McKesson 2012 Annual Report Download - page 49

McKESSON CORPORATION
FINANCIAL REVIEW (Continued)
45
Cash flows from operations can be significantly impacted by factors such as the timing of receipts from
customers and payments to vendors.
Net cash used in investing activities was $1,502 million in 2012 compared to $624 million in 2011 and
$309 million in 2010. Investing activities for 2012 included $1,156 million of cash payments for acquisitions,
including $919 million for our acquisition of the Katz Assets. Investing activities in 2012 also included $225
million and $178 million in capital expenditures for property acquisitions and capitalized software.
Investing activities for 2011 included $292 million of cash payments for acquisitions, including $244 million
for our acquisition of US Oncology, and $109 million of cash received from the sale of MAP. Investing activities in
2011 also included $233 million and $155 million in capital expenditures for property acquisitions and capitalized
software. Investing activities for 2010 included $199 million and $179 million in capital expenditures for property
acquisitions and capitalized software and the release of $55 million of restricted cash from escrow related to the
AWP private litigation settlement payments.
Financing activities utilized cash of $1,905 million in 2012 compared to $1,841 million in 2011 and
$421 million in 2010. Financing activities for 2012 included $1,850 million of cash paid for share repurchases,
$400 million of cash paid on the maturity of our 7.75% Notes in February 2012, $195 million of dividends paid,
$400 million of cash receipts from secured borrowings and $167 million of cash receipts from employees' exercises
of stock options.
Financing activities for 2011 reflect $1,689 million of cash received from the issuance of long-term debt. In
February 2011, we issued $600 million of 3.25% notes due 2016, $600 million of 4.75% notes due 2021, and $500
million of 6.00% notes due 2041. Net proceeds from the issuance of the long-term notes, after discounts and
offering expenses, were used to pay off the $1,730 million of debt assumed as part of the acquisition of US
Oncology. Also as part of our acquisition of US Oncology, we borrowed $1,000 million for bridge financing which
was fully repaid by February 2011. Financing activities for 2011 also included $2,050 million of cash paid for share
repurchases, $171 million of cash paid for dividends and $367 million of cash receipts from employees’ exercises of
stock options.
Financing activities for 2010 included $323 million of cash paid for share repurchases and $218 million of cash
paid on our long-term debt, which primarily consisted of $215 million paid on the maturity of our 9.13% Series C
Senior Notes in March 2010, $131 million of cash paid for dividends and $212 million of cash receipts from
employees’ exercises of stock options.
The Company’s Board has authorized the repurchase of McKesson’s common stock from time-to-time in open
market transactions, privately negotiated transactions, through accelerated share repurchase (“ASR”) programs, or
by any combination of such methods. The timing of any repurchases and the actual number of shares repurchased
will depend on a variety of factors, including our stock price, corporate and regulatory requirements, restrictions
under our debt obligations and other market and economic conditions.
The Board authorized the repurchase of the Company’s common stock as follows: $1.0 billion in April 2010,
$1.0 billion in October 2010, $1.0 billion in April 2011 and $650 million in January 2012.
Total share repurchases transacted through ASR programs and open market transactions over the last three
years were as follows:
Years Ended March 31,
(In millions, except per share data) 2012
2011
2010
N
umber of shares repurchased (1) 20 29 8
Average price paid per share $ 83.47 $ 69.62 $ 41.47
Total value of shares repurchased $ 1,850 $ 2,032 $ 299
(1) Excludes shares surrendered for tax withholding.