Document and Entity Information
Document and Entity Information (USD $) | |||
In Billions, except Share data | 12 Months Ended
Mar. 31, 2010 | Apr. 30, 2010
| Sep. 30, 2009
|
Document and Entity Information [Abstract] | |||
Entity Registrant Name | MCKESSON CORP | ||
Entity Central Index Key | 0000927653 | ||
Document Type | 10-K | ||
Document Period End Date | 2010-03-31 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,010 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --03-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | 16.1 | ||
Entity Common Stock, Shares Outstanding (actual number of shares) | 271,391,624 |
Consolidated Statements of Oper
Consolidated Statements of Operations (USD $) | |||
In Millions, except Per Share data | 12 Months Ended
Mar. 31, 2010 | 12 Months Ended
Mar. 31, 2009 | 12 Months Ended
Mar. 31, 2008 |
Consolidated Statements of Operations [Abstract] | |||
Revenues | $108,702 | $106,632 | $101,703 |
Cost of Sales | 103,026 | 101,254 | 96,694 |
Gross Profit | 5,676 | 5,378 | 5,009 |
Operating Expenses | |||
Selling | 746 | 743 | 744 |
Distribution | 882 | 943 | 886 |
Research and development | 376 | 364 | 347 |
Administrative | 1,684 | 1,639 | 1,559 |
Litigation charge (credit), net | (20) | 493 | (5) |
Total Operating Expenses | 3,668 | 4,182 | 3,531 |
Operating Income | 2,008 | 1,196 | 1,478 |
Other Income, Net | 43 | 12 | 121 |
Interest Expense | (187) | (144) | (142) |
Income from Continuing Operations Before Income Taxes | 1,864 | 1,064 | 1,457 |
Income Tax Expense | (601) | (241) | (468) |
Income from Continuing Operations | 1,263 | 823 | 989 |
Discontinued operations, net | 1 | ||
Net Income | $1,263 | $823 | $990 |
Diluted | |||
Continuing operations | 4.62 | 2.95 | 3.32 |
Discontinued operations, net | |||
Total | 4.62 | 2.95 | 3.32 |
Basic | |||
Continuing operations | 4.7 | 2.99 | 3.4 |
Discontinued operations, net | |||
Total | 4.7 | 2.99 | 3.4 |
Weighted Average Common Shares | |||
Diluted | 273 | 279 | 298 |
Basic | 269 | 275 | 291 |
Consolidated Balance Sheets
Consolidated Balance Sheets (USD $) | ||
In Millions | 12 Months Ended
Mar. 31, 2010 | 12 Months Ended
Mar. 31, 2009 |
Current Assets | ||
Cash and cash equivalents | $3,731 | $2,109 |
Receivables, net | 8,075 | 7,774 |
Inventories, net | 9,441 | 8,527 |
Prepaid expenses and other | 257 | 261 |
Total | 21,504 | 18,671 |
Property, Plant and Equipment, Net | 851 | 796 |
Capitalized Software Held for Sale, Net | 234 | 221 |
Goodwill | 3,568 | 3,528 |
Intangible Assets, Net | 551 | 661 |
Other Assets | 1,481 | 1,390 |
Total Assets | 28,189 | 25,267 |
Current Liabilities | ||
Drafts and accounts payable | 13,255 | 11,739 |
Deferred revenue | 1,218 | 1,145 |
Current portion of long-term debt | 3 | 219 |
Other accrued liabilities | 2,536 | 2,503 |
Total | 17,012 | 15,606 |
Long-Term Debt | 2,293 | 2,290 |
Other Noncurrent Liabilities | 1,352 | 1,178 |
Other Commitments and Contingent Liabilities (Note 18) | ||
Stockholders' Equity | ||
Preferred stock, $0.01 par value, 100 shares authorized, no shares issued or outstanding | 0 | 0 |
Common stock, $0.01 par value, Shares authorized: 2010 and 2009 - 800; Shares issued: 2010 - 359, 2009 - 351 | 4 | 4 |
Additional Paid-in Capital | 4,756 | 4,417 |
Retained Earnings | 7,236 | 6,103 |
Accumulated Other Comprehensive Income (Loss) | 6 | (179) |
Other | (12) | (8) |
Treasury Shares, at Cost, 2010 - 88 and 2009 - 80 | (4,458) | (4,144) |
Total Stockholders' Equity | 7,532 | 6,193 |
Total Liabilities and Stockholders' Equity | $28,189 | $25,267 |
1_Consolidated Balance Sheets
Consolidated Balance Sheets (Parenthetical) | ||
Share data in Millions | Mar. 31, 2010
| Mar. 31, 2009
|
Stockholders' Equity | ||
Preferred stock, par value | 0.01 | 0.01 |
Preferred stock, shares authorized | 100 | 100 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | 0.01 | 0.01 |
Common stock, shares authorized | 800 | 800 |
Common stock, shares issued | 359 | 351 |
Treasury shares | 88 | 80 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (USD $) | |||||||||
In Millions | Common Stock
| Additional Paid-in Capital
| Other Capital
| Retained Earnings
| Accumulated Other Comprehensive Income (Loss)
| ESOP Notes and Guarantees
| Treasury
| Other Comprehensive Income (Loss)
| Total
|
Beginning Balance, Shares at Mar. 31, 2007 | 341 | (46) | |||||||
Beginning Balance, Value at Mar. 31, 2007 | $3 | $3,722 | ($19) | $4,712 | $31 | ($14) | ($2,162) | $6,273 | |
Issuance of shares under employee plans, value | 1 | 354 | (12) | 343 | |||||
Issuance of shares under employee plans, shares | 10 | ||||||||
Share-based compensation | 91 | 91 | |||||||
Tax benefit related to issuance of shares under employee plans | 85 | 85 | |||||||
ESOP note collections | 11 | 11 | |||||||
Translation adjustments | 95 | 95 | 95 | ||||||
Unrealized net gain/loss and other components of benefit plans, net of tax | 26 | 26 | 26 | ||||||
Net income | 990 | 990 | 990 | ||||||
Repurchase of common stock, value | (1,686) | (1,686) | |||||||
Repurchase of common stock, shares | (28) | ||||||||
Cash dividends declared | (70) | (70) | |||||||
Adoption of ASC 740-10 | (46) | (46) | |||||||
Other | 9 | 9 | |||||||
Ending Balance, Value at Mar. 31, 2008 | 4 | 4,252 | (10) | 5,586 | 152 | (3) | (3,860) | 1,111 | 6,121 |
Ending Balance, Shares at Mar. 31, 2008 | 351 | (74) | |||||||
Issuance of shares under employee plans, value | 97 | (19) | 78 | ||||||
Issuance of shares under employee plans, shares | 4 | ||||||||
ESOP funding | 15 | 15 | |||||||
Share-based compensation | 99 | 99 | |||||||
Tax benefit related to issuance of shares under employee plans | 8 | 8 | |||||||
ESOP note collections | 2 | 2 | |||||||
Translation adjustments | (273) | (273) | (273) | ||||||
Unrealized net gain/loss and other components of benefit plans, net of tax | (57) | (57) | (57) | ||||||
Net income | 823 | 823 | 823 | ||||||
Repurchase and retirement of common stock, value | (39) | (165) | (280) | (484) | |||||
Repurchase and retirement of common stock, shares | (4) | (6) | |||||||
Cash dividends declared | (134) | (134) | |||||||
Other | 3 | (7) | (1) | (5) | |||||
Ending Balance, Value at Mar. 31, 2009 | 4 | 4,417 | (7) | 6,103 | (179) | (1) | (4,144) | 493 | 6,193 |
Ending Balance, Shares at Mar. 31, 2009 | 351 | (80) | |||||||
Issuance of shares under employee plans, value | 218 | (24) | 194 | ||||||
Issuance of shares under employee plans, shares | 8 | (1) | |||||||
Share-based compensation | 114 | 114 | |||||||
Tax benefit related to issuance of shares under employee plans | 11 | 11 | |||||||
ESOP note collections | 1 | 1 | |||||||
Translation adjustments | 238 | 238 | 238 | ||||||
Unrealized net gain/loss and other components of benefit plans, net of tax | (53) | (53) | (53) | ||||||
Net income | 1,263 | 1,263 | 1,263 | ||||||
Repurchase of common stock, value | (299) | (299) | |||||||
Repurchase of common stock, shares | (7) | ||||||||
Cash dividends declared | (131) | (131) | |||||||
Other | (4) | (5) | 1 | 9 | 1 | ||||
Ending Balance, Value at Mar. 31, 2010 | $4 | $4,756 | ($12) | $7,236 | $6 | $0 | ($4,458) | $1,448 | $7,532 |
Ending Balance, Shares at Mar. 31, 2010 | 359 | (88) |
2_Consolidated Statements of St
Consolidated Statements of Stockholders' Equity (Parenthetical) (USD $) | |||
In Millions, except Per Share data | 12 Months Ended
Mar. 31, 2010 | 12 Months Ended
Mar. 31, 2009 | 12 Months Ended
Mar. 31, 2008 |
Unrealized net gain and other components of benefit plans, tax effect | $32 | $33 | ($13) |
Cash dividends declared, shares | 0.48 | 0.48 | 0.24 |
Retained Earnings | |||
Cash dividends declared, shares | 0.48 | 0.48 | 0.24 |
Accumulated Other Comprehensive Income (Loss) | |||
Unrealized net gain and other components of benefit plans, tax effect | 32 | 33 | (13) |
Other Comprehensive Income (Loss) | |||
Unrealized net gain and other components of benefit plans, tax effect | $32 | $33 | ($13) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (USD $) | |||
In Millions | 12 Months Ended
Mar. 31, 2010 | 12 Months Ended
Mar. 31, 2009 | 12 Months Ended
Mar. 31, 2008 |
Operating Activities | |||
Net income | $1,263 | $823 | $990 |
Discontinued operations, net of income taxes | (1) | ||
Adjustments to reconcile to net cash provided by (used in) operating activities: | |||
Depreciation | 148 | 133 | 124 |
Amortization | 326 | 308 | 247 |
Provision for bad debts | 17 | 29 | 41 |
Impairment of investments | 63 | ||
Other deferred taxes | 161 | 320 | 196 |
Share-based compensation expense | 114 | 99 | 91 |
Other non-cash items | (20) | (99) | (107) |
Changes in operating assets and liabilities, net of business acquisitions: | |||
Receivables | (133) | (708) | (288) |
Inventories | (782) | 370 | (676) |
Drafts and accounts payable | 1,340 | (189) | 762 |
Deferred revenue | 27 | (55) | 98 |
Taxes | 88 | (47) | 336 |
Litigation charge (credit), net | (20) | 493 | (5) |
Litigation settlement payments | (350) | (962) | |
Deferred tax (benefit) expense on litigation | 116 | (172) | 2 |
Other | 21 | (17) | 21 |
Net cash provided by operating activities | 2,316 | 1,351 | 869 |
Investing Activities | |||
Property acquisitions | (199) | (195) | (195) |
Capitalized software expenditures | (179) | (197) | (161) |
Acquisitions of businesses, less cash and cash equivalents acquired | (18) | (358) | (610) |
Proceeds from sale of businesses | 1 | 63 | |
Restricted cash for litigation charges, net | 55 | (55) | 962 |
Other | 31 | 15 | (1) |
Net cash used in investing activities | (309) | (727) | (5) |
Financing Activities | |||
Proceeds from short-term borrowings | 5 | 3,630 | 260 |
Repayments of short-term borrowings | (6) | (3,630) | (260) |
Proceeds from issuances of long-term debt, net | 699 | ||
Repayment of long-term debt | (218) | (4) | (162) |
Common stock transactions: | |||
Issuances | 212 | 97 | 354 |
Share repurchases, including shares surrendered for tax withholding | (323) | (298) | (1,698) |
Share repurchases, retirements | (204) | ||
Dividends paid | (131) | (116) | (70) |
Other | 40 | 4 | 106 |
Net cash provided by (used in) financing activities | (421) | 178 | (1,470) |
Effect of exchange rate changes on cash and cash equivalents | 36 | (55) | 14 |
Net increase (decrease) in cash and cash equivalents | 1,622 | 747 | (592) |
Cash and cash equivalents at beginning of year | 2,109 | 1,362 | 1,954 |
Cash and cash equivalents at end of year | 3,731 | 2,109 | 1,362 |
Cash Paid For: | |||
Interest | 188 | 139 | 146 |
Income taxes, net of refunds | $234 | $235 | ($66) |
Significant Accounting Policies
Significant Accounting Policies | |
12 Months Ended
Mar. 31, 2010 | |
Significant Accounting Policies [Abstract] | |
Significant Accounting Policies | 1. Significant Accounting Policies Nature of Operations: McKesson Corporation (McKesson, the Company, or we and other similar pronouns) is a corporation that delivers medicines, pharmaceutical supplies, information and care management products and services designed to reduce costs and improve quality across the healthcare industry. We conduct our business through two operating segments, McKesson Distribution Solutions and McKesson Technology Solutions, as further described in Financial Note 21, Segments of Business. Basis of Presentation: The consolidated financial statements and accompanying notes are prepared in accordance with U. S. generally accepted accounting principles (GAAP). The consolidated financial statements of McKesson include the financial statements of all wholly-owned subsidiaries, majority-owned or controlled companies and certain immaterial variable interest entities (VIEs) of which the Company is the primary beneficiary. We evaluate our ownership, contractual and other interests in entities to determine if they are VIEs, if we have a variable interest in those entities and the nature and extent of those interests. These evaluations are highly complex and involve judgment and the use of estimates and assumptions based on available historical information and managements judgment, among other factors. Intercompany transactions and balances have been eliminated. Fiscal Period: The Companys fiscal year begins on April 1 and ends on March31. Unless otherwise noted, all references to a particular year shall mean the Companys fiscal year. Reclassifications: Certain prior year amounts have been reclassified to conform to the current year presentation. Use of Estimates: The preparation of financial statements in conformity with U.S. GAAP requires that we make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual amounts could differ from those estimated amounts. Cash and Cash Equivalents: All highly liquid debt instruments purchased with original maturity of three months or less at the date of acquisition are included in cash and cash equivalents. We maintain cash and cash equivalents with several financial institutions. Bank deposits may exceed the amount of federal deposit insurance. Cash equivalents may be invested in money market funds. We mitigate the risk of our short-term investment portfolio by investing the majority of funds in U.S. government securities, depositing funds with reputable financial institutions and monitoring risk profiles and investment strategies of money market funds. Restricted Cash: Cash that is subject to legal restrictions or is unavailable for general operating purposes is classified as restricted cash and included within prepaid expenses and other in the consolidated balance sheets. At March31, 2010 and 2009, restricted cash was not material. Marketable Securities Available for Sale: We carry our marketable securities, which are available for sale, at fair value and they are included in prepaid expenses and other in the consolidated balance sheets. The net unrealized gains and losses, net o |
Business Combinations and Inves
Business Combinations and Investments | |
12 Months Ended
Mar. 31, 2010 | |
Business Combinations and Investments [Abstract] | |
Business Combinations and Investments | 2. Business Combinations and Investments In 2009, we made the following acquisition: On May21, 2008, we acquired McQueary Brothers Drug Company (McQueary Brothers) of Springfield, Missouri for approximately $190million. McQueary Brothers is a regional distributor of pharmaceutical, health and beauty products to independent and regional chain pharmacies in the Midwestern U.S. This acquisition expanded our existing U.S. pharmaceutical distribution business. The acquisition was funded with cash on hand. Financial results for McQueary Brothers have been included within our Distribution Solutions segment since the date of acquisition. The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date: (In millions) Accounts receivable $ 37 Inventory 41 Goodwill 126 Intangible assets 67 Other assets 11 Accounts payable and other liabilities (60 ) Deferred tax liability (32 ) Net assets acquired, less cash and cash equivalents $ 190 During the first quarter of 2010, the acquisition accounting was completed. Approximately $126million of the purchase price allocation has been assigned to goodwill, which primarily reflects the expected future benefits from synergies to be realized upon integrating the business. Included in the purchase price allocation are acquired identifiable intangibles of $61million representing a customer relationship with a useful life of 7years, a trade name of $2million with a useful life of less than one year and a not-to-compete agreement of $4million with a useful life of 4years. In 2008, we made the following acquisition: On October29, 2007, we acquired all of the outstanding shares of Oncology Therapeutics Network (OTN) of San Francisco, California for approximately $519million, including the assumption of debt and net of $31million of cash and cash equivalents acquired from OTN. During the third quarter of 2009, the acquisition accounting was completed. OTN is a U.S. distributor of specialty pharmaceuticals. The acquisition of OTN expanded our existing specialty pharmaceutical distribution business. The acquisition was funded with cash on hand. Financial results for OTN have been included within our Distribution Solutions segment since the date of acquisition. The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date: (In millions) Accounts receivable $ 308 Inventory 87 Goodwill 240 Intangible assets 128 Deferred tax assets 62 Other assets 36 Accounts payable and other liabilities (342 ) Net assets acquired, less cash and cash equivalents $ 519 Approximately $240million of the purchase price allocation has been assigned to goodwill, which primarily reflects the expected future benefits from synergies upon integrating the business. Included in the purchase price allocation are acquired identifiable intangibles of $115million representing customer relationships with a weighted-average life |
Share-Based Compensation
Share-Based Compensation | |
12 Months Ended
Mar. 31, 2010 | |
Share-Based Compensation [Abstract] | |
Share-Based Compensation | 3. Share-Based Compensation We provide share-based compensation for our employees, officers and non-employee directors, including stock options, an employee stock purchase plan, restricted stock (RS), restricted stock units (RSUs) and performance-based restricted stock units (PeRSUs) (collectively, share-based awards.) Most of our share-based awards are granted in the first quarter of each fiscal year. Compensation expense for the share-based awards is recognized for the portion of the awards that is ultimately expected to vest. We develop an estimate of the number of share-based awards, which will ultimately vest primarily based on historical experience. The estimated forfeiture rate established upon grant is re-assessed throughout the requisite service period. As required, the forfeiture estimates are adjusted to reflect actual forfeitures when an award vests. The actual forfeitures in future reporting periods could be higher or lower than current estimates. The weighted-average forfeiture rate is approximately 7% at March31, 2010. The compensation expense recognized has been classified in the consolidated statements of operations or capitalized on the consolidated balance sheets in the same manner as cash compensation paid to our employees. There was no material share-based compensation expense capitalized as part of the cost of an asset in 2010, 2009 and 2008. Impact on Net Income The components of share-based compensation expense and the related tax benefit are shown in the following table: Years Ended March 31, (In millions) 2010 2009 2008 RSUs and RS (1) $ 47 $ 60 $ 50 PeRSUs (2) 39 13 22 Stock options 19 18 11 Employee stock purchase plan 9 8 8 Share-based compensation expense 114 99 91 Tax benefit for share-based compensation expense (3) (41 ) (34 ) (31 ) Share-based compensation expense, net of tax $ 73 $ 65 $ 60 (1) This expense was primarily the result of PeRSUs awarded in prior years, which converted to RSUs due to the attainment of goals during the applicable years performance period. (2) Represents estimated compensation expense for PeRSUs that are conditional upon attaining performance objectives during the current years performance period. (3) Income tax expense is computed using the tax rates of applicable tax jurisdictions. Additionally, a portion of pre-tax compensation expense is not tax-deductible. Stock Plans The 2005 Stock Plan provides our employees, officers and non-employee directors share-based long-term incentives. The 2005 Stock Plan permits the granting of up to 42.5million shares in the form of stock options, RS, RSUs, PeRSUs and other share-based awards. As of March31, 2010, 20 million shares remain available for future grant under the 2005 Stock Plan. Stock Options Stock options are granted at no less than fair market value and those options granted under the 2005 Stock Plan generally have a contractual term of seven years and follow a four-year vesting schedule. Prio |
Restructuring Activities and Ot
Restructuring Activities and Other Workforce Reduction Charges | |
12 Months Ended
Mar. 31, 2010 | |
Restructuring Activities and Other Workforce Reduction Charges [Abstract] | |
Restructuring Activities and Other Workforce Reduction Charges | 4. Restructuring Activities and Other Workforce Reduction Charges The following table summarizes the activity related to our restructuring liabilities for the last three years: Distribution Solutions Technology Solutions Corporate (In millions) Severance Exit-Related Severance Exit-Related Severance Total Balance, March31, 2007 $ 3 $ 6 $ 16 $ 5 $ $ 30 Expenses 5 1 4 2 12 Asset impairments 3 4 7 Total charge 5 3 1 8 2 19 Liabilities related to acquisitions 6 1 11 1 19 Cash payments (7 ) (22 ) (4 ) (33 ) Non-cash items (3 ) (4 ) (7 ) Balance, March31, 2008 7 7 6 6 2 28 Expenses 4 (1 ) (1 ) (1 ) 1 Liabilities related to acquisitions 3 1 4 Cash payments (8 ) (5 ) (4 ) (2 ) (19 ) Non-cash items (1 ) (1 ) Balance, March31, 2009 6 3 1 2 1 13 Expenses 1 1 (1 ) 1 2 Cash payments (3 ) (1 ) (1 ) (1 ) (6 ) Balance, March31, 2010 $ 4 $ 3 $ 1 $ $ 1 $ 9 Our restructuring activities are primarily due to the consolidation of business functions and facilities from newly acquired businesses. Restructuring Activities and Asset Impairment Expenses During 2010 and 2009, there were no material restructuring costs incurred. During 2008, we incurred $19million of restructuring expenses, which primarily consisted of: $4million of severance costs associated with the closure of two facilities within our Distribution Solutions segment, $1million and $3million of severance and asset impairments associated with the integration of OTN within our Distribution Solutions segment, and $5million of severance and exit-related costs and a $4million asset impairment charge for the write-off of capitalized software costs associated with the termination of a software project within our Technology Solutions segment. Restructuring Activities Liabilities Related to Business Combinations In connection with our OTN acquisition within our Distribution Solutions segment, to date we recorded a total of $8million of employee severance costs and $5million of facility exit costs. As of March31, 2010, the majority of the restructuring accruals of $9million, which primarily consist of employee severance costs and facility exit and contract termination costs, are anticipated to be disbursed through 2011. Accrued restructuring liabilities are included in other accrued and other noncurrent liabilities in the consolidated balance sheets. The majority of past initiatives were completed during 2010. Based on our current existing initiatives, we expect to complete the majority of these activit |
Other Income, Net
Other Income, Net | |
12 Months Ended
Mar. 31, 2010 | |
Other Income, Net [Abstract] | |
Other Income, Net | 5. Other Income, Net Years Ended March 31, (In millions) 2010 2009 2008 Interest income $ 16 $ 31 $ 89 Equity in earnings, net 6 7 21 Gain on sale of investment 17 24 Impairment of investments (63 ) Other, net 4 13 11 Total $ 43 $ 12 $ 121 In October2009, our Distribution Solutions segment sold its 50% equity interest in McKesson Logistics Solutions L.L.C. (MLS), a Canadian logistics company, for a pre-tax gain of $17million or $14million after-tax. In July2008, our Distribution Solutions segment sold its 42% equity interest in Verispan L.L.C. (Verispan), a data analytics company, for a pre-tax gain of $24million or $14million after-tax. We evaluate our investments for impairment when events or changes in circumstances indicate that the carrying values of such investments may have experienced an other-than-temporary decline in value. During the fourth quarter of 2009, we determined that the fair value of our interest in Parata Systems, LLC (Parata) was lower than its carrying value and that such impairment was other-than-temporary. Fair value was determined using a discounted cash flow analysis based on estimated future results and market capitalization rates. We determined the impairment was other-than-temporary based on our assessment of all relevant factors including deterioration in the investees financial condition and weak market conditions. As a result, we recorded a pre-tax impairment of $58million ($55million after-tax) on this investment, which is recorded within other income, net in the consolidated statements of operations. Our investment in Parata is accounted for under the equity method of accounting within our Distribution Solutions segment. During the fourth quarter of 2009, we also recorded a pre-tax impairment of $5million ($5million after-tax) on another equity-held investment within our Distribution Solutions segment. |
Income Taxes
Income Taxes | |
12 Months Ended
Mar. 31, 2010 | |
Income Taxes [Abstract] | |
Income Taxes | 6. Income Taxes Years Ended March 31, (In millions) 2010 2009 2008 Income from continuing operations before income taxes U.S. $ 1,340 $ 623 $ 1,059 Foreign 524 441 398 Total income from continuing operations before income taxes $ 1,864 $ 1,064 $ 1,457 The provision for income taxes related to continuing operations consists of the following: Years Ended March 31, (In millions) 2010 2009 2008 Current Federal $ 255 $ 177 $ 189 State and local 25 (111 ) 59 Foreign 44 35 22 Total current 324 101 270 Deferred Federal 269 69 178 State and local 13 62 16 Foreign (5 ) 9 4 Total deferred 277 140 198 Income tax provision $ 601 $ 241 $ 468 In 2009, we recorded a total income tax expense of $241million, which included an income tax benefit of $182million related to the Average Wholesale Price (AWP) litigation charge described in more detail in Financial Note 18, Other Commitments and Contingent Liabilities. The tax benefit could change in the future depending on the resolution of the pending and expected claims. In 2009, current income tax expense included $111million of net income tax benefits for discrete items of which, $87million represents a non-cash benefit. These benefits primarily relate to the recognition of previously unrecognized tax benefits and related accrued interest. The recognition of these discrete items was primarily due to the lapsing of the statutes of limitations. In 2008, the U.S. Internal Revenue Service (IRS) began its examination of our fiscal years 2003 through 2006. In 2009 and 2010, we received assessments from the Canada Revenue Agency (CRA) for a total of $62million related to transfer pricing for 2003, 2004 and 2005. We paid the CRA assessments to stop the accrual of interest. We have appealed the assessment for 2003 and have filed a notice of objection for 2004 and 2005. We believe that we have adequately provided for any potential adverse results. In nearly all jurisdictions, the tax years prior to 2003 are no longer subject to examination. We believe that we have made adequate provision for all remaining income tax uncertainties. In 2008, the IRS completed an examination of our consolidated income tax returns for 2000 to 2002 resulting in a signed Revenue Agent Report (RAR), which was subsequently approved by the Joint Committee on Taxation. The IRS and the Company agreed to certain adjustments, primarily related to transfer pricing and income tax credits. As a result of the approved RAR, we recognized approximately $25million of net federal and state income tax benefits in 2008. Significant judgments and estimates are required in determining the consolidated income tax provision. Although our major taxing jurisdictions are the U.S. and Canada, we are subject to income taxes in numerous fore |
Discontinued Operations
Discontinued Operations | |
12 Months Ended
Mar. 31, 2010 | |
Discontinued Operations [Abstract] | |
Discontinued Operations | 7. Discontinued Operations No charges for discontinued operations were incurred during 2010 and 2009. In 2008, discontinued operations included $1million from the Companys Acute Care business, which was sold in 2007. |
Earnings Per Common Share
Earnings Per Common Share | |
12 Months Ended
Mar. 31, 2010 | |
Earnings Per Common Share [Abstract] | |
Earnings Per Common Share | 8. Earnings Per Common Share Basic earnings per common share are computed by dividing net income by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per common share are computed similar to basic earnings per common share except that it reflects the potential dilution that could occur if dilutive securities or other obligations to issue common stock were exercised or converted into common stock. The computations for basic and diluted earnings per common share from continuing and discontinued operations are as follows: Years Ended March 31, (In millions, except per share amounts) 2010 2009 2008 Income from continuing operations $ 1,263 $ 823 $ 989 Discontinued operations, net 1 Net income $ 1,263 $ 823 $ 990 Weighted average common shares outstanding: Basic 269 275 291 Effect of dilutive securities: Options to purchase common stock 3 3 5 Restricted stock 1 1 2 Diluted 273 279 298 Earnings per common share: (1) Basic Continuing operations $ 4.70 $ 2.99 $ 3.40 Discontinued operations, net Total $ 4.70 $ 2.99 $ 3.40 Diluted Continuing operations $ 4.62 $ 2.95 $ 3.32 Discontinued operations, net Total $ 4.62 $ 2.95 $ 3.32 (1) Certain computations may reflect rounding adjustments. Approximately 8million, 5million and 8million stock options and restricted stock units were excluded from the computations of diluted net earnings per common share in 2010, 2009 and 2008 as their exercise and grant-date price was higher than the Companys average stock price. |
Receivables, net
Receivables, net | |
12 Months Ended
Mar. 31, 2010 | |
Receivables, net [Abstract] | |
Receivables, net | 9. Receivables, Net March 31, (In millions) 2010 2009 Customer accounts $ 7,256 $ 6,902 Other 968 1,033 Total 8,224 7,935 Allowances (149 ) (161 ) Net $ 8,075 $ 7,774 The allowances are primarily for estimated uncollectible accounts and sales returns to vendors. |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | |
12 Months Ended
Mar. 31, 2010 | |
Property, Plant and Equipment, Net [Abstract] | |
Property, Plant and Equipment, Net | 10. Property, Plant and Equipment, Net March 31, (In millions) 2010 2009 Land $ 50 $ 50 Building, machinery, equipment and other 1,808 1,673 Total property, plant and equipment 1,858 1,723 Accumulated depreciation (1,007 ) (927 ) Property, plant and equipment, net $ 851 $ 796 |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | |
12 Months Ended
Mar. 31, 2010 | |
Goodwill and Intangible Assets, Net [Abstract] | |
Goodwill and Intangible Assets, Net | 11. Goodwill and Intangible Assets, Net Changes in the carrying amount of goodwill were as follows: Distribution Technology (In millions) Solutions Solutions Total Balance, March31, 2008 $ 1,672 $ 1,673 $ 3,345 Goodwill acquired, net of purchase price adjustments 231 35 266 Goodwill written off related to the sale of a business (24 ) (24 ) Foreign currency translation adjustments and other (10 ) (49 ) (59 ) Balance, March31, 2009 $ 1,869 $ 1,659 $ 3,528 Goodwill acquired, net of purchase price adjustments 7 4 11 Acquisition accounting and other adjustments (26 ) (26 ) Foreign currency translation adjustments 21 34 55 Balance, March31, 2010 $ 1,871 $ 1,697 $ 3,568 Information regarding intangible assets is as follows: March 31, (In millions) 2010 2009 Customer lists $ 832 $ 824 Technology 190 187 Trademarks and other 74 70 Gross intangibles 1,096 1,081 Accumulated amortization (545 ) (420 ) Intangible assets, net $ 551 $ 661 Amortization expense of intangible assets was $121million, $128million and $107million for 2010, 2009 and 2008. The weighted average remaining amortization periods for customer lists, technology, trademarks and other intangible assets at March31, 2010 were: 7years, 2years and 6 years. Estimated annual amortization expense of these assets is as follows: $112million, $106million, $88million, $76million and $59million for 2011 through 2015, and $110million thereafter. All intangible assets were subject to amortization as of March31, 2010 and 2009. |
Long-Term Debt and Other Financ
Long-Term Debt and Other Financing | |
12 Months Ended
Mar. 31, 2010 | |
Long-Term Debt and Other Financing [Abstract] | |
Long-Term Debt and Other Financing | 12. Long-Term Debt and Other Financing March 31, (In millions) 2010 2009 9.13% SeriesC Senior Notes due February, 2010 $ $ 215 7.75% Notes due February, 2012 399 399 5.25% Notes due March, 2013 499 499 6.50% Notes due February, 2014 350 350 5.70% Notes due March, 2017 499 499 7.50% Notes due February, 2019 349 349 7.65% Debentures due March, 2027 175 175 ESOP related debt (see Financial Note 13) 1 Other 25 22 Total debt 2,296 2,509 Less current portion (3 ) (219 ) Total long-term debt $ 2,293 $ 2,290 Long-Term Debt On February12, 2009, the Company issued 6.50% notes due February15, 2014 (the 2014 Notes) in an aggregate principal amount of $350million and 7.50% notes due February15, 2019 (the 2019 Notes) in an aggregate principal amount of $350million. Interest is payable on February15 and August15 of each year beginning on August15, 2009. The 2014 Notes will mature on February15, 2014 and the 2019 Notes will mature on February15, 2019. The Company utilized net proceeds, after discounts and offering expenses, of $693million from the issuance of the 2014 Notes and 2019 Notes for general corporate purposes. On March5, 2007, we issued 5.25% notes due March1, 2013 (the 2013 Notes) in an aggregate principal amount of $500million and 5.70% notes due March1, 2017 (the 2017 Notes, collectively with the 2013 Notes, 2014 Notes, 2019 Notes, the Notes and each note constitutes a Series) in an aggregate principal amount of $500million for which interest is payable on March 1 and September 1 of each year. The 2013 Notes will mature on March1, 2013 and the 2017 Notes will mature on March1, 2017. We utilized net proceeds, after discounts and offering expenses, of $990million from the issuance of the 2013 Notes and 2017 Notes, together with cash on hand, to repay outstanding interim indebtedness related to our January2007 acquisition of Per-Se. Each Series constitutes an unsecured and unsubordinated obligation of the Company and ranks equally with all of the Companys existing and future unsecured and unsubordinated indebtedness outstanding from time-to-time. Each Series is governed by an indenture common to all Notes and an officers certificate specifying certain terms of each Series. Upon 30days notice to holders of a Series, we may redeem that Series at any time prior to maturity, in whole or in part, for cash at redemption prices that include accrued and unpaid interest and a make-whole premium, as specified in the indenture and officers certificate relating to that Series. In the event of the occurrence of both (1)a change of control of the Company and (2)a downgrade of a Series below an investment grade rating by each of Fitch Ratings, Moodys Investors Service, Inc. and Standard Poors Ratings Services within a specified period, an offer will be made to purchase that Series from the holders at a price in cash equal to 101% of the then outstanding principal amount of that Series, plus accrued and unpaid interest to, but not includi |
Pension Benefits
Pension Benefits | |
12 Months Ended
Mar. 31, 2010 | |
Pension Benefits [Abstract] | |
Pension Benefits | 13. Pension Benefits We maintain a number of qualified and nonqualified defined pension benefit plans and defined contribution plans for eligible employees. Defined Pension Benefit Plans Eligible U.S. employees who were employed by the Company prior to December31, 1996 are covered under the Company-sponsored defined benefit retirement plan. In 1997, we amended this plan to freeze all plan benefits based on each employees plan compensation and creditable service accrued to that date. The Company has made no annual contributions since this plan was frozen. The benefits for this defined benefit retirement plan are based primarily on age of employees at date of retirement, years of service and employees pay during the five years prior to retirement. We also have defined benefit pension plans for eligible Canadian and United Kingdom employees as well as an unfunded nonqualified supplemental defined benefit plan for certain U.S. executives. We also assumed a frozen qualified defined benefit plan through our acquisition of Per-Se Technologies, Inc. (Per-Se) in 2007. The Per-Se plan was merged into our retirement plan in 2008. We adopted the measurement provisions of new accounting standards for benefit provisions in the fourth quarter of 2009. As required, our defined benefit plan assets and obligations are now measured as of the Companys fiscal year-end. We previously performed this measurement at December 31. The net periodic expense for our pension plans is as follows: Years Ended March 31, (In millions) 2010 2009 2008 Service costbenefits earned during the year $ 4 $ 6 $ 7 Interest cost on projected benefit obligation 35 33 31 Expected return on assets (24 ) (39 ) (39 ) Amortization of unrecognized actuarial loss, prior service costs and net transitional obligation 25 10 11 Settlement charges and other 1 4 Net periodic pension expense $ 40 $ 11 $ 14 The projected unit credit method is utilized in measuring net periodic pension expense over the employees service life for the U.S. pension plans. Unrecognized actuarial losses exceeding 10% of the greater of the projected benefit obligation or the market value of assets are amortized straight-line over the average remaining future service periods. Information regarding the changes in benefit obligations and plan assets for our pension plans is as follows: 15 Month Year Ended Period Ended March March (In millions) 31, 2010 31, 2009 Change in benefit obligations Benefit obligation at beginning of period $ 456 $ 543 Measurement date adjustment adoption of new standards (3 ) Service cost 4 6 Interest cost 35 33 Actuarial loss (gain) 132 (65 ) Benefit payments (38 ) (32 ) Foreign exchange impact and other 4 (26 ) Benefit obligation at end of period (1) $ 593 $ 456 Change in plan assets Fair value of |
Postretirement Benefits
Postretirement Benefits | |
12 Months Ended
Mar. 31, 2010 | |
Postretirement Benefits [Abstract] | |
Postretirement Benefits | 14. Postretirement Benefits We maintain a number of postretirement benefits, primarily consisting of healthcare and life insurance (welfare) benefits, for certain eligible U.S. employees. Eligible employees consist of those who retired before March31, 1999 and those who retired after March31, 1999, but were an active employee as of that date, after meeting other age-related criteria. We also provide postretirement benefits for certain U.S. executives. We adopted the measurement provisions of new accounting standards for postretirement plans in the fourth quarter of 2009. As required, our defined benefit plan obligations are now measured as of the Companys fiscal year-end. We previously performed this measurement at December31. The net periodic expense (income)for our postretirement welfare benefits is as follows: Years Ended March 31, (In millions) 2010 2009 2008 Service costbenefits earned during the year $ 1 $ 1 $ 2 Interest cost on projected benefit obligation 9 10 10 Amortization of unrecognized actuarial loss (gain)and prior service costs (25 ) (14 ) 4 Net periodic postretirement expense (income) $ (15 ) $ (3 ) $ 16 Information regarding the changes in benefit obligations for our postretirement welfare plans is as follows: 15 Month Year Ended Period Ended March March (In millions) 31, 2010 31, 2009 Change in benefit obligations Benefit obligation at beginning of period $ 133 $ 157 Measurement date adjustment adoption of new standards 3 Service cost 1 1 Interest cost 9 10 Plan amendments and other 6 Actuarial loss (gain) 26 (30 ) Benefit payments (15 ) (14 ) Benefit obligation at end of period $ 154 $ 133 The components of the amount recognized in accumulated other comprehensive income for the Companys other postretirement plans at March31, 2010 and 2009 were net actuarial gain of $1million and $52million and net prior service credit of $2million and $2million. Other changes in benefit obligations recognized in other comprehensive income were net actuarial loss of $51million for 2010 and net actuarial gain of $12million and $33million for 2009 and 2008. We estimate that the amortization of the actuarial gain from stockholders equity to other postretirement expense in 2011 will be $10million ($25million in 2010). The decrease in the gain is due to completion of amortization of the 2007 actuarial gain in 2010 and a decrease in the discount rate in 2011. Other postretirement benefits are funded as claims are paid. Expected benefit payments for our postretirement welfare benefit plans, net of expected Medicare subsidy receipts of $2million annually, are as follows: $14million annually for 2011 to 2015 and $63million cumulatively for 2016 through 2020. Expected benefit payments are based on the same assumptions used to measure the benefit obligations and include estimated future employee service. Expected contributions to b |
Financial Instruments and Hedgi
Financial Instruments and Hedging Activities | |
12 Months Ended
Mar. 31, 2010 | |
Financial Instruments and Hedging Activities [Abstract] | |
Financial Instruments and Hedging Activities | 15. Financial Instruments and Hedging Activities At March31, 2010 and 2009, the carrying amounts of cash and cash equivalents, restricted cash, marketable securities, receivables, drafts and accounts payable and other current liabilities approximated their estimated fair values because of the short maturity of these financial instruments. All highly liquid debt instruments purchased with original maturity of three months or less at the date of acquisition are included in cash and cash equivalents. Included in cash and cash equivalents at March31, 2010 and 2009, are money market fund investments of $2.3billion and $1.7billion, which are reported at fair value. The fair value of these investments was determined by using quoted prices for identical investments in active markets, which are considered to be Level 1 inputs under the fair value measurements and disclosures guidance. The carrying value of all other cash equivalents approximates fair value due to their relatively short-term nature. The carrying amount and estimated fair value of our long-term debt and other financing was $2.3billion and $2.5billion at March31, 2010 and $2.5 billion each at March 31, 2009. The estimated fair value of our long-term debt and other financing was determined using quoted market prices and other inputs that were derived from available market information and may not be representative of actual values that could have been realized or that will be realized in the future. In the normal course of business, we are exposed to interest rate changes and foreign currency fluctuations. We limit these risks through the use of derivatives such as interest rate swaps and forward foreign exchange contracts. In accordance with our policy, derivatives are only used for hedging purposes. We do not use derivatives for trading or speculative purposes. The volume of activity related to derivative financial instruments was not material for 2010, 2009 and 2008. |
Lease Obligations
Lease Obligations | |
12 Months Ended
Mar. 31, 2010 | |
Lease Obligations [Abstract] | |
Lease Obligations | 16. Lease Obligations We lease facilities and equipment almost solely under operating leases. At March31, 2010, future minimum lease payments required under operating leases that have initial or remaining noncancellable lease terms in excess of one year for years ending March31 are: Noncancellable Operating (In millions) Leases 2011 $ 106 2012 85 2013 55 2014 38 2015 29 Thereafter 50 Total minimum lease payments $ 363 Rental expense under operating leases was $154million, $146million and $149million in 2010, 2009 and 2008. We recognize rent expense on a straight-line basis over the term of the lease, taking into account, when applicable, lessor incentives for tenant improvements, periods where no rent payment is required and escalations in rent payments over the term of the lease. Deferred rent is recognized for the difference between the rent expense recognized on a straight-line basis and the payments made per the terms of the lease. Remaining terms for facilities leases generally range from one to seven years, while remaining terms for equipment leases range from one to three years. Most real property leases contain renewal options (generally for five-year increments) and provisions requiring us to pay property taxes and operating expenses in excess of base period amounts. Sublease rental income was not material for any period presented. |
Financial Guarantees and Warran
Financial Guarantees and Warranties | |
12 Months Ended
Mar. 31, 2010 | |
Financial Guarantees and Warranties [Abstract] | |
Financial Guarantees and Warranties | 17. Financial Guarantees and Warranties Financial Guarantees We have agreements with certain of our customers financial institutions under which we have guaranteed the repurchase of inventory (primarily for our Canadian business) at a discount in the event these customers are unable to meet certain obligations to those financial institutions. Among other requirements, these inventories must be in resalable condition. The inventory repurchase agreements mostly range from one to two years. Customer guarantees range from one to five years and were primarily provided to facilitate financing for certain customers. The majority of our other customer guarantees are secured by certain assets of the customer. We also have an agreement with one software customer that, under limited circumstances, may require us to secure standby financing. Because the amount of the standby financing is not explicitly stated, the overall amount of this guarantee cannot reasonably be estimated. At March31, 2010, the maximum amounts of inventory repurchase guarantees and other customer guarantees were $124million and $17million, none of which had been accrued. At March31, 2010, we had commitments of $2million of cash contributions to our equity-held investments, for which no amounts had been accrued and a loan commitment of $5million to an equity-held investment, of which $2million had been funded and is included under other assets in our consolidated balance sheet. The expirations of the above noted financial guarantees and commitments are as follows: $64million, $24million, $1million, nil and $6million from 2011 through 2015 and $51million thereafter. In addition, at March31, 2010, our banks and insurance companies have issued $111million of standby letters of credit and surety bonds, which were issued on our behalf mostly related to our customer contracts and in order to meet the security requirements for statutory licenses and permits, court and fiduciary obligations and our workers compensation and automotive liability programs. Our software license agreements generally include certain provisions for indemnifying customers against liabilities if our software products infringe a third partys intellectual property rights. To date, we have not incurred any material costs as a result of such indemnification agreements and have not accrued any liabilities related to such obligations. In conjunction with certain transactions, primarily divestitures, we may provide routine indemnification agreements (such as retention of previously existing environmental, tax and employee liabilities) whose terms vary in duration and often are not explicitly defined. Where appropriate, obligations for such indemnifications are recorded as liabilities. Because the amounts of these indemnification obligations often are not explicitly stated, the overall maximum amount of these commitments cannot be reasonably estimated. Other than obligations recorded as liabilities at the time of divestiture, we have historically not made significant payments as a result of these indemnification provisions. Warranties In the normal course of business, we provide certain warran |
Other Commitments and Contingen
Other Commitments and Contingent Liabilities | |
12 Months Ended
Mar. 31, 2010 | |
Other Commitments and Contingent Liabilities [Abstract] | |
Other Commitments and Contingent Liabilities | 18. Other Commitments and Contingent Liabilities In addition to commitments and obligations in the ordinary course of business, we are subject to various claims, other pending and potential legal actions for damages, investigations relating to governmental laws and regulations and other matters arising out of the normal conduct of our business. We record a provision for a liability when management believes that it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. We believe we have made adequate provisions for any such matters. Management reviews these provisions at least quarterly and adjusts these provisions to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular case. Because litigation outcomes are inherently unpredictable, these decisions often involve a series of complex assessments by management about future events that can rely heavily on estimates and assumptions and it is possible that the ultimate cost of these matters could impact our earnings, either negatively or positively, in the period of their resolution. We are party to the significant legal proceedings described below. Based on our experience, we believe that any damage amounts claimed in the specific matters discussed below are not meaningful indicators of our potential liability. We believe that we have valid defenses to these legal proceedings and are defending the matters vigorously. Nevertheless, the outcome of any litigation is inherently uncertain. We are currently unable to estimate the remaining possible losses in these unresolved legal proceedings. Should any one or a combination of more than one of these proceedings be successful, or should we determine to settle any or a combination of these matters, we may be required to pay substantial sums, become subject to the entry of an injunction or be forced to change the manner in which we operate our business, which could have a material adverse impact on our financial position or results of operations. I.Accounting Litigation Following the announcements by McKesson in April, May and July of 1999 that McKesson had determined that certain software sales transactions in its Information Solutions segment, formerly HBO Company, Inc. (HBOC) and later known as McKesson Information Solutions LLC, were improperly recorded as revenue and reversed, numerous lawsuits were filed against McKesson, HBOC, certain of McKessons and HBOCs current and former officers or directors, and other defendants. Although almost all of these cases (collectively the Securities Litigation) have now been resolved, certain matters remain pending as more fully described below. On January 12, 2005, we announced that we reached an agreement to settle the previously-reported action in the Northern District of California captioned: In re McKesson HBOC, Inc. Securities Litigation, (No. C-99-20743 RMW) (the Consolidated Securities Litigation Action). The last two Securities Litigation lawsuits pending against the Company are Holcombe T. Green and HTG Corp. v. McKesson Corporation, et al. (Ge |
Stockholders' Equity
Stockholders' Equity | |
12 Months Ended
Mar. 31, 2010 | |
Stockholders' Equity [Abstract] | |
Stockholders' Equity | 19. Stockholders Equity Each share of the Companys outstanding common stock is permitted one vote on proposals presented to stockholders and is entitled to share equally in any dividends declared by the Companys Board of Directors (the Board). Share Repurchase Plans In April2010, the Board authorized the repurchase of up to an additional $1.0billion of the Companys common stock. Stock repurchases may be made from time-to-time in open market transactions, privately negotiated transactions, through accelerated share repurchase 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. Information regarding our share repurchase activity is as follows: Share Repurchases (1) Approximate Dollar Value of Shares that Total May Yet Be Number of Shares Average Price Paid Purchased Under (In millions, except price per share data) Purchased (2) (3) Per Share the Programs Balance, March31, 2007 $ Share repurchase plans approved April2007 1,000 September2007 1,000 Shares repurchased 28 $ 59.48 (1,686 ) Balance, March31, 2008 $ 314 Share repurchase plan approved April2008 1,000 Shares repurchased 10 $ 50.52 (484 ) Balance, March31, 2009 $ 830 Shares repurchased 8 $ 41.47 (299 ) Balance, March31, 2010 $ 531 (1) This table does not include shares tendered to satisfy the exercise price in connection with cashless exercises of employee stock options or shares tendered to satisfy tax withholding obligations in connection with employee equity awards. (2) All of the shares purchased were part of the publicly announced programs. (3) The number of shares purchased reflects rounding adjustments. In July2008, the Board authorized the retirement of shares of the Companys common stock that may be repurchased from time-to-time pursuant to its stock repurchase program. During the second quarter of 2009, all of the 4million repurchased shares, which we purchased for $204million, were formally retired 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, $165million was recorded as a decrease to retained earnings. Accumulated Other Comprehensive Income (Loss) Information regarding our other comprehensive income (loss)is as follows: March 31, (In millions) 2010 2009 Unrealized net loss and other components of benefit plans, net of tax $ (162 ) $ (109 ) Translation adjus |
Related Party Balances and Tran
Related Party Balances and Transactions | |
12 Months Ended
Mar. 31, 2010 | |
Related Party Balances and Transactions [Abstract] | |
Related Party Balances and Transactions | 20. Related Party Balances and Transactions Notes receivable outstanding from certain of our current and former officers and senior managers totaled $16million at March31, 2010 and 2009. These notes related to purchases of common stock under our various employee stock purchase plans. The notes bear interest at rates ranging from 4.7% to 7.1% and were due at various dates through February2004. Interest income on these notes is recognized only to the extent that cash is received. These notes, which are included in other capital in the consolidated balance sheets, were issued for amounts equal to the market value of the stock on the date of the purchase and are at full recourse to the borrower. At March31, 2010, the value of the underlying stock collateral was $12million. The collectability of these notes is evaluated on an ongoing basis. At March31, 2010 and 2009, we provided a reserve of approximately $4million and $9million for the outstanding notes. Other receivable balances held with related parties, consisting of loans made to certain officers and senior managers and an equity-held investment, amounted to nil and $1million at March31, 2010 and 2009. We incurred $11million in 2010 and $10million in 2009 and 2008 of annual rental expense paid to an equity-held investment. |
Segment of Business
Segment of Business | |
12 Months Ended
Mar. 31, 2010 | |
Segment of Business [Abstract] | |
Segments of Business | 21. Segments of Business We report our operations in two operating segments: McKesson Distribution Solutions and McKesson Technology Solutions. The factors for determining the reportable segments included the manner in which management evaluates the performance of the Company combined with the nature of the individual business activities. We evaluate the performance of our operating segments based on operating profit before interest expense, income taxes and results from discontinued operations. The Distribution Solutions segment distributes ethical and proprietary drugs, medical-surgical supplies and equipment and health and beauty care products throughout North America. This segment also provides specialty pharmaceutical solutions for biotech and pharmaceutical manufacturers, sells financial, operational and clinical solutions for pharmacies (retail, hospital, long-term care) and provides consulting, outsourcing and other services. This segment includes a 49% interest in Nadro, S.A. de C.V. (Nadro), one of the leading pharmaceutical distributors in Mexico and a 39% interest in Parata, which sells automated pharmacy and supply management systems and services to retail and institutional outpatient pharmacies. The Technology Solutions segment delivers enterprise-wide clinical, patient care, financial, supply chain, strategic management software solutions, pharmacy automation for hospitals, as well as connectivity, outsourcing and other services, including remote hosting and managed services, to healthcare organizations. The segment also includes our Payor group of businesses, which includes our InterQual claims payment solutions, medical management software businesses and our care management programs. The segments customers include hospitals, physicians, homecare providers, retail pharmacies and payors from North America, the United Kingdom, Ireland, other European countries, Asia Pacific and Israel. Revenues for our Technology Solutions segment are classified in one of three categories: services, software and software systems and hardware. Services revenues primarily include fees associated with installing our software and software systems, as well as revenues associated with software maintenance and support, remote processing, disease and medical management, and other outsourcing and professional services. Software and software systems revenues primarily include revenues from licensing our software and software systems, including the segments clinical auditing and compliance and InterQual businesses. Corporate includes expenses associated with Corporate functions and projects, certain employee benefits and the results of certain equity-held investments. Corporate expenses are allocated to the operating segments to the extent that these items can be directly attributable to the segment. Financial information relating to the reportable operating segments is presented below: Years Ended March 31, (In millions) 2010 2009 2008 Revenues Distribution Solutions (1) Direct distribution services $ 72,210 $ 66,876 $ 60,436 |
Quarterly Financial Information
Quarterly Financial Information (Unaudited) | |
12 Months Ended
Mar. 31, 2010 | |
Quarterly Financial Information (Unaudited) [Abstract] | |
Quarterly Financial Information (Unaudited) | 22. Quarterly Financial Information (Unaudited) First Second Third Fourth (In millions, except per share amounts) Quarter Quarter Quarter Quarter Year Fiscal 2010 Revenues $ 26,657 $ 27,130 $ 28,272 $ 26,643 $ 108,702 Gross profit 1,303 1,335 1,455 1,583 5,676 Net income (1) 288 301 326 348 1,263 Earnings per common share (1) Diluted 1.06 1.11 1.19 1.26 4.62 Basic 1.07 1.13 1.21 1.29 4.70 Fiscal 2009 Revenues $ 26,704 $ 26,574 $ 27,130 $ 26,224 $ 106,632 Gross profit 1,268 1,302 1,343 1,465 5,378 Net income (2)(3)(4)(5) 235 327 (20 ) 281 823 Earnings per common share (2)(3)(4)(5) Diluted 0.83 1.17 (0.07 ) 1.01 2.95 Basic 0.85 1.19 (0.07 ) 1.03 2.99 (1) Financial results for the third quarter and full year 2010 include a $17million pre-tax gain ($14million after-tax) on sale of our 50% interest in MLS. (2) Financial results for the second quarter and full year 2009 include a $24million pre-tax gain ($14million after-tax) on sale of our 42% interest in Verispan. (3) Financial results for the second and fourth quarters and full year 2009 include $67million, $22million and $89million of income tax credits related to the recognition of previously unrecognized tax benefits and related interest expense as a result of the lapsing of the statutes of limitations. (4) Financial results for the third quarter and full year 2009 include a $493million pre-tax charge ($311million after-tax) associated with the AWP litigation. (5) Financial results for the fourth quarter and full year 2009 include a $63million pre-tax impairment charge ($60million after-tax) associated with two equity-held investments. |
Subsequent Events
Subsequent Events | |
12 Months Ended
Mar. 31, 2010 | |
Subsequent Events [Abstract] | |
Subsequent Events | 23. Subsequent Events In April2010, our Technology Solutions segment entered into a definitive agreement to sell its wholly-owned subsidiary, McKesson Asia Pacific Pty Limited, a provider of phone and web-based healthcare services in Australia and New Zealand. This agreement is the result of an unsolicited purchase offer. The divestiture is subject to regulatory approval. Upon completion of the sale, any gain will be reported as discontinued operations in our consolidated financial statements. On May 4, 2010, we received $51million cash proceeds representing our share of a settlement of an antitrust class action lawsuit. This will be recorded as a reduction of cost of sales in our consolidated statement of operations in the first quarter of 2011. |
Supplementary Consolidated Fina
Supplementary Consolidated Financial Statement Schedule | |
12 Months Ended
Mar. 31, 2010 | |
Supplementary Consolidated Financial Statement [Abstract] | |
SUPPLEMENTARY CONSOLIDATED FINANCIAL STATEMENT | Schedule Of Valuation And Qualifying Accounts Disclosure SCHEDULE II SUPPLEMENTARY CONSOLIDATED FINANCIAL STATEMENT SCHEDULE VALUATION AND QUALIFYING ACCOUNTS For the Years Ended March31, 2010, 2009 and 2008 (In millions) Additions Deductions Balance at Charged to Charged to From Balance at Beginning of Costs and Other Allowance End of Description Year Expenses Accounts (3) Accounts (1) Year (2) Year Ended March31, 2010 Allowances for doubtful accounts $ 152 $ 17 $ 7 $ (45 ) $ 131 Other allowances 12 6 10 (4 ) 24 $ 164 $ 23 $ 17 $ (49 ) $ 155 Year Ended March31, 2009 Allowances for doubtful accounts $ 163 $ 27 $ 3 $ (41 ) $ 152 Other allowances 9 6 1 (4 ) 12 $ 172 $ 33 $ 4 $ (45 ) $ 164 Year Ended March31, 2008 Allowances for doubtful accounts $ 139 $ 41 $ 17 $ (34 ) $ 163 Other allowances 11 (2 ) 9 $ 150 $ 41 $ 17 $ (36 ) $ 172 2010 2009 2008 (1 ) Deductions: Written off $ 49 $ 27 $ 32 Operation sold 6 Credited to other accounts 12 2 Total $ 49 $ 45 $ 34 (2 ) Amounts shown as deductions from current and non-current receivables $ 155 $ 164 $ 172 (3 ) Primarily represents reclassifications from other balance sheet accounts. |