MCKESSON CORP (Form: 8-K/A, Received: 05/08/2019 17:29:34)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): May 8, 2019

McKesson Corporation

(Exact Name of Registrant as Specified in Charter)

Delaware

1-13252

94-3207296

(State or Other Jurisdiction

of Incorporation)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

6555 State Hwy 161

Irving, TX 75039

(Address of Principal Executive Offices, and Zip Code)

(972) 446-4800

Registrant’s Telephone Number, Including Area Code

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

☐	Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange

on which registered

Common stock, $0.01 par value

MCK

New York Stock Exchange

Item 2.02

Results of Operations and Financial Condition.

On May 8, 2019, McKesson Corporation (the “Company”) furnished a Current Report on Form 8-K (the “Report”) to the Securities and Exchange Commission (the “Commission”), to report the Company’s preliminary results for the fourth quarter and fiscal year ended on March 31, 2019. This Amendment No. 1 to the Report amends Items 2.02 and 9.01 of the Report to include a corrected press release. The corrected press release revises Schedule 5, Condensed Consolidated Statements of Cash Flows, to include the line “Gain from Sale of Businesses and Investments” and the corresponding amounts for the years ended March 31, 2018 and 2019. This correction does not impact net cash provided by operating activities as previously presented for either period.

The information contained in this Form 8-K, including Exhibit 99.1, is furnished to the Securities and Exchange Commission (the “Commission”), but shall not be deemed “filed” with the Commission for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act except as shall be expressly set forth by specific reference in such a filing.

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits.


Exhibit No.		Description

99.1		Press release issued by the Company dated May 8, 2019.

SIGNATURES

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 hereunto duly authorized.

Date: May 8, 2019


McKesson Corporation

By:		/s/ Britt J. Vitalone
		Britt J. Vitalone
		Executive Vice President and
		Chief Financial Officer


	Quarter Ended March 31,									Year Ended March 31,
	2019			2018			Change			2019			2018			Change
Revenues	$	52,429		$	51,628			2	%	$	214,319		$	208,357			3	%
Cost of sales ⁽¹⁾		(49,228	)		(48,553	)		1			(202,565	)		(197,173	)		3

Gross profit		3,201			3,075			4			11,754			11,184			5
Operating expenses ^{(2) (3) (4)}		(2,255	)		(2,316	)		(3	)		(8,474	)		(8,226	)		3
Goodwill impairment charges ⁽⁵⁾		(1,206	)		(1,388	)		(13	)		(1,797	)		(1,738	)		3
Restructuring and asset impairment charges ⁽⁶⁾		(309	)		(315	)		(2	)		(597	)		(567	)		5
Gain from sale of business ⁽⁷⁾		—			—			—			—			109			(100	)

Total operating expenses		(3,770	)		(4,019	)		(6	)		(10,868	)		(10,422	)		4

Operating income (loss)		(569	)		(944	)		(40	)		886			762			16
Other income, net ⁽⁸⁾		38			28			36			182			130			40
Income (loss) from equity method investment in Change Healthcare ⁽⁹⁾		(32	)		23			(239	)		(194	)		(248	)		(22	)
Loss on debt extinguishment ⁽¹⁰⁾		—			(122	)		(100	)		—			(122	)		(100	)
Interest expense		(70	)		(79	)		(11	)		(264	)		(283	)		(7	)

Income (loss) from continuing operations before income taxes		(633	)		(1,094	)		(42	)		610			239			155
Income tax (expense) benefit ⁽¹¹⁾		(111	)		7			NM			(356	)		53			(772	)

Income (loss) from continuing operations after tax		(744	)		(1,087	)		(32	)		254			292			(13	)
Income from discontinued operations, net of tax		—			2			(100	)		1			5			(80	)

Net income (loss)		(744	)		(1,085	)		(31	)		255			297			(14	)
Net income attributable to noncontrolling interests		(52	)		(61	)		(15	)		(221	)		(230	)		(4	)

Net income (loss) attributable to McKesson Corporation	$	(796	)	$	(1,146	)		(31	)%	$	34		$	67			(49	)%

Earnings (loss) per common share attributable to McKesson Corporation ^(a)
Diluted ^(b)
Continuing operations	$	(4.17	)	$	(5.58	)		(25	)%	$	0.17		$	0.30			(43	)%
Discontinued operations		—			—			—			—			0.02			(100	)

Total	$	(4.17	)	$	(5.58	)		(25	)%	$	0.17		$	0.32			(47	)%

Basic
Continuing operations	$	(4.17	)	$	(5.58	)		(25	)%	$	0.17		$	0.30			(43	)%
Discontinued operations		—			—			—			—			0.02			(100	)

Total	$	(4.17	)	$	(5.58	)		(25	)%	$	0.17		$	0.32			(47	)%

Dividends declared per common share	$	0.39		$	0.34					$	1.51		$	1.30

Weighted average common shares
Diluted		191			206			(7	)%		197			209			(6	)%
Basic		191			206			(7	)		196			208			(6	)


	Quarter Ended March 31, 2019																								Change Vs. Prior Quarter
	As Reported (GAAP)			Amortization of Acquisition- Related Intangibles			Acquisition- Related Expenses and Adjustments			LIFO Inventory- Related Adjustments			Gains from Antitrust Legal Settlements			Restructuring and Asset Impairment Charges, Net			Other Adjustments, Net			Adjusted Earnings (Non-GAAP)			As Reported (GAAP)			Adjusted Earnings (Non-GAAP)
Gross profit ⁽¹⁾	$	3,201		$	—		$	—		$	(146	)	$	(63	)	$	4		$	—		$	2,996			4	%		—	%

Operating expenses ^{(5) (6)}	$	(3,770	)	$	121		$	34		$	—		$	—		$	309		$	1,228		$	(2,078	)		(6	)%		1	%

Other income, net	$	38		$	—		$	—		$	—		$	—		$	—		$	—		$	38			36	%		36	%

Income (loss) from equity method investment in Change Healthcare ⁽⁹⁾	$	(32	)	$	75		$	27		$	—		$	—		$	—		$	—		$	70			(239	)%		(3	)%

Income (loss) from continuing operations before income taxes	$	(633	)	$	196		$	61		$	(146	)	$	(63	)	$	313		$	1,228		$	956			(42	)%		1	%

Income tax expense	$	(111	)	$	(47	)	$	(15	)	$	37		$	16		$	(58	)	$	(19	)	$	(197	)		NM			21	%

Income (loss) from continuing operations, net of tax, attributable to McKesson Corporation	$	(796	)	$	149		$	46		$	(109	)	$	(47	)	$	255		$	1,209		$	707			(31	)%		(2	)%

Diluted earnings (loss) per common share from continuing operations, net of tax, attributable to McKesson Corporation ^{(a) (b)}	$	(4.17	)	$	0.78		$	0.24		$	(0.56	)	$	(0.24	)	$	1.33		$	6.30		$	3.69	^(c)		(25	)%		6	%

Diluted weighted average common shares		191			192			192			192			192			192			192			192			(7	)%		(7	)%


	Quarter Ended March 31, 2018
	As Reported (GAAP)			Amortization of Acquisition- Related Intangibles			Acquisition- Related Expenses and Adjustments			LIFO Inventory- Related Adjustments			Gains from Antitrust Legal Settlements			Restructuring and Asset Impairment Charges, Net			Other Adjustments, Net			Adjusted Earnings (Non-GAAP)
Gross profit ⁽¹⁾	$	3,075		$	—		$	2		$	(94	)	$	—		$	—		$	—		$	2,983

Operating expenses ^{(5) (6)}	$	(4,019	)	$	134		$	49		$	—		$	—		$	387		$	1,389		$	(2,060	)

Other income, net	$	28		$	—		$	1		$	—		$	—		$	—		$	(1	)	$	28

Income from equity method investment in Change Healthcare ⁽⁹⁾	$	23		$	74		$	48		$	—		$	—		$	—		$	(73	)	$	72

Loss on debt extinguishment ⁽¹⁰⁾	$	(122	)	$	—		$	—		$	—		$	—		$	—		$	122		$	—

Income (loss) from continuing operations before income taxes	$	(1,094	)	$	208		$	100		$	(94	)	$	—		$	387		$	1,437		$	944

Income tax benefit (expense) ⁽¹¹⁾	$	7		$	(64	)	$	(34	)	$	33		$	—		$	(33	)	$	(72	)	$	(163	)

Income (loss) from continuing operations, net of tax, attributable to McKesson Corporation	$	(1,148	)	$	144		$	66		$	(61	)	$	—		$	354		$	1,365		$	720

Diluted earnings (loss) per common share from continuing operations, net of tax, attributable to McKesson Corporation ^{(a) (b)}	$	(5.58	)	$	0.70		$	0.31		$	(0.29	)	$	—		$	1.72		$	6.60		$	3.49

Diluted weighted average common shares		206			207			207			207			207			207			207			207


	Year Ended March 31, 2019																								Change Vs. Prior Year
	As Reported (GAAP)			Amortization of Acquisition- Related Intangibles			Acquisition- Related Expenses and Adjustments			LIFO Inventory- Related Adjustments			Gains from Antitrust Legal Settlements			Restructuring and Asset Impairment Charges, Net			Other Adjustments, Net			Adjusted Earnings (Non-GAAP)			As Reported (GAAP)			Adjusted Earnings (Non-GAAP)
Gross profit ⁽¹⁾	$	11,754		$	—		$	1		$	(210	)	$	(202	)	$	4		$	—		$	11,347			5	%		2	%

Operating expenses ^{(3) (5) (6)}	$	(10,868	)	$	485		$	118		$	—		$	—		$	597		$	1,736		$	(7,932	)		4	%		4	%

Other income, net ⁽⁸⁾	$	182		$	1		$	—		$	—		$	—		$	—		$	(56	)	$	127			40	%		41	%

Income (loss) from equity method investment in Change Healthcare ⁽⁹⁾	$	(194	)	$	304		$	126		$	—		$	—		$	—		$	6		$	242			(22	)%		(11	)%

Income (loss) from continuing operations before income taxes	$	610		$	790		$	245		$	(210	)	$	(202	)	$	601		$	1,686		$	3,520			155	%		(2	)%

Income tax expense	$	(356	)	$	(195	)	$	(61	)	$	54		$	52		$	(102	)	$	(17	)	$	(625	)		(772	)%		(11	)%

Income from continuing operations, net of tax, attributable to McKesson Corporation	$	33		$	595		$	184		$	(156	)	$	(150	)	$	499		$	1,669		$	2,674			(47	)%		1	%

Diluted earnings per common share from continuing operations, net of tax, attributable to McKesson Corporation ^(a)	$	0.17		$	3.02		$	0.93		$	(0.79	)	$	(0.76	)	$	2.53		$	8.47		$	13.57	^(b)		(43	)%		8	%


Diluted weighted average common shares		197			197			197			197			197			197			197			197			(6	)%		(6	)%


	Year Ended March 31, 2018
	As Reported (GAAP)			Amortization of Acquisition- Related Intangibles			Acquisition- Related Expenses and Adjustments			LIFO Inventory- Related Adjustments			Gains from Antitrust Legal Settlements			Restructuring and Asset Impairment Charges, Net			Other Adjustments, Net			Adjusted Earnings (Non-GAAP)
Gross profit ⁽¹⁾	$	11,184		$	—		$	14		$	(99	)	$	—		$	(1	)	$	—		$	11,098

Operating expenses ^{(2) (4) (5) (6) (7)}	$	(10,422	)	$	503		$	68		$	—		$	—		$	680		$	1,571		$	(7,600	)

Other income, net ⁽⁸⁾	$	130		$	1		$	2		$	—		$	—		$	—		$	(43	)	$	90

Income (loss) from equity method investment in Change Healthcare ⁽⁹⁾	$	(248	)	$	288		$	293		$	—		$	—		$	—		$	(61	)	$	272

Loss on debt extinguishment ⁽¹⁰⁾	$	(122	)	$	—		$	—		$	—		$	—		$	—		$	122		$	—

Income from continuing operations before income taxes	$	239		$	792		$	377		$	(99	)	$	—		$	679		$	1,589		$	3,577

Income tax benefit (expense) ⁽¹¹⁾	$	53		$	(247	)	$	(124	)	$	35		$	—		$	(89	)	$	(331	)	$	(703	)

Income from continuing operations, net of tax, attributable to McKesson Corporation	$	62		$	545		$	253		$	(64	)	$	—		$	590		$	1,258		$	2,644

Diluted earnings per common share from continuing operations, net of tax, attributable to McKesson Corporation ^(a)	$	0.30		$	2.60		$	1.20		$	(0.31	)	$	—		$	2.82		$	6.01		$	12.62


Diluted weighted average common shares		209			209			209			209			209			209			209			209


	Quarter Ended March 31, 2019									Quarter Ended March 31, 2018									GAAP						Non-GAAP					Change
	As Reported (GAAP)			Adjustments			Adjusted Earnings (Non-GAAP)			As Reported (GAAP)			Adjustments			Adjusted Earnings (Non-GAAP)			Foreign Currency Effects			FX- Adjusted			Foreign Currency Effects		FX- Adjusted			As Reported (GAAP)			Adjusted Earnings (Non- GAAP)			FX- Adjusted (GAAP)			FX- Adjusted (Non- GAAP)
REVENUES
U.S. Pharmaceutical and Specialty Solutions	$	40,897		$	—		$	40,897		$	39,733		$	—		$	39,733		$	—		$	40,897		$	—	$	40,897			3	%		3	%		3	%		3	%
European Pharmaceutical Solutions		6,757			—			6,757			7,176			—			7,176			536			7,293			536		7,293			(6	)		(6	)		2			2
Medical-Surgical Solutions		1,955			—			1,955			1,725			—			1,725			—			1,955			—		1,955			13			13			13			13
Other ^(a)		2,820			—			2,820			2,994			—			2,994			131			2,951			131		2,951			(6	)		(6	)		(1	)		(1	)

Revenues	$	52,429		$	—		$	52,429		$	51,628		$	—		$	51,628		$	667		$	53,096		$	667	$	53,096			2	%		2	%		3	%		3	%


OPERATING PROFIT (LOSS) ^(5) (6)
U.S. Pharmaceutical and Specialty Solutions ⁽¹⁾	$	873		$	(121	)	$	752		$	785		$	(23	)	$	762		$	—		$	873		$	—	$	752			11	%		(1	)%		11	%		(1	)%
European Pharmaceutical Solutions		(1,454	)		1,477			23			(1,185	)		1,267			82			(108	)		(1,562	)		3		26			23			(72	)		32			(68	)
Medical-Surgical Solutions		121			51			172			112			30			142			—			121			—		172			8			21			8			21
Other ^{(a) (8) (9)}		111			147			258			(378	)		621			243			3			114			3		261			129			6			130			7

Operating profit (loss)		(349	)		1,554			1,205			(666	)		1,895			1,229			(105	)		(454	)		6		1,211			(48	)		(2	)		(32	)		(1	)
Corporate		(214	)		35			(179	)		(227	)		21			(206	)		—			(214	)		—		(179	)		(6	)		(13	)		(6	)		(13	)

Income (loss) from continuing operations before interest expense and income taxes	$	(563	)	$	1,589		$	1,026		$	(893	)	$	1,916		$	1,023		$	(105)		$	(668	)	$	6	$	1,032			(37	)%		—	%		(25	)%		1	%


OPERATING PROFIT (LOSS) AS A % OF REVENUES
U.S. Pharmaceutical and Specialty Solutions		2.13	%					1.84	%		1.98	%					1.92	%					2.13	%				1.84	%		15	bp		(8	) bp		15	bp		(8	) bp
European Pharmaceutical Solutions		(21.52	)					0.34			(16.51	)					1.14						(21.42	)				0.36			(501	)		(80	)		(491	)		(78	)
Medical-Surgical Solutions		6.19						8.80			6.49						8.23						6.19					8.80			(30	)		57			(30	)		57


	Year Ended March 31, 2019									Year Ended March 31, 2018								GAAP						Non-GAAP					Change
	As Reported (GAAP)			Adjustments			Adjusted Earnings (Non-GAAP)			As Reported (GAAP)			Adjustments		Adjusted Earnings (Non- GAAP)			Foreign Currency Effects			FX- Adjusted			Foreign Currency Effects		FX- Adjusted			As Reported (GAAP)			Adjusted Earnings (Non-GAAP)			FX- Adjusted (GAAP)			FX- Adjusted (Non- GAAP)
REVENUES
U.S. Pharmaceutical and Specialty Solutions	$	167,763		$	—		$	167,763		$	162,587		$	—	$	162,587		$	—		$	167,763		$	—	$	167,763			3	%		3	%		3	%		3	%
European Pharmaceutical Solutions		27,242			—			27,242			27,320			—		27,320			345			27,587			345		27,587			—			—			1			1
Medical-Surgical Solutions		7,618			—			7,618			6,611			—		6,611			—			7,618			—		7,618			15			15			15			15
Other ^(a)		11,696			—			11,696			11,839			—		11,839			246			11,942			246		11,942			(1	)		(1	)		1			1

Revenues	$	214,319		$	—		$	214,319		$	208,357		$	—	$	208,357		$	591		$	214,910		$	591	$	214,910			3	%		3	%		3	%		3	%


OPERATING PROFIT ^{(5) (6)}
U.S. Pharmaceutical and Specialty Solutions ^{(1) (8)}	$	2,697		$	(177	)	$	2,520		$	2,535		$	31	$	2,566		$	—		$	2,697		$	—	$	2,520			6	%		(2	)%		6	%		(2	)%
European Pharmaceutical Solutions		(1,978	)		2,197			219			(1,681	)		2,021		340			(87	)		(2,065	)		1		220			18			(36	)		23			(35	)
Medical-Surgical Solutions		455			150			605			461			83		544			—			455			—		605			(1	)		11			(1	)		11
Other ^{(a) (2) (3) (4) (7) (8) (9)}		394			601			995			(107	)		1,035		928			(6	)		388			6		1,001			468			7			463			8

Operating profit		1,568			2,771			4,339			1,208			3,170		4,378			(93	)		1,475			7		4,346			30			(1	)		22			(1	)
Corporate		(694	)		139			(555	)		(564	)		46		(518	)		—			(694	)		—		(555	)		23			7			23			7

Income from continuing operations before interest expense and income taxes	$	874		$	2,910		$	3,784		$	644		$	3,216	$	3,860		$	(93	)	$	781		$	7	$	3,791			36	%		(2	)%		21	%		(2	)%


OPERATING PROFIT (LOSS) AS A % OF REVENUES
U.S. Pharmaceutical and Specialty Solutions		1.61	%					1.50	%		1.56	%				1.58	%					1.61	%				1.50	%		5	bp		(8	) bp		5	bp		(8	) bp
European Pharmaceutical Solutions		(7.26	)					0.80			(6.15	)				1.24						(7.49	)				0.80			(111	)		(44	)		(134	)		(44	)
Medical-Surgical Solutions		5.97						7.94			6.97					8.23						5.97					7.94			(100	)		(29	)		(100	)		(29	)


	March 31, 2019		March 31, 2018
ASSETS
Current Assets
Cash and cash equivalents	$	2,981	$	2,672
Receivables, net		18,246		17,711
Inventories, net		16,709		16,310
Prepaid expenses and other		529		443

Total Current Assets		38,465		37,136
Property, Plant and Equipment, Net		2,548		2,464
Goodwill		9,358		10,924
Intangible Assets, Net		3,689		4,102
Equity Method Investment in Change Healthcare		3,513		3,728
Other Noncurrent Assets		2,099		2,027

Total Assets	$	59,672	$	60,381

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Current Liabilities
Drafts and accounts payable	$	33,853	$	32,177
Current portion of long-term debt		330		1,129
Other accrued liabilities		3,443		3,379

Total Current Liabilities		37,626		36,685
Long-Term Debt		7,265		6,751
Long-Term Deferred Tax Liabilities		2,998		2,804
Other Noncurrent Liabilities		2,103		2,625

Redeemable Noncontrolling Interests		1,393		1,459

McKesson Corporation Stockholders’ Equity		8,094		9,804
Noncontrolling Interests		193		253

Total Equity		8,287		10,057

Total Liabilities, Redeemable Noncontrolling Interests and Equity	$	59,672	$	60,381