McKesson 2013 Annual Report Download - page 89

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McKESSON CORPORATION
FINANCIAL NOTES (Continued)
The delinquency ratio for the qualifying receivables represented less than 1% of the total qualifying receivables as of
March 31, 2013 and 2012.
Revolving Credit Facility
In September 2011, we renewed our existing syndicated $1.3 billion five-year senior unsecured revolving credit facility.
This renewed credit facility has terms and conditions substantially similar to those previously in place and matures in
September 2016. Borrowings under this renewed credit facility bear interest based upon either the London Interbank Offered
Rate or a prime rate. There were no borrowings under this credit facility during 2013, 2012 and 2011. As of March 31, 2013
and 2012, there were no borrowings outstanding under this credit facility.
Commercial Paper
There were no commercial paper issuances during 2013, 2012 and 2011 and no amounts outstanding at March 31, 2013
and 2012.
Debt Covenants
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%. For the purpose of calculating
this ratio, borrowings under the accounts receivable sales facility are excluded. If we exceed this ratio, repayment of debt
outstanding under the revolving credit facility could be accelerated. As of March 31, 2013, we were in compliance with our
financial covenants.
15. Variable Interest Entities
We are involved with VIEs, which we do not consolidate because we do not have the power to direct the activities that
most significantly impact their economic performance and thus are not considered the primary beneficiary of the entities. Our
relationships include equity investments, lending, leasing, contractual or other relationships with the VIEs. Our most
significant relationships are with oncology and other specialty practices. Under these practice arrangements, we generally
own or lease all of the real estate and the equipment used by the affiliated practices and manage the practices' administrative
functions. Our maximum exposure to loss (regardless of probability) as a result of all VIEs was $1.1 billion and $1.1 billion at
March 31, 2013 and 2012, which primarily represents the value of intangible assets related to service agreements and lease
and loan receivables. These amounts exclude the customer loan guarantees discussed in Financial Note 21, “Financial
Guarantees and Warranties.” We believe that there is no material loss exposure on these assets or from these relationships.
16. Pension Benefits
We maintain a number of qualified and nonqualified defined benefit pension plans and defined contribution plans for
eligible employees.
Defined Benefit Pension Plans
Eligible U.S. employees who were employed by the Company as of December 31, 1995 are covered under the Company-
sponsored defined benefit retirement plan. In 1997, the plan was amended to freeze all plan benefits as of December 31, 1996.
Benefits for the defined benefit retirement plan are based primarily on age of employees at date of retirement, years of
creditable service and the average of the highest 60 months of pay during the 15 years prior to the plan freeze date. We also
have defined benefit pension plans for eligible Canadian and United Kingdom employees, as well as an unfunded
nonqualified supplemental defined benefit plan for certain U.S. executives. Defined benefit plan assets and obligations are
measured as of the Company's fiscal year-end.