Cardinal Health 2009 Annual Report Download - page 71

Download and view the complete annual report

Please find page 71 of the 2009 Cardinal Health annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 154

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154

Financing activities. Net cash used in financing activities of $468 million during fiscal 2009 reflected the
Company’s repayment of long-term obligations ($305 million) and dividend payments to shareholders ($200
million). The Company’s repayment of long-term obligations included the July 2008 repayment of $150 million
of 6.25% notes due 2008 and the repayment of $149 million for the preferred debt securities. See “Capital
Resources” below for further discussion of the Company’s financing activities.
Net cash used in financing activities of $803 million during fiscal 2008 reflected the Company’s repurchase
of its Common Shares ($1.2 billion) and dividend payments to shareholders ($173 million). See “Share
Repurchase Program” below for additional information; however, amounts may differ due to the timing of share
settlements at the end of reporting periods. Cash provided by financing activities included proceeds received
from shares issued under various employee stock plans ($228 million) and proceeds received from the issuance
of long-term obligations, net of issuance costs ($304 million).
Net cash used in financing activities for continuing operations of $2.6 billion during fiscal 2007 reflected
the Company’s repurchase of its Common Shares ($3.7 billion), primarily driven by the use of proceeds from the
sale of the PTS Business, and dividend payments to shareholders ($144 million). The Company also used cash to
repay long-term obligations ($784 million). Cash provided by financing activities included proceeds received
from the issuance of long-term obligations, net of issuance costs ($1.5 billion), and proceeds received from
shares issued under various employee stock plans ($553 million).
Net cash used in financing activities for discontinued operations in fiscal 2007 reflected $39 million in
repayments on borrowings. Sources of cash for fiscal 2007 were additional borrowings of $4 million.
International Cash
The Company’s cash balance of approximately $1.8 billion as of June 30, 2009 included approximately
$906 million of cash held by its subsidiaries outside of the United States (of which approximately two-thirds related
to CareFusion). Although the vast majority of cash held outside the United States is available for repatriation, doing
so subjects it to U.S. federal, state and local income tax.
During fiscal 2008, the Company repatriated cash of $308 million from non-U.S. subsidiaries. As a result, it
incurred taxable dividends of $14 million, nontaxable return of capital/currency gain of $161 million and taxable
capital gain of $132 million. The taxable capital gain amount of $132 million was fully offset with a previously
unrecognized capital loss carryforward, and foreign tax credits of $14 million were recorded related to the
taxable dividends resulting in a net tax benefit of $4 million. See Note 10 of “Notes to Consolidated Financial
Statements” for additional information regarding income taxes.
Share Repurchases
The Company repurchased approximately $4.9 billion of its Common Shares, in aggregate, through share
repurchase programs during fiscal 2008 and 2007, as described below. The Company used the after-tax net
proceeds of approximately $3.1 billion from the sale of the PTS Business to repurchase shares during fiscal 2007
and the first quarter of fiscal 2008.
During fiscal 2009, the Company did not repurchase any of its Common Shares under a $2.0 billion share
repurchase program announced on August 8, 2007. At June 30, 2009, approximately $1.3 billion remained from
the $2.0 billion repurchase authorization. This repurchase program was cancelled by the Company on August 5,
2009.
During fiscal 2008, the Company repurchased approximately $750 million of its Common Shares pursuant
to the $2.0 billion repurchase program referenced above. In addition, the Company repurchased approximately
$342 million of its Common Shares under a $4.5 billion combined repurchase authorization, which expired on
June 30, 2008 with approximately $406 million remaining unused. The Company’s fiscal 2008 Common Share
repurchases represented 17 million shares at an average price per share of $64.81.
49