McKesson 2012 Annual Report Download - page 53

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McKESSON CORPORATION
FINANCIAL REVIEW (Continued)
49
Revolving Credit Facility
In September 2011, we renewed our existing syndicated $1.3 billion five-year senior unsecured revolving credit
facility, which was scheduled to mature in June 2012. This renewed credit facility has terms and conditions
substantially similar to those previously in place and matures in September 2016. Borrowings under this renewed
credit facility bear interest based upon either the London Interbank Offered Rate or a prime rate. There were no
borrowings under this credit facility during 2012, 2011 and 2010. As of March 31, 2012 and 2011, there were no
borrowings outstanding under this credit facility.
Commercial Paper
There were no commercial paper issuances during 2012, 2011 and 2010 and no amount outstanding at
March 31, 2012 and 2011.
Debt Covenant
Our various borrowing facilities and long-term debt are subject to certain covenants. Our principal debt
covenant is our debt to capital ratio under our unsecured revolving credit facility, which cannot exceed 56.5%. For
the purpose of calculating the debt to capital ratio under this covenant, borrowings under the accounts receivable
sales facility are excluded. If we exceed this ratio, repayment of debt outstanding under the revolving credit facility
could be accelerated. As of March 31, 2012, we were in compliance with our financial covenants. A reduction in
our credit ratings, or the lack of compliance with our covenants, could negatively impact our ability to finance
operations or issue additional debt at acceptable interest rates.
Funds necessary for future debt maturities and our other cash requirements are expected to be met by existing
cash balances, cash flow from operations, existing credit sources and other capital market transactions.
RELATED PARTY BALANCES AND TRANSACTIONS
Information regarding our related party balances and transactions is included in Financial Note 21, “Related
Party Balances and Transactions,” to the consolidated financial statements appearing in this Annual Report on
Form 10-K.
NEW ACCOUNTING PRONOUNCEMENTS
New accounting pronouncements that we have recently adopted, as well as those that have been recently issued
but not yet adopted by us, are included in Financial Note 1, “Significant Accounting Policies,” to the consolidated
financial statements appearing in this Annual Report on Form 10-K.