McKesson 2015 Annual Report Download - page 50

McKESSON CORPORATION
FINANCIAL REVIEW (Continued)
Net Income (Loss) Attributable to Noncontrolling Interests: Net income attributable to noncontrolling
interests for 2015 primarily represents the $50 million guaranteed dividend and $12 million associated with the
quarterly accrual of the annual recurring compensation that we are obligated to pay to the noncontrolling
shareholders of Celesio under the Domination Agreement. Net loss attributable to noncontrolling interests for
2014 primarily represents the portion of Celesio’s net loss that was not allocable to McKesson Corporation.
Net Income Attributable to McKesson Corporation: Net income attributable to McKesson Corporation was
$1,476 million, $1,263 million and $1,338 million in 2015, 2014 and 2013 and diluted earnings per common
share were $6.27, $5.41 and $5.59.
Weighted Average Diluted Common Shares Outstanding: Diluted earnings per common share was
calculated based on a weighted average number of shares outstanding of 235 million, 233 million and
239 million for 2015, 2014 and 2013. Weighted average diluted common shares outstanding is impacted by the
exercise and settlement of share-based awards and in 2014 the cumulative effect of share repurchases.
Foreign Operations
Foreign operations accounted for approximately 20%, 11% and 8% of 2015, 2014 and 2013 consolidated
revenues. Foreign operations are subject to certain risks, including currency fluctuations. We monitor our
operations and adopt strategies responsive to changes in the economic and political environment in each of the
countries in which we operate. Additional information regarding our foreign operations is also included in
Financial Note 26, “Segments of Business,” to the consolidated financial statements appearing in this Annual
Report on Form 10-K.
Business Combinations
Fiscal 2014
On February 6, 2014, we completed the acquisition of 77.6% of the then outstanding common shares of
Celesio AG (“Celesio”) and certain convertible bonds of Celesio for cash consideration of $4.5 billion, net of
cash acquired (the “Acquisition”). Upon the Acquisition, our ownership of Celesio’s fully diluted common shares
was 75.6% and, as required, we consolidated Celesio’s debt with a fair value of $2.3 billion as a liability on our
consolidated balance sheet. At March 31, 2014, we owned approximately 75.4% of Celesio’s outstanding and
fully diluted common shares. The Acquisition was funded by utilizing a senior bridge loan, our existing accounts
receivable sales facility and cash on hand. Celesio is an international wholesale and retail company and a
provider of logistics and services to the pharmaceutical and healthcare sectors. Celesio’s headquarters is in
Stuttgart, Germany and it operates in 14 countries around the world. The Acquisition of Celesio expands our
global geographic area; the combined company will be one of the largest pharmaceutical wholesalers and
providers of logistics and services in the healthcare sector worldwide. Financial results for Celesio are included
within our International pharmaceutical distribution and services business, which is part of our Distribution
Solutions segment, since the date of the Acquisition.
Fiscal 2013
In addition to our April 2012 acquisition of the remaining 50% ownership interest in our corporate
headquarters building located in San Francisco, California, on February 22, 2013, we acquired all of the
outstanding shares of PSSI for $29.00 per share plus the assumption of PSSI’s debt, or approximately $1.9 billion
in aggregate, consisting of cash consideration of $1.3 billion, net of cash acquired, and the assumption of
long-term debt with a fair value of $0.6 billion. The cash paid at acquisition was funded from cash on hand and
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