Medco 2015 Annual Report Download - page 43

41 Express Scripts 2015 Annual Report
• Changes in working capital resulted in cash inflows of $598.9 million in 2014 compared to cash inflows of $775.4
million from the same period in 2013, resulting in a total decrease of $176.5 million.
There were no discontinued operations in 2015 or 2014. In 2013, net cash used in discontinued operations was $11.4
million. We substantially shut down our European operations in 2014 and sold our acute infusion therapies line of business and
various portions of our UBC line of business in 2013.
In 2015, net cash used in investing activities by continuing operations decreased $143.4 million to $268.5 million.
Capital expenditures for purchases of property and equipment decreased $140.7 million in 2015 compared to 2014. We intend
to continue to invest in infrastructure and technology, which we believe will provide efficiencies in operations, facilitate growth
and enhance the service we provide to our clients. Anticipated capital expenditures will be funded primarily from operating
cash flow or, to the extent necessary, with borrowings under our available credit sources, described below.
In 2014, net cash used in investing activities by continuing operations increased $341.9 million to $411.9 million. This
change is primarily due to $356.9 million of cash inflows related to the sale of discontinued operations for the year ended
December 31, 2013. Capital expenditures for purchases of property and equipment increased $13.6 million in 2014 compared
to 2013. Capital expenditures for the year ended December 31, 2014 include $65.2 million related to new data centers, $68.2
million related to a new high volume pharmacy fulfillment facility and $15.0 million related to a new office facility.
In 2015, net cash used in financing activities by continuing operations decreased $1,072.7 million to $3,217.0 million.
Cash inflows for 2015 include $5,500.0 million related to the 2015 credit agreement (as defined below), compared to inflows
during the same period of 2014 of $2,490.1 million related to the issuance of the June 2014 Senior Notes. Cash outflows for
2015 include $5,500.0 million for treasury share repurchases and $3,390.8 million related to the repayment of debt, compared
to outflows during the same period of 2014 of $4,493.0 million for treasury share repurchases and $2,834.3 million related to
the repayment of debt.
In 2014, net cash used in financing activities by continuing operations decreased $1,205.1 million to $4,289.7 million.
Cash inflows for 2014 include $2,490.1 million related to the issuance of our June 2014 Senior Notes. This inflow was offset
by outflows of $4,493.0 million related to treasury share repurchases, $2,150.0 million related to senior note redemptions and
$684.3 million of quarterly term facility payments during the year ended December 31, 2014. These net outflows are compared
to $4,055.2 million related to treasury share repurchases, $1,300.0 million related to senior note redemptions and $631.6
million of quarterly term facility payments during the year ended December 31, 2013.
At December 31, 2015, our available sources of capital include a $2,000.0 million 2015 revolving facility (as defined
below), a $150.0 million uncommitted revolving 2015 credit facility (as defined below) and a $130.0 million uncommitted
revolving 2014 credit facility (as defined below), none of which had amounts outstanding at December 31, 2015.
Our current maturities of long-term debt at December 31, 2015, excluding unamortized discounts, premiums and
financing costs, include $1,500.0 million of senior notes, as well as $150.0 million of term loan payments.
As of December 31, 2015 and 2014, we have an outstanding receivable balance of approximately $170.5 million and
$212.5 million, respectively, from the state of Illinois. We have not recorded a reserve against this receivable, as it is associated
with a state, which continues to make payments. We believe the full receivable balance will be realized.
We anticipate our current cash balances, cash flows from operations and our available credit sources will be sufficient
to meet our cash needs and make scheduled payments for our contractual obligations and current capital commitments over the
next 12 months. However, if needs arise, we may decide to secure external capital to provide additional liquidity. New sources
of liquidity may include additional lines of credit, term loans, or issuances of notes or common stock, all of which are
allowable, with certain limitations, under our credit agreements and other debt instruments. While our ability to secure debt
financing in the short term at rates favorable to us may be moderated due to various factors, including existing debt levels,
market conditions or other factors, we believe our liquidity options described above are sufficient to meet our cash flow needs.
ACQUISITIONS AND RELATED TRANSACTIONS
We regularly review potential acquisitions and affiliation opportunities. We believe available cash resources, bank
financing or the issuance of debt or equity could be used to finance future acquisitions or affiliations. There can be no assurance
we will enter into new acquisitions or establish new affiliations in the future.