McKesson 2012 Annual Report Download - page 82

Download and view the complete annual report

Please find page 82 of the 2012 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)
78
12. Debt and Financing Activities
March 31,
(In millions) 2012 2011
7.75% Notes due February 1, 2012 $ — $ 399
5.25% Notes due March 1, 2013 500 499
6.50% Notes due February 15, 2014 350 350
3.25% Notes due March 1, 2016 598 598
5.70% Notes due March 1, 2017 499 499
7.50% Notes due February 15, 2019 349 349
4.75% Notes dues March 1, 2021 598 598
7.65% Debentures due March 1, 2027 175 175
6.00% Notes due March 1, 2041 493 493
Other 18 44
Total debt 3,580 4,004
Less current portion (508) (417)
Total long-term debt $ 3,072 $ 3,587
Senior Bridge Term Loan Facility
In connection with our execution of an agreement to acquire US Oncology, in November 2010 we entered into a
$2.0 billion unsecured Senior Bridge Term Loan Agreement (“Bridge Loan”). In December 2010, we reduced the
Bridge Loan commitment to $1.0 billion. On January 31, 2011, we borrowed $1.0 billion under the Bridge Loan.
On February 28, 2011, we repaid the funds obtained under the Bridge Loan with long-term debt, as further described
below, and the Senior Bridge Term Loan Agreement was terminated. During the time it was outstanding, the Bridge
Loan bore interest of 1.76%, which was based on the London Interbank Offered Rate plus a margin based on the
Company’s credit rating. Bridge Loan fees in 2011 of $25 million were included in interest expense.
US Oncology Debt Acquired
Upon our purchase of US Oncology in December 2010, we assumed the outstanding debt of US Oncology
Holdings, Inc. and its wholly-owned subsidiary US Oncology, Inc. Immediately prior to our acquisition, US
Oncology Holdings, Inc. called for redemption all of its outstanding Senior Unsecured Floating Rate Toggle Notes
due 2012 and US Oncology, Inc. called for redemption all of its outstanding 9.125% Senior Secured Notes due 2017
and 10.75% Senior Subordinated Notes due 2014. In the fourth quarter of 2011, we paid interest of $50 million and
redeemed these notes, including the remaining accrued interest for $1,738 million using cash on hand and
borrowings under our Bridge Loan.
Long-Term Debt
On February 28, 2011, we issued 3.25% notes due March 1, 2016 in an aggregate principal amount of
$600 million, 4.75% notes due March 1, 2021 in an aggregate principal amount of $600 million and 6.00% notes
due March 1, 2041 in an aggregate principal amount of $500 million. Interest is payable on March 1 and September
1 of each year beginning on September 1, 2011. We utilized net proceeds, after discounts and offering expenses, of
$1,673 million from the issuance of these notes (each note constitutes a “Series”) for general corporate purposes,
including the repayment of borrowings under the Bridge Loan.
Each Series constitutes an unsecured and unsubordinated obligation of the Company and ranks equally with all
of the Company’s existing and future unsecured and unsubordinated indebtedness outstanding from time-to-time.
Each Series is governed by materially similar indentures and an officers’ certificate specifying certain terms of each
Series.