Medtronic 2008 Annual Report Download - page 57

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Fiscal Year
(in millions) 2008 2007 2006
Operating Activities:
Net earnings $ 2,231 $ 2,802 $ 2,547
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization 637 583 544
Special charges 78 98 —
IPR&D charges 390 — 364
Provision for doubtful accounts 31 31 39
Stock-based compensation 217 185 25
Excess tax benefit from exercise of stock-based awards (40) (36) 99
Deferred income taxes (49) (236) 105
Change in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable (461) (326) (217)
Inventories 30 (24) (257)
Prepaid expenses and other assets 92 (45) (86)
Accounts payable and accrued liabilities 61 17 (981)
Other long-term liabilities 272 (70) 38
Net cash provided by operating activities 3,489 2,979 2,220
Investing Activities:
Acquisitions, net of cash acquired (4,221) (8) (285)
Purchases of intellectual property (93) (121) (837)
Additions to property, plant and equipment (513) (573) (407)
Purchases of marketable securities (6,433) (11,837) (8,065)
Sales and maturities of marketable securities 8,557 10,894 6,627
Other investing activities, net (87) (56) 100
Net cash used in investing activities (2,790) (1,701) (2,867)
Financing Activities:
Change in short-term borrowings, net 543 45 (18)
Payments on long-term debt (12) (1,880) —
Issuance of long-term debt 300 — 5,428
Purchase of call options —— (1,075)
Sale of warrants —— 517
Dividends to shareholders (565) (504) (465)
Repurchase of common stock (1,544) (1,039) (3,589)
Issuance of common stock 403 331 506
Excess tax benefit from exercise of stock-based awards 40 36 —
Net cash (used in) provided by financing activities (835) (3,011) 1,304
Effect of exchange rate changes on cash and cash equivalents (60) (5) 105
Net change in cash and cash equivalents (196) (1,738) 762
Cash and cash equivalents at beginning of period 1,256 2,994 2,232
Cash and cash equivalents at end of period
$ 1,060
$ 1,256
$ 2,994
Supplemental Cash Flow Information:
Cash paid during the year for:
Income taxes $ 717 $ 1,034 $ 860
Interest 258 230 109
Supplemental noncash investing and financing activities:
Reclassification of debentures from short-term to long-term debt $ — $ 94 $ —
Reclassification of debentures from long-term to short-term debt 94 — 1,971
The accompanying notes are an integral part of these consolidated financial statements.
Consolidated Statements of Cash Flows
53Medtronic, Inc.