Cardinal Health 2009 Annual Report Download - page 70

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Operating activities. Net cash provided by operating activities during fiscal 2009 totaled $1.6 billion which
was driven by net earnings and changes in working capital. The most significant changes in working capital were
increased trade receivables ($649 million) and increased inventories ($342 million), partially offset by increased
accounts payable ($749 million). These increases were due primarily to Healthcare Supply Chain Services
revenue growth as well as the timing of inventory purchases, receipts and payments. Cash flows from operations
during a year can be significantly impacted by factors such as the timing of cash receipts from customers and
payments to vendors during the regular course of business.
In addition, on March 20, 2009, the Company terminated certain fixed-to-floating interest rate swaps and
received settlement proceeds totaling $123 million on March 24, 2009. The proceeds are classified as cash
provided by operating activities in the consolidated statements of cash flows.
Net cash provided by operating activities during fiscal 2008 totaled $1.5 billion, an increase of $284 million
from the prior year due primarily to the increase in earnings from continuing operations of $475 million
compared to the prior year combined with the impact of changes in working capital.
Net cash provided by operating activities from continuing operations during fiscal 2007 totaled $975
million. Net income from continuing operations ($821 million) was impacted by litigation charges and cash
settlements made in the fourth quarter of fiscal 2007 ($655 million). The increase in trade receivables
($781 million) was based on the repurchase of trade receivables ($550 million) under the Company’s committed
receivables program. In addition, inventory levels declined $220 million and accounts payable increased
$224 million.
Net cash provided by operating activities from discontinued operations during fiscal 2007 totaled
$259 million. Net cash provided by operating activities from discontinued operations in fiscal 2007 was a result
of earnings from discontinued operations ($1.1 billion) less the gain on the sale of the PTS Business
($1.1 billion).
Investing activities. Net cash used in investing activities of $543 million during fiscal 2009 primarily
reflected capital spending ($533 million) from continuing operations, which included $151 million to repurchase
assets previously under an operating lease arrangement.
Net cash used in investing activities of $726 million during fiscal 2008 reflected capital spending ($366
million) partially offset by the net proceeds from the sale of short-term investments classified as available for
sale ($132 million). The Company utilized $515 million in cash for acquisitions, net of cash received for the
divestiture of an investment within the Healthcare Supply Chain Services segment and the divestiture of assets
associated with a particular line of business within the Clinical and Medical Products segment (combined impact
of approximately $74 million). Acquisitions completed during fiscal 2008 included Enturia and other minor
acquisitions within the Clinical and Medical Products segment. See “Acquisitions and Divestitures” within
“Item 1—Business” of this Form 10-K and Note 2 of “Notes to Consolidated Financial Statements” for further
information regarding the Company’s acquisitions.
Net cash used in investing activities for continuing operations of $1.6 billion during fiscal 2007 reflected
cash used to complete acquisitions of Viasys and other minor acquisitions within the Clinical and Medical
Products segment and SpecialtyScripts within the Healthcare Supply Chain Services segment. Proceeds from the
sale of short-term investments classified as available for sale ($367 million) were offset by capital spending
($356 million) to develop and enhance the Company’s infrastructure including facilities, information systems and
machinery and equipment.
Net cash provided by investing activities for discontinued operations in fiscal 2007 of $3.1 billion reflected
proceeds from the PTS Business divestiture ($3.2 billion) offset by capital spending ($110 million).
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