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McKESSON CORPORATION
FINANCIAL REVIEW
28
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
GENERAL
Management’s discussion and analysis of financial condition and results of operations, referred to as the
Financial Review, is intended to assist the reader in the understanding and assessment of significant changes and
trends related to the results of operations and financial position of the Company together with its subsidiaries. This
discussion and analysis should be read in conjunction with the consolidated financial statements and accompanying
financial notes in Item 8 of Part II of this Annual Report on Form 10-K. The Company’s fiscal year begins on April
1 and ends on March 31. Unless otherwise noted, all references in this document to a particular year shall mean the
Company’s fiscal year.
Certain statements in this report constitute forward-looking statements. See Item 1 – Business – Forward-
Looking Statements in Part I of this Annual Report on Form 10-K for additional factors relating to these statements;
also see Item 1A – Risk Factors in Part I of this Annual Report on Form 10-K for a list of certain risk factors
applicable to our business, financial condition and results of operations.
We conduct our business through two operating segments: McKesson Distribution Solutions and McKesson
Technology Solutions. See Financial Note 22, “Segments of Business,” to the consolidated financial statements
appearing in this Annual Report on Form 10-K for a description of these segments.
RESULTS OF OPERATIONS
Overview:
Years Ended March 31, Change
(Dollars in millions, except per share data) 2012
2011
2010 2012 2011
Revenues $ 122,734 $ 112,084 $ 108,702 10% 3%
Gross Profit $ 6,567 $ 5,970 $ 5,676 10% 5%
Operating Expenses 4,269 3,936 3,688 8 7
Litigation Charges (Credit), Net 149 213 (20) (30) —
Total Operating Expenses 4,418 4,149 3,668 6 13
Other Income, Net 21 36 43 (42) (16)
Interest Expense (251) (222) (187) 13 19
Income from Continuing Operations Before Income
Taxes 1,919 1,635 1,864 17 (12)
Income Tax Expense (516) (505) (601) 2 (16)
Income from Continuing Operations 1,403 1,130 1,263 24 (11)
Discontinued Operation – gain on sale, net of tax — 72
—
— —
N
et Income $ 1,403 $ 1,202 $ 1,263 17 (5)
Diluted Earnings Per Common Share
Continuing Operations $ 5.59 $ 4.29 $ 4.62 30% (7)%
Discontinued Operation — 0.28
—
— —
Total $ 5.59 $ 4.57 $ 4.62 22 (1)
Weighted Average Diluted Common Shares 251 263 273 (5)% (4)%
Revenues increased over each of the last two years primarily reflecting market growth in our Distribution
Solutions segment, which accounted for approximately 97% of our consolidated revenues. Additionally, revenues
for 2012 and 2011 benefited from our December 30, 2010 acquisition of US Oncology Holdings, Inc. (“US
Oncology”).