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McKESSON CORPORATION
FINANCIAL NOTES (Continued)
87
5. Other Income, Net
Years Ended March 31,
(In millions) 2009 2008 2007
Interest income $ 31 $ 89 $ 103
Equity in earnings, net 7 21 23
Gain on sale of investment 24 - -
Impairment of investments (63) - -
Other, net 13 11 6
Total $ 12 $ 121 $ 132
We evaluate our investments for impairment when events or changes in circumstances indicate that the carrying
values of such investment may have experienced an other than temporary decline in value. During the fourth quarter
of 2009, we determined that the fair value of our interest in Parata was lower than its carrying value and that such
impairment was other than temporary. Fair value was determined using a discounted cash flow analysis based on
estimated future results and market capitalization rates. We determined the impairment was other than temporary
based on our assessment of all relevant factors including a deterioration in the investee’s financial condition and
weak market conditions. As a result, we recorded a pre-tax impairment of $58 million ($55 million after-tax) on this
investment which is recorded within other income, net in the consolidated statements of operations. Our investment
in Parata is accounted for under the equity method of accounting within our Distribution Solutions segment.
During the fourth quarter of 2009, we also recorded a pre-tax impairment of $5 million ($5 million after-tax) on
another equity-held investment within our Distribution Solutions segment.
In July 2008, our Distribution Solutions segment sold its 42% equity interest in Verispan, L.L.C. (“Verispan”),
a data analytics company, for a pre-tax gain of approximately $24 million or $14 million after-tax.
6. Income Taxes
Years Ended March 31,
(In millions) 2009 2008 2007
Income from continuing operations before income taxes
U.S. $ 623 $ 1,059 $ 987
Foreign 441 398 310
Total income from continuing operations before income
taxes $ 1,064 $ 1,457 $ 1,297