McKesson 2008 Annual Report Download - page 79

Download and view the complete annual report

Please find page 79 of the 2008 McKesson annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 119

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119

McKESSON CORPORATION
FINANCIAL NOTES (Continued)
72
In 2006, we made the following acquisitions:
−We acquired substantially all of the issued and outstanding stock of D&K Healthcare Resources, Inc. (“D&K”)
of St. Louis, Missouri for an aggregate cash purchase price of $479 million, including the assumption of D&K’ s
debt. D&K is primarily a wholesale distributor of branded and generic pharmaceuticals and over-the-counter
health and beauty products to independent and regional pharmacies, primarily in the Midwest. The acquisition
of D&K expanded our existing U.S. pharmaceutical distribution business. Approximately $158 million of the
purchase price has been assigned to goodwill. Included in the purchase price were acquired identifiable
intangibles of $43 million primarily representing customer lists and not-to-compete covenants which have an
estimated weighted-average useful life of nine years. Financial results for D&K are included in our Distribution
Solutions segment.
−We acquired all of the issued and outstanding shares of Medcon, Ltd. (“Medcon”), an Israeli company, for an
aggregate purchase price of $82 million. Medcon provides web-based cardiac image and information
management services to healthcare providers. Approximately $60 million of the purchase price was assigned to
goodwill and $20 million was assigned to intangibles which represent technology assets and customer lists
which have an estimated weighted-average useful life of four years. Financial results for Medcon are included
in our Technology Solutions segment.
During the last three years, we also completed a number of other smaller acquisitions and investments within
both of our operating segments. Financial results for our business acquisitions have been included in our
consolidated financial statements since their respective acquisition dates. Purchase prices for our business
acquisitions have been allocated based on estimated fair values at the date of acquisition and, for certain recent
acquisitions, may be subject to change as we continue to evaluate and implement various restructuring initiatives.
Goodwill recognized for our business acquisitions is not expected to be deductible for tax purposes. Pro forma
results of operations for our business acquisitions have not been presented because the effects were not material to
the consolidated financial statements on either an individual or an aggregate basis.
3. Discontinued Operations
Results from discontinued operations were as follows:
Years Ended March 31,
(In millions) 2008 2007 2006
Income (loss) from discontinued operations
Acute Care $ 1 $ (9) $ (13)
BioServices - - 2
Other 1 - -
Income taxes (1) 4 4
Total $ 1 $ (5) $ (7)
Gain (loss) on sales of discontinued operations
Acute Care $ - $ (49) $ -
BioServices - - 22
Other - 10 -
Income taxes - (11) (9)
Total $ - $ (50) $ 13
Discontinued operations, net of taxes
Acute Care $ 1 $ (66) $ (8)
BioServices - - 14
Other - 11 -
Total $ 1 $ (55) $ 6