Revenues:Equipment
    
    
    298,612
    
    
    
    40,504
    
    
    
    
    
    
    
    339,116Customer service and supplies
    
    
    162,425
    
    
    
    30,688
    
    
    
    
    
    
    
    193,113Managed and professional services
    
    
    134,433
    
    
    
    12,478
    
    
    
    
    
    
    
    146,911Rental and fees
    
    
    8,120
    
    
    
    224
    
    
    
    
    
    
    
    8,344Other
    
    
    
    
    
    
    10,574
    
    
    
    
    
    
    
    10,574Total cost of revenues
    
    
    603,590
    
    
    
    94,468
    
    
    
    
    
    
    
    698,058Gross Profit:Equipment
    
    
    89,246
    
    
    
    19,365
    
    
    
    
    
    
    
    108,611Customer service and supplies
    
    
    139,470
    
    
    
    13,344
    
    
    
    
    
    
    
    152,814
 14




---



##### 



*CorporateIKON North
    
    
    IKON
    
    
    andAmerica
    
    
    Europe
    
    
    Eliminations
    
    
    TotalManaged and professional services
    
    
    54,610
    
    
    
    1,851
    
    
    
    
    
    
    
    56,461Rental and fees
    
    
    21,749
    
    
    
    1,861
    
    
    
    
    
    
    
    23,610Other
    
    
    
    
    
    
    5,462
    
    
    
    
    
    
    
    5,462Total gross profit
    
    
    305,075
    
    
    
    41,883
    
    
    
    
    
    
    
    346,958Selling and administrative
    
    
    235,951
    
    
    
    34,345
    
    
    
    23,077
    
    
    
    293,373Operating income
    
    
    69,124
    
    
    
    7,538
    
    
    
    (23,077
    )
    
    
    53,585Interest income
    
    
    
    
    
    
    
    
    
    
    2,473
    
    
    
    2,473Interest expense
    
    
    
    
    
    
    
    
    
    
    12,860
    
    
    
    12,860Income before taxes on income
    
    $
    69,124
    
    
    $
    7,538
    
    
    $
    (33,464
    )
    
    $
    43,198
  *CorporateIKON North
    
    
    IKON
    
    
    andAmerica
    
    
    Europe
    
    
    Eliminations
    
    
    TotalNine Months Ended June 30, 2008Revenues:Equipment
    
    $
    1,085,495
    
    
    $
    206,108
    
    
    $
    
    
    
    $
    1,291,603Customer service and supplies
    
    
    894,590
    
    
    
    146,818
    
    
    
    
    
    
    
    1,041,408Managed and professional services
    
    
    588,504
    
    
    
    39,076
    
    
    
    
    
    
    
    627,580Rental and fees
    
    
    91,884
    
    
    
    4,919
    
    
    
    
    
    
    
    96,803Other
    
    
    
    
    
    
    50,339
    
    
    
    
    
    
    
    50,339Total revenues
    
    
    2,660,473
    
    
    
    447,260
    
    
    
    
    
    
    
    3,107,733Cost of Revenues:Equipment
    
    
    820,012
    
    
    
    137,403
    
    
    
    
    
    
    
    957,415Customer service and supplies
    
    
    497,371
    
    
    
    104,116
    
    
    
    
    
    
    
    601,487Managed and professional services
    
    
    413,540
    
    
    
    35,569
    
    
    
    
    
    
    
    449,109Rental and fees
    
    
    21,615
    
    
    
    721
    
    
    
    
    
    
    
    22,336Other
    
    
    
    
    
    
    32,685
    
    
    
    
    
    
    
    32,685Total cost of revenues
    
    
    1,752,538
    
    
    
    310,494
    
    
    
    
    
    
    
    2,063,032Gross Profit:Equipment
    
    
    265,483
    
    
    
    68,705
    
    
    
    
    
    
    
    334,188Customer service and supplies
    
    
    397,219
    
    
    
    42,702
    
    
    
    
    
    
    
    439,921Managed and professional services
    
    
    174,964
    
    
    
    3,507
    
    
    
    
    
    
    
    178,471Rental and fees
    
    
    70,269
    
    
    
    4,198
    
    
    
    
    
    
    
    74,467Other
    
    
    
    
    
    
    17,654
    
    
    
    
    
    
    
    17,654Total gross profit
    
    
    907,935
    
    
    
    136,766
    
    
    
    
    
    
    
    1,044,701Selling and administrative
    
    
    686,453
    
    
    
    112,212
    
    
    
    87,672
    
    
    
    886,337Restructuring charge
    
    
    5,561
    
    
    
    
    
    
    
    
    
    
    
    5,561Operating income
    
    
    215,921
    
    
    
    24,554
    
    
    
    (87,672
    )
    
    
    152,803Loss from the early extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    5,702
    
    
    
    5,702Interest income
    
    
    
    
    
    
    
    
    
    
    4,273
    
    
    
    4,273Interest expense
    
    
    
    
    
    
    
    
    
    
    45,814
    
    
    
    45,814Income before taxes on income
    
    $
    215,921
    
    
    $
    24,554
    
    
    $
    (134,915
    )
    
    $
    105,560
 *CorporateIKON North
    
    
    IKON
    
    
    andAmerica
    
    
    Europe
    
    
    Eliminations
    
    
    TotalNine Months Ended June 30, 2007Revenues:Equipment
    
    $
    1,145,205
    
    
    $
    172,445
    
    
    $
    
    
    
    $
    1,317,650Customer service and supplies
    
    
    908,919
    
    
    
    128,245
    
    
    
    
    
    
    
    1,037,164Managed and professional services
    
    
    550,959
    
    
    
    42,893
    
    
    
    
    
    
    
    593,852Rental and fees
    
    
    95,722
    
    
    
    6,216
    
    
    
    
    
    
    
    101,938Other
    
    
    
    
    
    
    53,032
    
    
    
    
    
    
    
    53,032Total revenues
    
    
    2,700,805
    
    
    
    402,831
    
    
    
    
    
    
    
    3,103,636Cost of Revenues:Equipment
    
    
    875,693
    
    
    
    113,516
    
    
    
    
    
    
    
    989,209Customer service and supplies
    
    
    500,408
    
    
    
    89,626
    
    
    
    
    
    
    
    590,034Managed and professional services
    
    
    395,443
    
    
    
    37,931
    
    
    
    
    
    
    
    433,374Rental and fees
    
    
    26,088
    
    
    
    651
    
    
    
    
    
    
    
    26,739Other
    
    
    
    
    
    
    35,201
    
    
    
    
    
    
    
    35,201
 15




---



##### 



*CorporateIKON North
    
    
    IKON
    
    
    andAmerica
    
    
    Europe
    
    
    Eliminations
    
    
    TotalTotal cost of revenues
    
    
    1,797,632
    
    
    
    276,925
    
    
    
    
    
    
    
    2,074,557Gross Profit:Equipment
    
    
    269,512
    
    
    
    58,929
    
    
    
    
    
    
    
    328,441Customer service and supplies
    
    
    408,511
    
    
    
    38,619
    
    
    
    
    
    
    
    447,130Managed and professional services
    
    
    155,516
    
    
    
    4,962
    
    
    
    
    
    
    
    160,478Rental and fees
    
    
    69,634
    
    
    
    5,565
    
    
    
    
    
    
    
    75,199Other
    
    
    
    
    
    
    17,831
    
    
    
    
    
    
    
    17,831Total gross profit
    
    
    903,173
    
    
    
    125,906
    
    
    
    
    
    
    
    1,029,079Selling and administrative
    
    
    677,160
    
    
    
    101,231
    
    
    
    96,399
    
    
    
    874,790Operating income
    
    
    226,013
    
    
    
    24,675
    
    
    
    (96,399
    )
    
    
    154,289Interest income
    
    
    
    
    
    
    
    
    
    
    8,872
    
    
    
    8,872Interest expense
    
    
    
    
    
    
    
    
    
    
    37,842
    
    
    
    37,842Income before taxes on income
    
    $
    226,013
    
    
    $
    24,675
    
    
    $
    (125,369
    )
    
    $
    125,319
  *
    
    Corporate and Eliminations, which is not treated as a business segment, includes certain
corporate and administrative functions such as finance, legal and customer support.
 12. RESTRUCTURING
   Non-cashCash
    
    EmployeeFiscal 2008
    
    Payments
    
    Compensation
    
    Fiscal 2008
    
    Balance atCharge
    
    Fiscal 2008
    
    Fiscal 2008
    
    Adjustments*
    
    June 30, 2008Severance
    
    $
    6,683
    
    
    $
    (1,699
    )
    
    $
    (405
    )
    
    $
    (1,122
    )
    
    $
    3,457
  Fiscal 2008
    
    Fiscal 2009
    
    Fiscal 2010
    
    Total$1,134
    
    $
    1,751
    
    
    $
    572
    
    
    $
    3,457
  Remaining EmployeesFiscal 2008
    
    
    Fiscal 2008
    
    
    yet to beEmployees
    
    
    Employee
    
    
    Employee
    
    
    TerminatedHeadcount Reductions
    
    Affected
    
    
    Terminations
    
    
    Adjustments*
    
    
    at June 30, 2008U.S. field and
operations
organizations
    
    
    251
    
    
    
    141
    
    
    
    (58
    )
    
    
    52Corporate staff
    
    
    35
    
    
    
    34
    
    
    
    (1
    )
    
    
    Total
    
    
    286
    
    
    
    175
    
    
    
    (59
    )
    
    
    52
 16




---



##### 



*
    
    The adjustments in the tables above reflect our revised estimates based primarily on the
impact of voluntary employee turnover and the impact of employees who transferred into open
positions once they were informed that their position was being eliminated.
 13. PENSION PLANS
  Three Months Ended June 302008
    
    
    2007U.S.
    
    
    Non-U.S.
    
    
    U.S.
    
    
    Non-U.S.Plans
    
    Plans
    
    Plans
    
    PlansService cost
    
    $
    
    
    
    $
    799
    
    
    $
    
    
    
    $
    747Interest cost
    
    
    8,665
    
    
    
    1,384
    
    
    
    8,358
    
    
    
    1,279Expected return on assets
    
    
    (8,930
    )
    
    
    (1,537
    )
    
    
    (9,193
    )
    
    
    (1,451
    )Amortization of prior service cost
    
    
    
    
    
    
    (59
    )
    
    
    
    
    
    
    (54
    )Recognized net actuarial loss
    
    
    755
    
    
    
    101
    
    
    
    758
    
    
    
    256Net periodic pension cost (income)
    
    $
    490
    
    
    $
    688
    
    
    $
    (77
    )
    
    $
    777
 Nine Months Ended June 302008
    
    
    2007U.S.
    
    
    Non-U.S.
    
    
    U.S.
    
    
    Non-U.S.Plans
    
    
    Plans
    
    
    Plans
    
    
    PlansService cost
    
    $
    
    
    
    $
    2,424
    
    
    $
    
    
    
    $
    2,167Interest cost
    
    
    25,593
    
    
    
    4,205
    
    
    
    24,740
    
    
    
    3,756Expected return on assets
    
    
    (26,535
    )
    
    
    (4,670
    )
    
    
    (27,372
    )
    
    
    (4,262
    )Amortization of prior service cost
    
    
    
    
    
    
    (179
    )
    
    
    
    
    
    
    (157
    )Recognized net actuarial loss
    
    
    2,132
    
    
    
    307
    
    
    
    2,106
    
    
    
    752Net periodic pension cost (income)
    
    $
    1,190
    
    
    $
    2,087
    
    
    $
    (526
    )
    
    $
    2,256
   14. RECLASSIFICATION
 Statement of Cash Flows
  17




---



##### 



Nine months endedJune 30, 2007
    
    
    
    
    
    Nine months endedAs previously
    
    
    
    
    
    June 30, 2007reported
    
    Adjustment
    
    As revisedCash Flows from Operating ActivitiesDecrease in finance lease receivables
    
    
    
    
    
    
    7,821
    
    
    
    7,821Total net cash used in operating activities
    
    
    9,042
    
    
    
    7,821
    
    
    
    16,863Cash Flows from Investing ActivitiesProceeds from the sale of lease receivables
    
    
    160,181
    
    
    
    (160,181
    )
    
    
    Lease receivables  additions
    
    
    (226,494
    )
    
    
    226,494
    
    
    
    Lease receivables  collections
    
    
    74,134
    
    
    
    (74,134
    )
    
    
    Total net cash used in investing activities
    
    
    (21,181
    )
    
    
    (7,821
    )
    
    
    (29,002
    )The table below provides a reconciliation of the amounts previously reported for the impacted
line items to the current presentation discussed above for the three months ended December 31, 2007
and 2006.Three Months Ended
    
    
    
    
    
    Three Months EndedDecember 31, 2007
    
    
    
    
    
    Ended December 31,As previously
    
    
    
    
    
    2007reported
    
    Adjustment
    
    As revisedCash Flows from Operating ActivitiesIncrease in finance lease receivables
    
    
    
    
    
    
    (2,360
    )
    
    
    (2,360
    )Total net cash used in operating activities
    
    
    (15,707
    )
    
    
    (2,360
    )
    
    
    (18,067
    )Cash Flows from Investing ActivitiesProceeds from the sale of lease receivables
    
    
    52,325
    
    
    
    (52,325
    )
    
    
    Lease receivables  additions
    
    
    (82,696
    )
    
    
    82,696
    
    
    
    Lease receivables  collections
    
    
    28,011
    
    
    
    (28,011
    )
    
    
    Total net cash used in investing activities
    
    
    (13,331
    )
    
    
    2,360
    
    
    
    (10,971
    )Three Months Ended
    
    
    
    
    
    Three Months EndedDecember 31, 2006
    
    
    
    
    
    Ended December 31,As previously
    
    
    
    
    
    2006reported
    
    Adjustment
    
    As revisedCash Flows from Operating ActivitiesIncrease in finance lease receivables
    
    
    
    
    
    
    (2,847
    )
    
    
    (2,847
    )Total net cash used in operating activities
    
    
    (8,440
    )
    
    
    (2,847
    )
    
    
    (11,287
    )Cash Flows from Investing ActivitiesProceeds from the sale of lease receivables
    
    
    53,481
    
    
    
    (53,481
    )
    
    
    Lease receivables  additions
    
    
    (80,925
    )
    
    
    80,925
    
    
    
    Lease receivables  collections
    
    
    24,597
    
    
    
    (24,597
    )
    
    
    Total net cash used in investing activities
    
    
    (9,994
    )
    
    
    2,847
    
    
    
    (7,147
    )The table below provides a reconciliation of the fiscal 2007, 2006, 2005 and 2004 presentation
of the impacted cash flow line items discussed above, on an as reported basis as shown in our
Annual Report on Form 10-K, compared to an as adjusted basis, which reclassifies the impacted cash
flow line items from investing activities to operating activities. In future filings, any
comparative period presentations will be revised accordingly the next time those periods are
presented.Fiscal 2007As previously
    
    
    
    
    
    Fiscal 2007reported
    
    Adjustment
    
    As revisedCash Flows from Operating ActivitiesDecrease in finance lease receivables
    
    
    
    
    
    
    4,019
    
    
    
    4,019Total net cash provided by operating activities
    
    
    167,881
    
    
    
    4,019
    
    
    
    171,900Cash Flows from Investing ActivitiesProceeds from the sale of lease receivables
    
    
    238,618
    
    
    
    (238,618
    )
    
    
    Lease receivables  additions
    
    
    (332,305
    )
    
    
    332,305
    
    
    
    Lease receivables  collections
    
    
    97,706
    
    
    
    (97,706
    )
    
    
    Total net cash used in investing activities
    
    
    (45,138
    )
    
    
    (4,019
    )
    
    
    (49,157
    )Fiscal 2006As previously
    
    
    
    
    
    Fiscal 2006reported
    
    Adjustment
    
    As revisedCash Flows from Operating ActivitiesDecrease in finance lease receivables
    
    
    
    
    
    
    145,989
    
    
    
    145,989Total net cash provided by continuing operating activities
    
    
    100,312
    
    
    
    145,989
    
    
    
    246,301Cash Flows from Investing ActivitiesProceeds from the sale of lease receivables
    
    
    201,687
    
    
    
    (201,687
    )
    
    
    
 18




---



##### 



Fiscal 2006As previously
    
    
    
    
    
    Fiscal 2006reported
    
    Adjustment
    
    As revisedLease receivables  additions
    
    
    (348,119
    )
    
    
    348,119
    
    
    
    Lease receivables  collections
    
    
    292,421
    
    
    
    (292,421
    )
    
    
    Total net cash provided by investing activities
    
    
    327,558
    
    
    
    (145,989
    )
    
    
    181,569
 Fiscal 2005As previously
    
    
    
    
    
    Fiscal 2005reported
    
    Adjustment
    
    As revisedCash Flows from Operating ActivitiesDecrease in finance lease receivables
    
    
    
    
    
    
    394,720
    
    
    
    394,720Total net cash provided by continuing operating activities
    
    
    10,686
    
    
    
    394,720
    
    
    
    405,406Cash Flows from Investing ActivitiesProceeds from the sale of lease receivables
    
    
    249,083
    
    
    
    (249,083
    )
    
    
    Lease receivables  additions
    
    
    (385,630
    )
    
    
    385,630
    
    
    
    Lease receivables  collections
    
    
    531,267
    
    
    
    (531,267
    )
    
    
    Total net cash provided by continuing investing activities
    
    
    423,666
    
    
    
    (394,720
    )
    
    
    28,946
 Fiscal 2004As previously
    
    
    
    
    
    Fiscal 2004reported
    
    Adjustment
    
    As revisedCash Flows from Operating ActivitiesDecrease in finance lease receivables
    
    
    
    
    
    
    365,111
    
    
    
    365,111Total net cash used in continuing operating activities
    
    
    (365,385
    )
    
    
    365,111
    
    
    
    (274
    )Cash Flows from Investing ActivitiesProceeds from the sale of lease receivables
    
    
    383,381
    
    
    
    (383,381
    )
    
    
    Lease receivables  additions
    
    
    (1,191,212
    )
    
    
    1,191,212
    
    
    
    Lease receivables  collections
    
    
    1,172,942
    
    
    
    (1,172,942
    )
    
    
    Total net cash provided by continuing investing activities
    
    
    2,128,439
    
    
    
    (365,111
    )
    
    
    1,763,328
  19




---



##### 



As revisedFiscal Year Ended September 302007
    
    
    2006
    
    
    2005
    
    
    2004(in thousands)Cash Flows from Operating ActivitiesNet income
    
    $
    114,487
    
    
    $
    101,409
    
    
    $
    60,666
    
    
    $
    83,694Net loss from discontinued operations
    
    
    
    
    
    
    47
    
    
    
    12,529
    
    
    
    4,615Income from continuing operations
    
    
    114,487
    
    
    
    101,456
    
    
    
    73,195
    
    
    
    88,309Additions (deductions) to reconcile net income to net cash
provided by (used in) operating activities:Depreciation
    
    
    68,719
    
    
    
    70,070
    
    
    
    73,110
    
    
    
    81,894Amortization
    
    
    1,010
    
    
    
    541
    
    
    
    932
    
    
    
    496Other non-cash items
    
    
    2,394
    
    
    
    2,759
    
    
    
    4,324
    
    
    
    8,074(Gain) loss from the divestiture of businesses and assets
    
    
    
    
    
    
    (11,497
    )
    
    
    (11,531
    )
    
    
    11,427Loss on disposal of property and equipment
    
    
    759
    
    
    
    4,057
    
    
    
    3,729
    
    
    
    5,125Provision for losses on accounts and lease receivables
    
    
    6,940
    
    
    
    2,602
    
    
    
    17,166
    
    
    
    35,910Restructuring and asset impairment (benefit) charge
    
    
    
    
    
    
    (322
    )
    
    
    10,543
    
    
    
    Provision for deferred income taxes
    
    
    6,333
    
    
    
    (95,261
    )
    
    
    (102,972
    )
    
    
    (289,380
    )Stock based compensation expense
    
    
    9,637
    
    
    
    9,197
    
    
    
    10,060
    
    
    
    515Excess tax benefits from stock based compensation
arrangements
    
    
    (1,740
    )
    
    
    (4,334
    )
    
    
    (1,514
    )
    
    
    Pension expense
    
    
    2,372
    
    
    
    27,603
    
    
    
    43,079
    
    
    
    51,065Loss from the early extinguishment of debt
    
    
    
    
    
    
    5,535
    
    
    
    6,034
    
    
    
    35,906Changes in operating assets and liabilities, net of
divestiture of businesses:Decrease (increase) in accounts receivable
    
    
    40,624
    
    
    
    94,459
    
    
    
    37,208
    
    
    
    (252,755
    )Decrease in finance lease receivables
    
    
    4,019
    
    
    
    145,989
    
    
    
    394,720
    
    
    
    365,111(Increase) decrease in inventories
    
    
    (67,893
    )
    
    
    29,204
    
    
    
    (14,116
    )
    
    
    (5,951
    )(Increase) decrease in prepaid expenses and other current
assets
    
    
    (3
    )
    
    
    2,704
    
    
    
    8,003
    
    
    
    (39,804
    )Increase (decrease) in accounts payable
    
    
    33,523
    
    
    
    (19,868
    )
    
    
    (68,557
    )
    
    
    57,838(Decrease) increase in deferred revenue
    
    
    (12,858
    )
    
    
    3,220
    
    
    
    2,058
    
    
    
    9,944Decrease in accrued expenses
    
    
    (28,040
    )
    
    
    (10,622
    )
    
    
    (1,614
    )
    
    
    (54,638
    )Contributions to pension plans
    
    
    (9,725
    )
    
    
    (100,210
    )
    
    
    (44,108
    )
    
    
    (97,500
    )Increase (decrease) in taxes payable
    
    
    1,262
    
    
    
    (8,516
    )
    
    
    (26,255
    )
    
    
    (9,408
    )Decrease in accrued restructuring
    
    
    
    
    
    
    (1,534
    )
    
    
    (8,306
    )
    
    
    Other
    
    
    80
    
    
    
    (931
    )
    
    
    218
    
    
    
    (2,452
    )Net cash provided by (used in) continuing operations
    
    
    171,900
    
    
    
    246,301
    
    
    
    405,406
    
    
    
    (274
    )Net cash used in discontinued operations
    
    
    
    
    
    
    (1,159
    )
    
    
    (13,076
    )
    
    
    (6,742
    )Net cash provided by (used in) operating activities
    
    
    171,900
    
    
    
    245,142
    
    
    
    392,330
    
    
    
    (7,016
    )Cash Flows from Investing ActivitiesProceeds from the divestiture of businesses and assets
    
    
    
    
    
    
    242,043
    
    
    
    23,107
    
    
    
    1,849,148Expenditures for property and equipment
    
    
    (34,269
    )
    
    
    (37,470
    )
    
    
    (28,000
    )
    
    
    (37,725
    )Expenditures for equipment on operating leases
    
    
    (29,600
    )
    
    
    (40,705
    )
    
    
    (44,149
    )
    
    
    (52,459
    )Proceeds from the sale of equipment on operating leases
    
    
    11,015
    
    
    
    21,647
    
    
    
    23,677
    
    
    
    12,003Proceeds from life insurance (cash surrender value)
    
    
    5,821
    
    
    
    5,177
    
    
    
    55,343
    
    
    
    Other
    
    
    (2,124
    )
    
    
    (9,123
    )
    
    
    (1,032
    )
    
    
    (7,639
    )Net cash (used in) provided by continuing operations
    
    
    (49,157
    )
    
    
    181,569
    
    
    
    28,946
    
    
    
    1,763,328Net cash provided by (used in) discontinued operations
    
    
    
    
    
    
    
    
    
    
    1,558
    
    
    
    (1,319
    )Net cash (used in) provided by investing activities
    
    
    (49,157
    )
    
    
    181,569
    
    
    
    30,504
    
    
    
    1,762,009Cash Flows from Financing ActivitiesShort-term corporate debt repayments, net
    
    
    1
    
    
    
    (30
    )
    
    
    (774
    )
    
    
    (3,167
    )Repayment of other borrowings
    
    
    (67
    )
    
    
    (7,786
    )
    
    
    (3,429
    )
    
    
    (60,047
    )Proceeds from the issuance of long-term corporate debt
    
    
    
    
    
    
    
    
    
    
    227,049
    
    
    
    1,055Debt modification costs
    
    
    (16,430
    )
    
    
    
    
    
    
    
    
    
    
    Debt issuance costs
    
    
    
    
    
    
    (2,510
    )
    
    
    (4,140
    )
    
    
    Long-term corporate debt repayments
    
    
    (2,598
    )
    
    
    (138,748
    )
    
    
    (300,723
    )
    
    
    (327,929
    )Non-corporate debt  issuances
    
    
    158,244
    
    
    
    23,964
    
    
    
    18,756
    
    
    
    440,974Non-corporate debt  repayments
    
    
    (166,225
    )
    
    
    (142,452
    )
    
    
    (366,481
    )
    
    
    (1,676,603
    )Dividends paid
    
    
    (20,048
    )
    
    
    (21,009
    )
    
    
    (22,393
    )
    
    
    (23,476
    )Decrease in restricted cash
    
    
    
    
    
    
    2,127
    
    
    
    8,760
    
    
    
    68,815Proceeds from option exercises
    
    
    17,944
    
    
    
    22,182
    
    
    
    4,787
    
    
    
    10,154Excess tax benefit from stock based compensation
arrangements
    
    
    1,740
    
    
    
    4,334
    
    
    
    1,514
    
    
    
    Purchase of treasury shares
    
    
    (174,968
    )
    
    
    (131,190
    )
    
    
    (86,943
    )
    
    
    (78,124
    )Other
    
    
    
    
    
    
    (49
    )
    
    
    
    
    
    
    Net cash used in financing activities
    
    
    (202,407
    )
    
    
    (391,167
    )
    
    
    (524,017
    )
    
    
    (1,648,348
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    14,662
    
    
    
    4,990
    
    
    
    1,937
    
    
    
    6,276Net (decrease) increase in cash and cash equivalents
    
    
    (65,002
    )
    
    
    40,534
    
    
    
    (99,246
    )
    
    
    112,921Cash and cash equivalents at the beginning of the year
    
    
    414,239
    
    
    
    373,705
    
    
    
    472,951
    
    
    
    360,030Cash and cash equivalents at the end of the year
    
    $
    349,237
    
    
    $
    414,239
    
    
    $
    373,705
    
    
    $
    472,951
 20




---



##### 



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 OVERVIEW
 The Company
  Summary of Consolidated Results
 Three Months Ended
    
    
    
    
    
    Nine Months EndedJune 30
    
    
    
    
    
    June 302008
    
    2007
    
    Change
    
    2008
    
    2007
    
    ChangeRevenue
    
    $
    1,050,478
    
    
    $
    1,045,016
    
    
    
    0.5
    %
    
    $
    3,107,733
    
    
    $
    3,103,636
    
    
    
    0.1
    %Selling and
administrative
expense as a % of
revenue
    
    
    27.8
    %
    
    
    28.1
    %
    
    (30) basis points
    
    
    28.5
    %
    
    
    28.2
    %
    
    30 basis pointsOperating income as % of
revenue
    
    
    6.0
    %
    
    
    5.1
    %
    
    90 basis points
    
    
    4.9
    %
    
    
    5.0
    %
    
    (10) basis pointsDiluted earnings per share
    
    $
    0.34
    
    
    $
    0.23
    
    
    
    47.8
    %
    
    $
    0.69
    
    
    $
    0.68
    
    
    
    1.5
    %
   21




---



##### 



Outlook
  Amendment to Canadian Rider
  RESULTS OF OPERATIONS
 Reportable Segments
  Three Months Ended June 30, 2008 Compared to the Three Months Ended June 30, 2007
 Equipment
 IKON North
    
    IKONAmerica
    
    Europe
    
    TotalThree Months Ended June 30, 2008Revenues
    
    $
    371,118
    
    
    $
    73,202
    
    
    $
    444,320Gross profit
    
    $
    87,520
    
    
    $
    23,870
    
    
    $
    111,390Gross profit %
    
    
    23.6
    %
    
    
    32.6
    %
    
    
    25.1
    %Three Months Ended June 30, 2007Revenues
    
    $
    387,858
    
    
    $
    59,869
    
    
    $
    447,727Gross profit
    
    $
    89,246
    
    
    $
    19,365
    
    
    $
    108,611Gross profit %
    
    
    23.0
    %
    
    
    32.3
    %
    
    
    24.3
    %$ ChangeRevenues
    
    $
    (16,740
    )
    
    $
    13,333
    
    
    $
    (3,407
    )Gross profit
    
    $
    (1,726
    )
    
    $
    4,505
    
    
    $
    2,779% ChangeRevenues
    
    
    (4.3
    )%
    
    
    22.3
    %
    
    
    (0.8
    )%
 22




---



##### 



Customer Service and Supplies
 IKON North
    
    IKONAmerica
    
    Europe
    
    TotalThree Months Ended June 30, 2008Revenues
    
    $
    296,906
    
    
    $
    49,934
    
    
    $
    346,840Gross profit
    
    $
    135,961
    
    
    $
    14,140
    
    
    $
    150,101Gross profit %
    
    
    45.8
    %
    
    
    28.3
    %
    
    
    43.3
    %Three Months Ended June 30, 2007Revenues
    
    $
    301,895
    
    
    $
    44,032
    
    
    $
    345,927Gross profit
    
    $
    139,470
    
    
    $
    13,344
    
    
    $
    152,814Gross profit %
    
    
    46.2
    %
    
    
    30.3
    %
    
    
    44.2
    %$ ChangeRevenues
    
    $
    (4,989
    )
    
    $
    5,902
    
    
    $
    913Gross profit
    
    $
    (3,509
    )
    
    $
    796
    
    
    $
    (2,713
    )% ChangeRevenues
    
    
    (1.7
    )%
    
    
    13.4
    %
    
    
    0.3
    %
  23




---



##### 



Managed and Professional Services
 IKON North
    
    IKONAmerica
    
    Europe
    
    TotalThree Months Ended June 30, 2008Revenues
    
    $
    198,522
    
    
    $
    12,126
    
    
    $
    210,648Gross profit
    
    $
    60,618
    
    
    $
    1,209
    
    
    $
    61,827Gross profit %
    
    
    30.5
    %
    
    
    10.0
    %
    
    
    29.4
    %Three Months Ended June 30, 2007Revenues
    
    $
    189,043
    
    
    $
    14,329
    
    
    $
    203,372Gross profit
    
    $
    54,610
    
    
    $
    1,851
    
    
    $
    56,461Gross profit %
    
    
    28.9
    %
    
    
    12.9
    %
    
    
    27.8
    %$ ChangeRevenues
    
    $
    9,479
    
    
    $
    (2,203
    )
    
    $
    7,276Gross profit
    
    $
    6,008
    
    
    $
    (642
    )
    
    $
    5,366% ChangeRevenues
    
    
    5.0
    %
    
    
    (15.4
    )%
    
    
    3.6
    %
   24




---



##### 



Rental and Fees
 IKON North
    
    IKONAmerica
    
    Europe
    
    TotalThree Months Ended June 30, 2008Revenues
    
    $
    30,849
    
    
    $
    1,470
    
    
    $
    32,319Gross profit
    
    $
    23,921
    
    
    $
    1,195
    
    
    $
    25,116Gross profit %
    
    
    77.5
    %
    
    
    81.3
    %
    
    
    77.7
    %Three Months Ended June 30, 2007Revenues
    
    $
    29,869
    
    
    $
    2,085
    
    
    $
    31,954Gross profit
    
    $
    21,749
    
    
    $
    1,861
    
    
    $
    23,610Gross profit %
    
    
    72.8
    %
    
    
    89.3
    %
    
    
    73.9
    %$ ChangeRevenues
    
    $
    980
    
    
    $
    (615
    )
    
    $
    365Gross profit
    
    $
    2,172
    
    
    $
    (666
    )
    
    $
    1,506% ChangeRevenues
    
    
    3.3
    %
    
    
    (29.5
    )%
    
    
    1.1
    %
  Other Revenue
 Finance Income
 IKON North
    
    IKONAmerica
    
    Europe
    
    TotalThree Months Ended June 30, 2008Finance income
    
    
    
    
    
    $
    5,968
    
    
    $
    5,968Finance income gross profit
    
    
    
    
    
    $
    4,382
    
    
    $
    4,382Finance income gross profit %
    
    
    
    
    
    
    73.4
    %
    
    
    73.4
    %Three Months Ended June 30, 2007Finance income
    
    
    
    
    
    $
    6,215
    
    
    $
    6,215Finance income gross profit
    
    
    
    
    
    $
    4,678
    
    
    $
    4,678Finance income gross profit %
    
    
    
    
    
    
    75.3
    %
    
    
    75.3
    %$ ChangeFinance income
    
    
    
    
    
    $
    (247
    )
    
    
    (247
    )Finance income gross profit
    
    
    
    
    
    $
    (296
    )
    
    
    (296
    )% ChangeFinance income
    
    
    
    
    
    
    (4.0
    )%
    
    
    (4.0
    )%
  25




---



##### 



Other
 IKON North
    
    IKONAmerica
    
    Europe
    
    TotalThree Months Ended June 30, 2008Other
    
    
    
    
    
    $
    10,383
    
    
    $
    10,383Other gross profit
    
    
    
    
    
    $
    1,431
    
    
    $
    1,431Other gross profit %
    
    
    
    
    
    
    13.8
    %
    
    
    13.8
    %Three Months Ended June 30, 2007Other
    
    
    
    
    
    $
    9,821
    
    
    $
    9,821Other gross profit
    
    
    
    
    
    $
    784
    
    
    $
    784Other gross profit%
    
    
    
    
    
    
    8.0
    %
    
    
    8.0
    %$ ChangeOther
    
    
    
    
    
    $
    562
    
    
    $
    562Other gross profit
    
    
    
    
    
    $
    647
    
    
    $
    647% ChangeOther
    
    
    
    
    
    
    5.7
    %
    
    
    5.7
    %
  Selling and Administrative Expenses
 2008
    
    2007
    
    $ Change
    
    % ChangeSelling and administrative expenses
    
    $
    291,848
    
    
    $
    293,373
    
    
    $
    (1,525
    )
    
    
    (0.5
    )%Selling and administrative
expenses as a % of revenue
    
    
    27.8
    %
    
    
    28.1
    %
   
    
    an increase of $7,655, related to compensation and benefits primarily related to
higher expense requirements for performance compensation;
    
    a decrease of $4,407 due to lower spending on information technology, professional
fees, facilities and related expenses;
    
    a decrease of $2,612 due to the mark-to-market adjustment of our unfunded deferred
compensation obligations; and
    
    a decrease in workers compensation of $1,035 as a result of fewer claim related
expenses in 2008 compared to 2007.
 Other Items
 2008
    
    2007
    
    $ ChangeRestructuring benefit
    
    $
    1,051
    
    
    $
    
    
    
    $
    1,051Loss from the early extinguishment of debt
    
    
    5,702
    
    
    
    
    
    
    
    5,702Interest income
    
    
    992
    
    
    
    2,473
    
    
    
    (1,481
    )Interest expense
    
    
    15,537
    
    
    
    12,860
    
    
    
    2,677Taxes on income
    
    
    11,123
    
    
    
    14,132
    
    
    
    (3,009
    )Net income
    
    
    32,080
    
    
    
    29,066
    
    
    
    3,014Diluted earnings per common share
    
    $
    0.34
    
    
    $
    0.23
    
    
    $
    0.11
  26




---



##### 



Nine Months Ended June 30, 2008 Compared to the Nine Months Ended June 30, 2007
 Equipment
 IKON North
    
    IKONAmerica
    
    Europe
    
    TotalNine Months Ended June 30, 2008Revenues
    
    $
    1,085,495
    
    
    $
    206,108
    
    
    $
    1,291,603Gross profit
    
    $
    265,483
    
    
    $
    68,705
    
    
    $
    334,188Gross profit %
    
    
    24.5
    %
    
    
    33.3
    %
    
    
    25.9
    %Nine Months Ended June 30, 2007Revenues
    
    $
    1,145,205
    
    
    $
    172,445
    
    
    $
    1,317,650Gross profit
    
    $
    269,512
    
    
    $
    58,929
    
    
    $
    328,441Gross profit %
    
    
    23.5
    %
    
    
    34.2
    %
    
    
    24.9
    %$ ChangeRevenues
    
    $
    (59,710
    )
    
    $
    33,663
    
    
    $
    (26,047
    )Gross profit
    
    $
    (4,029
    )
    
    $
    9,776
    
    
    $
    5,747% ChangeRevenues
    
    
    (5.2
    )%
    
    
    19.5
    %
    
    
    (2.0
    )%
  27




---



##### 



Customer Service and Supplies
 IKON North
    
    IKONAmerica
    
    Europe
    
    TotalNine Months Ended June 30, 2008Revenues
    
    $
    894,590
    
    
    $
    146,818
    
    
    $
    1,041,408Gross profit
    
    $
    397,219
    
    
    $
    42,702
    
    
    $
    439,921Gross profit %
    
    
    44.4
    %
    
    
    29.1
    %
    
    
    42.2
    %Nine Months Ended June 30, 2007Revenues
    
    $
    908,919
    
    
    $
    128,245
    
    
    $
    1,037,164Gross profit
    
    $
    408,511
    
    
    $
    38,619
    
    
    $
    447,130Gross profit %
    
    
    44.9
    %
    
    
    30.1
    %
    
    
    43.1
    %$ ChangeRevenues
    
    $
    (14,329
    )
    
    $
    18,573
    
    
    $
    4,244Gross profit
    
    $
    (11,292
    )
    
    $
    4,083
    
    
    $
    (7,209
    )% ChangeRevenues
    
    
    (1.6
    )%
    
    
    14.5
    %
    
    
    0.4
    %
    28




---



##### 



Managed and Professional Services
 IKON North
    
    IKONAmerica
    
    Europe
    
    TotalNine Months Ended June 30, 2008Revenues
    
    $
    588,504
    
    
    $
    39,076
    
    
    $
    627,580Gross profit
    
    $
    174,964
    
    
    $
    3,507
    
    
    $
    178,471Gross profit %
    
    
    29.7
    %
    
    
    9.0
    %
    
    
    28.4
    %Nine Months Ended June 30, 2007Revenues
    
    $
    550,959
    
    
    $
    42,893
    
    
    $
    593,852Gross profit
    
    $
    155,516
    
    
    $
    4,962
    
    
    $
    160,478Gross profit %
    
    
    28.2
    %
    
    
    11.6
    %
    
    
    27.0
    %$ ChangeRevenues
    
    $
    37,545
    
    
    $
    (3,817
    )
    
    $
    33,728Gross profit
    
    $
    19,448
    
    
    $
    (1,455
    )
    
    $
    17,993% ChangeRevenues
    
    
    6.8
    %
    
    
    (8.9
    )%
    
    
    5.7
    %
     Rental and Fees
 IKON North
    
    IKONAmerica
    
    Europe
    
    TotalNine Months Ended June 30, 2008Revenues
    
    $
    91,884
    
    
    $
    4,919
    
    
    $
    96,803Gross profit
    
    $
    70,269
    
    
    $
    4,198
    
    
    $
    74,467Gross profit %
    
    
    76.5
    %
    
    
    85.3
    %
    
    
    76.9
    %Nine Months Ended June 30, 2007Revenues
    
    $
    95,722
    
    
    $
    6,216
    
    
    $
    101,938Gross profit
    
    $
    69,634
    
    
    $
    5,565
    
    
    $
    75,199Gross profit %
    
    
    72.7
    %
    
    
    89.5
    %
    
    
    73.8
    %$ ChangeRevenues
    
    $
    (3,838
    )
    
    $
    (1,297
    )
    
    $
    (5,135
    )Gross profit
    
    $
    635
    
    
    $
    (1,367
    )
    
    $
    (732
    )% ChangeRevenues
    
    
    (4.0
    )%
    
    
    (20.9
    )%
    
    
    (5.0
    )%
 29




---



##### 



Other Revenue
 Finance Income
 IKON North
    
    IKONAmerica
    
    Europe
    
    TotalNine Months Ended June 30, 2008Finance income
    
    
    
    
    
    $
    18,344
    
    
    $
    18,344Finance income gross profit
    
    
    
    
    
    $
    13,290
    
    
    $
    13,290Finance income gross profit %
    
    
    
    
    
    
    72.4
    %
    
    
    72.4
    %Nine Months Ended June 30, 2007Finance income
    
    
    
    
    
    $
    18,356
    
    
    $
    18,356Finance income gross profit
    
    
    
    
    
    $
    13,904
    
    
    $
    13,904Finance income gross profit %
    
    
    
    
    
    
    75.7
    %
    
    
    75.7
    %$ ChangeFinance income
    
    
    
    
    
    $
    (12
    )
    
    $
    (12
    )Finance income gross profit
    
    
    
    
    
    $
    (614
    )
    
    $
    (614
    )% ChangeFinance income
    
    
    
    
    
    
    (0.1
    )%
    
    
    (0.1
    )%
  Other
 IKON North
    
    IKONAmerica
    
    Europe
    
    TotalNine Months Ended June 30, 2008Other revenue
    
    
    
    
    
    $
    31,995
    
    
    $
    31,995Other gross profit
    
    
    
    
    
    $
    4,364
    
    
    $
    4,364Other gross profit%
    
    
    
    
    
    
    13.6
    %
    
    
    13.6
    %Nine Months Ended June 30, 2007Other revenue
    
    
    
    
    
    $
    34,676
    
    
    $
    34,676Other gross profit
    
    
    
    
    
    $
    3,927
    
    
    $
    3,927Other gross profit%
    
    
    
    
    
    
    11.3
    %
    
    
    11.3
    %$ ChangeOther revenue
    
    
    
    
    
    $
    (2,681
    )
    
    $
    (2,681
    )Other gross profit
    
    
    
    
    
    $
    437
    
    
    $
    437% ChangeOther revenue
    
    
    
    
    
    
    (7.7
    )%
    
    
    (7.7
    )%
  Selling and Administrative Expenses
 2008
    
    2007
    
    $ Change
    
    % ChangeSelling and administrative expenses
    
    $
    886,337
    
    
    $
    874,790
    
    
    $
    11,547
    
    
    
    1.3
    %Selling and administrative
expenses as a % of revenue
    
    
    28.5
    %
    
    
    28.2
    %
  30




---



##### 




    
    an increase of $31,917, related to compensation and benefits primarily as a result
of higher selling wages due to a year-over-year increase in sales headcount, as well as
higher expense requirements for performance compensation;
    
    a decrease of approximately $12,239 as a result of lower spending for information
technology, professional fees, facilities and related expenses; and
    
    a decrease of approximately $8,986 due to the mark-to-market adjustment of our
unfunded deferred compensation obligations.
 Other Items
 2008
    
    2007
    
    $ ChangeRestructuring charge
    
    $
    5,561
    
    
    $
    
    
    
    $
    5,561Loss from the early extinguishment of debt
    
    
    5,702
    
    
    
    
    
    
    
    5,702Interest income
    
    
    4,273
    
    
    
    8,872
    
    
    
    (4,599
    )Interest expense
    
    
    45,814
    
    
    
    37,842
    
    
    
    7,972Taxes on income
    
    
    36,018
    
    
    
    38,463
    
    
    
    (2,445
    )Net income
    
    
    69,542
    
    
    
    86,856
    
    
    
    (17,314
    )Diluted earnings per common share
    
    $
    0.69
    
    
    $
    0.68
    
    
    $
    0.01
       31




---



##### 



FINANCIAL CONDITION AND LIQUIDITY
 Cash Flows and Liquidity
  2008Cash provided by operating activities
    
    $
    147,793Cash used in investing activities
    
    
    (35,817
    )Cash used in financing activities
    
    
    (354,138
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    (542
    )Decrease in cash and cash equivalents
    
    
    (242,704
    )Cash and cash equivalents at the beginning of the year
    
    
    349,237Cash and cash equivalents at the end of period
    
    $
    106,533
 Operating Cash Flows
  Investing Cash Flows
  32




---



##### 



Financing Cash Flows
  Capital Structure
      Credit Ratings
  Liquidity Outlook
   33




---



##### 



RESTRUCTURING
   Non-cashCash
    
    EmployeeFiscal 2008
    
    Payments
    
    Compensation
    
    Fiscal 2008
    
    Balance atCharge
    
    Fiscal 2008
    
    Fiscal 2008
    
    Adjustments*
    
    June 30, 2008Severance
    
    $
    6,683
    
    
    $
    (1,699
    )
    
    $
    (405
    )
    
    $
    (1,122
    )
    
    $
    3,457
  Fiscal 2008
    
    Fiscal 2009
    
    Fiscal 2010
    
    Total$1,134
    
    $1,751
    
    $572
    
    $3,457
  Remaining EmployeesFiscal 2008
    
    Fiscal 2008
    
    yet to beEmployees
    
    Employee
    
    Employee
    
    TerminatedHeadcount Reductions
    
    Affected
    
    Terminations
    
    Adjustments
    
    at June 30, 2008U.S. field and
operations
organizations
    
    
    251
    
    
    
    141
    
    
    
    (58
    )
    
    
    52Corporate staff
    
    
    35
    
    
    
    34
    
    
    
    (1
    )
    
    
    Total
    
    
    286
    
    
    
    175
    
    
    
    (59
    )
    
    
    52
 
 *
    
    The adjustments in the tables above reflect our revised estimates based primarily on the
impact of voluntary employee turnover and the impact of employees who transferred into open
positions once they were informed that their position was being eliminated. RECENT ACCOUNTING STANDARDS
  34




---



##### 



Item 3. Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
  35




---



##### 



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds and Issuer Purchases of Equity
Securities
  ApproximateTotal Number
    
    
    Dollar Valueof Shares
    
    
    of Shares thatTotal Number
    
    
    Average
    
    
    Purchased as
    
    
    May Yet Beof Shares
    
    
    Price Paid
    
    
    Part of
    
    
    Purchased UnderPeriod
    
    Purchased
    
    
    per Share
    
    
    Repurchase Plan
    
    
    the Repurchase PlanApril 1, 2008  April 30, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    315,285May 1, 2008  May 31, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    315,285June 1, 2008  June 30, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    315,285$
    315,285
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
 Item 6. Exhibits
 31.1
    
    Certification of Principal Executive Officer pursuant to Rule 13a-14(a) of the Securities
Exchange Act of 1934, as amended31.2
    
    Certification of Principal Financial Officer pursuant to Rule 13a-14(a) of the Securities
Exchange Act of 1934, as amended32.1
    
    Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 135032.2
    
    Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350
 36




---



##### 



SIGNATURES
  IKON OFFICE SOLUTIONS, INC.
Date: July 31, 2008By:
    /s/ ROBERT F. WOODS(Robert F. Woods)Senior Vice President and Chief
Financial Officer
(Principal Financial Officer) 37