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McKESSON CORPORATION
10
Research and Development: Our development expenditures primarily consist of our investment in software
development held for sale. We spent $438 million, $420 million and $359 million for development activities in
2009, 2008 and 2007 and of these amounts, we capitalized 17%, 17% and 21%. Development expenditures are
primarily incurred by our Technology Solutions segment. Our Technology Solutions segment’s product
development efforts apply computer technology and installation methodologies to specific information processing
needs of hospitals and other customers. We believe a substantial and sustained commitment to such expenditures is
important to the long-term success of this business. Additional information regarding our development activities is
included in Financial Note 1, “Significant Accounting Policies,” to the consolidated financial statements appearing
in this Annual Report on Form 10-K.
Environmental Regulation: We sold our chemical distribution operations in 1987 and retained responsibility for
certain environmental obligations. Agreements with the Environmental Protection Agency and certain states may
require environmental assessments and cleanups at several closed sites. These matters are described further in
Financial Note 18, “Other Commitments and Contingent Liabilities,” to the consolidated financial statements
appearing in this Annual Report on Form 10-K. Other than any expenditures that may be required in connection
with those legal matters, we do not anticipate making substantial capital expenditures either for environmental
issues, or to comply with environmental laws and regulations in the future. The amount of our capital expenditures
for environmental compliance was not material in 2009 and is not expected to be material in the next year.
Employees: On March 31, 2009, we employed approximately 32,500 persons compared to 32,900 in 2008 and
31,800 in 2007.
Financial Information About Foreign and Domestic Operations: Information as to foreign and domestic
operations is included in Financial Notes 1 and 22, “Significant Accounting Policies” and “Segments of Business,”
to the consolidated financial statements appearing in this Annual Report on Form 10-K.
Item 1A. Risk Factors
Information regarding our risk factors is included in the Financial Review under the captions “Factors Affecting
Forward-Looking Statements” and “Additional Factors That May Affect Future Results,” beginning on page 51 of
this Annual Report on Form 10-K.
Item 1B. Unresolved Staff Comments
Not applicable.
Item 2. Properties
Because of the nature of our principal businesses, our plant, warehousing, office and other facilities are operated
in widely dispersed locations, mostly throughout the U.S. and Canada. The warehouses are typically owned or
leased on a long-term basis. We consider our operating properties to be in satisfactory condition and adequate to
meet our needs for the next several years without making capital expenditures materially higher than historical
levels. Information as to material lease commitments is included in Financial Note 16, “Lease Obligations,” to the
consolidated financial statements appearing in this Annual Report on Form 10-K.
Item 3. Legal Proceedings
Certain legal proceedings in which we are involved are discussed in Financial Note 18, “Other Commitments
and Contingent Liabilities,” to our consolidated financial statements appearing in this Annual Report on Form 10-K.