McKesson 2016 Annual Report Download - page 119

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McKESSON CORPORATION
FINANCIAL NOTES (Continued)
At March 31, 2016 and 2015, the carrying amounts of cash, certain cash equivalents, restricted cash,
marketable securities, receivables, drafts and accounts payable, short-term borrowings and other current
liabilities approximated their estimated fair values because of the short maturity of these financial instruments.
Our long-term debt is carried at amortized cost. The carrying amounts and estimated fair values of these
liabilities were $8.1 billion and $8.6 billion at March 31, 2016 and $9.7 billion and $10.4 billion at
March 31, 2015. The estimated fair value of our long-term debt was determined using quoted market prices in a
less active market and other observable inputs from available market information, which are considered to be
Level 2 inputs, and may not be representative of actual values that could have been realized or that will be
realized in the future.
Assets Measured at Fair Value on a Recurring Basis
Our financial assets measured at fair value on a recurring basis consist of the following:
March 31, 2016 March 31, 2015
(In millions) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Cash Equivalents
Money market funds (1) $2,413 $— $— $2,413 $2,880 $— $— $2,880
Time deposits (2) —— — — — 94— 94
Repurchase agreements (2) — — — — 1,243 — — 1,243
Total cash equivalents $2,413 $— $— $2,413 $4,123 $ 94 $— $4,217
(1) Gross unrealized gain and losses were not material for the years ended March 31, 2016 and 2015 based on
quoted prices of identical investments.
(2) The carrying amounts of these cash equivalents approximated their estimated fair values because of their
short maturities.
Fair values of our marketable securities were determined using quoted prices in active markets for identical
assets, which are considered Level 1 inputs under the fair value measurements and disclosure guidance. Fair
values for our marketable securities were not material at March 31, 2016 and 2015.
Fair values of our forward foreign currency contracts were determined using quoted market prices of similar
instruments in an active market and other observable inputs from available market information. Fair values of our
foreign currency swaps were determined using quoted foreign currency exchange rates and other observable
inputs from available market information. These inputs are considered Level 2 under the fair value measurements
and disclosure guidance, and may not be representative of actual values that could have been realized or that will
be realized in the future.
Refer to Financial Note 20, “Hedging Activities,” for fair value and other information on our foreign
currency derivatives including foreign currency forward contracts and swaps.
There were no transfers between Level 1, Level 2 or Level 3 of the fair value hierarchy during the years
ended March 31, 2016 and 2015.
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