A portion of the Company’s business is subject to rising care costs due to an increase in the number and frequency of covered members seeking healthcare services and higher costs of such services. Many of these factors are beyond the Company’s control. Future results of operations will be heavily dependent on management’s ability to obtain customer rate increases that are consistent with care cost increases and/or to reduce operating expenses.
Interest Rate Risk.
Changes in interest rates affect interest income earned on the Company’s cash equivalents and investments, as well as interest expense on the variable interest rate borrowings under the 2017 Credit Agreement. In addition, interest rates on the Notes is subject to adjustment upon the occurrence of certain credit rating events. Based on the amount of cash equivalents and investments, the borrowing levels under the 2017 Credit Agreement and the principal amount of the Notes as of June 30, 2019, a hypothetical 10 percent increase or decrease in the interest rate associated with these instruments, with all other variables held constant, would not materially affect the Company’s future earnings and cash outflows.
Historical—Liquidity and Capital Resources
Operating Activities.
The Company reported net cash provided by operating activities of $21.1 million and $29.4 million for the Prior Year Period and Current Year Period, respectively. The $8.3 million increase in operating cash flows from the Prior Year Period is mainly attributable to lower tax payments, partially offset by lower segment profit.
The net unfavorable impact of working capital changes between periods totaled $0.2 million. For the Prior Year Period, operating cash flows were impacted by net unfavorable working capital changes of $57.9 million, largely attributable to timing related to receivables and payables partially offset by discretionary benefits. For the Current Year Period, operating cash flows were impacted by net unfavorable working capital changes of $58.1 million mainly attributable to an increase in accounts receivable.
Tax payments for the Current Year Period decreased $26.3 million from the Prior Year Period. Segment Profit for the Current Year Period decreased $15.9 million from the Prior Year Period.
Investing Activities.
The Company utilized $37.1 million and $27.8 million during the Prior Year Period and the Current Year Period, respectively, for capital expenditures. The additions related to hard assets (equipment, furniture, and leaseholds) and capitalized software for the Prior Year Period were $12.4 million and $24.7 million, respectively, as compared to additions for the Current Year Period related to hard assets and capitalized software of $7.6 million and $20.2 million, respectively.
During the Prior Year Period and the Current Year Period, the Company used $106.8 million and $7.5 million, respectively, for the net purchase of "available-for-sale" securities.
Financing Activities.
During the Prior Year Period, the Company paid $31.2 million on debt obligations, $14.3 million for the repurchase of treasury stock under the Company’s share repurchase program, $2.7 million on finance lease and deferred financing obligations and had other net unfavorable items of $3.1 million. In addition, the Company received $21.5 million from the exercise of stock options.
During the Current Year Period, the Company paid $10.0 million on debt obligations, $6.2 million for payments on contingent consideration, $5.5 million on finance lease and deferred financing obligations, $4.1 million for the repurchase of treasury stock under the Company's share repurchase program and had other net unfavorable items of $0.5 million. In addition, the Company received $20.6 million from the exercise of stock options.
Outlook—Liquidity and Capital Resources
Liquidity.
The Company may draw on the 2017 Credit Agreement as required to meet working capital needs associated with the timing of receivables and payables, fund share repurchases or support acquisition activities. The Company currently expects to have adequate liquidity to satisfy its existing financial commitments over the periods in which they will become due. The Company plans to maintain its current investment strategy of investing in a diversified, high quality, liquid portfolio of investments and continues to closely monitor the financial markets. The Company estimates that it has no risk of any material permanent loss on its investment portfolio; however, there can be no assurance the Company will not experience any such losses in the future.