McKesson 2015 Annual Report Download - page 106

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McKESSON CORPORATION
FINANCIAL NOTES (Continued)
under the plans. Plan assets are primarily invested in high-quality corporate and government bond funds and
equity securities. Assets are properly diversified to avoid excessive reliance on any particular asset, issuer or
group of undertakings so as to avoid accumulations of risk in the portfolio as a whole.
We develop the expected long-term rate of return assumption based on the projected performance of the asset
classes in which plan assets are invested. The target asset allocation was determined based on the liability and risk
tolerance characteristics of the plans and at times may be adjusted to achieve overall investment objectives.
Fair Value Measurements: The following tables represent our pension plan assets as of March 31, 2015 and
2014, using the fair value hierarchy by asset class. The fair value hierarchy has three levels based on the
reliability of the inputs used to determine fair value. Level 1 refers to fair values determined based on unadjusted
quoted prices in active markets for identical assets. Level 2 refers to fair values estimated using significant other
observable inputs and Level 3 includes fair values estimated using significant unobservable inputs.
U.S. Plans
March 31, 2015
Non-U.S. Plans
March 31, 2015
(In millions) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Cash and cash equivalents $ 55 $ 1 $— $ 56 $ 8 $— $— $ 8
Equity securities:
Common and preferred stock 18 — — 18 — — — —
Equity commingled funds — 138 — 138 7 149 — 156
Fixed income securities:
Government securities — 14 — 14 26 53 — 79
Corporate bonds — 14 — 14 — 13 — 13
Mortgage-backed securities — 14 — 14 — — — —
Asset-backed securities and other — 26 — 26 — — — —
Fixed income commingled funds — — — — 64 127 — 191
Other:
Real estate funds — — 18 18 — — 26 26
Other commingled funds — — — — — 13 — 13
Other — — — — 7 115 4 126
Total $ 73 $207 $ 18 $298 $112 $470 $ 30 $612
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