x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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94-3207296
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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One Post Street, San Francisco, California
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94104
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(Address of principal executive offices)
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(Zip Code)
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(Title of each class)
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(Name of each exchange on which registered)
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Common stock, $0.01 par value
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New York Stock Exchange
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Large accelerated filer
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x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Item
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Page
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1.
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1A.
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1B.
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2.
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3.
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4.
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5.
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6.
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7.
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7A.
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8.
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9.
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9A.
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9B.
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10.
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11.
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12.
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13.
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14.
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15.
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Item 1.
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Business.
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Years Ended March 31,
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||||||||||||||||
(Dollars in billions)
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2013
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2012
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2011
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||||||||||||
Distribution Solutions
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$
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119.1
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97
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%
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$
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119.4
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97
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%
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$
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108.9
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97
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%
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Technology Solutions
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3.4
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3
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%
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3.3
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3
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%
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3.2
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3
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%
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Total
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$
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122.5
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100
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%
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$
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122.7
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100
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%
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$
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112.1
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100
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%
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•
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Central Fill
SM
— Prescription refill service that enables pharmacies to more quickly refill prescriptions remotely, more accurately and at a lower cost, while reducing inventory levels and improving customer service.
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•
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Redistribution Centers — Two facilities totaling over 750 thousand square feet that offer access to inventory for single source warehouse purchasing, including pharmaceuticals and biologicals. These distribution centers also provide the foundation for a two-tiered distribution network that supports best-in-class direct store delivery.
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•
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EnterpriseRx® — A Software as a Service (SaaS) pharmacy management system, that allows large retail chain, health system, and retail independent pharmacies to meet demand for prescriptions while maximizing profits and optimizing operations.
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•
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RxPak
SM
— Bulk-to-bottle repackaging service that leverages our purchasing scale and supplier relationships to provide pharmaceuticals at reduced prices, help increase inventory turns and reduce working capital investment.
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•
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Inventory Management — An integrated solution comprising forecasting software and automated replenishment technologies that reduce inventory-carrying costs.
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•
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McKesson OneStop Generics® — Generic pharmaceutical purchasing program that helps pharmacies maximize their cost savings with a broad selection of generic drugs, low pricing and one-stop shopping.
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•
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ExpressRx Track™ — Pharmacy automation solution featuring state-of-the-art robotics, upgraded imaging and expanded vial capabilities, and industry-leading speed and accuracy in a radically small footprint.
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•
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Health Mart® — Health Mart® is a national network of more than 3,000 independently-owned pharmacies and is one of the industry's most comprehensive pharmacy franchise programs. Health Mart® provides franchisees support for managed care contracting, branding and local marketing solutions, the Health Mart private label line of products, merchandising solutions and programs for enhanced patient support.
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•
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AccessHealth® — Comprehensive managed care and reconciliation assistance services that help independent pharmacies save time, access competitive reimbursement rates and improve cash flow.
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•
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McKesson Reimbursement Advantage
SM
(“MRA”) — MRA is one of the industry's most comprehensive reimbursement optimization packages, comprising financial services (automated claim resubmission), analytic services and customer care.
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•
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McKesson OneStop Generics® — described above.
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•
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EnterpriseRx® — described above.
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•
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Sunmark® — Complete line of more than 700 products that provide retail independent pharmacies with value-priced alternatives to national brands.
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•
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FrontEdge™ — Strategic planning, merchandising and price maintenance program that helps independent pharmacies maximize store profitability.
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•
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McKesson Sponsored Clinical Services (SCS) Network — Access to patient-support services that allow pharmacists to earn service fees and develop stronger patient relationships.
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•
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McKesson Pharmacy Optimization® — An experienced group of pharmacy professionals providing consulting services and pharmacy practice resources. McKesson Pharmacy Optimization® develops customized and quantifiable solutions that help hospitals create and sustain financial, operational and clinical results.
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•
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Fulfill-Rx
SM
— Ordering and inventory management system that integrates McKesson pharmaceutical distribution services with our automation solutions, thus empowering hospitals to optimize the often complicated and disjointed processes related to unit-based cabinet replenishment and inventory management.
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•
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Asset Management — Award-winning inventory optimization and purchasing management program that helps institutional providers lower costs while ensuring product availability.
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•
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SKY Packaging — Blister-format packaging containing the most widely prescribed dosages and strengths in generic oral-solid medications. SKY Packaging enables acute care, long-term care and institutional pharmacies to provide cost-effective, uniform packaging.
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•
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McKesson Plasma and BioLogics — A full portfolio of plasma-derivatives and biologic products.
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•
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McKesson OneStop Generics® — described above.
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•
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McKesson 340B Solution Suite and Macro Helix® — Solutions that help providers manage, track and report on medication replenishment associated with the federal 340B Drug Pricing Program.
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InterQual® Criteria for clinical decision support and utilization management;
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•
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Claims payment solutions to facilitate accurate and efficient medical claim payments;
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•
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Business intelligence tools for measuring, reporting and improving clinical and financial performance;
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•
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Network management tools to enable health plans to transform the performance of their networks;
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•
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RelayHealth® financial solutions to facilitate communication between healthcare providers and patient aggregate data for claims management and trend analysis, and optimize revenue cycle management processes.
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Item 1A.
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Risk Factors.
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Item 1B.
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Unresolved Staff Comments.
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Item 2.
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Properties.
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Item 3.
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Legal Proceedings.
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Item 4.
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Mine Safety Disclosures.
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Name
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Age
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Position with Registrant and Business Experience
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John H. Hammergren
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54
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Chairman of the Board since July 2002; President and Chief Executive Officer since April 2001; and a director since July 1999. Service with the Company — 17 years.
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Jeffrey C. Campbell
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52
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Executive Vice President and Chief Financial Officer since April 2004. Service with the Company — 9 years.
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Patrick J. Blake
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49
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Executive Vice President and Group President since June 2009; President of McKesson Specialty Care Solutions (now McKesson Specialty Health) from April 2006 to June 2009. Service with the Company — 17 years.
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Jorge L. Figueredo
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52
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Executive Vice President, Human Resources since May 2008; Senior Vice President, Human Resources, Dow Jones, Inc. from February 2007 to January 2008. Service with the Company — 5 years.
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Paul C. Julian
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57
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Executive Vice President and Group President since April 2004. Service with the Company — 17 years.
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Laureen E. Seeger
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51
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Executive Vice President, General Counsel and Chief Compliance Officer since April 2010 (functionally has served as chief compliance officer since March 2006); Executive Vice President and General Counsel from July 2009 to April 2010; Executive Vice President, General Counsel and Secretary from March 2006 to July 2009. Service with the Company — 13 years.
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Randall N. Spratt
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61
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Executive Vice President, Chief Technology Officer and Chief Information Officer since April 2009; Executive Vice President, Chief Information Officer from July 2005 to April 2009. Service with the Company — 27 years.
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Brian S. Tyler
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46
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Executive Vice President, Corporate Strategy and Business Development since August 2012; President, U.S.
Pharmaceutical
from January 2011 to August 2012; President, McKesson Medical-Surgical from April 2006 to December 2010. Service with the Company — 16 years.
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Item 5.
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Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
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(a)
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Market Information:
The principal market on which the Company's common stock is traded is the New York Stock Exchange (“NYSE”).
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2013
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2012
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||||||||||
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High
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Low
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High
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Low
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||||||||
First quarter
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$
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94.47
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$
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85.95
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$
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87.32
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$
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77.55
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Second quarter
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$
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97.23
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$
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84.65
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$
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84.96
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$
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70.86
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Third quarter
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$
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100.00
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$
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85.57
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$
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85.70
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$
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66.61
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Fourth quarter
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$
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111.55
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$
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96.67
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$
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88.91
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$
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74.89
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(b)
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Holders:
The number of record holders of the Company's common stock at March 31,
2013
was approximately 7,300.
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(c)
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Dividends:
In April 2011, the Company's quarterly dividend was raised from $0.18 to $0.20 per common share for dividends declared after such date, until further action by the Company's Board of Directors (the “Board”). The Company declared regular cash dividends of $0.80 per share (or $0.20 per share per quarter) in the years ended March 31,
2013
and
2012
.
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(d)
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Securities Authorized for Issuance under Equity Compensation Plans:
Information relating to this item is provided under Part III, Item 12, to this Annual Report on Form 10-K.
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(e)
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Share Repurchase Plans:
Stock repurchases may be made from time-to-time in open market transactions, privately negotiated transactions, through accelerated share repurchase (“ASR”) programs, or by any combination of such methods. The timing of any repurchases and the actual number of shares repurchased will depend on a variety of factors, including our stock price, corporate and regulatory requirements, restrictions under our debt obligations and other market and economic conditions.
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Share Repurchases
(1)
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(In millions, except price per share)
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Total
Number of Shares
Purchased
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Average Price Paid per Share
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Total Number of Shares Purchased as Part of Publicly Announced Programs
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Approximate Dollar Value of Shares that May Yet Be Purchased Under the Programs
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||||||
January 1, 2013 - January 31, 2013
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—
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$
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—
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—
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$
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1,140
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February 1, 2013 - February 28, 2013
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2.7
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103.82
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2.7
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860
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March 1, 2013 - March 31, 2013
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4.7
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107.69
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4.7
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340
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Total
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7.4
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7.4
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340
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(1)
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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.
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(f)
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Stock Price Performance Graph*
: The following graph compares the cumulative total stockholder return on the Company's common stock for the periods indicated with the Standard & Poor's 500 Index and the Value Line Healthcare Sector Index (composed of 156 companies in the health care industry, including the Company).
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March 31,
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||||||||||||||||||||||
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2008
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2009
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2010
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2011
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2012
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2013
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||||||||||||
McKesson Corporation
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$
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100.00
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$
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67.62
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$
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127.96
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$
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155.58
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$
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174.45
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$
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216.44
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S&P 500 Index
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$
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100.00
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$
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61.91
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$
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92.73
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$
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107.24
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$
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116.39
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$
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132.64
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Value Line Healthcare Sector Index
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$
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100.00
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$
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77.09
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$
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106.21
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$
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126.60
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$
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143.64
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$
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179.39
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Item 6.
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Selected Financial Data.
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As of and for the Years Ended March 31,
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|||||||||||||||||||
(In millions, except per share data and ratios)
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2013
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2012
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2011
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2010
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2009
|
||||||||||
Operating Results
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|
||||||||||
Revenues
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$
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122,455
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$
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122,734
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|
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$
|
112,084
|
|
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$
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108,702
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$
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106,632
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Percent change
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(0.2
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)%
|
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9.5
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%
|
|
3.1
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%
|
|
1.9
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%
|
|
4.8
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%
|
|||||
Gross profit
|
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$
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6,984
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$
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6,567
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$
|
5,970
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$
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5,676
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$
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5,378
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Income from continuing operations before income taxes
|
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1,919
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1,919
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|
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1,635
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1,864
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|
|
1,064
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|||||
Income after income taxes
|
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|
||||||||||
Continuing operations
|
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1,338
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1,403
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1,130
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1,263
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|
|
823
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|
|||||
Discontinued operation
|
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—
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|
|
—
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|
|
72
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|
|
—
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|
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—
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|
|||||
Net income
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1,338
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|
|
1,403
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|
|
1,202
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|
|
1,263
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|
|
823
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|||||
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||||||||||
Financial Position
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||||||||||
Working capital
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$
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1,813
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$
|
1,917
|
|
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$
|
3,631
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$
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4,492
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$
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3,065
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Days sales outstanding for:
(1)
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||||||||||
Customer receivables
|
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26
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|
|
24
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|
25
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25
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24
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|
|||||
Inventories
|
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33
|
|
|
31
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|
|
31
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|
|
34
|
|
|
31
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|
|||||
Drafts and accounts payable
|
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51
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|
|
49
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|
|
47
|
|
|
48
|
|
|
43
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|
|||||
Total assets
|
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$
|
34,786
|
|
|
$
|
33,093
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|
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$
|
30,886
|
|
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$
|
28,189
|
|
|
$
|
25,267
|
|
Total debt, including capital lease obligations
|
|
4,873
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|
|
3,980
|
|
|
4,004
|
|
|
2,297
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|
|
2,512
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|
|||||
Stockholders' equity
|
|
7,070
|
|
|
6,831
|
|
|
7,220
|
|
|
7,532
|
|
|
6,193
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|
|||||
Property acquisitions
|
|
246
|
|
|
225
|
|
|
233
|
|
|
199
|
|
|
195
|
|
|||||
Acquisitions, net of cash and cash equivalents acquired
|
|
1,873
|
|
|
1,156
|
|
|
292
|
|
|
18
|
|
|
358
|
|
|||||
|
|
|
|
|
|
|
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|
||||||||||
Common Share Information
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Common shares outstanding at year-end
|
|
227
|
|
|
235
|
|
|
252
|
|
|
271
|
|
|
271
|
|
|||||
Shares on which earnings per common share were based
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted
|
|
239
|
|
|
251
|
|
|
263
|
|
|
273
|
|
|
279
|
|
|||||
Basic
|
|
235
|
|
|
246
|
|
|
258
|
|
|
269
|
|
|
275
|
|
|||||
Diluted earnings per common share
(2)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
|
$
|
5.59
|
|
|
$
|
5.59
|
|
|
$
|
4.29
|
|
|
$
|
4.62
|
|
|
$
|
2.95
|
|
Discontinued operation
|
|
—
|
|
|
—
|
|
|
0.28
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
5.59
|
|
|
5.59
|
|
|
4.57
|
|
|
4.62
|
|
|
2.95
|
|
|||||
Cash dividends declared
|
|
192
|
|
|
202
|
|
|
188
|
|
|
131
|
|
|
134
|
|
|||||
Cash dividends declared per common share
|
|
0.80
|
|
|
0.80
|
|
|
0.72
|
|
|
0.48
|
|
|
0.48
|
|
|||||
Book value per common share
(2) (3)
|
|
31.15
|
|
|
29.07
|
|
|
28.65
|
|
|
27.79
|
|
|
22.87
|
|
|||||
Market value per common share - year end
|
|
107.96
|
|
|
87.77
|
|
|
79.05
|
|
|
65.72
|
|
|
35.04
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital employed
(4)
|
|
$
|
11,943
|
|
|
$
|
10,811
|
|
|
$
|
11,224
|
|
|
$
|
9,829
|
|
|
$
|
8,705
|
|
Debt to capital ratio
(5)
|
|
40.8
|
%
|
|
36.8
|
%
|
|
35.7
|
%
|
|
23.4
|
%
|
|
28.9
|
%
|
|||||
Net debt to net capital employed
(6)
|
|
25.5
|
%
|
|
10.8
|
%
|
|
5.1
|
%
|
|
(23.5
|
)%
|
|
6.1
|
%
|
|||||
Average stockholders' equity
(7)
|
|
$
|
7,294
|
|
|
$
|
7,108
|
|
|
$
|
7,105
|
|
|
$
|
6,768
|
|
|
$
|
6,214
|
|
Return on stockholders' equity
(8)
|
|
18.3
|
%
|
|
19.7
|
%
|
|
16.9
|
%
|
|
18.7
|
%
|
|
13.2
|
%
|
(1)
|
Based on year-end balances and sales or cost of sales for the last 90 days of the year.
|
(2)
|
Certain computations may reflect rounding adjustments.
|
(3)
|
Represents stockholders' equity divided by year-end common shares outstanding.
|
(4)
|
Consists of the sum of total debt and stockholders' equity.
|
(5)
|
Ratio is computed as total debt divided by capital employed.
|
(6)
|
Ratio is computed as total debt, net of cash and cash equivalents (“net debt”), divided by the sum of net debt and stockholders' equity (“net capital employed”).
|
(7)
|
Represents a five-quarter average of stockholders' equity.
|
(8)
|
Ratio is computed as net income divided by a five-quarter average of stockholders' equity.
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
(Dollars in millions, except per share data)
|
Years Ended March 31,
|
|
Change
|
||||||||||||||||
2013
|
|
2012
|
|
2011
|
|
2013
|
|
2012
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
122,455
|
|
|
$
|
122,734
|
|
|
$
|
112,084
|
|
|
—
|
|
%
|
|
10
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Gross Profit
|
$
|
6,984
|
|
|
$
|
6,567
|
|
|
$
|
5,970
|
|
|
6
|
|
%
|
|
10
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating Expenses
|
(4,678
|
)
|
|
(4,269
|
)
|
|
(3,936
|
)
|
|
10
|
|
|
|
8
|
|
|
|||
Litigation Charges
|
(72
|
)
|
|
(149
|
)
|
|
(213
|
)
|
|
(52
|
)
|
|
|
(30
|
)
|
|
|||
Gain on Business Combination
|
81
|
|
|
—
|
|
|
—
|
|
|
NM
|
|
|
|
—
|
|
|
|||
Total Operating Expenses
|
(4,669
|
)
|
|
(4,418
|
)
|
|
(4,149
|
)
|
|
6
|
|
|
|
6
|
|
|
|||
Other Income, Net
|
35
|
|
|
21
|
|
|
36
|
|
|
67
|
|
|
|
(42
|
)
|
|
|||
Impairment of an Equity Investment
|
(191
|
)
|
|
—
|
|
|
—
|
|
|
NM
|
|
|
|
—
|
|
|
|||
Interest Expense
|
(240
|
)
|
|
(251
|
)
|
|
(222
|
)
|
|
(4
|
)
|
|
|
13
|
|
|
|||
Income from Continuing Operations Before Income Taxes
|
1,919
|
|
|
1,919
|
|
|
1,635
|
|
|
—
|
|
|
|
17
|
|
|
|||
Income Tax Expense
|
(581
|
)
|
|
(516
|
)
|
|
(505
|
)
|
|
13
|
|
|
|
2
|
|
|
|||
Income from Continuing Operations
|
1,338
|
|
|
1,403
|
|
|
1,130
|
|
|
(5
|
)
|
|
|
24
|
|
|
|||
Discontinued Operation - gain on sale, net of tax
|
—
|
|
|
—
|
|
|
72
|
|
|
—
|
|
|
|
—
|
|
|
|||
Net Income
|
$
|
1,338
|
|
|
$
|
1,403
|
|
|
$
|
1,202
|
|
|
(5
|
)
|
|
|
17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted Earnings Per Common Share
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Continuing Operations
|
$
|
5.59
|
|
|
$
|
5.59
|
|
|
$
|
4.29
|
|
|
—
|
|
%
|
|
30
|
|
%
|
Discontinued Operation
|
—
|
|
|
—
|
|
|
0.28
|
|
|
—
|
|
|
|
—
|
|
|
|||
Total
|
$
|
5.59
|
|
|
$
|
5.59
|
|
|
$
|
4.57
|
|
|
—
|
|
|
|
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted Average Diluted Common Shares
|
239
|
|
|
251
|
|
|
263
|
|
|
(5
|
)
|
%
|
|
(5
|
)
|
%
|
|
Years Ended March 31,
|
|
Change
|
||||||||||||||||
(Dollars in millions)
|
2013
|
|
2012
|
|
2011
|
|
2013
|
|
2012
|
||||||||||
Distribution Solutions
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Direct distribution & services
|
$
|
86,816
|
|
|
$
|
85,523
|
|
|
$
|
77,554
|
|
|
2
|
|
%
|
|
10
|
|
%
|
Sales to customers’ warehouses
|
18,646
|
|
|
20,453
|
|
|
18,631
|
|
|
(9
|
)
|
|
|
10
|
|
|
|||
Total U.S. pharmaceutical distribution & services
|
105,462
|
|
|
105,976
|
|
|
96,185
|
|
|
—
|
|
|
|
10
|
|
|
|||
Canada pharmaceutical distribution & services
|
9,981
|
|
|
10,303
|
|
|
9,784
|
|
|
(3
|
)
|
|
|
5
|
|
|
|||
Medical-Surgical distribution & services
|
3,611
|
|
|
3,145
|
|
|
2,920
|
|
|
15
|
|
|
|
8
|
|
|
|||
Total Distribution Solutions
|
119,054
|
|
|
119,424
|
|
|
108,889
|
|
|
—
|
|
|
|
10
|
|
|
|||
Technology Solutions
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Services
|
2,724
|
|
|
2,594
|
|
|
2,483
|
|
|
5
|
|
|
|
4
|
|
|
|||
Software & software systems
|
576
|
|
|
596
|
|
|
590
|
|
|
(3
|
)
|
|
|
1
|
|
|
|||
Hardware
|
101
|
|
|
120
|
|
|
122
|
|
|
(16
|
)
|
|
|
(2
|
)
|
|
|||
Total Technology Solutions
|
3,401
|
|
|
3,310
|
|
|
3,195
|
|
|
3
|
|
|
|
4
|
|
|
|||
Total Revenues
|
$
|
122,455
|
|
|
$
|
122,734
|
|
|
$
|
112,084
|
|
|
—
|
|
|
|
10
|
|
|
|
Years Ended March 31,
|
|
|||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Direct Sales
|
|
|
|
|
|
|
|
|
|||
Retail Chains
|
33
|
|
%
|
|
34
|
|
%
|
|
33
|
|
%
|
Institutions
|
37
|
|
|
|
34
|
|
|
|
34
|
|
|
Independents
|
11
|
|
|
|
11
|
|
|
|
12
|
|
|
Subtotal
|
81
|
|
|
|
79
|
|
|
|
79
|
|
|
Sales to retail customers' warehouses
|
19
|
|
|
|
21
|
|
|
|
21
|
|
|
Total
|
100
|
|
%
|
|
100
|
|
%
|
|
100
|
|
%
|
|
Years Ended March 31,
|
|
Change
|
|||||||||||||||||||
(Dollars in millions)
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2013
|
|
2012
|
||||||||||
Gross Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Distribution Solutions
(1)
|
$
|
5,439
|
|
|
|
$
|
5,057
|
|
|
|
$
|
4,565
|
|
|
|
8
|
|
%
|
|
11
|
|
%
|
Technology Solutions
(2)
|
1,545
|
|
|
|
1,510
|
|
|
|
1,405
|
|
|
|
2
|
|
|
|
7
|
|
|
|||
Total
|
$
|
6,984
|
|
|
|
$
|
6,567
|
|
|
|
$
|
5,970
|
|
|
|
6
|
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Gross Profit Margin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Distribution Solutions
|
4.57
|
|
%
|
|
4.23
|
|
%
|
|
4.19
|
|
%
|
|
34
|
|
bp
|
|
4
|
|
bp
|
|||
Technology Solutions
|
45.43
|
|
|
|
45.62
|
|
|
|
43.97
|
|
|
|
(19
|
)
|
|
|
165
|
|
|
|||
Total
|
5.70
|
|
|
|
5.35
|
|
|
|
5.33
|
|
|
|
35
|
|
|
|
2
|
|
|
(1)
|
Gross profit for our Distribution Solutions segment for 2013 and 2011 includes receipt of $44 million and $51 million representing our share of settlements of antitrust class action lawsuits brought against drug manufacturers, which were recorded as a reduction to cost of sales.
|
(2)
|
Gross profit for our Technology Solutions segment for 2013, 2012 and 2011 includes an asset impairment charge for capitalized software held for sale of $10 million, $31 million of product alignment charges and a $72 million asset impairment charge for capitalized software held for sale.
|
|
Years Ended March 31,
|
|
Change
|
|||||||||||||||||
(Dollars in millions)
|
2013
|
|
2012
|
|
2011
|
|
|
2013
|
|
2012
|
||||||||||
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Distribution Solutions
(1) (2)
|
$
|
3,071
|
|
|
$
|
2,854
|
|
|
$
|
2,673
|
|
|
|
8
|
|
%
|
|
7
|
|
%
|
Technology Solutions
(3)
|
1,252
|
|
|
1,151
|
|
|
1,108
|
|
|
|
9
|
|
|
|
4
|
|
|
|||
Corporate
(4)
|
346
|
|
|
413
|
|
|
368
|
|
|
|
(16
|
)
|
|
|
12
|
|
|
|||
Total
|
$
|
4,669
|
|
|
$
|
4,418
|
|
|
$
|
4,149
|
|
|
|
6
|
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating Expenses as a Percentage of Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Distribution Solutions
|
2.58
|
|
%
|
2.39
|
|
%
|
2.45
|
|
%
|
|
19
|
|
bp
|
|
(6
|
)
|
bp
|
|||
Technology Solutions
|
36.81
|
|
|
34.77
|
|
|
34.68
|
|
|
|
204
|
|
|
|
9
|
|
|
|||
Total
|
3.81
|
|
|
3.60
|
|
|
3.70
|
|
|
|
21
|
|
|
|
(10
|
)
|
|
(1)
|
Operating expenses for
2013
,
2012
and 2011 include
$72 million
,
$149 million
and
$213 million
of AWP litigation charges.
|
(2)
|
Operating expenses for 2013 include a $40 million charge for a legal dispute in our Canadian business.
|
(3)
|
Operating expenses for 2013 and 2012 include a goodwill impairment charge of $36 million and product alignment charges of $20 million.
|
(4)
|
Corporate expenses for 2013 are net of an
$81 million
pre-tax gain on business combination.
|
|
Years Ended March 31,
|
||||||||||
(In millions)
|
2013
|
|
2012
|
|
2011
|
||||||
Operating Expenses
|
|
|
|
|
|
||||||
Transaction closing expenses
|
$
|
16
|
|
|
$
|
3
|
|
|
$
|
22
|
|
Restructuring, severance and relocation
|
31
|
|
|
6
|
|
|
9
|
|
|||
Other integration related expenses
|
25
|
|
|
22
|
|
|
12
|
|
|||
Gain on business combination
|
(81
|
)
|
|
—
|
|
|
—
|
|
|||
Total
|
(9
|
)
|
|
31
|
|
|
43
|
|
|||
Other Income: reimbursement of post-acquisition interest expense
from former US Oncology shareholders
|
—
|
|
|
—
|
|
|
(16
|
)
|
|||
Interest Expense: bridge loan fees
|
11
|
|
|
—
|
|
|
25
|
|
|||
Total Acquisition Expenses and Related Adjustments
|
$
|
2
|
|
|
$
|
31
|
|
|
$
|
52
|
|
|
Years Ended March 31,
|
||||||||||
(In millions)
|
2013
|
|
2012
|
|
2011
|
||||||
Operating Expenses
|
|
|
|
|
|
||||||
Distribution Solutions
|
$
|
47
|
|
|
$
|
24
|
|
|
$
|
41
|
|
Technology Solutions
|
8
|
|
|
6
|
|
|
—
|
|
|||
Corporate
|
(64
|
)
|
|
1
|
|
|
2
|
|
|||
Total
|
(9
|
)
|
|
31
|
|
|
43
|
|
|||
Corporate - Other Income
|
—
|
|
|
—
|
|
|
(16
|
)
|
|||
Corporate - Interest Expense
|
11
|
|
|
—
|
|
|
25
|
|
|||
Total Acquisition Expenses and Related Adjustments
|
$
|
2
|
|
|
$
|
31
|
|
|
$
|
52
|
|
|
Years Ended March 31,
|
||||||||||
(In millions)
|
2013
|
|
2012
|
|
2011
|
||||||
Cost of Sales
|
|
|
|
|
|
||||||
Distribution Solutions
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Technology Solutions
|
14
|
|
|
19
|
|
|
16
|
|
|||
Total
|
16
|
|
|
20
|
|
|
16
|
|
|||
Operating Expenses
|
|
|
|
|
|
||||||
Distribution Solutions
|
146
|
|
|
120
|
|
|
70
|
|
|||
Technology Solutions
|
52
|
|
|
51
|
|
|
46
|
|
|||
Corporate
|
1
|
|
|
—
|
|
|
—
|
|
|||
Total
|
199
|
|
|
171
|
|
|
116
|
|
|||
Total Acquisition-related Amortization
|
$
|
215
|
|
|
$
|
191
|
|
|
$
|
132
|
|
|
Years Ended March 31,
|
||||||||||
(In millions)
|
2013
|
|
2012
|
|
2011
|
||||||
AWP Litigation reserve at beginning of period
|
$
|
453
|
|
|
$
|
330
|
|
|
$
|
143
|
|
Charges incurred
|
72
|
|
|
149
|
|
|
213
|
|
|||
Payments made
|
(483
|
)
|
|
(26
|
)
|
|
(26
|
)
|
|||
AWP litigation reserve at end of period
|
$
|
42
|
|
|
$
|
453
|
|
|
$
|
330
|
|
|
Years Ended March 31,
|
|
Change
|
||||||||||||||||
(Dollars in millions)
|
2013
|
|
2012
|
|
2011
|
|
2013
|
|
2012
|
||||||||||
Distribution Solutions
|
$
|
20
|
|
|
$
|
16
|
|
|
$
|
5
|
|
|
25
|
|
%
|
|
220
|
|
%
|
Technology Solutions
|
4
|
|
|
5
|
|
|
4
|
|
|
(20
|
)
|
|
|
25
|
|
|
|||
Corporate
|
11
|
|
|
—
|
|
|
27
|
|
|
100
|
|
|
|
(100
|
)
|
|
|||
Total
|
$
|
35
|
|
|
$
|
21
|
|
|
$
|
36
|
|
|
67
|
|
|
|
(42
|
)
|
|
|
Years Ended March 31,
|
|
|
Change
|
||||||||||||||||
(Dollars in millions)
|
2013
|
|
2012
|
|
2011
|
|
|
2013
|
|
2012
|
||||||||||
Segment Operating Profit
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Distribution Solutions
(2) (3) (4) (5)
|
$
|
2,197
|
|
|
$
|
2,219
|
|
|
$
|
1,897
|
|
|
|
(1
|
)
|
%
|
|
17
|
|
%
|
Technology Solutions
(6) (7) (8)
|
297
|
|
|
364
|
|
|
301
|
|
|
|
(18
|
)
|
|
|
21
|
|
|
|||
Subtotal
|
2,494
|
|
|
2,583
|
|
|
2,198
|
|
|
|
(3
|
)
|
|
|
18
|
|
|
|||
Corporate Expenses, Net
(9)
|
(335
|
)
|
|
(413
|
)
|
|
(341
|
)
|
|
|
(19
|
)
|
|
|
21
|
|
|
|||
Interest Expense
|
(240
|
)
|
|
(251
|
)
|
|
(222
|
)
|
|
|
(4
|
)
|
|
|
13
|
|
|
|||
Income From Continuing Operations Before Income Taxes
|
$
|
1,919
|
|
|
$
|
1,919
|
|
|
$
|
1,635
|
|
|
|
—
|
|
|
|
17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Segment Operating Profit Margin
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Distribution Solutions
|
1.85
|
|
%
|
1.86
|
|
%
|
1.74
|
|
%
|
|
(1
|
)
|
bp
|
|
12
|
|
bp
|
|||
Technology Solutions
|
8.73
|
|
|
11.00
|
|
|
9.42
|
|
|
|
(227
|
)
|
|
|
158
|
|
|
(1)
|
Segment operating profit includes gross profit, net of operating expenses, plus other income (expense), net for our two operating segments.
|
(2)
|
Operating profit for 2013 includes a $191 million charge for impairment of our equity investment in Nadro.
|
(3)
|
Operating profit for
2013
,
2012
and
2011
includes AWP litigation charges of
$72 million
,
$149 million
and
$213 million
.
|
(4)
|
Operating profit for 2013 includes a $40 million charge for a legal dispute in our Canadian business.
|
(5)
|
Operating profit for 2013 and 2011 includes the receipt of
$44
million and $51 million representing our share of settlements of antitrust class action lawsuits brought against drug manufacturers.
|
(6)
|
Operating profit for 2013 includes asset impairment charges of $46 million.
|
(7)
|
Operating profit for 2012 includes product alignment charges of $51 million.
|
(8)
|
Operating profit for 2011 includes $72 million asset impairment charges from capitalized software held for sale.
|
(9)
|
Corporate expenses for 2013 are net of an $81 million pre-tax gain on business combination.
|
|
Years Ended March 31,
|
||||||||||
(In millions, except per share data)
|
2013
|
|
2012
|
|
2011
|
||||||
Number of shares repurchased
(1)
|
13
|
|
|
20
|
|
|
29
|
|
|||
Average price paid per share
|
$
|
100.82
|
|
|
$
|
83.47
|
|
|
$
|
69.62
|
|
Total value of shares repurchased
(1)
|
$
|
1,159
|
|
|
$
|
1,850
|
|
|
$
|
2,032
|
|
(1)
|
Excludes shares surrendered for tax withholding.
|
|
March 31,
|
|||||||||||||
(Dollars in millions)
|
2013
|
|
2012
|
|
2011
|
|||||||||
Cash and cash equivalents
|
$
|
2,456
|
|
|
|
$
|
3,149
|
|
|
|
$
|
3,612
|
|
|
Working capital
|
1,813
|
|
|
|
1,917
|
|
|
|
3,631
|
|
|
|||
Debt, net of cash and cash equivalents
|
2,417
|
|
|
|
831
|
|
|
|
392
|
|
|
|||
Debt to capital ratio
(1)
|
40.8
|
|
%
|
|
36.8
|
|
%
|
|
35.7
|
|
%
|
|||
Net debt to net capital employed
(2)
|
25.5
|
|
|
|
10.8
|
|
|
|
5.1
|
|
|
|||
Return on stockholders' equity
(3)
|
18.3
|
|
|
|
19.7
|
|
|
|
16.9
|
|
|
(1)
|
Ratio is computed as total debt divided by the sum of total debt and stockholders’ equity.
|
(2)
|
Ratio is computed as total debt, net of cash and cash equivalents (“net debt”), divided by the sum of net debt and stockholders’ equity (“net capital employed”).
|
(3)
|
Ratio is computed as net income for the last four quarters, divided by a five-quarter average of stockholders’ equity.
|
|
|
|
Years
|
||||||||||||||||
(In millions)
|
Total
|
|
Within 1
|
|
Over 1 to 3
|
|
Over 3 to 5
|
|
After 5
|
||||||||||
On balance sheet
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt
(1)
|
$
|
4,873
|
|
|
$
|
352
|
|
|
$
|
1,101
|
|
|
$
|
1,001
|
|
|
$
|
2,419
|
|
Other
(2)
|
465
|
|
|
27
|
|
|
203
|
|
|
79
|
|
|
156
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Off balance sheet
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest on borrowings
(3)
|
1,841
|
|
|
200
|
|
|
353
|
|
|
280
|
|
|
1,008
|
|
|||||
Purchase obligations
(4)
|
473
|
|
|
423
|
|
|
50
|
|
|
—
|
|
|
—
|
|
|||||
Operating lease obligations
(5)
|
851
|
|
|
213
|
|
|
283
|
|
|
153
|
|
|
202
|
|
|||||
Other
(6)
|
280
|
|
|
153
|
|
|
78
|
|
|
1
|
|
|
48
|
|
|||||
Total
|
$
|
8,783
|
|
|
$
|
1,368
|
|
|
$
|
2,068
|
|
|
$
|
1,514
|
|
|
$
|
3,833
|
|
(1)
|
Represents maturities of the Company's long-term obligations including an immaterial amount of capital lease obligations.
|
(2)
|
Represents our estimated benefit payments, including assumed executive lump sum payments, for the unfunded benefit plans and minimum funding requirements for the pension plans. Actual lump sum payments could significantly differ from the estimated amounts depending on the timing of executive retirements and the lump sum interest rate in effect upon retirement.
|
(3)
|
Primarily represents interest that will become due on our fixed rate long-term debt obligations.
|
(4)
|
A purchase obligation is defined as an arrangement to purchase goods or services that is enforceable and legally binding on the Company. These obligations primarily relate to inventory purchases, capital commitments and service agreements.
|
(5)
|
Represents minimum rental payments for operating leases.
|
(6)
|
Includes agreements with certain of our Canadian customers' financial institutions under which we have guaranteed the repurchase of our customers' inventory of $155 million and our customers' debt of $53 million in the event these customers are unable to meet their obligations to those financial institutions.
|
Item 7A.
|
Quantitative and Qualitative Disclosures about Market Risk
|
Item 8.
|
Financial Statements and Supplementary Data
|
|
Page
|
Consolidated Financial Statements:
|
|
|
/s/ John H. Hammergren
|
John H. Hammergren
|
Chairman of the Board, President and Chief Executive Officer
|
(Principal Executive Officer)
|
|
/s/ Jeffrey C. Campbell
|
Jeffrey C. Campbell
|
Executive Vice President and Chief Financial Officer
|
(Principal Financial Officer)
|
|
/s/ Deloitte & Touche LLP
|
San Francisco, California
|
May 7, 2013
|
|
Years Ended March 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Revenues
|
$
|
122,455
|
|
|
$
|
122,734
|
|
|
$
|
112,084
|
|
Cost of Sales
|
(115,471
|
)
|
|
(116,167
|
)
|
|
(106,114
|
)
|
|||
Gross Profit
|
6,984
|
|
|
6,567
|
|
|
5,970
|
|
|||
Operating Expenses
|
|
|
|
|
|
||||||
Selling
|
(805
|
)
|
|
(764
|
)
|
|
(767
|
)
|
|||
Distribution
|
(1,042
|
)
|
|
(997
|
)
|
|
(920
|
)
|
|||
Research and development
|
(480
|
)
|
|
(440
|
)
|
|
(407
|
)
|
|||
Administrative
|
(2,351
|
)
|
|
(2,068
|
)
|
|
(1,842
|
)
|
|||
Litigation charges
|
(72
|
)
|
|
(149
|
)
|
|
(213
|
)
|
|||
Gain on business combination
|
81
|
|
|
—
|
|
|
—
|
|
|||
Total Operating Expenses
|
(4,669
|
)
|
|
(4,418
|
)
|
|
(4,149
|
)
|
|||
Operating Income
|
2,315
|
|
|
2,149
|
|
|
1,821
|
|
|||
Other Income, Net
|
35
|
|
|
21
|
|
|
36
|
|
|||
Impairment of an Equity Investment
|
(191
|
)
|
|
—
|
|
|
—
|
|
|||
Interest Expense
|
(240
|
)
|
|
(251
|
)
|
|
(222
|
)
|
|||
Income from Continuing Operations Before Income Taxes
|
1,919
|
|
|
1,919
|
|
|
1,635
|
|
|||
Income Tax Expense
|
(581
|
)
|
|
(516
|
)
|
|
(505
|
)
|
|||
Income from Continuing Operations
|
1,338
|
|
|
1,403
|
|
|
1,130
|
|
|||
Discontinued Operation – gain on sale, net of tax
|
—
|
|
|
—
|
|
|
72
|
|
|||
Net Income
|
$
|
1,338
|
|
|
$
|
1,403
|
|
|
$
|
1,202
|
|
|
|
|
|
|
|
||||||
Earnings Per Common Share
|
|
|
|
|
|
||||||
Diluted
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
5.59
|
|
|
$
|
5.59
|
|
|
$
|
4.29
|
|
Discontinued operation – gain on sale
|
—
|
|
|
—
|
|
|
0.28
|
|
|||
Total
|
$
|
5.59
|
|
|
$
|
5.59
|
|
|
$
|
4.57
|
|
Basic
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
5.71
|
|
|
$
|
5.70
|
|
|
$
|
4.37
|
|
Discontinued operation – gain on sale
|
—
|
|
|
—
|
|
|
0.28
|
|
|||
Total
|
$
|
5.71
|
|
|
$
|
5.70
|
|
|
$
|
4.65
|
|
|
|
|
|
|
|
||||||
Weighted Average Common Shares
|
|
|
|
|
|
||||||
Diluted
|
239
|
|
|
251
|
|
|
263
|
|
|||
Basic
|
235
|
|
|
246
|
|
|
258
|
|
|
Years Ended March 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Net Income
|
$
|
1,338
|
|
|
$
|
1,403
|
|
|
$
|
1,202
|
|
|
|
|
|
|
|
||||||
Other Comprehensive Income (Loss), net of tax
|
|
|
|
|
|
||||||
Foreign currency translation adjustments, net of income tax expense (benefit) of ($2), $2 and $2
|
(52
|
)
|
|
(56
|
)
|
|
76
|
|
|||
|
|
|
|
|
|
|
|
|
|||
Unrealized losses on cash flow hedges, net of income tax benefit of nil, nil and nil
|
—
|
|
|
(5
|
)
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|||
Retirement related benefit plans, net of income tax expense (benefit) of ($10), ($9) and $3
|
(18
|
)
|
|
(21
|
)
|
|
5
|
|
|||
Other Comprehensive Income (Loss), net of tax
|
(70
|
)
|
|
(82
|
)
|
|
81
|
|
|||
|
|
|
|
|
|
||||||
Comprehensive Income
|
$
|
1,268
|
|
|
$
|
1,321
|
|
|
$
|
1,283
|
|
|
March 31,
|
||||||
|
2013
|
|
2012
|
||||
ASSETS
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2,456
|
|
|
$
|
3,149
|
|
Receivables, net
|
9,975
|
|
|
9,977
|
|
||
Inventories, net
|
10,335
|
|
|
10,073
|
|
||
Prepaid expenses and other
|
404
|
|
|
404
|
|
||
Total Current Assets
|
23,170
|
|
|
23,603
|
|
||
Property, Plant and Equipment, Net
|
1,321
|
|
|
1,043
|
|
||
Goodwill
|
6,405
|
|
|
5,032
|
|
||
Intangible Assets, Net
|
2,270
|
|
|
1,750
|
|
||
Other Assets
|
1,620
|
|
|
1,665
|
|
||
Total Assets
|
$
|
34,786
|
|
|
$
|
33,093
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current Liabilities
|
|
|
|
||||
Drafts and accounts payable
|
$
|
16,108
|
|
|
$
|
16,114
|
|
Short-term borrowings
|
—
|
|
|
400
|
|
||
Deferred revenue
|
1,359
|
|
|
1,423
|
|
||
Deferred tax liabilities
|
1,626
|
|
|
1,092
|
|
||
Current portion of long-term debt
|
352
|
|
|
508
|
|
||
Other accrued liabilities
|
1,912
|
|
|
2,149
|
|
||
Total Current Liabilities
|
21,357
|
|
|
21,686
|
|
||
|
|
|
|
||||
Long-Term Debt
|
4,521
|
|
|
3,072
|
|
||
Other Noncurrent Liabilities
|
1,838
|
|
|
1,504
|
|
||
Other Commitments and Contingent Liabilities (Note 22)
|
|
|
|
||||
Stockholders’ Equity
|
|
|
|
||||
Preferred stock, $0.01 par value, 100 shares authorized, no shares issued or outstanding
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value, 800 shares authorized at March 31, 2013 and 2012, 376 and 373 shares issued at March 31, 2013 and 2012
|
4
|
|
|
4
|
|
||
Additional Paid-in Capital
|
6,078
|
|
|
5,571
|
|
||
Retained Earnings
|
10,402
|
|
|
9,451
|
|
||
Accumulated Other Comprehensive Income (Loss)
|
(65
|
)
|
|
5
|
|
||
Other
|
14
|
|
|
4
|
|
||
Treasury Shares, at Cost, 149 and 138 at March 31, 2013 and 2012
|
(9,363
|
)
|
|
(8,204
|
)
|
||
Total Stockholders’ Equity
|
7,070
|
|
|
6,831
|
|
||
Total Liabilities and Stockholders’ Equity
|
$
|
34,786
|
|
|
$
|
33,093
|
|
|
Common
Stock
|
|
Additional Paid-in Capital
|
|
Other Capital
|
|
Retained Earnings
|
|
Accumulated Other
Comprehensive
Income (Loss)
|
|
Treasury
|
|
Stockholders' Equity
|
||||||||||||||||||||
|
Shares
|
|
Amount
|
|
|
Common Shares
|
|
Amount
|
|
||||||||||||||||||||||||
Balances, March 31, 2010
|
359
|
|
|
$
|
4
|
|
|
$
|
4,756
|
|
|
$
|
(12
|
)
|
|
$
|
7,236
|
|
|
$
|
6
|
|
|
(88
|
)
|
|
$
|
(4,458
|
)
|
|
$
|
7,532
|
|
Issuance of shares under employee plans
|
10
|
|
|
|
|
370
|
|
|
|
|
|
|
|
|
|
|
(17
|
)
|
|
353
|
|
||||||||||||
Share-based compensation
|
|
|
|
|
137
|
|
|
|
|
|
|
|
|
|
|
|
|
137
|
|
||||||||||||||
Tax benefit related to issuance of shares under employee plans
|
|
|
|
|
113
|
|
|
|
|
|
|
|
|
|
|
|
|
113
|
|
||||||||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
81
|
|
|
|
|
|
|
81
|
|
||||||||||||||
Net income
|
|
|
|
|
|
|
|
|
1,202
|
|
|
|
|
|
|
|
|
1,202
|
|
||||||||||||||
Repurchase of common stock
|
|
|
|
|
(37
|
)
|
|
|
|
|
|
|
|
(29
|
)
|
|
(1,995
|
)
|
|
(2,032
|
)
|
||||||||||||
Cash dividends declared, $0.72 per common share
|
|
|
|
|
|
|
|
|
(188
|
)
|
|
|
|
|
|
|
|
(188
|
)
|
||||||||||||||
Other
|
|
|
|
|
|
|
22
|
|
|
|
|
|
|
|
|
|
|
22
|
|
||||||||||||||
Balances, March 31, 2011
|
369
|
|
|
$
|
4
|
|
|
$
|
5,339
|
|
|
$
|
10
|
|
|
$
|
8,250
|
|
|
$
|
87
|
|
|
(117
|
)
|
|
$
|
(6,470
|
)
|
|
$
|
7,220
|
|
Issuance of shares under employee plans
|
4
|
|
|
|
|
167
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
(24
|
)
|
|
143
|
|
|||||||||||
Share-based compensation
|
|
|
|
|
154
|
|
|
|
|
|
|
|
|
|
|
|
|
154
|
|
||||||||||||||
Tax benefit related to issuance of shares under employee plans
|
|
|
|
|
46
|
|
|
|
|
|
|
|
|
|
|
|
|
46
|
|
||||||||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
(82
|
)
|
|
|
|
|
|
(82
|
)
|
||||||||||||||
Net income
|
|
|
|
|
|
|
|
|
1,403
|
|
|
|
|
|
|
|
|
1,403
|
|
||||||||||||||
Repurchase of common stock
|
|
|
|
|
(140
|
)
|
|
|
|
|
|
|
|
(20
|
)
|
|
(1,710
|
)
|
|
(1,850
|
)
|
||||||||||||
Cash dividends declared, $0.80 per common share
|
|
|
|
|
|
|
|
|
(202
|
)
|
|
|
|
|
|
|
|
(202
|
)
|
||||||||||||||
Other
|
|
|
|
|
5
|
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
|||||||||||||
Balances, March 31, 2012
|
373
|
|
|
$
|
4
|
|
|
$
|
5,571
|
|
|
$
|
4
|
|
|
$
|
9,451
|
|
|
$
|
5
|
|
|
(138
|
)
|
|
$
|
(8,204
|
)
|
|
$
|
6,831
|
|
Issuance of shares under employee plans
|
5
|
|
|
|
|
166
|
|
|
|
|
|
|
|
|
|
|
(55
|
)
|
|
111
|
|
||||||||||||
Share-based compensation
|
|
|
|
|
167
|
|
|
|
|
|
|
|
|
|
|
|
|
167
|
|
||||||||||||||
Tax benefit related to issuance of shares under employee plans
|
|
|
|
|
34
|
|
|
|
|
|
|
|
|
|
|
|
|
34
|
|
||||||||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
(70
|
)
|
|
|
|
|
|
(70
|
)
|
||||||||||||||
Net income
|
|
|
|
|
|
|
|
|
1,338
|
|
|
|
|
|
|
|
|
1,338
|
|
||||||||||||||
Repurchase of common stock
|
|
|
|
|
162
|
|
|
|
|
|
|
|
|
(13
|
)
|
|
(1,321
|
)
|
|
(1,159
|
)
|
||||||||||||
Retirement of treasury stock
|
(2
|
)
|
|
|
|
(22
|
)
|
|
|
|
(195
|
)
|
|
|
|
2
|
|
|
217
|
|
|
—
|
|
||||||||||
Cash dividends declared, $0.80 per common share
|
|
|
|
|
|
|
|
|
(192
|
)
|
|
|
|
|
|
|
|
(192
|
)
|
||||||||||||||
Other
|
|
|
|
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
10
|
|
||||||||||||||
Balances, March 31, 2013
|
376
|
|
|
$
|
4
|
|
|
$
|
6,078
|
|
|
$
|
14
|
|
|
$
|
10,402
|
|
|
$
|
(65
|
)
|
|
(149
|
)
|
|
$
|
(9,363
|
)
|
|
$
|
7,070
|
|
|
Years Ended March 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Operating Activities
|
|
|
|
|
|
||||||
Net income
|
$
|
1,338
|
|
|
$
|
1,403
|
|
|
$
|
1,202
|
|
Discontinued operation – gain on sale, net of tax
|
—
|
|
|
—
|
|
|
(72
|
)
|
|||
Adjustments to reconcile to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation
|
146
|
|
|
140
|
|
|
139
|
|
|||
Amortization
|
445
|
|
|
411
|
|
|
357
|
|
|||
Provision for bad debts
|
28
|
|
|
30
|
|
|
18
|
|
|||
Other deferred taxes
|
606
|
|
|
164
|
|
|
128
|
|
|||
Share-based compensation expense
|
167
|
|
|
154
|
|
|
137
|
|
|||
Gain on business combination
|
(81
|
)
|
|
—
|
|
|
—
|
|
|||
Impairment of capitalized software held for sale
|
10
|
|
|
—
|
|
|
72
|
|
|||
Impairment of an equity investment
|
191
|
|
|
—
|
|
|
—
|
|
|||
Other non-cash items
|
56
|
|
|
66
|
|
|
12
|
|
|||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
||||||
Receivables
|
326
|
|
|
(770
|
)
|
|
(673
|
)
|
|||
Inventories
|
(59
|
)
|
|
(878
|
)
|
|
367
|
|
|||
Drafts and accounts payable
|
(125
|
)
|
|
2,027
|
|
|
533
|
|
|||
Deferred revenue
|
(25
|
)
|
|
66
|
|
|
42
|
|
|||
Taxes
|
(80
|
)
|
|
15
|
|
|
33
|
|
|||
Litigation charges
|
72
|
|
|
149
|
|
|
213
|
|
|||
Litigation settlement payments
|
(483
|
)
|
|
(26
|
)
|
|
(26
|
)
|
|||
Other
|
(49
|
)
|
|
(1
|
)
|
|
(144
|
)
|
|||
Net cash provided by operating activities
|
2,483
|
|
|
2,950
|
|
|
2,338
|
|
|||
|
|
|
|
|
|
||||||
Investing Activities
|
|
|
|
|
|
||||||
Property acquisitions
|
(246
|
)
|
|
(225
|
)
|
|
(233
|
)
|
|||
Capitalized software expenditures
|
(160
|
)
|
|
(178
|
)
|
|
(155
|
)
|
|||
Acquisitions, net of cash and cash equivalents acquired
|
(1,873
|
)
|
|
(1,156
|
)
|
|
(292
|
)
|
|||
Proceeds from sale of business
|
—
|
|
|
—
|
|
|
109
|
|
|||
Restricted cash for litigation charges
|
32
|
|
|
(32
|
)
|
|
—
|
|
|||
Other
|
38
|
|
|
89
|
|
|
(53
|
)
|
|||
Net cash used in investing activities
|
(2,209
|
)
|
|
(1,502
|
)
|
|
(624
|
)
|
|||
|
|
|
|
|
|
||||||
Financing Activities
|
|
|
|
|
|
||||||
Proceeds from short-term borrowings
|
2,225
|
|
|
400
|
|
|
1,000
|
|
|||
Repayments of short-term borrowings
|
(2,625
|
)
|
|
—
|
|
|
(1,000
|
)
|
|||
Proceeds from issuances of long-term debt
|
1,798
|
|
|
—
|
|
|
1,689
|
|
|||
Repayments of long-term debt
|
(1,143
|
)
|
|
(430
|
)
|
|
(1,730
|
)
|
|||
Common stock transactions:
|
|
|
|
|
|
|
|||||
Issuances
|
166
|
|
|
167
|
|
|
367
|
|
|||
Share repurchases, including shares surrendered for tax withholding
|
(1,214
|
)
|
|
(1,874
|
)
|
|
(2,050
|
)
|
|||
Dividends paid
|
(194
|
)
|
|
(195
|
)
|
|
(171
|
)
|
|||
Other
|
31
|
|
|
27
|
|
|
54
|
|
|||
Net cash used in financing activities
|
(956
|
)
|
|
(1,905
|
)
|
|
(1,841
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(11
|
)
|
|
(6
|
)
|
|
8
|
|
|||
Net decrease in cash and cash equivalents
|
(693
|
)
|
|
(463
|
)
|
|
(119
|
)
|
|||
Cash and cash equivalents at beginning of year
|
3,149
|
|
|
3,612
|
|
|
3,731
|
|
|||
Cash and cash equivalents at end of year
|
$
|
2,456
|
|
|
$
|
3,149
|
|
|
$
|
3,612
|
|
|
|
|
|
|
|
||||||
Supplemental Cash Flow Information
|
|
|
|
|
|
||||||
Cash paid for:
|
|
|
|
|
|
||||||
Interest
|
$
|
207
|
|
|
$
|
228
|
|
|
$
|
244
|
|
Income taxes, net of refunds
|
55
|
|
|
337
|
|
|
347
|
|
|||
Non-cash item:
|
|
|
|
|
|
||||||
Fair value of debt assumed on acquisition
|
$
|
(635
|
)
|
|
$
|
—
|
|
|
$
|
(1,891
|
)
|
1.
|
Significant Accounting Policies
|
2.
|
Business Combinations
|
(In millions)
|
Amounts
Recognized as of
Acquisition Date
(Provisional) |
||
Current assets, net of cash and cash equivalents acquired
|
$
|
706
|
|
Goodwill
|
1,145
|
|
|
Intangible assets
|
557
|
|
|
Other long-term assets
|
183
|
|
|
Current liabilities
|
(376
|
)
|
|
Current portion of long-term debt
|
(635
|
)
|
|
Other long-term liabilities
|
(281
|
)
|
|
Net assets acquired, less cash and cash equivalents
|
$
|
1,299
|
|
(In millions)
|
Amounts
Previously
Recognized as of
Acquisition Date
(Provisional) (1) |
|
Measurement
Period
Adjustments
|
|
Amounts
Recognized as of
Acquisition Date
(Final as Adjusted)
|
||||||
Current assets, net of cash and cash equivalents acquired
|
$
|
33
|
|
|
$
|
(1
|
)
|
|
$
|
32
|
|
Goodwill
|
506
|
|
|
6
|
|
|
512
|
|
|||
Intangible assets
|
441
|
|
|
1
|
|
|
442
|
|
|||
Other long-term assets
|
15
|
|
|
(1
|
)
|
|
14
|
|
|||
Current liabilities
|
(37
|
)
|
|
1
|
|
|
(36
|
)
|
|||
Long-term deferred tax liabilities
|
(39
|
)
|
|
—
|
|
|
(39
|
)
|
|||
Net assets acquired, less cash and cash equivalents
|
$
|
919
|
|
|
$
|
6
|
|
|
$
|
925
|
|
(1)
|
As previously reported in our Form 10-K for the year ended March 31, 2012.
|
(In millions)
|
Amounts Previously Recognized as of Acquisition Date (Provisional)
(1)
|
|
Measurement Period Adjustments
|
|
Amounts Recognized as of Acquisition Date (Final as Adjusted)
|
||||||
Current assets, net of cash and cash equivalents acquired
|
$
|
662
|
|
|
$
|
(13
|
)
|
|
$
|
649
|
|
Goodwill
|
808
|
|
|
20
|
|
|
828
|
|
|||
Intangible assets
|
1,007
|
|
|
(14
|
)
|
|
993
|
|
|||
Other long-term assets
|
354
|
|
|
(6
|
)
|
|
348
|
|
|||
Current liabilities
|
(489
|
)
|
|
(1
|
)
|
|
(490
|
)
|
|||
Current portion of long-term debt
|
(1,735
|
)
|
|
—
|
|
|
(1,735
|
)
|
|||
Other long-term liabilities
|
(338
|
)
|
|
16
|
|
|
(322
|
)
|
|||
Other stockholders' equity
|
(25
|
)
|
|
(2
|
)
|
|
(27
|
)
|
|||
Net assets acquired, less cash and cash equivalents
|
$
|
244
|
|
|
$
|
—
|
|
|
$
|
244
|
|
(1)
|
As previously reported in our Form 10-K for the year ended March 31, 2011.
|
|
Years Ended March 31,
|
||||||||||
(In millions)
|
2013
|
|
2012
|
|
2011
|
||||||
Operating Expenses
|
|
|
|
|
|
||||||
Transaction closing expenses
|
$
|
16
|
|
|
$
|
3
|
|
|
$
|
22
|
|
Restructuring, severance and relocation
|
31
|
|
|
6
|
|
|
9
|
|
|||
Other integration related expenses
|
25
|
|
|
22
|
|
|
12
|
|
|||
Gain on business combination
|
(81
|
)
|
|
—
|
|
|
—
|
|
|||
Total
|
(9
|
)
|
|
31
|
|
|
43
|
|
|||
Other Income: reimbursement of post-acquisition interest expense
from former US Oncology shareholders
|
—
|
|
|
—
|
|
|
(16
|
)
|
|||
Interest Expense: bridge loan fees
|
11
|
|
|
—
|
|
|
25
|
|
|||
Total Acquisition Expenses and Related Adjustments
|
$
|
2
|
|
|
$
|
31
|
|
|
$
|
52
|
|
|
Years Ended March 31,
|
||||||||||
(In millions)
|
2013
|
|
2012
|
|
2011
|
||||||
Operating Expenses
|
|
|
|
|
|
||||||
Distribution Solutions
|
$
|
47
|
|
|
$
|
24
|
|
|
$
|
41
|
|
Technology Solutions
|
8
|
|
|
6
|
|
|
—
|
|
|||
Corporate
|
(64
|
)
|
|
1
|
|
|
2
|
|
|||
Total
|
(9
|
)
|
|
31
|
|
|
43
|
|
|||
Corporate - Other Income
|
—
|
|
|
—
|
|
|
(16
|
)
|
|||
Corporate - Interest Expense
|
11
|
|
|
—
|
|
|
25
|
|
|||
Total Acquisition Expenses and Related Adjustments
|
$
|
2
|
|
|
$
|
31
|
|
|
$
|
52
|
|
3.
|
Asset Impairments and Product Alignment Charges
|
4.
|
Impairment of an Equity Investment
|
5.
|
Share-Based Compensation
|
|
Years Ended March 31,
|
||||||||||
(In millions)
|
2013
|
|
2012
|
|
2011
|
||||||
RSUs
(1)
|
$
|
109
|
|
|
$
|
97
|
|
|
$
|
79
|
|
PeRSUs
(2)
|
23
|
|
|
24
|
|
|
27
|
|
|||
Stock options
|
24
|
|
|
23
|
|
|
22
|
|
|||
Employee stock purchase plan
|
11
|
|
|
10
|
|
|
9
|
|
|||
Share-based compensation expense
|
167
|
|
|
154
|
|
|
137
|
|
|||
Tax benefit for share-based compensation expense
(3)
|
(59
|
)
|
|
(55
|
)
|
|
(48
|
)
|
|||
Share-based compensation expense, net of tax
|
$
|
108
|
|
|
$
|
99
|
|
|
$
|
89
|
|
(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 year's performance period.
|
(3)
|
Income tax benefit is computed using the tax rates of applicable tax jurisdictions. Additionally, a portion of pre-tax compensation expense is not tax-deductible.
|
•
|
Expected stock price volatility is based on a combination of historical volatility of our common stock and implied market volatility. We believe that this market-based input provides a reasonable estimate of our future stock price movements and is consistent with employee stock option valuation considerations.
|
•
|
Expected dividend yield is based on historical experience and investors' current expectations.
|
•
|
The risk-free interest rate for periods within the expected life of the option is based on the constant maturity U.S. Treasury rate in effect at the time of grant.
|
•
|
Expected life of the options is based primarily on historical employee stock option exercises and other behavior data and reflects the impact of changes in contractual life of current option grants compared to our historical grants.
|
|
Years Ended March 31,
|
||||
|
2013
|
|
2012
|
|
2011
|
Expected stock price volatility
|
27%
|
|
27%
|
|
29%
|
Expected dividend yield
|
0.9%
|
|
1.0%
|
|
1.1%
|
Risk-free interest rate
|
0.8%
|
|
2.1%
|
|
2.6%
|
Expected life (in years)
|
5
|
|
5
|
|
5
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||||||
Range of Exercise Prices
|
|
Number of Options Outstanding at Year End
(In millions)
|
|
Weighted-Average Remaining Contractual Life (Years)
|
|
Weighted- Average Exercise Price
|
|
Number of Options Exercisable at Year End
(In millions)
|
|
Weighted- Average Exercise Price
|
||||||||||
$
|
29.01
|
|
–
|
$
|
47.28
|
|
|
2
|
|
3
|
|
$
|
39.95
|
|
|
1
|
|
$
|
39.67
|
|
47.29
|
|
–
|
65.59
|
|
|
1
|
|
2
|
|
58.64
|
|
|
1
|
|
58.64
|
|
||||
65.60
|
|
–
|
83.90
|
|
|
3
|
|
5
|
|
75.13
|
|
|
1
|
|
72.79
|
|
||||
83.91
|
|
–
|
102.21
|
|
|
1
|
|
6
|
|
87.67
|
|
|
—
|
|
84.41
|
|
||||
|
|
|
|
7
|
|
|
|
|
|
3
|
|
|
(In millions, except per share data)
|
Shares
|
|
Weighted-Average Exercise Price
|
|
Weighted-Average Remaining Contractual Term (Years)
|
|
Aggregate Intrinsic
Value
(2)
|
||||
Outstanding, March 31, 2010
|
16
|
|
$
|
41.26
|
|
|
3
|
|
$
|
394
|
|
Granted
|
1
|
|
67.95
|
|
|
|
|
|
|||
Exercised
|
(8)
|
|
37.63
|
|
|
|
|
|
|||
Outstanding, March 31, 2011
|
9
|
|
$
|
49.01
|
|
|
4
|
|
$
|
269
|
|
Granted
|
1
|
|
83.30
|
|
|
|
|
|
|||
Exercised
|
(2)
|
|
42.20
|
|
|
|
|
|
|||
Outstanding, March 31, 2012
|
8
|
|
$
|
56.88
|
|
|
4
|
|
$
|
226
|
|
Granted
|
1
|
|
87.66
|
|
|
|
|
|
|||
Exercised
|
(2)
|
|
47.63
|
|
|
|
|
|
|||
Outstanding, March 31, 2013
|
7
|
|
$
|
65.79
|
|
|
4
|
|
$
|
260
|
|
|
|
|
|
|
|
|
|
||||
Vested and expected to vest
(1)
|
6
|
|
$
|
65.37
|
|
|
4
|
|
$
|
259
|
|
Vested and exercisable, March 31, 2013
|
3
|
|
56.19
|
|
|
3
|
|
154
|
|
(1)
|
The number of options expected to vest takes into account an estimate of expected forfeitures.
|
(2)
|
The intrinsic value is calculated as the difference between the period-end market price of the Company's common stock and the exercise price of “in-the-money” options.
|
|
Years Ended March 31,
|
||||||||||
(In millions, except per share data)
|
2013
|
|
2012
|
|
2011
|
||||||
Weighted-average grant date fair value per stock option
|
$
|
19.63
|
|
|
$
|
20.32
|
|
|
$
|
18.37
|
|
Aggregate intrinsic value on exercise
|
$
|
107
|
|
|
$
|
108
|
|
|
$
|
276
|
|
Cash received upon exercise
|
$
|
106
|
|
|
$
|
113
|
|
|
$
|
319
|
|
Tax benefits realized related to exercise
|
$
|
41
|
|
|
$
|
40
|
|
|
$
|
106
|
|
Total fair value of stock options vested
|
$
|
24
|
|
|
$
|
23
|
|
|
$
|
21
|
|
Total compensation cost, net of estimated forfeitures, related to unvested stock options not yet recognized, pre-tax
|
$
|
37
|
|
|
$
|
40
|
|
|
$
|
41
|
|
Weighted-average period in years over which stock option compensation cost is expected to be recognized
|
1
|
|
|
1
|
|
|
1
|
|
(In millions, except per share data)
|
Shares
|
|
Weighted-Average
Grant Date Fair
Value Per Share
|
||
Nonvested, March 31, 2010
|
4
|
|
$
|
49.21
|
|
Granted
|
3
|
|
67.84
|
|
|
Vested
|
(1)
|
|
61.05
|
|
|
Nonvested, March 31, 2011
|
6
|
|
$
|
57.79
|
|
Granted
|
2
|
|
82.71
|
|
|
Vested
|
(1)
|
|
57.95
|
|
|
Nonvested, March 31, 2012
|
7
|
|
$
|
65.14
|
|
Granted
|
1
|
|
87.86
|
|
|
Vested
|
(2)
|
|
41.80
|
|
|
Nonvested, March 31, 2013
|
6
|
|
$
|
76.20
|
|
|
Years Ended March 31,
|
||||||||||
(In millions)
|
2013
|
|
2012
|
|
2011
|
||||||
Total fair value of shares vested
|
$
|
66
|
|
|
$
|
44
|
|
|
$
|
43
|
|
Total compensation cost, net of estimated forfeitures, related to nonvested RSU awards not yet recognized, pre-tax
|
$
|
128
|
|
|
$
|
143
|
|
|
$
|
131
|
|
Weighted-average period in years over which RSU cost is expected to be recognized
|
2
|
|
|
3
|
|
|
2
|
|
6.
|
Other Income (Expense), Net
|
|
Years Ended March 31,
|
||||||||||
(In millions)
|
2013
|
2012
|
2011
|
||||||||
Interest income
|
$
|
22
|
|
|
$
|
19
|
|
|
$
|
18
|
|
Equity in earnings (loss), net
(1)
|
3
|
|
|
9
|
|
|
(6
|
)
|
|||
Reimbursement of post-acquisition interest expense
|
—
|
|
|
—
|
|
|
16
|
|
|||
Impairment of an investment
|
—
|
|
|
(6
|
)
|
|
—
|
|
|||
Other, net
|
10
|
|
|
(1
|
)
|
|
8
|
|
|||
Total
|
$
|
35
|
|
|
$
|
21
|
|
|
$
|
36
|
|
(1)
|
Primarily recorded within our Distribution Solutions segment.
|
7.
|
Income Taxes
|
|
Years Ended March 31,
|
||||||||||
(In millions)
|
2013
|
|
2012
|
|
2011
|
||||||
Income from continuing operations before income taxes
|
|
|
|
|
|
||||||
U.S.
|
$
|
1,578
|
|
|
$
|
1,316
|
|
|
$
|
1,161
|
|
Foreign
|
341
|
|
|
603
|
|
|
474
|
|
|||
Total income from continuing operations before income taxes
|
$
|
1,919
|
|
|
$
|
1,919
|
|
|
$
|
1,635
|
|
|
Years Ended March 31,
|
||||||||||
(In millions)
|
2013
|
|
2012
|
|
2011
|
||||||
Current
|
|
|
|
|
|
||||||
Federal
|
$
|
(85
|
)
|
|
$
|
271
|
|
|
$
|
283
|
|
State and local
|
14
|
|
|
52
|
|
|
40
|
|
|||
Foreign
|
46
|
|
|
28
|
|
|
54
|
|
|||
Total current
|
(25
|
)
|
|
351
|
|
|
377
|
|
|||
|
|
|
|
|
|
||||||
Deferred
|
|
|
|
|
|
||||||
Federal
|
542
|
|
|
129
|
|
|
121
|
|
|||
State and local
|
80
|
|
|
29
|
|
|
1
|
|
|||
Foreign
|
(16
|
)
|
|
7
|
|
|
6
|
|
|||
Total deferred
|
606
|
|
|
165
|
|
|
128
|
|
|||
Income tax provision
|
$
|
581
|
|
|
$
|
516
|
|
|
$
|
505
|
|
|
Years Ended March 31,
|
||||||||||
(In millions)
|
2013
|
|
2012
|
|
2011
|
||||||
Income tax provision at federal statutory rate
|
$
|
672
|
|
|
$
|
672
|
|
|
$
|
572
|
|
State and local income taxes net of federal tax benefit
|
58
|
|
|
57
|
|
|
33
|
|
|||
Foreign income taxed at various rates
|
(139
|
)
|
|
(176
|
)
|
|
(105
|
)
|
|||
Unrecognized tax benefits and settlements
|
1
|
|
|
(18
|
)
|
|
14
|
|
|||
Tax credits
|
(13
|
)
|
|
(13
|
)
|
|
(16
|
)
|
|||
Other, net
|
2
|
|
|
(6
|
)
|
|
7
|
|
|||
Income tax provision
|
$
|
581
|
|
|
$
|
516
|
|
|
$
|
505
|
|
|
March 31,
|
||||||
(In millions)
|
2013
|
|
2012
|
||||
Assets
|
|
|
|
||||
Receivable allowances
|
$
|
84
|
|
|
$
|
44
|
|
Deferred revenue
|
106
|
|
|
114
|
|
||
Compensation and benefit related accruals
|
553
|
|
|
447
|
|
||
AWP litigation accrual
|
17
|
|
|
175
|
|
||
Loss and credit carryforwards
|
341
|
|
|
400
|
|
||
Other
|
264
|
|
|
256
|
|
||
Subtotal
|
1,365
|
|
|
1,436
|
|
||
Less: valuation allowance
|
(118
|
)
|
|
(101
|
)
|
||
Total assets
|
1,247
|
|
|
1,335
|
|
||
Liabilities
|
|
|
|
||||
Inventory valuation and other assets
|
(2,089
|
)
|
|
(1,635
|
)
|
||
Fixed assets and systems development costs
|
(267
|
)
|
|
(263
|
)
|
||
Intangibles
|
(734
|
)
|
|
(544
|
)
|
||
Other
|
(24
|
)
|
|
(53
|
)
|
||
Total liabilities
|
(3,114
|
)
|
|
(2,495
|
)
|
||
Net deferred tax liability
|
$
|
(1,867
|
)
|
|
$
|
(1,160
|
)
|
|
|
|
|
||||
Current net deferred tax asset
|
$
|
16
|
|
|
$
|
—
|
|
Current net deferred tax liability
|
(1,626
|
)
|
|
(1,092
|
)
|
||
Long-term deferred tax asset
|
21
|
|
|
20
|
|
||
Long-term deferred tax liability
|
(278
|
)
|
|
(88
|
)
|
||
Net deferred tax liability
|
$
|
(1,867
|
)
|
|
$
|
(1,160
|
)
|
|
Years Ended March 31,
|
||||||||||
(In millions)
|
2013
|
|
2012
|
|
2011
|
||||||
Unrecognized tax benefits at beginning of period
|
$
|
595
|
|
|
$
|
635
|
|
|
$
|
619
|
|
Additions based on tax positions related to prior years
|
46
|
|
|
11
|
|
|
32
|
|
|||
Reductions based on tax positions related to prior years
|
(108
|
)
|
|
(72
|
)
|
|
(60
|
)
|
|||
Additions based on tax positions related to current year
|
31
|
|
|
37
|
|
|
50
|
|
|||
Reductions based on settlements
|
(2
|
)
|
|
(1
|
)
|
|
(6
|
)
|
|||
Reductions based on the lapse of the applicable statutes of limitations
|
(2
|
)
|
|
(15
|
)
|
|
—
|
|
|||
Unrecognized tax benefits at end of period
|
$
|
560
|
|
|
$
|
595
|
|
|
$
|
635
|
|
8.
|
Discontinued Operation
|
9.
|
Earnings Per Common Share
|
|
Years Ended March 31,
|
||||||||||
(In millions, except per share amounts)
|
2013
|
|
2012
|
|
2011
|
||||||
Income from continuing operations
|
$
|
1,338
|
|
|
$
|
1,403
|
|
|
$
|
1,130
|
|
Discontinued operation - gain on sale, net of tax
|
—
|
|
|
—
|
|
|
72
|
|
|||
Net income
|
$
|
1,338
|
|
|
$
|
1,403
|
|
|
$
|
1,202
|
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
235
|
|
|
246
|
|
|
258
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
||||||
Options to purchase common stock
|
1
|
|
|
2
|
|
|
3
|
|
|||
Restricted stock units
|
3
|
|
|
3
|
|
|
2
|
|
|||
Diluted
|
239
|
|
|
251
|
|
|
263
|
|
|||
|
|
|
|
|
|
||||||
Earnings per common share:
(1)
|
|
|
|
|
|
||||||
Diluted
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
5.59
|
|
|
$
|
5.59
|
|
|
$
|
4.29
|
|
Discontinued operation - gain on sale
|
—
|
|
|
—
|
|
|
0.28
|
|
|||
Total
|
$
|
5.59
|
|
|
$
|
5.59
|
|
|
$
|
4.57
|
|
Basic
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
5.71
|
|
|
$
|
5.70
|
|
|
$
|
4.37
|
|
Discontinued operation - gain on sale
|
—
|
|
|
—
|
|
|
0.28
|
|
|||
Total
|
$
|
5.71
|
|
|
$
|
5.70
|
|
|
$
|
4.65
|
|
(1)
|
Certain computations may reflect rounding adjustments.
|
10.
|
Receivables, Net
|
11.
|
Property, Plant and Equipment, Net
|
|
March 31,
|
||||||
(In millions)
|
2013
|
|
2012
|
||||
Land
|
$
|
129
|
|
|
$
|
68
|
|
Building, machinery, equipment and other
|
2,400
|
|
|
2,107
|
|
||
Total property, plant and equipment
|
2,529
|
|
|
2,175
|
|
||
Accumulated depreciation
|
(1,208
|
)
|
|
(1,132
|
)
|
||
Property, plant and equipment, net
|
$
|
1,321
|
|
|
$
|
1,043
|
|
12.
|
Goodwill and Intangible Assets, Net
|
(In millions)
|
Distribution
Solutions
|
|
Technology
Solutions
|
|
Total
|
||||||
Balance, March 31, 2011
|
$
|
2,662
|
|
|
$
|
1,702
|
|
|
$
|
4,364
|
|
Goodwill acquired
|
511
|
|
|
151
|
|
|
662
|
|
|||
Acquisition accounting and other adjustments
|
20
|
|
|
—
|
|
|
20
|
|
|||
Foreign currency translation adjustments
|
(3
|
)
|
|
(11
|
)
|
|
(14
|
)
|
|||
Balance, March 31, 2012
|
$
|
3,190
|
|
|
$
|
1,842
|
|
|
$
|
5,032
|
|
Goodwill acquired
|
1,228
|
|
|
193
|
|
|
1,421
|
|
|||
Impairment
|
—
|
|
|
(36
|
)
|
|
(36
|
)
|
|||
Acquisition accounting and other adjustments
|
6
|
|
|
(1
|
)
|
|
5
|
|
|||
Foreign currency translation adjustments
|
(11
|
)
|
|
(6
|
)
|
|
(17
|
)
|
|||
Balance, March 31, 2013
|
$
|
4,413
|
|
|
$
|
1,992
|
|
|
$
|
6,405
|
|
|
March 31, 2013
|
|
March 31, 2012
|
||||||||||||||||||||||
(Dollars in millions)
|
Weighted
Average
Remaining
Amortization
Period
(Years)
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
Customer lists
|
8
|
|
$
|
1,761
|
|
|
$
|
(672
|
)
|
|
$
|
1,089
|
|
|
$
|
1,081
|
|
|
$
|
(554
|
)
|
|
$
|
527
|
|
Service agreements
|
17
|
|
1,018
|
|
|
(114
|
)
|
|
904
|
|
|
1,022
|
|
|
(52
|
)
|
|
970
|
|
||||||
Trademarks and trade names
|
16
|
|
208
|
|
|
(46
|
)
|
|
162
|
|
|
192
|
|
|
(38
|
)
|
|
154
|
|
||||||
Technology
|
4
|
|
271
|
|
|
(207
|
)
|
|
64
|
|
|
244
|
|
|
(190
|
)
|
|
54
|
|
||||||
Other
|
6
|
|
89
|
|
|
(38
|
)
|
|
51
|
|
|
76
|
|
|
(31
|
)
|
|
45
|
|
||||||
Total
|
|
|
$
|
3,347
|
|
|
$
|
(1,077
|
)
|
|
$
|
2,270
|
|
|
$
|
2,615
|
|
|
$
|
(865
|
)
|
|
$
|
1,750
|
|
13.
|
Capitalized Software Held for Sale
|
|
Years Ended March 31,
|
||||||||||
(In millions)
|
2013
|
|
2012
|
|
2011
|
||||||
Capitalized software held for sale, net at beginning of period
|
$
|
144
|
|
|
$
|
152
|
|
|
$
|
234
|
|
Amounts capitalized
|
49
|
|
|
47
|
|
|
64
|
|
|||
Amortization expense
|
(56
|
)
|
|
(53
|
)
|
|
(75
|
)
|
|||
Impairment charges
|
(10
|
)
|
|
—
|
|
|
(72
|
)
|
|||
Foreign currency translations adjustments, net
|
(1
|
)
|
|
(2
|
)
|
|
1
|
|
|||
Capitalized software held for sale, net at end of period
|
$
|
126
|
|
|
$
|
144
|
|
|
$
|
152
|
|
14.
|
Debt and
Financing Activities
|
|
March 31,
|
||||||
(In millions)
|
2013
|
|
2012
|
||||
5.25% Notes due March 1, 2013
|
$
|
—
|
|
|
$
|
500
|
|
6.50% Notes due February 15, 2014
|
350
|
|
|
350
|
|
||
0.95% Notes due December 4, 2015
|
499
|
|
|
—
|
|
||
3.25% Notes due March 1, 2016
|
599
|
|
|
598
|
|
||
5.70% Notes due March 1, 2017
|
500
|
|
|
499
|
|
||
1.40% Notes due March 15, 2018
|
499
|
|
|
—
|
|
||
7.50% Notes due February 15, 2019
|
349
|
|
|
349
|
|
||
4.75% Notes due March 1, 2021
|
598
|
|
|
598
|
|
||
2.70% Notes due December 15, 2022
|
400
|
|
|
—
|
|
||
2.85% Notes due March 15, 2023
|
400
|
|
|
—
|
|
||
7.65% Debentures due March 1, 2027
|
175
|
|
|
175
|
|
||
6.00% Notes due March 1, 2041
|
493
|
|
|
493
|
|
||
Other
|
11
|
|
|
18
|
|
||
Total debt
|
4,873
|
|
|
3,580
|
|
||
Less current portion
|
(352
|
)
|
|
(508
|
)
|
||
Total long-term debt
|
$
|
4,521
|
|
|
$
|
3,072
|
|
15.
|
Variable Interest Entities
|
16.
|
Pension Benefits
|
|
Years Ended March 31,
|
||||||||||
(In millions)
|
2013
|
|
2012
|
|
2011
|
||||||
Service cost - benefits earned during the year
|
$
|
7
|
|
|
$
|
7
|
|
|
$
|
6
|
|
Interest cost on projected benefit obligation
|
28
|
|
|
31
|
|
|
31
|
|
|||
Expected return on assets
|
(28
|
)
|
|
(31
|
)
|
|
(29
|
)
|
|||
Amortization of unrecognized actuarial loss, prior service costs and net transitional obligation
|
32
|
|
|
27
|
|
|
28
|
|
|||
Net periodic pension expense
|
$
|
39
|
|
|
$
|
34
|
|
|
$
|
36
|
|
|
Years Ended March 31,
|
||||||
(In millions)
|
2013
|
|
2012
|
||||
Change in benefit obligations
|
|
|
|
||||
Benefit obligation at beginning of period
|
$
|
670
|
|
|
$
|
625
|
|
Service cost
|
7
|
|
|
7
|
|
||
Interest cost
|
28
|
|
|
31
|
|
||
Actuarial loss
|
73
|
|
|
42
|
|
||
Benefit payments
|
(35
|
)
|
|
(34
|
)
|
||
Foreign exchange impact and other
|
(7
|
)
|
|
(1
|
)
|
||
Benefit obligation at end of period
(1)
|
$
|
736
|
|
|
$
|
670
|
|
|
|
|
|
||||
Change in plan assets
|
|
|
|
||||
Fair value of plan assets at beginning of period
|
$
|
410
|
|
|
$
|
416
|
|
Actual return on plan assets
|
31
|
|
|
12
|
|
||
Employer and participant contributions
|
25
|
|
|
17
|
|
||
Benefits paid
|
(35
|
)
|
|
(34
|
)
|
||
Foreign exchange impact and other
|
(6
|
)
|
|
(1
|
)
|
||
Fair value of plan assets at end of period
|
$
|
425
|
|
|
$
|
410
|
|
|
|
|
|
||||
Funded status at end of period
|
$
|
(311
|
)
|
|
$
|
(260
|
)
|
|
|
|
|
||||
Amounts recognized on the balance sheet
|
|
|
|
||||
Current liabilities
|
$
|
(3
|
)
|
|
$
|
(13
|
)
|
Long-term liabilities
|
(308
|
)
|
|
(247
|
)
|
||
Total
|
$
|
(311
|
)
|
|
$
|
(260
|
)
|
(1)
|
The benefit obligation is the projected benefit obligation.
|
|
March 31,
|
||||||
(In millions)
|
2013
|
|
2012
|
||||
Projected benefit obligation
|
$
|
736
|
|
|
$
|
670
|
|
Accumulated benefit obligation
|
733
|
|
|
667
|
|
||
Fair value of plan assets
|
425
|
|
|
410
|
|
|
March 31,
|
||||||
(In millions)
|
2013
|
|
2012
|
||||
Net actuarial loss
|
$
|
310
|
|
|
$
|
274
|
|
Prior service cost
|
—
|
|
|
1
|
|
||
Net transition obligation
|
—
|
|
|
1
|
|
||
Total
|
$
|
310
|
|
|
$
|
276
|
|
|
Years Ended March 31,
|
|||||||||||
(In millions)
|
2013
|
|
2012
|
|
2011
|
|||||||
Net actuarial loss
|
$
|
70
|
|
|
$
|
61
|
|
|
$
|
10
|
|
|
Amortization of:
|
|
|
|
|
|
|||||||
Net actuarial loss
|
(31
|
)
|
|
(25
|
)
|
|
(26
|
)
|
||||
Prior service cost
|
(1
|
)
|
|
(2
|
)
|
|
(2
|
)
|
||||
Foreign exchange impact and other
|
(4
|
)
|
|
—
|
|
|
—
|
|
||||
Total recognized in other comprehensive loss (income)
|
$
|
34
|
|
|
$
|
34
|
|
|
$
|
(18
|
)
|
|
|
Years Ended March 31,
|
|||||||
|
|
2013
|
|
2012
|
|
2011
|
|||
Net periodic pension expense
|
|
|
|
|
|
|
|||
Discount rates
|
|
4.22
|
%
|
|
4.98
|
%
|
|
5.30
|
%
|
Rate of increase in compensation
|
|
3.58
|
|
|
3.74
|
|
|
3.75
|
|
Expected long-term rate of return on plan assets
|
|
6.94
|
|
|
7.60
|
|
|
7.79
|
|
Benefit obligation
|
|
|
|
|
|
|
|||
Discount rates
|
|
3.55
|
%
|
|
4.23
|
%
|
|
4.99
|
%
|
Rate of increase in compensation
|
|
3.59
|
|
|
3.56
|
|
|
3.74
|
|
(In millions)
|
|
One Percentage
Point Increase
|
|
One Percentage
Point Decrease
|
||
Increase (decrease) on projected benefit obligation
|
|
$
|
(41)
|
|
$
|
48
|
Increase (decrease) on net periodic pension cost
|
|
|
(2)
|
|
|
3
|
|
March 31, 2013
|
||||||||||||||
(In millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Cash and cash equivalents
|
$
|
3
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
11
|
|
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Common and preferred stock
|
20
|
|
|
—
|
|
|
—
|
|
|
20
|
|
||||
Equity commingled funds
|
—
|
|
|
209
|
|
|
—
|
|
|
209
|
|
||||
Fixed income securities:
|
|
|
|
|
|
|
|
||||||||
Government securities
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
||||
Corporate bonds
|
—
|
|
|
28
|
|
|
—
|
|
|
28
|
|
||||
Mortgage-backed securities
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
||||
Asset-backed securities and other
|
—
|
|
|
22
|
|
|
—
|
|
|
22
|
|
||||
Fixed income commingled funds
|
—
|
|
|
97
|
|
|
—
|
|
|
97
|
|
||||
Other:
|
|
|
|
|
|
|
|
||||||||
Real estate funds
|
—
|
|
|
—
|
|
|
19
|
|
|
19
|
|
||||
Other commingled funds
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
23
|
|
|
$
|
382
|
|
|
$
|
19
|
|
|
424
|
|
|
Receivables
(1)
|
|
|
|
|
|
|
1
|
|
|||||||
Payables
(1)
|
|
|
|
|
|
|
—
|
|
|||||||
Total
|
|
|
|
|
|
|
$
|
425
|
|
(1)
|
Represents pending trades at March 31,
2013
.
|
|
March 31, 2012
|
||||||||||||||
(In millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Cash and cash equivalents
|
$
|
14
|
|
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
28
|
|
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Common and preferred stock
|
100
|
|
|
—
|
|
|
—
|
|
|
100
|
|
||||
Equity commingled funds
|
—
|
|
|
134
|
|
|
—
|
|
|
134
|
|
||||
Fixed income securities:
|
|
|
|
|
|
|
|
||||||||
Government securities
|
—
|
|
|
11
|
|
|
—
|
|
|
11
|
|
||||
Corporate bonds
|
—
|
|
|
48
|
|
|
—
|
|
|
48
|
|
||||
Mortgage-backed securities
|
—
|
|
|
21
|
|
|
—
|
|
|
21
|
|
||||
Asset-backed securities and other
|
—
|
|
|
20
|
|
|
—
|
|
|
20
|
|
||||
Fixed income commingled funds
|
—
|
|
|
25
|
|
|
—
|
|
|
25
|
|
||||
Other:
|
|
|
|
|
|
|
|
||||||||
Real estate funds
|
—
|
|
|
—
|
|
|
17
|
|
|
17
|
|
||||
Other Commingled funds
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
||||
Total
|
$
|
114
|
|
|
$
|
285
|
|
|
$
|
17
|
|
|
416
|
|
|
Receivables
(1)
|
|
|
|
|
|
|
6
|
|
|||||||
Payables
(1)
|
|
|
|
|
|
|
(12
|
)
|
|||||||
Total
|
|
|
|
|
|
|
$
|
410
|
|
(1)
|
Represents pending trades at March 31,
2012
.
|
(In millions)
|
|
Real Estate Funds
|
|
Hedge Funds
|
|
Total
|
||||||
Balance at March 31, 2011
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
10
|
|
Unrealized gain on plan assets still held
|
|
1
|
|
|
—
|
|
|
1
|
|
|||
Purchases, sales and settlements
|
|
11
|
|
|
(5
|
)
|
|
6
|
|
|||
Balance at March 31, 2012
|
|
$
|
17
|
|
|
$
|
—
|
|
|
$
|
17
|
|
Unrealized gain on plan assets still held
|
|
1
|
|
|
—
|
|
|
1
|
|
|||
Purchases, sales and settlements
|
|
1
|
|
|
—
|
|
|
1
|
|
|||
Balance at March 31, 2013
|
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
19
|
|
17.
|
Postretirement Benefits
|
|
Years Ended March 31,
|
||||||||||
(In millions)
|
2013
|
|
2012
|
|
2011
|
||||||
Service cost - benefits earned during the year
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
1
|
|
Interest cost on accumulated benefit obligation
|
6
|
|
|
7
|
|
|
8
|
|
|||
Amortization of unrecognized actuarial gain and prior service costs
|
(2
|
)
|
|
(1
|
)
|
|
(4
|
)
|
|||
Net periodic postretirement expense
|
$
|
6
|
|
|
$
|
8
|
|
|
$
|
5
|
|
|
Years Ended March 31,
|
||||||
(In millions)
|
2013
|
|
2012
|
||||
Benefit obligation at beginning of period
|
$
|
144
|
|
|
$
|
152
|
|
Service cost
|
2
|
|
|
2
|
|
||
Interest cost
|
6
|
|
|
7
|
|
||
Actuarial gain
|
(9
|
)
|
|
(4
|
)
|
||
Benefit payments
|
(12
|
)
|
|
(13
|
)
|
||
Benefit obligation at end of period
|
$
|
131
|
|
|
$
|
144
|
|
18.
|
Hedging Activities
|
19.
|
Fair Value Measurements
|
|
March 31, 2013
|
|
March 31, 2012
|
||||||||||||||||||||||
(In millions
)
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||||||
Cash Equivalents
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Money market funds
(1)
|
$
|
1,036
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,036
|
|
|
$
|
805
|
|
$
|
—
|
|
$
|
—
|
|
$
|
805
|
|
Time deposits
(2)
|
—
|
|
95
|
|
—
|
|
95
|
|
|
—
|
|
132
|
|
—
|
|
132
|
|
||||||||
Repurchase agreements
(2)
|
447
|
|
—
|
|
—
|
|
447
|
|
|
211
|
|
—
|
|
—
|
|
211
|
|
||||||||
Total cash equivalents
|
$
|
1,483
|
|
$
|
95
|
|
$
|
—
|
|
$
|
1,578
|
|
|
$
|
1,016
|
|
$
|
132
|
|
$
|
—
|
|
$
|
1,148
|
|
20.
|
Lease Obligations
|
(In millions)
|
Noncancelable Operating Leases
|
||
2014
|
$
|
213
|
|
2015
|
165
|
|
|
2016
|
118
|
|
|
2017
|
90
|
|
|
2018
|
63
|
|
|
Thereafter
|
202
|
|
|
Total minimum lease payments
(1)
|
$
|
851
|
|
(1)
|
Minimum lease payments have not been reduced by minimum sublease rentals of
$33
million due under future noncancelable subleases.
|
21.
|
Financial Guarantees and Warranties
|
22.
|
Other Commitments and Contingent Liabilities
|
|
Years Ended March 31,
|
||||||||||
(In millions)
|
2013
|
|
2012
|
|
2011
|
||||||
AWP litigation reserve at beginning of period
|
$
|
453
|
|
|
$
|
330
|
|
|
$
|
143
|
|
Charges incurred
|
72
|
|
|
149
|
|
|
213
|
|
|||
Payments made
|
(483
|
)
|
|
(26
|
)
|
|
(26
|
)
|
|||
AWP litigation reserve at end of period
|
$
|
42
|
|
|
$
|
453
|
|
|
$
|
330
|
|
23.
|
Stockholders’ Equity
|
|
Share Repurchases
(1)
|
||||||||||
(In millions, except price per share data)
|
|
Total
Number of Shares Purchased
(2) (3)
|
|
|
Average Price
Paid Per Share
|
|
Approximate
Dollar Value of
Shares that May
Yet Be Purchased
Under the
Programs
|
||||
Balance, March 31, 2010
|
|
|
|
|
|
|
$
|
531
|
|
||
Share repurchase plans approved:
|
|
|
|
|
|
|
|
||||
April 2010
|
|
|
|
|
|
|
1,000
|
|
|||
October 2010
|
|
|
|
|
|
|
1,000
|
|
|||
Shares repurchased
|
|
29
|
|
|
$
|
69.62
|
|
|
(2,032
|
)
|
|
Balance, March 31, 2011
|
|
|
|
|
|
|
$
|
499
|
|
||
Share repurchase plans approved:
|
|
|
|
|
|
|
|
||||
April 2011
|
|
|
|
|
|
|
1,000
|
|
|||
January 2012
|
|
|
|
|
|
|
650
|
|
|||
Shares repurchased
|
|
20
|
|
|
$
|
83.47
|
|
|
(1,850
|
)
|
|
Balance, March 31, 2012
|
|
|
|
|
|
|
$
|
299
|
|
||
Share repurchase plans approved:
|
|
|
|
|
|
|
|
||||
April 2012
|
|
|
|
|
|
|
700
|
|
|||
January 2013
|
|
|
|
|
|
|
500
|
|
|||
Shares repurchased
|
|
13
|
|
|
$
|
100.82
|
|
|
(1,159
|
)
|
|
Balance, March 31, 2013
|
|
|
|
|
|
|
$
|
340
|
|
(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.
|
|
Years Ended March 31,
|
||||||||||
(In millions)
|
2013
|
|
2012
|
|
2011
|
||||||
Foreign currency translation adjustments
|
|
|
|
|
|
||||||
Foreign currency translation adjustments arising during period, net of income tax expense (benefit) of ($2), $2 and $2
|
$
|
(52
|
)
|
|
$
|
(56
|
)
|
|
$
|
76
|
|
|
|
|
|
|
|
|
|
|
|||
Unrealized gains (losses) on cash flow hedges
|
|
|
|
|
|
||||||
Unrealized losses on cash flow hedges arising during period, net of income tax benefit of nil, nil and nil
|
—
|
|
|
(5
|
)
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|||
Changes in retirement-related benefit plans
|
|
|
|
|
|
||||||
Net actuarial loss arising during period, net of income tax (benefit) of ($22), ($18) and ($5)
|
(40
|
)
|
|
(38
|
)
|
|
(9
|
)
|
|||
Amortization of actuarial loss, prior service cost and transition obligation, net of income tax (benefit) of ($12), ($9) and ($8)
|
18
|
|
|
17
|
|
|
14
|
|
|||
Foreign currency translation adjustments, net of income tax expense of nil, nil and nil
|
4
|
|
|
—
|
|
|
—
|
|
|||
|
(18
|
)
|
|
(21
|
)
|
|
5
|
|
|||
|
|
|
|
|
|
|
|||||
Other Comprehensive Income (Loss), net of tax
|
$
|
(70
|
)
|
|
$
|
(82
|
)
|
|
$
|
81
|
|
(In millions)
|
Foreign Currency Translation Adjustments, Net of Tax
|
|
Unrealized Losses on Cash Flow Hedges,
Net of Tax
|
|
Unrealized Net Loss and Other Components of Benefit Plans, Net of Tax
|
|
Total Accumulated Other Comprehensive Income (Loss)
|
||||||||
Balance at March 31, 2011
|
$
|
244
|
|
|
$
|
—
|
|
|
$
|
(157
|
)
|
|
$
|
87
|
|
Other comprehensive loss
|
(56
|
)
|
|
(5
|
)
|
|
(21
|
)
|
|
(82
|
)
|
||||
Balance at March 31, 2012
|
$
|
188
|
|
|
$
|
(5
|
)
|
|
$
|
(178
|
)
|
|
$
|
5
|
|
Other comprehensive loss
|
(52
|
)
|
|
—
|
|
|
(18
|
)
|
|
(70
|
)
|
||||
Balance at March 31, 2013
|
$
|
136
|
|
|
$
|
(5
|
)
|
|
$
|
(196
|
)
|
|
$
|
(65
|
)
|
24.
|
Related Party Balances and Transactions
|
25.
|
Segments of Business
|
|
Years Ended March 31,
|
||||||||||
(In millions)
|
2013
|
|
2012
|
|
2011
|
||||||
Revenues
|
|
|
|
|
|
||||||
Distribution Solutions
(1)
|
|
|
|
|
|
||||||
Direct distribution & services
|
$
|
86,816
|
|
|
$
|
85,523
|
|
|
$
|
77,554
|
|
Sales to customers’ warehouses
|
18,646
|
|
|
20,453
|
|
|
18,631
|
|
|||
Total U.S. pharmaceutical distribution & services
|
105,462
|
|
|
105,976
|
|
|
96,185
|
|
|||
Canada pharmaceutical distribution & services
|
9,981
|
|
|
10,303
|
|
|
9,784
|
|
|||
Medical-Surgical distribution & services
|
3,611
|
|
|
3,145
|
|
|
2,920
|
|
|||
Total Distribution Solutions
|
119,054
|
|
|
119,424
|
|
|
108,889
|
|
|||
Technology Solutions
|
|
|
|
|
|
||||||
Services
|
2,724
|
|
|
2,594
|
|
|
2,483
|
|
|||
Software & software systems
|
576
|
|
|
596
|
|
|
590
|
|
|||
Hardware
|
101
|
|
|
120
|
|
|
122
|
|
|||
Total Technology Solutions
|
3,401
|
|
|
3,310
|
|
|
3,195
|
|
|||
Total Revenues
|
$
|
122,455
|
|
|
$
|
122,734
|
|
|
$
|
112,084
|
|
|
|
|
|
|
|
||||||
Operating profit
|
|
|
|
|
|
||||||
Distribution Solutions
(2)
|
$
|
2,197
|
|
|
$
|
2,219
|
|
|
$
|
1,897
|
|
Technology Solutions
|
297
|
|
|
364
|
|
|
301
|
|
|||
Total
|
2,494
|
|
|
2,583
|
|
|
2,198
|
|
|||
Corporate Expenses, Net
|
(335
|
)
|
|
(413
|
)
|
|
(341
|
)
|
|||
Interest expense
|
(240
|
)
|
|
(251
|
)
|
|
(222
|
)
|
|||
Income From Continuing Operations Before Income Taxes
|
$
|
1,919
|
|
|
$
|
1,919
|
|
|
$
|
1,635
|
|
|
|
|
|
|
|
||||||
Depreciation and amortization
(3)
|
|
|
|
|
|
||||||
Distribution Solutions
|
$
|
265
|
|
|
$
|
225
|
|
|
$
|
167
|
|
Technology Solutions
|
206
|
|
|
209
|
|
|
209
|
|
|||
Corporate
|
120
|
|
|
117
|
|
|
120
|
|
|||
Total
|
$
|
591
|
|
|
$
|
551
|
|
|
$
|
496
|
|
|
|
|
|
|
|
||||||
Expenditures for long-lived assets
(4)
|
|
|
|
|
|
||||||
Distribution Solutions
|
$
|
163
|
|
|
$
|
175
|
|
|
$
|
158
|
|
Technology Solutions
|
42
|
|
|
22
|
|
|
26
|
|
|||
Corporate
|
41
|
|
|
28
|
|
|
49
|
|
|||
Total
|
$
|
246
|
|
|
$
|
225
|
|
|
$
|
233
|
|
|
|
|
|
|
|
||||||
Revenues, net by geographic area
(5)
|
|
|
|
|
|
||||||
United States
|
$
|
112,283
|
|
|
$
|
112,230
|
|
|
$
|
102,089
|
|
International
|
10,172
|
|
|
10,504
|
|
|
9,995
|
|
|||
Total
|
$
|
122,455
|
|
|
$
|
122,734
|
|
|
$
|
112,084
|
|
(1)
|
Revenues derived from services represent
less than 2%
of this segment’s total revenues.
|
(2)
|
Operating profit for 2013 and 2011 includes the receipt of
$44
million and
$51
million representing our share of settlements of antitrust class action lawsuits brought against drug manufacturers, which were recorded as a reduction to cost of sales.
|
(3)
|
Amounts primarily include amortization of acquired intangible assets purchased in connection with acquisitions, capitalized software held for sale and capitalized software for internal use.
|
(4)
|
Long-lived assets consist of property, plant and equipment.
|
(5)
|
Net revenues were attributed to geographic areas based on the customers' shipment locations.
|
|
March 31,
|
||||||
(In millions)
|
2013
|
|
2012
|
||||
Segment assets
|
|
|
|
||||
Distribution Solutions
|
$
|
27,307
|
|
|
$
|
25,374
|
|
Technology Solutions
|
3,829
|
|
|
3,575
|
|
||
Total
|
31,136
|
|
|
28,949
|
|
||
Corporate
|
|
|
|
||||
Cash and cash equivalents
|
2,456
|
|
|
3,149
|
|
||
Other
|
1,194
|
|
|
995
|
|
||
Total
|
$
|
34,786
|
|
|
$
|
33,093
|
|
|
|
|
|
||||
Property, plant and equipment, net
|
|
|
|
|
|
||
United States
|
$
|
1,205
|
|
|
$
|
952
|
|
International
|
116
|
|
|
91
|
|
||
Total
|
$
|
1,321
|
|
|
$
|
1,043
|
|
26.
|
Quarterly Financial Information (Unaudited)
|
(In millions, except per share amounts)
|
First
Quarter
|
|
Second Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
Fiscal 2013
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
30,798
|
|
|
$
|
29,850
|
|
|
$
|
31,187
|
|
|
$
|
30,620
|
|
Gross profit
|
1,600
|
|
|
1,720
|
|
|
1,668
|
|
|
1,996
|
|
||||
Net income
(1) (2) (3) (4) (5)
|
380
|
|
|
401
|
|
|
298
|
|
|
259
|
|
||||
Earnings per common share
(1) (2) (3) (4) (5) (8)
|
|
|
|
|
|
|
|
||||||||
Diluted
|
$
|
1.58
|
|
|
$
|
1.67
|
|
|
$
|
1.24
|
|
|
$
|
1.10
|
|
Basic
|
1.61
|
|
|
1.70
|
|
|
1.27
|
|
|
1.12
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Fiscal 2012
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
29,980
|
|
|
$
|
30,216
|
|
|
$
|
30,839
|
|
|
$
|
31,699
|
|
Gross profit
|
1,509
|
|
|
1,647
|
|
|
1,566
|
|
|
1,845
|
|
||||
Net income
(6) (7)
|
286
|
|
|
296
|
|
|
300
|
|
|
521
|
|
||||
Earnings per common share
(6) (7) (8)
|
|
|
|
|
|
|
|
||||||||
Diluted
|
$
|
1.13
|
|
|
$
|
1.18
|
|
|
$
|
1.20
|
|
|
$
|
2.09
|
|
Basic
|
1.15
|
|
|
1.20
|
|
|
1.22
|
|
|
2.14
|
|
(1)
|
Financial results for the first, second and fourth quarters of 2013 include AWP litigation charges of
$16
million pre-tax (
$10
million after-tax),
$44
million pre-tax (
$27
million after-tax) and
$12
million pre-tax (
$8
million after-tax), which were recorded in operating expenses.
|
(2)
|
Financial results for the first quarter of 2013 include an
$81
million pre-tax (
$51
million after-tax) gain on business combination, which was recorded as a reduction to operating expenses.
|
(3)
|
Financial results for the second, third and fourth quarters of 2013 include the pre-tax receipts of
$19
million,
$8
million and
$17
million representing our share of settlements of antitrust class action lawsuits brought against drug manufacturers, which were recorded as a reduction to cost of sales.
|
(4)
|
Financial results for the third quarter of 2013 include a
$40
million pre-tax (
$29
million after-tax) charge for a legal dispute in our Canadian business which was recorded in operating expenses.
|
(5)
|
Financial results for the fourth quarter of 2013 include the following pre-tax impairment charges: an equity investment of
$191
million, goodwill of
$36
million, and capitalized software held for sale of
$10
million.
|
(6)
|
Financial results for the second, third and fourth quarters of 2012 include AWP litigation charges of
$118
million pre-tax (
$77
million after-tax),
$27
million pre-tax (
$15
million after-tax) and
$4
million pre-tax (benefit of
$32
million after-tax), which were recorded in operating expenses.
|
(7)
|
Financial results for the third and fourth quarters of 2012 include product alignment pre-tax charges of
$42
million and
$9
million.
|
(8)
|
Certain computations may reflect rounding adjustments.
|
27.
|
Subsequent Event
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
|
Item 9A.
|
Controls and Procedures.
|
Item 9B.
|
Other Information.
|
Item 10.
|
Directors, Executive Officers and Corporate Governance.
|
Item 11.
|
Executive Compensation.
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|
Plan Category
(In millions, except per share amounts)
|
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
|
|
Weighted-average
exercise price of
outstanding options,
warrants and rights
(1)
|
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column)
|
|||
Equity compensation plans approved by
security holders
|
12.3
(2)
|
|
$
|
66.34
|
|
|
6.6
(3)
|
|
Equity compensation plans not approved by
security holders
|
0.1
(4)
|
|
$
|
34.47
|
|
|
—
|
|
(1)
|
The weighted-average exercise price set forth in this column is calculated excluding outstanding restricted stock unit (“RSU”) awards, since recipients are not required to pay an exercise price to receive the shares subject to these awards.
|
(2)
|
Represents options and RSUs awarded under the following plans: (i) 1997 Non-Employee Directors' Equity Compensation and Deferral Plan and (ii) the 2005 Stock Plan.
|
(3)
|
Represents 864,731 shares available for purchase under the 2000 Employee Stock Purchase Plan and 5,771,245 shares available for grant under the 2005 Stock Plan.
|
(4)
|
Represents options and RSUs awarded under the 1999 Stock Option and Restricted Stock Plan. No further awards will be made under this plan.
|
Item 13.
|
Certain Relationships and Related Transactions and Director Independence.
|
Item 14.
|
Principal Accounting Fees and Services.
|
Item 15.
|
Exhibits and Financial Statement Schedule.
|
|
Page
|
(a)(1) Consolidated Financial Statements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)(2) Financial Statement Schedule
|
|
|
|
|
|
All other schedules not included have been omitted because of the absence of conditions under which they are required or because the required information, where material, is shown in the financial statements, financial notes or supplementary financial information.
|
|
|
|
|
|
|
|
|
M
C
K
ESSON
C
ORPORATION
|
|
|
|
|
Date: May 7, 2013
|
|
/s/ Jeffrey C. Campbell
|
|
|
|
|
Jeffrey C. Campbell
|
|
|
|
Executive Vice President and Chief Financial Officer
|
*
|
|
*
|
John H. Hammergren
Chairman of the Board, President and Chief Executive Officer
(Principal Executive Officer)
|
|
M. Christine Jacobs, Director
|
|
|
|
*
|
|
*
|
Jeffrey C. Campbell
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|
Marie L. Knowles, Director
|
|
|
|
*
|
|
*
|
Nigel A. Rees
Vice President and Controller
(Principal Accounting Officer)
|
|
David M. Lawrence, M.D., Director
|
|
|
|
*
|
|
*
|
Andy D. Bryant, Director
|
|
Edward A. Mueller, Director
|
|
|
|
*
|
|
*
|
Wayne A. Budd, Director
|
|
Jane E. Shaw, Director
|
|
|
|
*
|
|
/s/ Laureen E. Seeger
|
Alton F. Irby III, Director
|
|
Laureen E. Seeger
*Attorney-in-Fact
|
|
|
|
Date: May 7, 2013
|
|
|
|
|
Additions
|
|
|
|
|
||||||||||||
Description
|
Balance at Beginning of Year
|
|
Charged to Costs and Expenses
|
|
Charged to Other Accounts
(3)
|
|
Deductions From Allowance Accounts
(1)
|
|
Balance at End of
Year
(2)
|
||||||||||
Year Ended March 31, 2013
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowances for doubtful
accounts
|
$
|
111
|
|
|
$
|
28
|
|
|
$
|
16
|
|
|
$
|
(34
|
)
|
|
$
|
121
|
|
Other allowances
|
14
|
|
|
4
|
|
|
1
|
|
|
(4
|
)
|
|
15
|
|
|||||
|
$
|
125
|
|
|
$
|
32
|
|
|
$
|
17
|
|
|
$
|
(38
|
)
|
|
$
|
136
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year Ended March 31, 2012
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowances for doubtful
accounts
|
$
|
124
|
|
|
$
|
30
|
|
|
$
|
—
|
|
|
$
|
(43
|
)
|
|
$
|
111
|
|
Other allowances
|
16
|
|
|
5
|
|
|
—
|
|
|
(7
|
)
|
|
14
|
|
|||||
|
$
|
140
|
|
|
$
|
35
|
|
|
$
|
—
|
|
|
$
|
(50
|
)
|
|
$
|
125
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year Ended March 31, 2011
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowances for doubtful
accounts
|
$
|
131
|
|
|
$
|
18
|
|
|
$
|
5
|
|
|
$
|
(30
|
)
|
|
$
|
124
|
|
Other allowances
|
24
|
|
|
—
|
|
|
(2
|
)
|
|
(6
|
)
|
|
16
|
|
|||||
|
$
|
155
|
|
|
$
|
18
|
|
|
$
|
3
|
|
|
$
|
(36
|
)
|
|
$
|
140
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
2012
|
|
2011
|
||||||
(1)
|
Deductions:
|
|
|
|
|
|
|
||||||
|
Written off
|
|
$
|
(38
|
)
|
|
$
|
(44
|
)
|
|
$
|
(36
|
)
|
|
Credited to other accounts
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|||
|
Total
|
|
$
|
(38
|
)
|
|
$
|
(50
|
)
|
|
$
|
(36
|
)
|
|
|
|
|
|
|
|
|
||||||
(2)
|
Amounts shown as deductions from current and non-current receivables
|
|
$
|
136
|
|
|
$
|
125
|
|
|
$
|
140
|
|
|
|
|
|
|
|
|
|
||||||
(3)
|
Primarily represents reclassifications from other balance sheet accounts.
|
|
|
|
|
|
|
•
|
should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;
|
•
|
may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and
|
•
|
were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.
|
|
|
Incorporated by Reference
|
|||
Exhibit Number
|
Description
|
Form
|
File Number
|
Exhibit
|
Filing Date
|
10.2*
|
McKesson Corporation 1997 Non-Employee Directors'
Equity Compensation and Deferral Plan, as amended through January 29, 2003.
|
10-K
|
1-13252
|
10.4
|
June 10, 2004
|
10.3*
|
McKesson Corporation Supplemental Profit Sharing Investment Plan, as amended and restated on January 29, 2003.
|
10-K
|
1-13252
|
10.6
|
June 6, 2003
|
10.4*
|
McKesson Corporation Supplemental Profit Sharing Investment Plan II, as amended and restated on October 24, 2008.
|
10-Q
|
1-13252
|
10.1
|
October 29, 2008
|
10.5*
|
McKesson Corporation Deferred Compensation Administration Plan, as amended and restated as of October 28, 2004.
|
10-K
|
1-13252
|
10.6
|
May 13, 2005
|
10.6*
|
McKesson Corporation Deferred Compensation Administration Plan II, as amended and restated as of October 28, 2004, and Amendment No. 1 thereto effective July 25, 2007.
|
10-K
|
1-13252
|
10.7
|
May 7, 2008
|
10.7*
|
McKesson Corporation Deferred Compensation Administration Plan III, as amended and restated October 24, 2008.
|
10-Q
|
1-13252
|
10.2
|
October 29, 2008
|
10.8*
|
McKesson Corporation Option Gain Deferral Plan, as amended and restated as of October 28, 2004.
|
10-K
|
1-13252
|
10.8
|
May 13, 2005
|
10.9*
|
McKesson Corporation Executive Benefit Retirement Plan, as amended and restated on October 24, 2008.
|
10-Q
|
1-13252
|
10.3
|
October 29, 2008
|
10.10*
|
McKesson Corporation Executive Survivor Benefits Plan,
as amended and restated as of January 20, 2010.
|
8-K
|
1-13252
|
10.1
|
January 25, 2010
|
10.11†*
|
McKesson Corporation Severance Policy for Executive Employees, as amended and restated as of April 23, 2013.
|
—
|
—
|
—
|
—
|
10.12*
|
McKesson Corporation Change in Control Policy for Selected Executive Employees, as amended and restated on October 26, 2010.
|
10-Q
|
1-13252
|
10.2
|
February 1, 2011
|
10.13*
|
McKesson Corporation 2005 Management Incentive Plan, as amended and restated on April 21, 2010, effective July 28, 2010.
|
10-Q
|
1-13252
|
10.3
|
July 30, 2010
|
10.14*
|
Form of Statement of Terms and Conditions applicable to Awards under the McKesson Corporation 2005 Management Incentive Plan.
|
10-K
|
1-13252
|
10.3
|
July 26, 2012
|
10.15*
|
McKesson Corporation Long-Term Incentive Plan, as amended and restated effective May 26, 2010.
|
10-Q
|
1-13252
|
10.1
|
July 30, 2010
|
10.16*
|
Form of Statement and Terms and conditions applicable to Awards under the McKesson Corporation Long-Term Incentive Plan.
|
10-Q
|
1-13252
|
10.4
|
July 26, 2012
|
10.17*
|
McKesson Corporation 2005 Stock Plan, as amended and restated on July 28, 2010.
|
10-Q
|
1-13252
|
10.4
|
July 30, 2010
|
10.18*
|
Forms of (i) Statement of Terms and Conditions, (ii) Stock Option Grant Notice and (iii), Restricted Stock Unit Agreement, each as applicable to Awards under the McKesson Corporation 2005 Stock Plan.
|
10-Q
|
1-13252
|
10.2
|
July 26, 2012
|
|
|
Incorporated by Reference
|
|||
Exhibit Number
|
Description
|
Form
|
File Number
|
Exhibit
|
Filing Date
|
10.19
|
Amendment No. 1, dated as of May 16, 2012, to Fourth Amended and Restated Receivables Purchase Agreement and Fourth Amended and Restated Receivables Purchase Agreement, dated as of May 18, 2011, among the Company, as servicer, CGSF Funding Corporation, as seller, the several conduit purchasers from time to time party to the Agreement, the several committed purchasers from time to time party to the Agreement, the several managing agents from time to time party to the Agreement, and JPMorgan Chase Bank, N.A., as collateral agent.
|
10-Q
|
1-13252
|
10.1
|
July 26, 2012
|
10.20
|
Credit Agreement, dated as of September 23, 2011, among the Company and McKesson Canada Corporation, collectively, the Borrowers, Bank of America, N.A. as Administrative Agent, Bank of America, N.A. (acting through its Canada branch), as Canadian Administrative Agent, JPMorgan Chase Bank, N.A. and Wells Fargo Bank, National Association, as Co-Syndication Agents, Wells Fargo Bank, National Association as L/C Issuer, The Bank of Tokyo-Mitsubishi UFJ, LTD., The Bank of Nova Scotia and U.S. Bank National Association as Co-Documentation Agents, and The Other Lenders Party Thereto, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Sole Lead Arranger and Sole Book Manager.
|
10-Q
|
1-13252
|
10.1
|
October 25, 2011
|
10.21
|
Senior Bridge Term Loan Agreement, dated as of December 21, 2012, among the Company, Bank of America, N.A., as Administrative Agent, and the Lenders.
|
8-K
|
1-13252
|
99.1
|
December 26, 2012
|
10.22*
|
Amended and Restated Employment Agreement, effective as of November 1, 2008, by and between the Company and its Chairman, President and Chief Executive Officer.
|
10-Q
|
1-13252
|
10.10
|
October 29, 2008
|
10.23*
|
Letter dated March 27, 2012 relinquishing certain rights provided in the Amended and Restated Employment Agreement by and between the Company and its Chairman, President and Chief Executive Officer.
|
8-K
|
1-13252
|
10.1
|
April 2, 2012
|
10.24*
|
Amended and Restated Employment Agreement, effective as of November 1, 2008, by and between the Company and its Executive Vice President and Group President.
|
10-Q
|
1-13252
|
10.12
|
October 29, 2008
|
10.25*
|
Form of Director and Officer Indemnification Agreement.
|
10-K
|
1-13252
|
10.27
|
May 4, 2010
|
12†
|
Computation of Ratio of Earnings to Fixed Charges.
|
—
|
—
|
—
|
—
|
21†
|
List of Subsidiaries of the Registrant.
|
—
|
—
|
—
|
—
|
23†
|
Consent of Independent Registered Public Accounting Firm, Deloitte & Touche LLP.
|
—
|
—
|
—
|
—
|
24†
|
Power of Attorney.
|
—
|
—
|
—
|
—
|
31.1†
|
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, and adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
—
|
—
|
—
|
—
|
31.2†
|
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934 as amended, and adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
—
|
—
|
—
|
—
|
|
|
Incorporated by Reference
|
|||
Exhibit Number
|
Description
|
Form
|
File Number
|
Exhibit
|
Filing Date
|
32††
|
Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
—
|
—
|
—
|
—
|
101†
|
The following materials from the McKesson Corporation Annual Report on Form 10-K for the fiscal year ended March 31, 2013, formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Statements of Operations, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Stockholders' Equity, (v) Consolidated Statements of Cash Flows, and (vi) related Financial Notes.
|
—
|
—
|
—
|
—
|
*
|
Management contract or compensation plan or arrangement in which directors and/or executive officers are eligible to participate.
|
†
|
Filed herewith.
|
††
|
Furnished herewith.
|
DIRECTORS AND OFFICERS
|
||
|
|
|
BOARD OF DIRECTORS
|
|
CORPORATE OFFICERS
|
|
|
|
John H. Hammergren
|
|
John H. Hammergren
|
Chairman of the Board,
|
|
Chairman of the Board,
|
President and Chief Executive Officer,
|
|
President and Chief Executive Officer,
|
McKesson Corporation
|
|
McKesson Corporation
|
|
|
|
Andy D. Bryant
|
|
Patrick J. Blake
|
Chairman of the Board,
|
|
Executive Vice President and Group President
|
Intel Corporation
|
|
|
|
|
Jeffrey C. Campbell
|
Wayne A. Budd
|
|
Executive Vice President and Chief Financial Officer
|
Senior Counsel,
|
|
|
Goodwin Procter LLP
|
|
Jorge L. Figueredo
|
|
|
Executive Vice President, Human Resources
|
Alton F. Irby III
|
|
|
Chairman and Founding Partner,
|
|
Paul C, Julian
|
London Bay Capital
|
|
Executive Vice President and Group President
|
|
|
|
M. Christine Jacobs
|
|
Laureen E. Seeger
|
Chairman of the Board, President and
|
|
Executive Vice President, General Counsel and
|
Chief Executive Officer,
|
|
Chief Compliance Officer
|
Theragenics Corporation
|
|
|
|
|
Randall N. Spratt
|
Marie L. Knowles
|
|
Executive Vice President, Chief Technology Officer and
|
Executive Vice President and
|
|
Chief Information Officer
|
Chief Financial Officer, Retired,
|
|
|
Atlantic Richfield Company
|
|
Brian S. Tyler
|
|
|
Executive Vice President, Corporate Strategy and Business
|
David M. Lawrence, M.D.
|
|
Development
|
Chairman of the Board and
|
|
|
Chief Executive Officer, Retired,
|
|
Nicholas A. Loiacono
|
Kaiser Foundation Health Plan, Inc. and
|
|
Vice President and Treasurer
|
Kaiser Foundation Hospitals
|
|
|
|
|
Nigel A. Rees
|
Edward A. Mueller
|
|
Vice President and Controller
|
Chairman of the Board and
|
|
|
Chief Executive Officer, Retired,
|
|
Willie C. Bogan
|
Qwest Communications International Inc.
|
|
Secretary
|
|
|
|
Jane E. Shaw, Ph.D.
|
|
|
Chairman of the Board, Retired, Intel Corporation;
|
|
|
Chairman of the Board and
|
|
|
Chief Executive Officer, Retired,
|
|
|
Aerogen, Inc.
|
|
|
|
|
|
1.
|
ADOPTION AND PURPOSE OF POLICY.
|
2.
|
SEVERANCE BENEFITS.
|
(a)
|
Severance Benefit.
In the event that the Company terminates the employment of a Participant under circumstances that (i) constitute a Separation from Service for any reason other than Cause and (ii) do not make the Participant eligible for benefits under the McKesson's Change in Control Policy for Selected Executive Employees (together, a “Qualifying Termination”), that Participant shall be entitled to a severance benefit equal to the lesser of (A) 12 months' Base Salary plus one additional month for each Year of Service or (B) 24 months' Base Salary (the “Severance Benefit”). In no event shall the number of months' Base Salary a Participant is entitled to receive hereunder exceed the number of months remaining between the date of Participant's Separation from Service and the date he or she will attain age 62 (rounded to the next higher whole month).
|
(b)
|
Effect on Other Plans.
Except as provided in Sections 2(c) and 2(d), nothing in the Policy shall alter or impair any rights a Participant may have upon Separation from Service under any other plan or program of the Company.
|
(c)
|
Other Income.
The Severance Benefit shall be reduced on a dollar-for-dollar basis by (i) the benefit received by the Participant under the Company's short-term disability plan and (ii) compensation received by the Participant from any subsequent employer(s) for work performed, in either case, during the period of time following his or her Separation from Service equal to the number of months of Base Salary the Participant is entitled to receive as the Severance Benefit. Moreover, the Severance Benefit may be considered to be “other income” that reduces benefits payable under other Company-sponsored welfare plans (e.g., the Company's long-term disability plan).
|
(d)
|
No Duplication of Benefits
.
|
(i)
|
In no event shall a Participant be entitled to any benefits under the Policy if his or her employment with the Company terminates under circumstances that entitle the Participant to receive severance benefits following a change of control of the Company pursuant to McKesson's Change in Control Policy for Executive Employees (or a successor plan) or the terms of any individual written employment or severance agreement; provided, however, to the extent that the benefits provided in the Policy are greater than the benefits provided in such written employment agreement, the benefits shall be paid under the Policy in lieu of the benefits provided in the individual written employment or severance agreement.
|
(ii)
|
If a Participant receives severance benefits under the Policy, any predecessor plan or any other McKesson-sponsored severance agreement or arrangement and if the Participant subsequently provides service to McKesson as an Employee, then any
new
benefits under the Policy after the date of recommencement of service shall be based solely on (x) the Participant's Period of Service after the date of recommencement; and (y) the Period of Service, if any, attributable to the benefit that was not paid under the Policy.
|
(e)
|
Release Required
. Notwithstanding any provision in the Policy, no payments will be made to a Participant under the Policy until the Participant provides to the Company a signed release of claims, in the form that the Company provides to the Participant, and does not revoke such release during the applicable statutory period provided to revoke a release, if any (the “revocation period”). If the Participant does not revoke his or her signed release by the end of the revocation period, then the Participant shall have an “Effective Release” on file with the Company. No payments will be made to a Participant under the Policy unless the Company has received an Effective Release from that Participant no later than forty-five (45) days after the Participant's Separation from Service.
|
3.
|
FORM OF BENEFIT.
|
(a)
|
General
. Unless otherwise determined by the Administrator, the Severance Benefit shall be paid in installments over the number of months calculated in accordance with Section 2(a) on regular paydays for wages paid to similarly situated active employees of the Company. The Severance Benefit once having commenced cannot be stopped and restarted. Subject to the special rules described in Section 3(b), such payments shall commence no later than 60 calendar days after the later of (x) the date the release is received by the Company or, if the release is subject to a statutory revocation period, the date on which such revocation period expires, and (y) the effective date of the Participant's Qualifying Termination.
|
(b)
|
Special Rules
.
|
(i)
|
Special Rule for Participants Engaged as Non-Employees
. If the Participant commences service to the Company as a non-Employee prior to the date of his or her Qualifying Termination, and to the extent that the Participant's severance benefit hereunder is not exempt from Section 409A of the Code under Section 9(g), then such non-exempt payments shall commence on the date on which the Participant incurs an actual Separation from Service.
|
(ii)
|
Special Rule for Non-409A Exempt Severance Benefit
. If the Participant's Severance Benefit is not exempt from Section 409A of the Code pursuant to Section 9(g), then notwithstanding the general rule for commencement of benefits under Section 3(a), payment of the Severance Benefit shall commence:
|
a.
|
On a fixed date 60 calendar days following the date of the Participant's Qualifying Termination; or
|
b.
|
During a specified period no longer than 60 days following the date of the Participant's Qualifying Termination, with payments commencing in the later taxable year if such specified period could span two taxable years, provided that in the event of such a delay in the commencement of payments, the first installment paid in the later taxable year shall include any installments that would have been paid in the prior taxable year absent this Section 3(b)(ii)b.
|
(iii)
|
Special Rule for Specified Employees
. If the Participant is a Specified Employee on the date of his or her Separation from Service, any payment or portion of the payment that is scheduled to be made in the six-month period following the Participant's Separation from Service, when considered together with any other severance payments or separation benefits which may be considered deferred compensation under Section 409A of the Code, would result in the imposition of additional tax under Section 409A of the Code if paid to the Participant on or within the six (6) month period following his or her Separation from Service shall be made in the seventh month following the month in which the Participant's Separation from Service occurs. Any payment that is subject to the delay shall include an additional amount representing interest credited at the rate being credited to accounts under McKesson's Deferred Compensation Administration Plan III during the relevant period of delay and such interest shall be paid in a lump sum at the same time that the delayed payments are made. All subsequent payments or benefits will be payable in accordance with the payment schedule applicable to each such payment or benefits.
|
(c)
|
Re-employment
. Payments hereunder shall stop and no further payments shall be made to a Participant if during the benefit payment period calculated under Section 2(a) the Participant resumes service as an Employee of the Company.
|
4.
|
EFFECT OF DEATH OF EMPLOYEE.
|
5.
|
STOCKHOLDER APPROVAL.
|
6.
|
AMENDMENT AND TERMINATION.
|
7.
|
ADMINISTRATION AND FIDUCIARIES.
|
(a)
|
Plan Sponsor and Administrator
. McKesson is the “plan sponsor” and the “Administrator” of the Policy, within the meaning of ERISA.
|
(b)
|
Administrative Responsibilities
. McKesson shall be the named fiduciary within the meaning of ERISA, with the power and sole discretion to determine who is eligible for benefits under the Policy, to determine the value of benefits paid in any form other than cash or the present value of any cash or other benefits paid over time, to interpret the Policy and to prescribe such forms, make such rules, regulations and computations and prescribe such guidelines as it may determine are necessary or appropriate for the operation and administration of the Policy and to change the terms of or rescind such rules, regulations or guidelines. Such determinations of eligibility, rules, regulations, interpretations, computations and guidelines shall be conclusive and binding upon all persons. In administering the Policy, McKesson shall at all times discharge its duties with respect to the Policy in accordance with the standards set forth in section 404(a)(1) of ERISA.
|
(c)
|
Allocation and Delegation of Responsibilities
. The Compensation Committee may allocate any of McKesson's responsibilities for the operation and administration of the Policy among McKesson's officers, employees and agents. It may also delegate any of McKesson's responsibilities under the Policy by designating, in writing, another person to carry out such responsibilities.
|
(d)
|
No Individual Liability
. It is declared to be the express purpose and intent of McKesson that no individual liability shall attach to or be incurred by any member of the Board of McKesson, or by any officer, employee representative or agent of the Company, under, or by reason of the operation of, the Policy.
|
(e)
|
Employer Identification Number and Policy Number
. The employer identification number (EIN) assigned to McKesson by the Internal Revenue Service is 94-3207296. The plan number (PIN) assigned to the Policy by McKesson is 552.
|
(f)
|
Policy Year
. All records with respect to the Policy are kept on a calendar year basis.
|
(g)
|
Legal Actions
. No lawsuit can be brought to recover a benefit under the Policy until an individual or his or her representative has done all of the following: (i) filed a written claim as required by the Policy, (ii) received a written denial of the claim (or the claim is deemed denied as described below), (iii) filed a written request for a review of the denied claim with the Administrator, and (iv) received written notification that the denial of the claim has been affirmed (or the denial is deemed to be affirmed as described below).
|
(h)
|
Agent for Service of Legal Process
. If an individual wishes to take legal action after exhausting the Policy's claims and appeal procedures, legal process should be served on: Senior Vice President, Human Resources, McKesson Corporation, One Post Street, San Francisco, California 94104. The individual may also serve process with respect to the Policy by serving the Administrator at the address shown above.
|
(i)
|
ERISA Rights
.
|
(i)
|
Participants are entitled to certain rights and protections under Title I of ERISA.
|
(ii)
|
Participants may examine without charge all official Policy documents during business hours in the McKesson Human Resources Department. These documents include the legal texts of the plans, Policy descriptions and annual reports that McKesson files with the U.S. Department of Labor.
|
(iii)
|
Participants may also obtain a copy of any of these documents by writing to the Administrator, and may be charged a reasonable fee for copies.
|
(iv)
|
Participants have the right to receive a summary of the Policy's annual financial report. The Administrator is required by law to furnish each Participant with a copy of this summary annual report.
|
(v)
|
Questions about the Policy should be directed to the Administrator. A Participant who has any questions about this statement or about his or her rights under ERISA, or who needs assistance in obtaining documents from the Administrator, should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in the telephone directory, or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210. Participants may also obtain certain publications about their rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.
|
(vi)
|
No right to a benefit under the Policy shall depend (or shall be deemed to depend) upon whether a Participant retires or elects to receive retirement benefits under the terms of any employee pension benefit plan.
|
(vii)
|
The Policy shall contain no terms or provisions except those set forth herein, or as hereafter amended in accordance with the provisions of Section 6. If any description made in any other document is deemed to be in conflict with any provision of the Policy, the provisions of the Policy shall control.
|
8.
|
CLAIMS AND APPEAL PROCEDURES
|
(a)
|
Informal Resolution of Questions
. Any Participant who has questions or concerns about his or her benefits under the Policy is encouraged to communicate with the Human Resources Department of McKesson. If this discussion does not give the Participant satisfactory results, a formal claim for benefits may be made in accordance with the procedures of this Section 8.
|
(b)
|
Formal Benefits Claim-Review by Executive Vice President, Human Resources
. A Participant may make a written request for review of any matter concerning his or her benefits under the Policy. The claim must be addressed to the Executive Vice President, Human Resources, McKesson Corporation, One Post Street, San Francisco, California 94104. The Executive Vice President, Human Resources or his or her delegate (“Executive Vice President”) shall decide the action to be taken with respect to any such request and may require additional information if necessary to process the request. The Executive Vice President shall review the request and shall issue his or her decision, in writing, no later than 90 days after the date the request is received, unless the circumstances require an extension of time. If such an extension is required, written notice of the extension shall be furnished to the person making the request within the initial 90-day period, and the notice shall state the circumstances requiring the extension and the date by which the Executive Vice President expects to reach a decision on the request. In no event shall the extension exceed a period of 90 days from the end of the initial period. Any claim under the Policy must be brought within two years of the date the events giving rise to the claim first occurred.
|
(c)
|
Notice of Denied Request
. If the Executive Vice President denies a request in whole or in part, he or she shall provide the person making the request with written notice of the denial within the period specified in Section 8(b). The notice shall set forth the specific reason for the denial, reference to the specific Policy provisions upon which the denial is based, a description of any additional material or information necessary to perfect the request, an explanation of why such information is required, and an explanation of the Policy's appeal procedures and the time limits applicable to such procedures, including a statement of the claimant's right to bring a civil action under Section 502(a) of ERISA following an adverse benefit determination on review.
|
(d)
|
Appeal to Executive Vice President
.
|
(e)
|
Exhaustion of Remedies. No legal or equitable action for benefits under the Policy shall be brought unless and until the claimant has submitted a written claim for benefits in accordance with Section 8(b), has been notified that the claim is denied in accordance with Section 8(c), has filed a written request for a review of the claim in accordance with Section 8(d), and has been notified in writing that the Executive Vice President has affirmed the denial of the claim in accordance with Section 8(d). A legal or equitable action for benefits must be brought no later than the date that is 90 days after the date on which the claimant was notified in writing that the denial was affirmed on appeal.
|
9.
|
GENERAL PROVISIONS.
|
(a)
|
Basis of Payments to and from Policy
. All benefits under the Policy shall be paid by McKesson. The Policy shall be unfunded and benefits hereunder shall be paid only from the general assets of McKesson. Nothing contained in the Policy shall be deemed to create a trust of any kind for the benefit of any employee, or create any fiduciary relationship between the Company and any employee with respect to any assets of the Company. McKesson is under no obligation to fund the benefits provided herein prior to payment, although it may do so if it chooses. Any assets which McKesson chooses to use for advance funding shall not cause the Policy to be a funded plan within the meaning of ERISA.
|
(b)
|
No Employment Rights
. Nothing in the Policy shall be deemed to give any individual the right to remain in the employ of the Company or a subsidiary or to limit in any way the right of the Company or a subsidiary to discharge, demote, reclassify, transfer, relocate an individual or terminate an individual's employment at any time and for any reason, which right is hereby reserved.
|
(c)
|
Non-alienation of Benefits
. No benefit payable under the Policy shall be subject to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, and any attempt to do shall be void.
|
(d)
|
Legal Construction
. The Policy shall be governed and interpreted in accordance with ERISA.
|
(e)
|
Choice of Law
. The Policy shall be construed and enforced according to federal law except where not preempted by the laws of the State of California, other than its laws respecting choice of law.
|
(f)
|
Tax Consequences
. McKesson does not guarantee or warrant the tax consequences of any payment of benefit under the Policy, and a Participant shall, in all cases, be liable for any taxes due as a result of the Policy. Policy benefits are subject to applicable federal, state and local withholding taxes, as well as other authorized payroll deductions.
|
(g)
|
Section 409A
. Notwithstanding any other provision of the Policy, McKesson shall administer and construe the Policy in accordance with Section 409A of the Code, the regulations promulgated thereunder, and any other published interpretive authority, as issued or amended from time to time.
|
(i)
|
The Policy shall be administered and interpreted to maximize exemptions from Section 409A of the Code and to comply with Section 409A of the Code to the extent benefits are subject thereto. Payments under Section 2(a) paid on or before the last day of the Short-Term Deferral Period shall constitute a “short-term deferral” within the meaning of Treasury Regulations § 1.409A-1(b)(9). Payments under Section 2(a) that are not short-term deferrals shall be administered to satisfy the exception for involuntary separation pay under Treasury Regulations § 1.409A-1(b)(9)(iii) to the extent such payments do not exceed the amount set forth in Treasury Regulations § 1.409A-1(b)(9)(iii)(A). To the extent a payment under Section 2(a) is not exempt from Section 409A of the Code, each payment shall be construed to the extent permissible as being made in accordance with specified times or a fixed schedule as provided in Treasury Regulations § 1.409A-3(i)(1).
|
(ii)
|
Each installment payment provided for in the Policy is a separate “payment” within the meaning of Treasury Regulation § 1.409A-2(b)(2)(i).
|
(iii)
|
Notwithstanding any other provision of the Policy, no payment under the Policy shall be made later than the last day of the second calendar year following the year in which the Separation from Service occurs.
|
10.
|
DEFINITIONS.
|
(a)
|
“Administrator” means the person specified in Section 7.
|
(b)
|
“Base Salary” means a Participant's monthly base salary as in effect immediately prior to the date of such Participant's Separation from Service.
|
(c)
|
“Board” means the Board of Directors of McKesson.
|
(d)
|
“Cause” means negligent or willful engagement in misconduct which, in the sole determination of McKesson's Chief Executive Officer, is injurious to the Employer, its employees or its customers. No act, or failure to act, on the part of a Participant shall be considered “willful” unless done, or omitted to be done, by the Participant not in good faith and without reasonable belief that the Participant's action or omission was in the best interest of the Employer.
|
(e)
|
“Code” means the Internal Revenue Code of 1986, as amended.
|
(f)
|
“Company” means McKesson and any affiliate that would be considered a service recipient for purposes of Treasury Regulation § 1.409A-1(g).
|
(g)
|
“Earnings” means a Participant's (i) annualized Base Salary plus (ii) target bonus for the fiscal year in which such Participant's Separation from Service occurs, in each case inclusive of any amounts deferred by the Participant.
|
(h)
|
“Employee” means an individual who is an employee under the common-law standard as determined by McKesson in its sole discretion based on the Internal Revenue Service's right-to-control and 20-factor test and other applicable guidance.
|
(i)
|
“Employer” means McKesson and any other affiliate that would be considered a service recipient or employer for purposes of Treasury Regulation §1.409A-1(h)(3).
|
(j)
|
“McKesson” means McKesson Corporation, a Delaware corporation.
|
(k)
|
“Participant” means (i) an Employee who is designated to be eligible to participate in the Policy by the Compensation Committee of the Board of McKesson and (ii) whose employment is terminated under circumstances that render him or her eligible for the benefits described in Section 2 of the Policy.
|
(l)
|
“Period of Service” means the period of time starting on the date that a Participant first performs an hour of service for the Company and ending on the date of his or her termination of employment for any reason. Breaks in service (e.g., the period of time from termination of employment to the date of rehire by the Company) are not included in a Participant's Period of Service. Non-consecutive Periods of Service shall be aggregated.
|
(m)
|
“Qualifying Termination” is defined in Section 2(a).
|
(n)
|
“Severance Payments” means (i) lump-sum cash payments (including payments in lieu of medical and other benefits), (ii) the estimated present value of periodic cash payments under previously established bonus, retirement, deferred compensation, or other Company benefit plans, (iii) fringe benefits other than those provided under Company programs or arrangements applicable to one or more groups of employees in addition to Participants, and (iv) consulting fees (including reimbursable expenses) other than reasonable fees and expenses for bona fide services provided to the Company after termination, paid or payable by the Company to a Participant pursuant to the Policy or otherwise upon a termination by the Company of employment of such Participant at any time other than within two years following a Change in Control, excluding Vested, Accrued or Appropriate Benefits.
|
(o)
|
“Separate from Service” or “Separation from Service” means termination of services (whether as an Employee or, if applicable a non-Employee) with the Employer, except in the event of death. A Participant shall be deemed to have had a Separation from Service if the Participant's service with the Employer is reduced to an annual rate that is equal to or less than 20% of the services rendered, on average, during the immediately preceding three years of service with the Employer (or if providing service to the Employer less than three years, such lesser period).
|
(p)
|
“Specified Employee” means a Participant who is determined by the Administrator to be a “specified employee” under Treasury Regulations § 1.409A-1.
|
(q)
|
“Vested, Accrued or Appropriate Benefits” means any benefits paid or payable by the Company to a Participant upon a termination by the Company of such Participant's employment at any time other than within two years following a Change in Control that are (i) earned, accrued, deferred or otherwise received for employment services rendered through the date of Separation from Service pursuant to bonus, retirement, deferred compensation, or other Company benefit plans, (ii) approved under the terms of bonus, retirement, deferred compensation, or other Company benefit plans existing at the time of such termination at the reasonable discretion of the Compensation Committee taking into consideration the age, length of service and other circumstances of such termination, (iii) payments or benefits required to be provided by law, and (iv) benefits and perquisites provided by the Company under plans, programs or arrangements of the Company applicable to one or more groups of employees in addition to Participants. For the avoidance of doubt, Vested, Accrued or Appropriate Benefits shall not include benefits payable pursuant to the Policy.
|
(r)
|
“Year of Service” means the number of calendar days in a Participant's Period of Service divided by 365.
|
11.
|
EXECUTION
|
McKESSON CORPORATION
|
|
|
|
By
|
/s/ Jorge Figueredo
|
Jorge Figueredo
|
|
Executive Vice President Human Resources
|
|
Years Ended March 31,
|
||||||||||||||||||
(Dollars in millions)
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from continuing operations before income taxes
|
$
|
1,919
|
|
|
$
|
1,919
|
|
|
$
|
1,635
|
|
|
$
|
1,864
|
|
|
$
|
1,064
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjustment to exclude equity in net income of and
dividends from equity investees
|
(1
|
)
|
|
(2
|
)
|
|
9
|
|
|
(2
|
)
|
|
(1
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges
|
322
|
|
|
332
|
|
|
280
|
|
|
240
|
|
|
195
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Amortization of capitalized interest
|
2
|
|
|
3
|
|
|
3
|
|
|
4
|
|
|
4
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Less: Capitalized interest
|
(1
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings as adjusted
|
$
|
2,241
|
|
|
$
|
2,251
|
|
|
$
|
1,924
|
|
|
$
|
2,106
|
|
|
$
|
1,261
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges:
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest Expense
(a) (b)
|
$
|
240
|
|
|
$
|
251
|
|
|
$
|
222
|
|
|
$
|
187
|
|
|
$
|
144
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Capitalized interest
|
1
|
|
|
1
|
|
|
3
|
|
|
—
|
|
|
1
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Portion of rental expense representative of the interest
factor
(c)
|
81
|
|
|
80
|
|
|
55
|
|
|
53
|
|
|
50
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total fixed charges
|
$
|
322
|
|
|
$
|
332
|
|
|
$
|
280
|
|
|
$
|
240
|
|
|
$
|
195
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio:
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges
|
7.0
|
|
|
6.8
|
|
|
6.9
|
|
|
8.8
|
|
|
6.5
|
|
(a)
|
Interest expense includes amortization of debt discounts and deferred loan costs.
|
(b)
|
Interest accrued on the liability recorded for uncertain tax positions is excluded from Interest expense.
|
(c)
|
One-third of net rent expense is the portion of rental expense deemed representative of the interest factor.
|
|
JURISDICTION
OF
ORGANIZATION
|
CGSF Funding Corporation
|
Delaware
|
McKesson Technologies Inc.
|
Delaware
|
McKesson Financial Holdings
|
Ireland
|
|
|
|
/s/ Deloitte & Touche LLP
|
San Francisco, California
|
May 7, 2013
|
/s/ Andy D. Bryant
|
|
/s/ Marie L. Knowles
|
Andy D. Bryant, Director
|
|
Marie L. Knowles, Director
|
|
|
|
/s/ Wayne A. Budd
|
|
/s/ David M. Lawrence
|
Wayne A. Budd, Director
|
|
David M. Lawrence, M.D., Director
|
|
|
|
/s/ Jeffrey C. Campbell
|
|
/s/ Edward A. Mueller
|
Jeffrey C. Campbell, Executive Vice President
and Chief Financial Officer
(Principal Financial Officer)
|
|
Edward A. Mueller, Director
|
|
|
|
/s/ John H. Hammergren
|
|
/s/ Nigel A. Rees
|
John H. Hammergren, Chairman, President
and Chief Executive Officer
(Principal Executive Officer)
|
|
Nigel A. Rees, Vice President and Controller
(Principal Accounting Officer)
|
|
|
|
/s/ Alton F. Irby
|
|
/s/ Jane E. Shaw
|
Alton F. Irby III, Director
|
|
Jane E. Shaw, Director
|
|
|
|
/s/ M. Christine Jacobs
|
|
|
M. Christine Jacobs, Director
|
|
|
|
|
|
Dated: April 24, 2013
|
|
|
1.
|
I have reviewed this annual report on Form 10-K of McKesson Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: May 7, 2013
|
|
/s/ John H. Hammergren
|
|
|
|
|
John H. Hammergren
|
|
|
|
Chairman of the Board, President and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of McKesson Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: May 7, 2013
|
|
/s/ Jeffrey C. Campbell
|
|
|
|
|
Jeffrey C. Campbell
|
|
|
|
Executive Vice President and Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ John H. Hammergren
|
|
|
John H. Hammergren
|
|
|
Chairman of the Board, President and Chief Executive Officer
|
|
|
May 7, 2013
|
|
|
|
|
|
/s/ Jeffrey C. Campbell
|
|
|
Jeffrey C. Campbell
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
May 7, 2013
|
|
|
|
|
|