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McKESSON CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
Years Ended March 31,
2015 2014 2013
Operating Activities
Net income $ 1,543 $ 1,258 $ 1,338
Adjustments to reconcile to net cash provided by operating activities:
Depreciation 306 185 143
Amortization 711 550 438
Deferred taxes 171 17 615
Share-based compensation expense 174 160 167
Gain on business combination — — (81)
Impairment charges and impairment of equity investment 241 80 191
Charges associated with last-in-first-out inventory method 337 311 13
Other non-cash items 47 130 90
Changes in operating assets and liabilities, net of acquisitions:
Receivables (2,821) (868) 318
Inventories (2,144) (1,182) (60)
Drafts and accounts payable 4,718 2,412 (125)
Deferred revenue (141) (81) (44)
Taxes (222) 218 (98)
Claim and litigation charges 150 68 72
Litigation settlement payments — (105) (483)
Other 42 (17) (11)
Net cash provided by operating activities 3,112 3,136 2,483
Investing Activities
Property acquisitions (376) (278) (241)
Capitalized software expenditures (169) (141) (159)
Acquisitions, net of cash and cash equivalents acquired (170) (4,634) (1,873)
Proceeds from sale of businesses and equity investment 15 97 —
Other 23 (90) 64
Net cash used in investing activities (677) (5,046) (2,209)
Financing Activities
Proceeds from short-term borrowings 3,100 6,080 2,225
Repayments of short-term borrowings (3,152) (6,132) (2,625)
Proceeds from issuances of long-term debt 3 4,124 1,798
Repayments of long-term debt (353) (348) (1,143)
Common stock transactions:
Issuances 152 177 166
Share repurchases, including shares surrendered for tax withholding (450) (130) (1,214)
Dividends paid (227) (214) (194)
Other (41) 62 31
Net cash provided by (used in) financing activities (968) 3,619 (956)
Effect of exchange rate changes on cash and cash equivalents (319) 28 (11)
Net increase (decrease) in cash and cash equivalents 1,148 1,737 (693)
Cash and cash equivalents at beginning of year 4,193 2,456 3,149
Cash and cash equivalents at end of year $ 5,341 $ 4,193 $ 2,456
Supplemental Cash Flow Information
Cash paid for:
Interest $ 359 $ 255 $ 207
Income taxes, net of refunds $ 866 $ 508 $ 55
Non-cash item:
Fair value of debt assumed on acquisitions $ — $(2,312) $ (635)
Conversion of Celesio’s convertible bonds to equity $ — $ 313 $ —
See Financial Notes
66