McKesson 2005 Annual Report Download - page 58

McKESSON CORPORATION
FINANCIAL NOTES
Nature of Operations. The consolidated financial statements of McKesson Corporation (“McKesson,” the “Company,” or “we” and other
similar pronouns) include the financial statements of all majority-owned or controlled companies. Significant intercompany transactions and
balances have been eliminated. The Company’s fiscal year begins on April 1 and ends on March 31. Unless otherwise noted, all references to a
particular year shall mean the Company’s fiscal year.
We conduct our business through three segments. Through our Pharmaceutical Solutions segment, we are a leading distributor of ethical
and proprietary drugs, and health and beauty care products throughout North America. This segment also manufactures and sells automated
pharmaceutical dispensing systems for retail pharmacies, and provides medical management and specialty pharmaceutical solutions for biotech
and pharmaceutical manufacturers, patient and other services for payors, and software, and consulting and outsourcing services to pharmacies.
Our Medical-Surgical Solutions segment distributes medical-surgical supplies, first-aid products and equipment, and provides logistics and
other services within the United States and Canada. Our Provider Technologies segment delivers enterprise-wide patient care, clinical,
financial, supply chain, managed care and strategic management software solutions, automated pharmaceutical dispensing systems for
hospitals, as well as outsourcing and other services, to healthcare organizations throughout North America, the United Kingdom and other
European countries.
Reclassifications. Certain prior year amounts have been reclassified to conform to the current year presentation. In addition, we have revised
the presentation of our 2004 and 2003 Consolidated Statements of Cash Flows to include cash flows from notes receivable related to sales of
inventory as an operating cash flow. These amounts were previously included in cash flows from investing activities. Cash flows from notes
receivable generally relate to the sale of automated pharmacy and supply management systems to hospitals and retail pharmacies, as well as the
subsequent sale of those notes receivable to a third party. These reclassifications resulted from guidance recently issued by Securities and
Exchange Commission (“SEC”) staff to all public registrants.
The table below reconciles the revised presentation of our Consolidated Statements of Cash Flows to our prior presentation:
In April 2004, we reconfigured our operating segments to better align product development and selling efforts with the evolving needs of
the healthcare market. Accordingly, historical segment information has been reclassified to conform with the new presentation.
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1. Si
g
nificant Accountin
g
Policies
Years Ended March 31,
(In millions) 2004 2003
O
p
eratin
g
Activities
Net cash provided by operating activities, as previously reported $ 563.4 $ 710.3
Notes receivable issuances and other (13.6)(54.8)
Proceeds from sale of notes receivable 45.4 117.9
Net cash provided by operating activities, revised $ 595.2 $773.4
Investin
g
Activities
Net cash used by investing activities, as previously reported $ (267.9) $ (600.9)
Notes receivable issuances and other 13.6 54.8
Proceeds from sale of notes receivable (45.4)(117.9)
Net cash used in investing activities, revised $ (299.7) $ (664.0)