McKesson 2011 Annual Report Download - page 55

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McKESSON CORPORATION
FINANCIAL REVIEW (Continued)
49
Additional information regarding our accounts receivable sales facility is included in Financial Notes 1 and 11,
“Significant Accounting Policies” and “Debt and Financing Activities,” to the consolidated financial statements
appearing in this Annual Report on Form 10-K.
Revolving Credit Facility
We have a syndicated $1.3 billion five-year senior unsecured revolving credit facility, which expires in June
2012. Borrowings under this credit facility bear interest based upon either a Prime rate or the London Interbank
Offered Rate. There were no borrowings under this facility in 2011 and 2010 and $279 million for 2009. As of
March 31, 2011 and 2010, there were no amounts outstanding under this facility.
Commercial Paper
There were no commercial paper issuances during 2011 and 2010 and no amount outstanding at March 31, 2011
and 2010. We issued and repaid $3.3 billion of commercial paper in 2009.
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%. If we
exceed this ratio, repayment of debt outstanding under the revolving credit facility could be accelerated. As of
March 31, 2011, this ratio was 35.7% and we were in compliance with our other 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 19, “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.