McKesson 2014 Annual Report Download - page 26

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McKESSON CORPORATION
23
Volatility and disruption to the global capital and credit markets may adversely affect our ability to access credit, our cost of
credit and the financial soundness of our customers and suppliers.
Volatility and disruption in the global capital and credit markets, including the bankruptcy or restructuring of certain financial
institutions, reduced lending activity by other financial institutions, decreased liquidity and increased costs in the commercial
paper market and the reduced market for securitizations, may adversely affect the availability and cost of credit already arranged
and the availability, terms and cost of credit in the future, including any arrangements to renew or replace our current credit or
financing arrangements. Although we believe that our operating cash flow, financial assets, current access to capital and credit
markets, including our existing credit and sales facilities, will give us the ability to meet our financing needs for the foreseeable
future, there can be no assurance that continued or increased volatility and disruption in the global capital and credit markets will
not impair our liquidity or increase our costs of borrowing.
Our $1.35 billion accounts receivable sales facility is generally renewed annually and will expire in November 2014.
Historically, we have primarily used the accounts receivable sales facility to fund working capital requirements, as needed. We
anticipate extending or renewing this facility before its expiration. Although we believe we will be able to renew this facility,
there is no assurance that we will be able to do so.
Our business could also be negatively impacted if our customers or suppliers experience disruptions resulting from tighter
capital and credit markets or a slowdown in the general economy. As a result, customers may modify, delay or cancel plans to
purchase or implement our products or services and suppliers may increase their prices, reduce their output or change their terms
of sale. Additionally, if customers’ or suppliers’ operating and financial performance deteriorates or if they are unable to make
scheduled payments or obtain credit, customers may not be able to pay, or may delay payment of accounts receivable owed to us
and suppliers may restrict credit, impose different payment terms or be unable to make payments due to us for fees, returned
products or incentives. Any inability of customers to pay us for our products and services or any demands by suppliers for different
payment terms may have a material adverse impact on our results of operations and cash flow.
Changes in accounting standards issued by the Financial Accounting Standards Board (“FASB”) or other standard-setting
bodies may adversely affect our financial statements.
Our financial statements are subject to the application of U.S. GAAP, which is periodically revised and/or expanded.
Accordingly, from time-to-time we are required to adopt new or revised accounting standards issued by recognized authoritative
bodies, including the FASB and the SEC. It is possible that future accounting standards we are required to adopt could change
the current accounting treatment that we apply to our consolidated financial statements and that such changes could have a material
adverse impact on our results of operations and financial condition.
We could face significant liability if we withdraw from participation in one or more multiemployer pension plans in which we
participate or one or more multiemployer plans in which we participate is reported to have underfunded liabilities.
We participate in various “multiemployer” pension plans. In the event that we withdraw from participation in one of these
plans, then applicable law could require us to make an additional cash contribution to the plans, payable in installments and/or
lump sum. Our withdrawal liability for any multiemployer plan would depend on the extent of the plan’s funding of vested benefits.
Our multiemployer plans could have significant underfunded liabilities. Such underfunding may increase in the event other
employers become insolvent or withdraw from the applicable plan or upon the inability or failure of withdrawing employers to
pay their withdrawal liability. In addition, such underfunding may increase as a result of lower than expected returns on pension
fund assets or other funding deficiencies. The occurrence of any of these events could have a material adverse effect on our
consolidated financial position, results of operations or cash flows.
Item 1B. Unresolved Staff Comments.
None.