Volume I - Finance - Government of Newfoundland and Labrador

10
UNDERSTANDING THE FINANCIAL HEALTH OF THE PROVINCE OF NEWFOUNDLAND AND LABRADOR
CASH FLOW ANALYSIS
The Province records its transactions on an accrual basis in accordance with generally accepted
accounting principles, the timing of which may vary from when actual cash is paid or received. In 2010,
the Province’s overall net cash outflow was $345.7 million. As detailed in the following chart, there was
a net cash inflow of $951.5 million in the previous year, which resulted in a difference in cash flow of
approximately $1,297.2 million between 2010 and 2009.
Cash Flow by Category 2010 2009 Difference
($000’s) ($000’s) ($000’s)
Operating 487,478 1,631,778 (1,144,300)
Capital (420,691) (295,520) (125,171)
Financing (432,361) (414,698) (17,663)
Investing 19,914 29,947 (10,033)
Net Inflows (Outflows) of Cash (345,660) 951,507 (1,297,167)
The change in cash flows was primarily driven by reduced cash inflows from operations and increased
cash outflows relating to capital activities.
The decrease in cash inflows from operating activities can be attributed to a deficit of $32.6 million in
2010 compared to a surplus of $2,350.4 in 2009. For further details, please refer to the ‘Consolidated
Accrual Result’ and ‘Highlights - Financial Operations’ sections of this report as well as the ‘Statement of
Operations’ and the ‘Statement of Cash Flows’ in the Consolidated Summary Financial Statements.
Cash outflows from capital activities were impacted due to an increase in tangible capital asset
acquisitions in 2010 consistent with the Province’s infrastructure investment initiatives.