McKesson 2010 Annual Report Download - page 86

McKESSON CORPORATION
FINANCIAL NOTES (Continued)
80
12. Long-Term Debt and Other Financing
March 31,
(In millions) 2010 2009
9.13% Series C Senior Notes due February, 2010 $ — $ 215
7.75% Notes due February, 2012 399 399
5.25% Notes due March, 2013 499 499
6.50% Notes due February, 2014 350 350
5.70% Notes due March, 2017 499 499
7.50% Notes due February, 2019 349 349
7.65% Debentures due March, 2027 175 175
ESOP related debt (see Financial Note 13) — 1
Other 25 22
Total debt 2,296 2,509
Less current portion (3) (219)
Total long-term debt $ 2,293 $ 2,290
Long-Term Debt
On February 12, 2009, the Company issued 6.50% notes due February 15, 2014 (the “2014 Notes”) in an
aggregate principal amount of $350 million and 7.50% notes due February 15, 2019 (the “2019 Notes”) in an
aggregate principal amount of $350 million. Interest is payable on February 15 and August 15 of each year
beginning on August 15, 2009. The 2014 Notes will mature on February 15, 2014 and the 2019 Notes will mature
on February 15, 2019. The Company utilized net proceeds, after discounts and offering expenses, of $693 million
from the issuance of the 2014 Notes and 2019 Notes for general corporate purposes.
On March 5, 2007, we issued 5.25% notes due March 1, 2013 (the “2013 Notes”) in an aggregate principal
amount of $500 million and 5.70% notes due March 1, 2017 (the “2017 Notes,” collectively with the 2013 Notes,
2014 Notes, 2019 Notes, the “Notes” and each note constitutes a “Series”) in an aggregate principal amount of
$500 million for which interest is payable on March 1 and September 1 of each year. The 2013 Notes will mature
on March 1, 2013 and the 2017 Notes will mature on March 1, 2017. We utilized net proceeds, after discounts and
offering expenses, of $990 million from the issuance of the 2013 Notes and 2017 Notes, together with cash on hand,
to repay outstanding interim indebtedness related to our January 2007 acquisition of Per-Se.
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 an indenture common to all Notes and an officers’ certificate specifying certain terms of
each Series.
Upon 30 days notice to holders of a Series, we may redeem that Series at any time prior to maturity, in whole or
in part, for cash at redemption prices that include accrued and unpaid interest and a make-whole premium, as
specified in the indenture and officers’ certificate relating to that Series. In the event of the occurrence of both (1) a
change of control of the Company and (2) a downgrade of a Series below an investment grade rating by each of
Fitch Ratings, Moody’s Investors Service, Inc. and Standard & Poor’s Ratings Services within a specified period, an
offer will be made to purchase that Series from the holders at a price in cash equal to 101% of the then outstanding
principal amount of that Series, plus accrued and unpaid interest to, but not including, the date of repurchase. The
indenture and the related officers’ certificate for each Series, subject to the exceptions and in compliance with the
conditions as applicable, specify that we may not incur liens, enter into sale and leaseback transactions or
consolidate, merge or sell all or substantially all of our assets. The indentures also contain customary events and
default provisions.