McKesson 2012 Annual Report Download - page 91

Download and view the complete annual report

Please find page 91 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)
87
The McKesson Corporation PSIP was a member of the settlement class in the Consolidated Securities Litigation
Action. On April 27, 2009, the court issued an order approving the distribution of the settlement funds. On October
9, 2009, the PSIP received approximately $119 million of the Consolidated Securities Litigation Action proceeds.
Approximately $42 million of the proceeds were attributable to the allocated shares of McKesson common stock
owned by the PSIP participants during the Consolidated Securities Litigation Action class-holding period and were
allocated to the respective participants on that basis in the third quarter of 2010. Approximately $77 million of the
proceeds were attributable to the unallocated shares (the “Unallocated Proceeds”) of McKesson common stock
owned by the PSIP in an ESOP suspense account. In accordance with the plan terms, the PSIP distributed all of the
Unallocated Proceeds to current PSIP participants after the close of the plan year in April 2010. The receipt of the
Unallocated Proceeds by the PSIP was reimbursement for the loss in value of the Company’s common stock held by
the PSIP in its ESOP suspense account during the Consolidated Securities Litigation Action class-holding period
and was not a contribution made by the Company to the PSIP or ESOP. Accordingly, there were no accounting
consequences to the Company’s financial statements relating to the receipt of the Unallocated Proceeds by the PSIP.
As a result of the PSIP’s receipt of the Unallocated Proceeds, in 2010 the Company contributed $1 million to
the PSIP. Accordingly, the PSIP expense for 2010 was nominal. Commencing in 2011, the Company resumed its
contributions to the PSIP.
PSIP expense by segment for the last three years was as follows:
Years Ended March 31,
(In millions) 2012 2011 2010
Distribution Solutions $ 22 $ 23 $ —
Technology Solutions 30 32 1
Corporate 6 4 —
PSIP expense $ 58 $ 59 $ 1
Cost of sales
(
1
)
$ 17 $ 17 $ —
Operating expenses 41 42 1
PSIP expense $ 58 $ 59 $ 1
(1) Amounts recorded to cost of sales pertain solely to our McKesson Technology Solutions segment.
15. Postretirement Benefits
We maintain a number of postretirement benefits, primarily consisting of healthcare and life insurance
(“welfare”) benefits, for certain eligible U.S. employees. Eligible employees consist of those who retired before
March 31, 1999 and those who retired after March 31, 1999, but were an active employee as of that date, after
meeting other age-related criteria. We also provide postretirement benefits for certain U.S. executives. Defined
benefit plan obligations are measured as of the Company’s fiscal year-end.
The net periodic expense (income) for our postretirement welfare benefits is as follows:
Years Ended March 31,
(In millions) 2012 2011 2010
Service cost—benefits earned during the year $ 2 $ 1 $ 1
Interest cost on accumulated benefit obligation 7 8 9
Amortization of unrecognized actuarial loss (gain) and
prior service costs (1) (4) (25)
Net periodic postretirement expense (income) $ 8 $ 5 $ (15)