McKesson 2009 Annual Report Download - page 108

Download and view the complete annual report

Please find page 108 of the 2009 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 128

  • 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
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128

McKESSON CORPORATION
FINANCIAL NOTES (Continued)
102
Actuarial gain or loss for the postretirement welfare benefit plan is amortized to income over a three-year
period. The assumed healthcare cost trends used in measuring the accumulated postretirement benefit obligation
were 9% and 10% for prescription drugs, 7% and 9% for medical and 6% and 7% for dental in 2009 and 2008. The
healthcare cost trend rate assumption has a significant effect on the amounts reported. For 2009, 2008 and 2007, a
one-percentage-point increase or a one-percentage-point decrease in the assumed healthcare cost trend rate would
impact total service and interest cost components by approximately $1 million to $2 million and the postretirement
benefit obligation by approximately $12 million to $15 million.
15. Financial Instruments and Hedging Activities
At March 31, 2009 and 2008, the carrying amounts of cash and cash equivalents, restricted cash, marketable
securities, receivables, drafts and accounts payable and other current liabilities approximated their estimated fair
values because of the short maturity of these financial instruments. The carrying amounts and estimated fair values
of our long-term debt were $2,509 million and $2,545 million at March 31, 2009 and $1,797 million and $1,861
million at March 31, 2008. The estimated fair value of our long-term debt was determined based on quoted market
prices and may not be representative of actual values that could have been realized or that will be realized in the
future.
In the normal course of business, we are exposed to interest rate changes and foreign currency fluctuations. We
limit these risks through the use of derivatives such as interest rate swaps and forward contracts. In accordance with
our policy, derivatives are only used for hedging purposes. We do not use derivatives for trading or speculative
purposes. The volume of activity related to derivative financial instruments was not material for 2009, 2008 and
2007.
16. Lease Obligations
We lease facilities and equipment primarily under operating leases. At March 31, 2009, future minimum lease
payments required under operating leases that have initial or remaining noncancelable lease terms in excess of one
year for years ending March 31 are:
(In millions)
Noncancelable
Operating
Leases
2010 $ 105
2011 90
2012 72
2013 48
2014 33
Thereafter 79
Total minimum lease payments $ 427