McKesson 2014 Annual Report Download - page 53

McKESSON CORPORATION
FINANCIAL REVIEW (Continued)
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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 materially similar indentures and officers’ certificate specifying certain terms of each Series.
With the exception of the Floating Rate Notes, 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 must 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 of default provisions.
We repaid our $350 million 6.50% Notes due February 15, 2014 and our $500 million 5.25% Notes due March 1, 2013, at
maturity.
Scheduled future payments of long-term debt are $1,424 million in 2015, $1,535 million in 2016, $1,277 million in 2017,
$520 million in 2018, $1,485 million in 2019 and $4,132 million thereafter.
Accounts Receivable Sales Facility
We have an Accounts Receivable Sales facility (the “Facility”) with a committed balance of $1.35 billion, although from time-
to-time, the available amount of the Facility may be less than $1.35 billion based on accounts receivable concentration limits and
other eligibility requirements. Prior to the Celesio acquisition, we amended the Facility to extend the term for an additional year,
increased the maximum debt to capital ratio from 56.5% to 65% and added an extended cure period with respect to defaults under
the facility relating to Celesio. The Facility will expire in November 2014 and we anticipate renewing the Facility before its
expiration.
In 2014, 2013 and 2012, we borrowed $550 million, $1,325 million and $400 million under the Facility and we repaid
$550 million, $1,725 million and nil. At March 31, 2014 and March 31, 2013, there were no secured borrowings and related
securitized accounts receivable outstanding under the Facility.
The Facility contains requirements relating to the performance of the accounts receivable and covenants relating to the
Company. If we do not comply with these covenants, our ability to use the Facility may be suspended and repayment of any
outstanding balances under the Facility may be required. At March 31, 2014 and March 31, 2013, we were in compliance with
all covenants.
Revolving Credit Facility
We have a syndicated $1.3 billion five-year senior unsecured revolving credit facility, which expires in September 2016. Prior
to the Celesio acquisition, we amended this facility to increase the maximum debt to capital ratio from 56.5% to 65%, and added
an extended cure period with respect to defaults under the credit facility relating to Celesio. 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 2014, 2013 and 2012. As of March 31, 2014 and 2013, there were no borrowings outstanding under this
credit facility.
Commercial Paper
There were no commercial paper issuances during 2014, 2013 and 2012 and no amounts outstanding at March 31, 2014 and
2013.