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statements in “Item 8. Financial Statements and Supplementary Data” in this Annual Report on Form 10-K for additional
information regarding fair value measurements.
Summary of Cash Flows
Fiscal Year
(in millions) 2014 2013 2012
Cash provided by (used in):
Operating activities $ 4,959 $ 4,942 $ 4,470
Investing activities (3,594) (3,101) (2,662)
Financing activities (918) (2,101) (1,882)
Effect of exchange rate changes on cash and cash equivalents 37 7 (71)
Net change in cash and cash equivalents $ 484 $ (253) $ (145)
Operating Activities Our net cash provided by operating activities was $4.959 billion, increasing $17 million for the fiscal
year ended April 25, 2014 compared to $4.942 billion for the prior year.
Our net cash provided by operating activities was $4.942 billion for the fiscal year ended April 26, 2013 compared to
$4.470 billion for the fiscal year ended April 27, 2012. The $472 million increase in net cash provided by operating activities
was primarily attributable to an increase in accounts receivable collections, primarily in certain Southern European countries,
and a decrease in inventories, partially offset by a decrease in accrued income taxes due to the timing of certain tax payments
during fiscal year 2013 as compared to the prior fiscal year.
Investing Activities Our net cash used in investing activities was $3.594 billion for the fiscal year ended April 25, 2014
compared to $3.101 billion for the prior year. The $493 million increase in net cash used in investing activities was primarily
attributable to increased net purchases of marketable securities compared to the prior fiscal year partially offset by higher levels
of cash used in the prior year for acquisitions, primarily related to Kanghui.
Our net cash used in investing activities was $3.101 billion for the fiscal year ended April 26, 2013 compared to $2.662 billion
for the prior year. The $439 million increase in cash used in investing activities was primarily attributable to an increase in cash
used for acquisitions in comparison to the prior fiscal year and the proceeds from divestiture of Physio-Control in fiscal year
2012, partially offset by a decrease in net purchases and sales and maturities of marketable securities.
Financing Activities We had net cash used in financing activities of $918 million for the fiscal year ended April 25, 2014
compared to $2.101 billion for the prior year. The $1.183 billion decrease in cash used in financing activities primarily resulted
from a $1.457 billion decrease in net payments in excess of issuances on long-term debt and short-term borrowings, partially
offset by a $266 million increase in common stock repurchases net of issuances compared to the prior fiscal year.
We had net cash used in financing activities of $2.101 billion for the fiscal year ended April 26, 2013 compared to
$1.882 billion for the prior fiscal year. The $219 million increase in cash used in financing activities primarily resulted from a
$627 million decrease in net borrowings (long-term debt issuances and short-term borrowings in excess of payments), partially
offset by higher levels of common stock issuances under employee stock purchase and award plans and a $159 million net
decrease in cash returned to shareholders in the form of dividends and common stock repurchases compared to the prior fiscal
year.
Off-Balance Sheet Arrangements and Long-Term Contractual Obligations
We acquire assets still in development, enter into research and development arrangements, and sponsor certain clinical trials that
often require milestone and/or royalty payments to a third-party, contingent upon the occurrence of certain future events.
Milestone payments may be required contingent upon the successful achievement of an important point in the development life
cycle of a product or upon certain pre-designated levels of achievement in clinical trials. In addition, if required by the
arrangement, we may have to make royalty payments based on a percentage of sales related to the product under development
or in the event that regulatory approval for marketing is obtained. In situations where we have no ability to influence the
achievement of the milestone or otherwise avoid the payment, we have included those milestone or minimum royalty payments
in the following table. However, the majority of these arrangements give us the discretion to unilaterally make the decision to
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