McKesson 2014 Annual Report Download - page 49

Download and view the complete annual report

Please find page 49 of the 2014 McKesson annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 133

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133

McKESSON CORPORATION
FINANCIAL REVIEW (Continued)
46
Financing activities for 2013 included cash receipts of $1,325 million and cash paid of $1,725 million from short-term
borrowings. In addition, in connection with our acquisition of PSS World Medical, we borrowed $900 million for bridge financing
in February 2013, which was fully repaid in March 2013. Financing activities for 2013 also include cash receipts of $1,798 million
for the issuance of long-term debt and cash paid of $1,143 million for repayments of long-term debt. In December 2012, we issued
$500 million of 0.95% Notes due 2015 and $400 million of 2.70% Notes due 2022. In March 2013, we issued $500 million of
1.40% Notes due 2018 and $400 million of 2.85% Notes dues 2023. Long-term debt repayments include $500 million paid on
the maturity of our 5.25% Notes due in March 2013 and $635 million paid to redeem the debt acquired on the acquisition of PSS
World Medical. Additionally, financing activities for 2013 included $1,214 million of cash paid for stock repurchases and $194
million of dividends paid.
Financing activities for 2012 included $1,874 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.
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, $650 million in January 2012, $700 million in April 2012 and $500 million in January
2013. 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) 2014 2013 2012
Number of shares repurchased (1) — 13 20
Average price paid per share $ — $ 100.82 $ 83.47
Total value of shares repurchased (1) $ — $ 1,159 $ 1,850
(1) Excludes shares surrendered for tax withholding.
The total authorization outstanding for repurchases of the Company’s common stock was $340 million at March 31, 2014.
During the fourth quarter of 2013, we retired approximately 2 million shares repurchased for $217 million by the Company.
The retired shares constitute authorized but unissued shares. We elected to allocate any excess of share repurchase price over
par value between additional paid-in capital and retained earnings. As such, $195 million was recorded as a decrease to retained
earnings.
We believe that our operating cash flow, financial assets and current access to capital and credit markets, including our existing
credit facilities, will give us the ability to meet our financing needs for the foreseeable future. However, there can be no assurance
that continued or increased volatility and disruption in the global capital and credit markets will not impair our liquidity or increase
our costs of borrowing.