SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For quarter ended June 30, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 1-13252
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McKESSON CORPORATION
- -----------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
DELAWARE 94-3207296
- ------------------------------ --------------------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
One Post Street, San Francisco, California 94104
- -----------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(415) 983-8300
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(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at June 30, 1998
- ---------------------------- ----------------------------
Common stock, $.01 par value 95,016,153 shares
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
==============================
Item Page
- ---- ----
1. Condensed Financial Statements
Consolidated Balance Sheets
June 30, 1998 and March 31, 1998 3 - 4
Statements of Consolidated Income
Three month periods ended
June 30, 1998 and 1997 5
Statements of Consolidated Cash Flows
Three month periods ended
June 30, 1998 and 1997 6 - 7
Financial Notes 8 - 10
2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Financial Review 11 - 14
PART II. OTHER INFORMATION
===========================
4. Submission of Matters to a Vote of Security Holders 15
5. Other Information 15
6. Exhibits and Reports on Form 8-K 16
Exhibit Index 18
PART I. FINANCIAL INFORMATION
==============================
McKESSON CORPORATION and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)
June 30, March 31,
1998 1998
-------- --------
(in millions)
ASSETS
- ------
Current Assets
Cash and cash equivalents $ 169.8 $ 35.7
Marketable securities available
for sale (Note 2) 44.9 77.9
Receivables 1,732.0 1,380.4
Inventories 2,775.2 2,583.5
Prepaid expenses 33.3 28.1
------- -------
Total 4,755.2 4,105.6
------- -------
Property, Plant and Equipment
Land 37.6 35.6
Buildings, machinery and equipment 854.8 834.7
------- -------
Total 892.4 870.3
Accumulated depreciation (448.4) (440.0)
------- -------
Net 444.0 430.3
Goodwill and Other Intangibles 751.7 752.4
Other Assets 350.2 319.2
------- -------
Total Assets $6,301.1 $5,607.5
======= =======
(Continued)
- 3 -
McKESSON CORPORATION and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)
June 30, March 31,
1998 1998
-------- --------
(in millions,
except par value)
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current Liabilities
Drafts payable $ 245.5 $ 286.2
Accounts payable - trade 2,397.3 1,859.1
Short-term borrowings 58.4 -
Current portion of long-term debt 10.3 10.0
Salaries and wages 41.0 53.9
Taxes 138.7 115.7
Interest and dividends 45.3 29.5
Other 222.4 223.4
------- -------
Total 3,158.9 2,577.8
------- -------
Postretirement Obligations and
Other Noncurrent Liabilities 238.4 233.3
------- -------
Long-Term Debt (Note 2) 1,147.6 1,194.2
------- -------
McKesson-obligated mandatorily
redeemable preferred securities
of subsidiary grantor trust whose
sole assets are junior subordinated
debentures of McKesson (Note 3) 195.4 195.4
------- -------
Stockholders' Equity
Common stock (200.0 shares authorized,
95.2 and 93.4 issued as of June 30 and
March 31, 1998, respectively;
par value of $.01) 1.0 0.9
Additional paid-in capital 564.0 440.7
Other capital (41.0) (42.2)
Retained earnings 1,204.4 1,173.2
Accumulated translation adjustment (46.6) (45.4)
ESOP notes and guarantee (115.6) (115.6)
Treasury shares, at cost (5.4) (4.8)
------- -------
Net 1,560.8 1,406.8
------- -------
Total Liabilities and
Stockholders' Equity $6,301.1 $5,607.5
======= =======
See Financial Notes.
(Concluded)
- 4 -
McKESSON CORPORATION and SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
(unaudited)
Three Months Ended
June 30
---------------------
1998 1997
-------- --------
(in millions - except
per share amounts)
REVENUES $5,870.9 $4,975.5
------- -------
COSTS AND EXPENSES
Cost of sales 5,468.6 4,610.7
Selling, distribution and administration 302.2 278.5
Interest 28.0 23.1
------- -------
Total 5,798.8 4,912.3
------- -------
INCOME BEFORE INCOME TAX EXPENSE
AND DIVIDENDS ON PREFERRED
SECURITIES OF SUBSIDIARY TRUST 72.1 63.2
INCOME TAX EXPENSE (28.4) (24.0)
DIVIDENDS ON PREFERRED
SECURITIES OF SUBSIDIARY TRUST (1.6) (1.6)
------- -------
NET INCOME $ 42.1 $ 37.6
======= =======
EARNINGS PER COMMON SHARE
Diluted $ 0.43 $ 0.39
Basic 0.45 0.41
Dividends 0.125 0.125
SHARES ON WHICH EARNINGS
PER COMMON SHARE WERE BASED
Diluted 103.5 100.2
Primary 92.9 91.0
See Financial Notes.
- 5 -
McKESSON CORPORATION and SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
(unaudited)
Three Months Ended
June 30
---------------------
1998 1997
-------- --------
(in millions)
Operating Activities
Net Income $ 42.1 $ 37.6
Adjustments to reconcile to net cash
provided (used) by operating activities
Depreciation 18.1 17.7
Amortization 5.0 3.6
Provision for bad debts 3.4 2.8
Deferred taxes on income (1.0) 2.7
Other non-cash items 4.0 (2.9)
------- -------
Total 71.6 61.5
------- -------
Effects of changes in
Receivables (361.9) (25.5)
Inventories (198.0) 133.3
Accounts and drafts payable 504.6 (165.7)
Taxes 34.7 15.7
Other (3.1) (46.9)
------- -------
Total (23.7) (89.1)
------- -------
Net cash provided (used) by
operating activities 47.9 (27.6)
------- -------
Investing Activities
Purchases of marketable securities (6.8) (1.2)
Maturities of marketable securities 40.7 11.4
Property acquisitions (34.8) (23.1)
Properties sold 6.2 1.7
Acquisitions of businesses, less cash
and short-term investments acquired (3.9) (3.2)
Other (25.8) (11.7)
------- -------
Net cash used by
investing activities (24.4) (26.1)
------- -------
(Continued)
- 6 -
McKESSON CORPORATION and SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
(unaudited)
Three Months Ended
June 30
---------------------
1998 1997
-------- --------
(in millions)
Financing Activities
Proceeds from issuance of debt $ 62.8 $ 35.1
Repayment of debt (48.9) (19.0)
Dividends paid on preferred
securities of subsidiary trust (2.5) (2.8)
Capital stock transactions
Issuances 111.1 2.0
ESOP notes and guarantee - 1.9
Dividends paid (11.7) (11.5)
Other (.2) -
------- -------
Net cash provided by
financing activities 110.6 5.7
------- -------
Net Increase (Decrease) in Cash
and Cash Equivalents 134.1 (48.0)
Cash and Cash Equivalents
at beginning of period 35.7 124.8
------- -------
Cash and Cash Equivalents
at end of period $ 169.8 $ 76.8
======= =======
See Financial Notes.
(Concluded)
- 7 -
McKESSON CORPORATION and SUBSIDIARIES
FINANCIAL NOTES
1. Interim Financial Statements
----------------------------
In the opinion of the Company, these unaudited condensed
consolidated financial statements include all adjustments
necessary for a fair presentation of its financial position as of
June 30, 1998 and the results of its operations and its cash
flows for the three months ended June 30, 1998 and 1997.
The results of operations for the three months ended June
30, 1998 and 1997 are not necessarily indicative of the results
for the full years.
It is suggested that these interim financial statements be
read in conjunction with the annual audited financial statements,
accounting policies and financial notes thereto included in the
Company's 1998 Annual Report to Stockholders which have
previously been filed with the Securities and Exchange
Commission.
2. Marketable Securities
---------------------
The June 30, 1998 marketable securities balance includes
$41.3 million held in trust as exchange property for the
Company's $67.7 million principal amount of 4.5% exchangeable
subordinated debentures which remain outstanding.
3. Convertible Preferred Securities
--------------------------------
In February 1997, a wholly owned subsidiary trust of the
Company issued 4 million shares of preferred securities to the
public and 123,720 common securities to the Company, which are
convertible at the holder's option into McKesson common stock.
The proceeds of such issuances were invested by the trust in
$206,186,000 aggregate principal amount of the Company's 5%
Convertible Junior Subordinated Debentures due 2027 (the
"Debentures"). The Debentures represent the sole assets of the
trust. The Debentures mature on June 1, 2027, bear interest at
the rate of 5%, payable quarterly, and are redeemable by the
Company beginning in March 2000 at 103.5% of the principal amount
thereof.
Holders of the securities are entitled to cumulative cash
distributions at an annual rate of 5% of the liquidation amount
of $50 per security. Each preferred security is convertible at
the rate of 1.3418 shares of McKesson common stock, subject to
adjustment in certain circumstances. The preferred securities
will be redeemed upon repayment of the Debentures, and are
callable by the Company at 103.5% of the liquidation amount
beginning in March 2000.
The Company has guaranteed, on a subordinated basis,
distributions and other payments due to the preferred securities
(the "Guarantee"). The Guarantee, when taken together with the
Company's obligations under the Debentures and in the indenture
pursuant to which the Debentures were issued and the Company's
obligations under the Amended and Restated Declaration of Trust
governing the subsidiary trust, provides a full and unconditional
guarantee of amounts due on the preferred securities.
The Debentures and related trust investment in the
Debentures have been eliminated in consolidation and the
preferred securities are reflected as outstanding in the
accompanying consolidated financial statements.
- 8 -
McKESSON CORPORATION and SUBSIDIARIES
FINANCIAL NOTES
4. Comprehensive Income
--------------------
The Company has adopted Statement of Financial Accounting
Standards ("SFAS") No. 130 "Reporting Comprehensive Income," in
the first quarter of fiscal 1999. Comprehensive income is
defined as all changes in stockholders' equity from nonowner
sources. As such, it includes net income and amounts arising
from foreign currency translations, unrecognized pension costs
and unrealized gains or losses on marketable securities
classified as available for sale which are recorded directly to
stockholders' equity. Total comprehensive income for the three
months ended June 30, 1998 and 1997 is as follows:
Three Months Ended
June 30
------------------
1998 1997
---- ----
Net income $42.1 $37.6
Foreign currency translation adjustments (1.2) -
---- ----
$40.9 $37.6
==== ====
5. New Accounting Pronouncements
-----------------------------
In fiscal 1998, the Financial Accounting Standards Board
issued SFAS No. 131 "Disclosures about Segments of an Enterprise
and Related Information," which establishes annual and interim
reporting standards for an enterprise's operating segments and
related disclosures about its products, services, geographic
areas, and major customers; and SFAS No. 132 "Employers'
Disclosures about Pension and Other Postretirement Benefits,"
which standardizes the disclosure requirements for pensions and
other postretirement benefits and expands disclosures on changes
in benefit obligations and fair values of plan assets. The
Company will implement these statements in fiscal 1999. Adoption
of these statements will not impact the Company's consolidated
financial position, results of operations or cash flows, and any
effect will be limited to the form and content of its
disclosures.
In fiscal 1999, the Financial Accounting Standards Board
issued SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities," which standardizes the accounting for
derivatives, requiring recognition as either assets or
liabilities on the balance sheet and measurement at fair value.
The Company plans to adopt this statement in fiscal 2001. The
Company has not yet determined the effect adoption of this
statement will have on the Company's consolidated financial
position, results of operations or cash flows.
- 9 -
McKESSON CORPORATION and SUBSIDIARIES
FINANCIAL NOTES
6. Proposed Acquisition
--------------------
On September 23, 1997, the Company and AmeriSource Health
Corporation ("AmeriSource"), a leading U. S. wholesale
distributor of pharmaceutical and related health care products
and services, jointly announced the execution of a definitive
Merger Agreement providing for the Company to acquire
AmeriSource. On March 3, 1998, the Federal Trade Commission
("FTC") voted to block the proposed merger. On March 9, 1998,
the FTC filed a complaint with the United States District Court
for the District of Columbia seeking a preliminary injunction to
halt the merger. On March 18, 1998, the Company and AmeriSource
each announced that they would oppose the FTC's motion for
preliminary injunction. The hearing commenced on June 9, 1998
and concluded on July 24, 1998. On July 31, 1998 the court
issued its opinion granting the FTC's motion for the preliminary
injunction to halt the merger until a full administrative hearing
can be held before the FTC. The Company and AmeriSource
announced on that date that they would discuss the impact of the
court's decision on the merger agreement, but that it was highly
unlikely that the merger would continue to be pursued. On August
7, 1998, the Company and AmeriSource announced that their merger
agreement had been terminated.
- 10 -
McKESSON CORPORATION and SUBSIDIARIES
FINANCIAL REVIEW
Segment Results
- ---------------
Three Months Ended
June 30
------------------------
1998 1997 %Chg
------ ------ ----
(in millions)
REVENUES
Health Care Services
Pharmaceutical Distribution
& Services
U. S. Health Care (1) $4,797.6 $4,073.9 17.8
International 518.9 377.8 37.3
------- -------
Total Pharmaceutical
Distribution & Services 5,316.5 4,451.7 19.4
Medical/Surgical Distribution
& Services 475.8 446.9 6.5
------- -------
Total Health Care Services 5,792.3 4,898.6 18.2
------- -------
Water Products 74.7 72.3 3.3
Corporate 3.9 4.6 (15.2)
------- -------
Total $5,870.9 $4,975.5 18.0
======= =======
OPERATING PROFIT
Pharmaceutical Distribution
& Services $ 82.7 (2) $ 68.3 21.1
Medical/Surgical Distribution
& Services 17.1 14.5 17.9
------- -------
Total Health Care Services 99.8 82.8 20.5
Water Products 11.5 11.1 3.6
------- -------
Total 111.3 93.9 18.5
Interest - net (3) (26.5) (21.8)
Corporate and other (12.7) (8.9)
------- -------
Income before income taxes $ 72.1 $ 63.2 14.1
======= =======
(1) Includes sales to customers' warehouses of $927.9 million
and $632.8 million in the quarters ended June 30, 1998 and
1997, respectively.
(2) Includes $4.9 million in charges related to the terminated
transaction with AmeriSource and $2.8 million in costs
incurred in connection with the integration and
rationalization of recent acquisitions.
(3) Interest expense is shown net of corporate interest income.
- 11 -
McKESSON CORPORATION and SUBSIDIARIES
FINANCIAL REVIEW
Overview of Results
- -------------------
Net income for the first quarter increased to $42.1 million,
$0.43 per diluted share, from $37.6 million, $0.39 per share, in
the prior year. Included in the current year first quarter
results were $4.9 million in pre-tax and after-tax charges
associated with the Company's terminated merger transaction with
AmeriSource Health Corporation ("AmeriSource") and $2.8 million
in pre-tax costs incurred in connection with the integration and
rationalization of recent acquisitions. In the second quarter,
the Company anticipates recording additional costs associated
with the terminated AmeriSource transaction that were incurred
subsequent to June 30, 1998 and related tax benefits on costs
incurred to date. See Financial Note 6.
The effective income tax rate applicable to continuing
operations for the quarter ended June 30, 1998 differed from the
effective income tax rate for the comparable year period
primarily due to the write-off of costs associated with the
terminated AmeriSource transaction, net of the positive effect of
a refinancing of Canadian debt in a more tax-efficient manner in
the third quarter of fiscal 1998.
PHARMACEUTICAL DISTRIBUTION & SERVICES
The Pharmaceutical Distribution & Services segment includes
the operations of the Company's U.S. pharmaceutical and health
care products distribution business and its international health
care distribution businesses in Canada and Mexico. This segment
accounted for approximately 91% of total revenues in the first
quarter.
Segment revenues increased by 19% for the quarter compared
with the prior year, reflecting internal growth of 18% (12.5%
excluding sales to customers' warehouses) in the U.S.
pharmaceutical distribution business, and a 37% increase in
international revenues. U.S. pharmaceutical distribution
revenues increased due to sales growth in the existing customer
base and the addition of several major new customers during the
quarter in the retail and institutional sectors. The increase in
international revenues reflects the transition of additional
customers of Drug Trading Company, Limited, to Medis, the
Company's Canadian health care distribution business.
Operating profit for the quarter, excluding the effect of
the $7.7 million in charges noted above, increased by 32% to
$90.4 million from the prior year, and as a percentage of
revenues (excluding sales to customers' warehouses), increased 27
basis points to 2.06% from 1.79%. The improvement reflects
growth in procurement profits and operating efficiencies, the
latter resulting from facility consolidations and continuing
emphasis on technologies and logistics systems.
MEDICAL/SURGICAL DISTRIBUTION & SERVICES
The Medical/Surgical Distribution & Services segment
includes the operations of the Company's medical/surgical
supplies distribution business. This segment accounted for
approximately 8% of total revenues in the first quarter.
Revenues increased 6.5% to $475.8 million, due to gains in
the acute care and primary care segments offset, in part, by a
decline in long-term care revenues. Operating profit for the
quarter increased by 18% to $17.1 million reflecting a 35 basis
point increase in its operating margin resulting from ongoing
productivity initiatives.
- 12 -
McKESSON CORPORATION and SUBSIDIARIES
FINANCIAL REVIEW
WATER PRODUCTS
Revenues at Water Products increased by 3% for the quarter
compared with the prior year and operating profit increased 4% in
the quarter to $11.5 million from $11.1 million in the prior
year. Both revenues and operating profit were affected adversely
by reduced demand resulting from unusually cold and rainy weather
in California, which accounts for more than 70% of Water
Products' business.
INTEREST, NET
Interest expense, net of interest income, increased to $26.5
million in the quarter from $21.8 million for the prior year
period, reflecting an increase in working capital earlier in the
quarter associated, in part, with an inventory build-up for the
commencement of business with several large new customers.
Liquidity and Capital Resources
- -------------------------------
Cash and marketable securities available for sale were
$214.7 million at June 30, 1998 and $113.6 million at March 31,
1998. The June 30, 1998 marketable securities balance included
$41.3 million that is currently restricted and held in trust as
exchange property in connection with the Company's outstanding
exchangeable debentures. The increase in cash and marketable
securities is due in large part to the purchase by the McKesson
Employee Stock Ownership Plan (ESOP) of approximately 1.3 million
shares of newly issued common stock from the Company at $78.125
per share on May 29, 1998.
The increase in receivables at June 30, 1998 compared to
March 31, 1998 reflects quarter on quarter sales growth and the
addition of a large new customer at the end of May 1998. The
increase in accounts and drafts payable at June 30, 1998 compared
to March 31, 1998 is due to the growth in sales and extended
payment terms with certain vendors.
Stockholders' equity was $1,560.8 million at June 30, 1998,
and the net debt-to-capital ratio was 36%, down from 41% at March
31, 1998. The net debt-to-capital ratio for both periods was
computed by reducing the outstanding debt amount by the cash and
marketable securities balances at the end of the period.
Average diluted shares increased to 103.5 million from 100.2
million in the prior year due primarily to shares issued under
employee benefits plans and the sale of shares to the ESOP noted
above.
- 13 -
McKESSON CORPORATION and SUBSIDIARIES
FINANCIAL REVIEW
Other
- -----
The Company relies heavily on computer technologies to
operate its business. As a result, the Company continuously
seeks to upgrade and improve its computer systems in order to
provide better service to its customers and to support the
Company's growth. The Company has conducted an assessment of its
computer systems and has begun to make the changes necessary to
make these systems Year 2000 compliant. The Company believes
that with modifications to or replacements of its existing
computer-based systems, it will be Year 2000 compliant by June
30, 1999, although the Company cannot provide any assurance in
this regard. The Company's systems rely in part on the
computer-based systems of its trading partners. As part of the
Company's assessment, an overview of certain of its trading
partners' Year 2000 compliance strategies is being performed and
the Company plans to conduct extensive systems testing with such
trading partners during calendar year 1999. Nevertheless, if any
trading partner or other entity upon which they rely failed to
become Year 2000 compliant, the Company could be adversely
affected. The Company incurred approximately $7 million in
fiscal 1998 and expects to incur between $10 and $15 million in
each of fiscal 1999 and 2000 in costs associated with
modifications to the Company's existing systems to make them Year
2000 compliant and related testing, including planned testing
with trading partners. Such costs are being expensed as
incurred. Year 2000 project costs are difficult to estimate
accurately and the projected cost could change due to
unanticipated technological difficulties, project vendor delays
and project vendor cost overruns.
- 14 -
PART II. OTHER INFORMATION
===========================
Item 4. Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
The Company's Annual Meeting of Stockholders was held on
July 29, 1998. The following matters were voted upon at the
meeting and the stockholder votes on each such matter are briefly
described below:
The Board of Directors' nominees for directors as
listed in the proxy statement were each elected to
serve for a three-year term expiring at the Annual
Meeting in 2001. The vote was as follows:
Votes For Votes Withheld
---------- --------------
Mary G. F. Bitterman 85,814,897 907,077
Mark A. Pulido 85,832,897 889,077
Robert H. Waterman, Jr. 85,827,207 894,767
The terms of the following named directors continued
after the meeting:
Tully M. Friedman Carl E. Reichardt
John M. Pietruski Alan Seelenfreund
David S. Pottruck Jane E. Shaw
The proposal to amend the Company's Restated
Certificate of Incorporation to increase the number of
authorized shares of Common Stock from 200,000,000 to
400,000,000 was approved by the following vote:
Votes For Votes Against Votes Withheld
---------- ------------- --------------
79,616,499 6,894,463 211,012
Item 5. Other Information
- --------------------------
The ratios of earnings to fixed charges and of earnings to
combined fixed charges and preferred stock dividends amounted to
2.93x and 3.02x for the three months ended June 30, 1998 and
1997, respectively. There were no preferred stock dividends in
the three months ended June 30, 1998 and 1997, respectively.
The ratio of earnings to fixed charges was computed by
dividing fixed charges (interest expense, the portion of rental
expense under operating leases deemed by the Company to be
representative of the interest factor and dividends on preferred
securities of a subsidiary grantor trust) into earnings available
for fixed charges (net income plus income tax expense and fixed
charges).
- 15 -
PART II. OTHER INFORMATION
===========================
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits
3.1 Certificate of Amendment of Restated Certificate
of Incorporation of the Company, as filed with the
Office of the Delaware Secretary of State on July
29, 1998
3.2 Restated Certificate of Incorporation of the
Company, as filed with the Office of the Delaware
Secretary of State on July 30, 1998
10.1 Amendment No. 1 to Consulting Agreement entered
into as of March 25, 1998 by and between the
Company and its Chairman and former Chief
Executive Officer
10.2 McKesson Corporation Management Deferred
Compensation Plan, amended as of May 29, 1998
10.3 McKesson Corporation Deferred Compensation
Administration Plan, amended as of May 29, 1998
10.4 McKesson Corporation 1985 Executives Elective
Deferred Compensation Plan, amended as of May 29,
1998
12.1 Computation of Ratio of Earnings to Fixed charges
and Earnings to Combined Fixed Charges and
Preferred Stock Dividends
27 Financial Data Schedule
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the
three months ended June 30, 1998.
- 16 -
SIGNATURE
=========
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
McKESSON CORPORATION
(Registrant)
Dated: August 7, 1998 By /s/ Richard H. Hawkins
-----------------------------
Richard H. Hawkins
Vice President and
Chief Financial Officer
By /s/ Heidi E. Yodowitz
-----------------------------
Heidi E. Yodowitz
Controller
- 17 -
EXHIBIT INDEX
Exhibit
Number Description
- ------- -------------------------------------------------------
3.1 Certificate of Amendment of Restated Certificate of
Incorporation of the Company, as filed with the Office
of the Delaware Secretary of State on July 29, 1998
3.2 Restated Certificate of Incorporation of the Company,
as filed with the Office of the Delaware Secretary of
State on July 30, 1998
10.1 Amendment No. 1 to Consulting Agreement entered into as
of March 25, 1998 by and between the Company and its
Chairman and former Chief Executive Officer
10.2 McKesson Corporation Management Deferred Compensation
Plan, amended as of May 29, 1998
10.3 McKesson Corporation Deferred Compensation
Administration Plan, amended as of May 29, 1998
10.4 McKesson Corporation 1985 Executives Elective Deferred
Compensation Plan, amended as of May 29, 1998
12.1 Computation of Ratio of Earnings to Fixed charges and
Earnings to Combined Fixed Charges and Preferred Stock
Dividends
27 Financial Data Schedule
- 18 -