ITEM 1. BUSINESS
(A) GENERAL DEVELOPMENT OF BUSINESS
In fiscal 1994, the Company consummated several transactions reflecting its increased focus on health care.
The Company's capabilities in managed health care were expanded through acquisitions. In April 1993, the Company acquired Clinical Pharmaceuticals, Inc. ("CPI"), an administrator of clinically based managed prescription drug benefit programs. In December 1993, the Company acquired interests in Technology Assessment Group ("TAG"), a consulting firm specializing in health outcomes assessment, and Integrated Medical Systems ("IMS"), a developer of community medical information systems. IMS's networks link physicians with other health care providers, managed care organizations and health plan sponsors.
In April 1993, the Company acquired a 22.7% interest in Nadro S.A. de C.V. ("Nadro"). Nadro is the leading pharmaceutical wholesale distributor in Mexico. At the same time, the Company received an option to acquire an additional 9% of Nadro's common stock.
The Company's plan is to make its majority-owned subsidiary, Armor All Products Corporation ("Armor All") an independent entity over time. In the first quarter of fiscal 1994, the Company sold to the public 5,175,000 shares and donated to the McKesson Foundation 250,000 shares of common stock of Armor All. A pre-tax gain of $55.1 million was recorded on the sale and contribution of these shares. The shares donated to the McKesson Foundation had a market value of $4.3 million. These transactions reduced the Company's equity interest in Armor All from 83% to 57%. In addition, in March, 1994, the Company sold $180 million of subordinated debentures that are exchangeable, at the option of the holders, into 6.9 million additional shares of Armor All common stock owned by the Company. If all of the debentures were exchanged, McKesson's ownership interest in Armor All would be reduced to approximately 24%.
Developments which could be considered significant to individual segments of the business are described under (c)(1) "Narrative Description of Business" on pages 1 through 4 of this report.
(B) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
Financial information for the three years ended March 31, 1994 appears in Financial Note 15, "Segments of Business", on pages 34 and 35 of the Appendix to the Company's 1994 Proxy Statement, which note is incorporated herein by reference.
(C) NARRATIVE DESCRIPTION OF BUSINESS
(1) DESCRIPTION OF SEGMENTS OF BUSINESS
The principal segments of the Company's business are:
Health Care Services Water Products Armor All
HEALTH CARE SERVICES
Products & Markets
Wholesale Distribution of Pharmaceutical & Health Care Products --Within the United States and Canada, McKesson is the largest distributor of ethical and proprietary drugs and health and beauty care products. Its products are distributed to chain and independent drug stores, hospitals, food stores and mass merchandisers throughout the United States and Canada. This business requires large inventories, significant amounts of which are financed by related payables. In addition, McKesson owns a 22.7% equity interest in Nadro, the leading pharmaceutical wholesaler in Mexico.
Using the name "Economost" and "Econolink" and a number of related service marks, McKesson has promoted electronic order entry systems and a wide range of computerized merchandising and asset management services for drug retailers and hospitals. McKesson is also a supplier of computer systems and software for pharmacists.
In the United States, McKesson does business under the McKesson Drug Co. tradename. In Canada, McKesson does business under the Medis and Groupe Pharmaceutique Focus names.
Voluntary Marketing Program -- Under the Valu-Rite pharmacy program, McKesson provides its independent U.S. retail drug store customers with a common marketing identity, group advertising, purchasing programs, promotional merchandise and access to a pharmacy provider network. At March 31, 1994, approximately 4,500 stores were participating in the Valu-Rite program. Similar programs are available to independent drug stores through other drug wholesalers. McKesson provides similar services to retail drug stores in Canada.
Millbrook Distribution Services -- Millbrook Distribution Services (formerly Service Merchandising) distributes health and beauty care products, general merchandise and specialty foods to supermarkets, drug stores and discount department stores. The distribution services provided often include a review of inventory levels and restocking of retail sales areas for customers.
PCS Health Systems, Inc. -- PCS Health Systems, Inc. ("PCS") provides computer-based prescription drug claims processing and pharmacy benefit design, administration and management services to health plan sponsors, including, insurance companies, third party administrators, self-insured employers, and health maintenance and Blue Cross/Blue Shield organizations that underwrite or administer prescription benefit plans. PCS helps these customers manage the cost of prescription plans by providing drug utilization reviews, clinically-based formularies and generic substitution programs. Clinically-based drug formulary services are provided by McKesson's subsidiary, CPI. PCS also operates an on- line electronic network to transmit medical, hospital, laboratory, clinical and billing information that links health care providers (physicians, hospitals and clinics) with health plan sponsors. RECAP/TM/, PCS's on line prescription claims management system, is linked with over 95% of retail pharmacies in the U.S.
Other -- Through its Sunmark operations, McKesson supplies durable medical equipment to the home health care industry. Through its Central American operation, McKesson manufactures a full line of McKesson branded generic pharmaceuticals that are distributed directly and indirectly to retailers in Central America. Through Zee Medical, Inc., McKesson distributes first-aid products and supplies to industrial and commercial customers.
Competition
In every area of operations, the distribution businesses face strong competition both in price and service from national, regional and local full- line, short-line and specialty wholesalers, service merchandisers, and from manufacturers engaged in direct distribution.
PCS has strong competition from pharmaceutical benefit management companies and from claims processors. For certain accounts, PCS competes with some retail pharmacy chains, mail order programs and organized groups of independent pharmacists.
WATER PRODUCTS
Products & Markets
McKesson Water Products Company is primarily engaged in the processing and sale of bottled drinking water delivered to homes and businesses under its Sparkletts, Alhambra, and Crystal brands. It also sells packaged water through retail stores in California, Arizona, Nevada and Texas and sells and leases processed water dispensers and coolers. In addition, under the Aqua-Vend trademark, it sells processed water through vending machines in California, Arizona, Nevada, Texas, Louisiana and Florida.
Competition
This operation faces significant competition in both price and service in all aspects of its business.
ARMOR ALL
Products & Markets
The Company is engaged through its majority-owned Armor All Products Corporation subsidiary in developing and marketing a line of branded appearance enhancement and protection products primarily for the do-it-yourself automotive aftermarket. Its principal brand, Armor All/R/, has the leading position in the domestic automotive protectant market. A second major brand, Rain Dance/R/, is a strong competitor in the market for automotive waxes, polishes and washes. Armor All's principal product, Armor All/R/ Protectant, is designed to protect and beautify natural and synthetic polymer materials and is used primarily on certain automobile surfaces. Armor All's products are marketed in the U.S. and Canada by its direct sales force and through independent manufacturers' representatives and distributors. International sales are effected through foreign sales offices, foreign distributors and a marketing and distribution alliance with S.C. Johnson. Primary customers include mass merchandiser retailers, auto supply stores, warehouse clubs, hardware stores and other retail outlets. The Company has recently extended its product lines by introducing Armor All/R/ Tire Foam/R/ Protectant, Armor All Quicksilver/TM/ Wheel Cleaner, Armor All/R/ Protectant Low-Gloss Natural Finish, Armor All Spot & Wash/TM/ Concentrate, Armor All/R/ Leather Care Protectant and three car polishes under the Rain Dance name. In January 1994, Armor All acquired the E-Z D/TM/ line of do-it-yourself products for use on home exteriors.
Competition
Armor All Protectant has one principal competitor and several secondary competitors in the domestic protectant market. Armor All Tire Foam Protectant has one principal competitor and several secondary competitors. Armor All brand cleaner competes against many specialty automotive and household cleaner products. Armor All brand wax and wash products and all of the Rain Dance brand products compete with many wash, wax and polish products in the automotive appearance chemical aftermarket. In the domestic home care products market, the E-Z D/TM/ line of do-it-yourself products has two principal and several secondary competitors.
(2) OTHER INFORMATION ABOUT THE BUSINESS
Customers -- Sales to the Company's largest customer, Wal-Mart Stores, Inc., accounted for 10% of consolidated revenues in fiscal 1994. No material part of the business is dependent upon a single or a very few customers, the loss of any one of which would have a material adverse effect on the Company.
Environmental Legislation -- The Company sold its Chemical distribution operations in fiscal 1987. In connection with the disposition of those operations, the Company retained responsibility for certain environmental obligations and has entered into agreements with the Environmental Protection Agency and certain states pursuant to which it is or may be required to conduct environmental assessments and cleanups at several closed sites. These matters are described further in Item 3 below. Other than any capital expenditures which may be required in connection with those matters, the Company does not anticipate making substantial capital expenditures for environmental control facilities or to comply with environmental laws and regulations in the future. The amount of capital expenditures for environmental compliance was not material in fiscal 1994 and is not expected to be material in the next fiscal year.
Employees -- At March 31, 1994, the Company employed approximately 14,500 persons.
(D) FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND EXPORT SALES
Information as to foreign operations is included in Financial Note 4, "Acquisitions and Investments" on pages 22 and 23 and in Financial Note 15, "Segments of Business" on pages 34 and 35 of the Appendix to the Company's 1994 Proxy Statement, which notes are incorporated herein by reference.
ITEM 2.
ITEM 2. PROPERTIES
Because of the nature of the Company's principal businesses, plant and warehousing facilities are operated in widely dispersed locations. The warehouses are typically owned or leased on a long-term basis. The Company considers its operating properties to be in satisfactory condition and adequate to meet its needs for the next several years.
Information as to lease commitments is included in Financial Note 10, "Lease Obligations" on pages 26 and 27 of the Appendix to the Company's 1994 Proxy Statement, which note is incorporated herein by reference.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
In addition to commitments and obligations in the ordinary course of business, the Company is subject to various claims, other pending and possible legal actions for product liability and other damages, investigations relating to governmental laws and regulations, and other matters arising out of the normal conduct of the Company's business.
The Company is a defendant in several civil actions filed in late 1993 and early 1994 by independent pharmacies in the Superior Court for the State of California (County of San Francisco) and in multiple federal district courts. Most of the actions were brought as purported class actions on behalf of all other similarly-situated retail pharmacies, and the Federal actions have since been transferred to the U.S. District Court for the Northern District of Illinois for consolidated proceedings. There are numerous other defendants in these actions including pharmaceutical manufacturers, one pharmaceutical mail order firm, and several other wholesale distributors. These cases allege, in essence, that the defendants have unlawfully conspired together and agreed to fix the prices of brand name pharmaceuticals sold to plaintiffs at artificially high, discriminatory, and non-competitive levels, all in violation of various state and federal antitrust laws. Plaintiffs seek remedies in the form of injunctive relief, unquantified monetary damages (trebled as provided by law), and attorneys fees and costs. The Company believes it has meritorious defenses to the allegations made against it and intends to vigorously defend itself in this litigation.
Primarily as a result of the operation of its former chemical businesses, which were divested in fiscal 1987, the Company is involved in numerous matters pursuant to various environmental laws and regulations. The Company has received various claims and demands from governmental agencies relating to investigative and remedial actions purportedly required to address environmental conditions alleged to exist at six (6) sites where the Company formerly conducted operations; and the Company, by administrative order or otherwise, has agreed to take certain actions at those sites. A seventh site, in Commerce City, Colorado, is the subject of a consent decree entered in fiscal 1991 whereby the site has been fully remediated by the successor of the former site operator and the Company and was removed from the National Priorities List (i.e., Superfund) in fiscal 1993. Another such Superfund site is a closed wood treatment facility formerly operated by Mass Merchandisers, Inc. ("MMI") acquired by the Company in 1985. In fiscal 1993, a consent decree was entered whereby the Company will remediate the site at a cost estimated by the EPA to be approximately $11 million, with an additional estimated contingent cost of approximately $4 million. The Company's escrow dispute with the former MMI shareholders regarding the costs of investigation and cleanup of that site has been settled.
In addition to the foregoing remedial actions, the Company has been asked by current property owners to contribute to the investigation and environmental cleanup of eight (8) properties which the Company formerly owned or leased. The Company has also been designated as a potentially responsible party ("PRP") by the EPA under the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended (the "Superfund" law), for environmental assessment and cleanup costs as the result of the Company's alleged treatment or disposal of hazardous substances at thirty-two (32) Superfund sites. With respect to each of these Superfund sites, numerous other PRPs have similarly been designated and, while the current state of the law potentially imposes joint and several liability upon PRPs, as a practical matter costs of these sites are typically shared with other PRPs. In some cases the Company has partial indemnity agreements with its insurers or an allocation or contribution agreement with other PRPs, and settlements and costs paid by the Company in Superfund matters to date have not been significant.
The potential costs to the Company related to all of these environmental matters are highly uncertain due to such factors as: the unknown magnitude of possible pollution and cleanup costs; the complexity and evolving nature of governmental laws and regulations and their interpretations; the timing,
varying costs and effectiveness of alternative cleanup technologies; the determination of the Company's liability in proportion to other PRPs; and the extent, if any, to which such costs are recoverable from insurance or other parties. The Company has established reserves which it considers to be appropriate for these environmental matters, net of amounts which third parties have agreed to pay in settlement, where the Company believes it is probable the third parties will fulfill their agreements to pay.
Finally, the product liability lawsuits involving the nutrition supplement L-tryptophan, which the Company has previously reported, have continued to be resolved by the manufacturer of the product without any payment by the Company. Only one such lawsuit is currently pending against the Company. Consistent with its existing agreements with the manufacturer and experience to date, the Company continues to believe it is entitled to full indemnification both with respect to the remaining case and any possible future suits involving L- tryptophan. While no assurance can be given, it appears unlikely that the Company will face non-indemnified damages as a result of this litigation.
In view of the inherent difficulty in predicting the outcome of litigation and governmental proceedings, management cannot state what the eventual outcome of such litigation and proceedings will be. Although liabilities associated with the foregoing matters could be substantial, management believes, based on current knowledge, that the outcome of such litigation and proceedings will not have a material adverse effect on the Company's consolidated financial position.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders, through the solicitation of proxies or otherwise, during the three months ended March 31, 1994.
EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth information concerning the executive officers of the Registrant as of June 1, 1994. The number of years of service with the Company includes service with predecessor and acquired companies.
There are no family relationships between any of the executive officers or directors of the Registrant. The executive officers are chosen annually to serve until the first meeting of the Board of Directors following the next annual meeting of stockholders and until their successors are elected and have qualified, or until death, resignation or removal, whichever is sooner.
NAME AGE POSITION WITH REGISTRANT AND BUSINESS EXPERIENCE - -------------------- --- ---------------------------------------------------
Alan Seelenfreund 57 Chairman of the Board and Chief Executive Officer since November 1989 and a Director since July 1988; Executive Vice President from November 1986 to November 1989; and Chief Financial Officer from April 1984 to April 1990. Service with the Company - 19 years.
David E. McDowell 51 President and Chief Operating Officer and a Director since January 1992; Vice President and General Manager, Quality and Chief Information Officer, IBM Corporation from November 1990 to January 1992; President of IBM's National Service Division from July 1987 to August 1990 and Assistant General Manager from January to July 1987. Service with the Company - 2.5 years.
William A. Armstrong 53 Vice President Human Resources and Administration since April 1993; Vice President Administration from July 1991 to April 1993; Executive Assistant to the Office of the Chief Executive from 1990 to April 1992; Staff Vice President, Management Development from 1988 to 1990. Service with the Company - 22 years.
Jon W. d'Alessio 47 Treasurer since January 1992; Staff Vice President and Chief Information Officer from 1990 to November 1991; Staff Vice President, Operations Planning and Information Technology from 1988 to 1990. Service with the Company - 16 years.
Richard H. Hawkins 44 Vice President since April 1993; Controller since April 1990 and Chief Financial Officer of McKesson Drug Company since September 1993; Vice President Finance of the McKesson Distribution Group from February 1991 to April 1993; Assistant Corporate Controller from June 1984 to April 1990. Service with the Company - 10 years.
NAME AGE POSITION WITH REGISTRANT AND BUSINESS EXPERIENCE - -------------------- --- -------------------------------------------------
Robert C. Johnson 58 Vice President, Government Relations since September 1992; Chairman (since April 1990), Chief Executive Officer (from April 1990 until February 1994) and President (from November 1990 until May 1993) of PCS Health Systems, Inc., a wholly-owned subsidiary of the Company. Executive Vice President, California Pharmacists Association from 1969 until 1990. Service with the Company - 4 years.
Marvin L. Krasnansky 64 Vice President Corporate Relations since 1979. Service with the Company - 15 years.
David L. Mahoney 39 Vice President Strategic Planning since July 1990. Principal at McKinsey & Company, Inc. (an international management consulting firm) from 1987 to July 1990. Service with the Company - 4 years.
Ivan D. Meyerson 49 Vice President and General Counsel since January 1987. Service with the Company - 16 years.
Nancy A. Miller 50 Vice President and Corporate Secretary since December 1989; Staff Vice President and Corporate Secretary from November 1986 to December 1989. Service with the Company - 16 years.
Charles A. Norris 49 Vice President since April 1993 and President of McKesson Water Products Company since May 1990. President of Deer Park Water Company (a bottled drinking water firm) from 1981 until May 1990. Service with the Company - 4 years.
Garret A. Scholz 54 Vice President Finance since April 1990; Vice President and Treasurer from November 1984 to April 1990. Service with the Company - 21 years.
James H. Smith 50 Vice President and President of McKesson Drug Company since February 1994. Senior Vice President of Avnet, Inc. (a distributor of electrical and computer components) from 1990 until February 1994; Executive Vice President of the Hamilton Hallmark Division from 1990 until February 1994 and Vice President of the Hamilton Avnet Division from 1986 to 1990. Service with the Company - 4 months.
PART II
ITEM 5.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
(A) MARKET INFORMATION
The principal market on which the Company's common stock is traded is the New York Stock Exchange. High and low prices for the common stock by quarter appear in Financial Note 18, "Quarterly Financial Information" on pages 38 and 39 of the Appendix to the Company's 1994 Proxy Statement, which note is incorporated herein by reference.
(B) HOLDERS
The approximate number of record holders of the Company's common stock as of March 31, 1994 was 18,995.
(C) DIVIDENDS
Dividend information is included in Financial Note 18, "Quarterly Financial Information" on pages 38 and 39 of the Appendix to the Company's 1994 Proxy Statement, which note is incorporated herein by reference.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
Selected financial data is shown on pages 2 to 5 of the Appendix to the Company's 1994 Proxy Statement and is incorporated herein by reference.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management's discussion and analysis of the Company's financial condition and results of operations appears in the Financial Review on pages 6 to 13 of the Appendix to the Company's 1994 Proxy Statement and is incorporated herein by reference.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial Statements and Supplementary Data appear on pages 16 to 39 of the Appendix to the Company's 1994 Proxy Statement and are incorporated herein by reference.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information with respect to Directors of the Company is incorporated by reference from the Company's 1994 Proxy Statement. Certain information relating to Executive Officers of the Company appears at pages 7 and 8 of this Form 10-K Annual Report. The information with respect to this item required by Item 405 of Regulation S-K is incorporated herein by reference from the Company's 1994 Proxy Statement.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
Information with respect to this item is incorporated herein by reference from the Company's 1994 Proxy Statement.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information with respect to this item is incorporated herein by reference from the Company's 1994 Proxy Statement.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information with respect to this item is incorporated by reference from Item 14(a) - Consolidated Supplementary Financial Schedules -- Schedule II -- Amounts Receivable from Related Parties and Underwriters, Promoters, and Employees (other than related parties). Information with respect to certain transactions with management is incorporated by reference from the Company's 1994 Proxy Statement.
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(A) EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
The following consolidated financial statements of the Company and the Independent Auditors' Report are included on pages 15 to 39 of the Appendix to the Company's 1994 Proxy Statement and are incorporated by reference in Item 8:
Independent Auditors' Report
Consolidated Financial Statements Statements of Consolidated Income for the years ended March 31, 1994, 1993 and 1992 Consolidated Balance Sheets, March 31, 1994, 1993 and Statements of Consolidated Stockholders' Equity for the years ended March 31, 1994, 1993 and 1992 Statements of Consolidated Cash Flows for the years ended March 31, 1994, 1993 and 1992 Financial Notes
Financial statements and schedules not included or incorporated by reference herein have been omitted because of the absence of conditions under which they are required or because the required information, where material, is shown in the financial statements, financial notes or supplementary financial information.
Exhibits submitted with this Form 10-K as filed with the SEC and those incorporated by reference to other filings are listed on the Exhibit Index on pages 17 through 19.
(B) REPORTS ON FORM 8-K
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
McKESSON CORPORATION
Date: May 31, 1994 By: /s/Alan Seelenfreund ------------------------------------- Alan Seelenfreund, Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on May 31, 1994 by the following persons on behalf of the Registrant and in the capacities indicated:
/s/Alan Seelenfreund /s/David E. McDowell - -------------------------------------- -------------------------------------- Alan Seelenfreund, Chairman and David E. McDowell, President and Chief Executive Officer and Director Chief Operating Officer and Director
/s/Garret A. Scholz /s/Richard H. Hawkins - -------------------------------------- -------------------------------------- Garret A. Scholz, Richard H. Hawkins, Vice President Finance Vice President and Controller
/s/Tully M. Friedman /s/James R. Harvey - -------------------------------------- -------------------------------------- Tully M. Friedman, Director James R. Harvey, Director
/s/George M. Keller - -------------------------------------- -------------------------------------- George M. Keller, Director Leslie L. Luttgens, Director
/s/John M. Pietruski /s/Jane E. Shaw - -------------------------------------- -------------------------------------- John M. Pietruski, Director Jane E. Shaw, Director
/s/Robert H. Waterman - -------------------------------------- Robert H. Waterman, Jr., Director
INDEPENDENT AUDITORS' REPORT ON SUPPLEMENTARY FINANCIAL SCHEDULES
The Stockholders and Board of Directors of McKesson Corporation:
We have audited the consolidated financial statements of McKesson Corporation and subsidiaries as of March 31, 1994, 1993 and 1992, and for the years then ended and have issued our report thereon dated May 16, 1994 which expresses an unqualified opinion and includes an explanatory paragraph relating to the Corporation's change in its method of accounting for postemployment benefits, postretirement benefits other than pensions and environmental clean-up costs; such consolidated financial statements and report are included in the Appendix to your Proxy Statement for the 1994 annual meeting of stockholders of the Corporation and are incorporated herein by reference. Our audits also included the consolidated supplementary financial schedules of McKesson Corporation, listed in Item 14(a). These consolidated supplementary financial schedules are the responsibility of the Corporation's management. Our responsibility is to express an opinion based on our audits. In our opinion, such consolidated supplementary financial schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly in all material respects the information set forth therein.
/s/ Deloitte & Touche
DELOITTE & TOUCHE San Francisco, California May 16, 1994
SCHEDULE II MCKESSON CORPORATION - CONSOLIDATED AMOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS, PROMOTERS, AND EMPLOYEES (OTHER THAN RELATED PARTIES) FOR THE YEARS ENDED MARCH 31, 1994, 1993 AND 1992 (IN THOUSANDS)
NOTES: 1 Loan is secured by a deed of trust and is interest bearing. 2 Includes a loan secured by a deed of trust that is noninterest bearing so long as the individual remains in the employ of the Company or is under an employment contract. 3 Includes a $450,000 note used by the employee in connection with his purchase of real property. The note is unsecured and non- interest bearing. 4 Loan is secured by a deed of trust and was entered into when the individual was in the employ of the Company. 5 Includes 6.75% interest bearing recourse notes relating to the Company's Stock Purchase Plan due in installments through 2003 and collateralized with common stock of the Registrant. 6 Loan is secured by a deed of trust and is noninterest bearing. 7 Includes a $100,000 secured note with interest equal to McKesson's cost of funds. 8 Noninterest bearing short-term relocation loan. 9 Recourse note relating to the Company's Stock Purchase Plan due in installments through 1992 and collateralized with common stock of the Registrant.
SCHEDULE VIII
MCKESSON CORPORATION - CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED MARCH 31, 1994, 1993 AND 1992 (IN THOUSANDS)
SCHEDULE IX
MCKESSON CORPORATION - CONSOLIDATED SHORT-TERM BORROWINGS FOR THE YEARS ENDED MARCH 31, 1994, 1993 AND 1992 (IN THOUSANDS)
NOTES: 1 Based on average daily balances except for international borrowings which are based on average monthly balances.
EXHIBIT INDEX
EXHIBIT INDEX
EXHIBIT INDEX
* Document has heretofore been filed with the Commission by the Registrant and is incorporated by reference and made a part hereof.
EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS
1. McKesson Corporation Deferred Compensation Administration Plan II, amended as of March 30, 1994 (Exhibit (10)G to the Registrant's Annual Report on Form 10-K for the fiscal year ended March 31, 1994).
2. McKesson Corporation Deferred Compensation Administration Plan, amended as of March 30, 1994 (Exhibit (10)H to the Registrant's Annual Report on Form 10-K for the fiscal year ended March 31, 1994).
3. McKesson Corporation Management Deferred Compensation Plan, amended as of March 30, 1994 (Exhibit (10)I to the Registrant's Annual Report on Form 10-K for the fiscal year ended March 31, 1994).
4. McKesson Corporation 1985 Executives Elective Deferred Compensation Plan, amended as of October 27, 1993 (Exhibit (10)J to the Registrant's Annual Report on Form 10-K for the fiscal year ended March 31, 1994).
5. McKesson Corporation Directors' Deferred Compensation Plan, amended as of October 27, 1993 (Exhibit (10)K to the Registrant's Annual Report on Form 10-K for the fiscal year ended March 31, 1994).
6. McKesson Corporation 1985 Directors Elective Deferred Compensation Plan, amended as of October 27, 1993 (Exhibit (10)L to the Registrant's Annual Report on Form 10-K for the fiscal year ended March 31, 1994).
7. McKesson Corporation Severance Policy for Executive Employees, as adopted September 29, 1993 (Exhibit (10)M to the Registrant's Annual Report on Form 10-K for the fiscal year ended March 31, 1994).
8. Description of McKesson Corporation Retirement Program for Outside Directors, as amended through July 29, 1992 (Exhibit (10)N to the Registrant's Annual Report on Form 10-K for the fiscal year ended March 31, 1993).
9. McKesson Corporation 1973 Stock Purchase Plan, amended effective as of July 31, 1987 (Exhibit (10)D to the Registrant's Form SE dated June 15, 1988).
10. McKesson Corporation Supplemental PSIP, amended as of March 30,1994 (Exhibit (10)P to the Registrant's Annual Report on Form 10-K for the fiscal year ended March 31, 1994).
11. 1981 Long-Term Incentive Plan of McKesson Corporation as amended through March 30, 1994 (Exhibit (10)Q to the Registrant's Annual Report on Form 10-K for the fiscal year ended March 31, 1994).
12. McKesson Corporation 1989 Management Incentive Plan, amended as of March 30,1994 (Exhibit (10)R to the Registrant's Annual Report on Form 10-K for the fiscal year ended March 31, 1994).
13. McKesson Corporation 1988 Restricted Stock Plan as amended through March 30, 1994 (Exhibit (10)S to the Registrant's Annual Report on Form 10-K for the fiscal year ended March 31, 1994).
EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS
14. McKesson Corporation 1978 Stock Option Plan, as amended through July 31, 1991 (Exhibit (19)A to the Registrant's Quarterly Report on Form 10-Q for the quarter ended December 31, 1991).
15. McKesson Corporation 1984 Executive Benefit Retirement Plan, amended as of October 27, 1993 (Exhibit (10)U to the Registrant's Annual Report on Form 10-K for the fiscal year ended March 31, 1994).
16. McKesson Corporation 1988 Executive Survivor Benefits Plan, amended as of October 27, 1993 (Exhibit (10)V to the Registrant's Annual Report on Form 10-K for the fiscal year ended March 31, 1994).
17. Form of Amended Employment Agreement dated as of November 1, 1991 by and between the Registrant and certain designated Executive Officers (Exhibit (19)B to the Registrant's Quarterly Report on Form 10-Q for the quarter ended December 31, 1991).
18. Form of Amended Termination Agreement dated as of February 1, 1994 by and between the Registrant and certain designated Executive Officers (Exhibit (10)X to the Registrant's Annual Report on Form 10-K for the fiscal year ended March 31, 1994).
19. Form of Employment Agreement dated as of January 13, 1992 by and between the Registrant and its President and Chief Operating Officer (Exhibit (19)F to Registrant's Form SE dated June 9, 1992).
20. Form of Employment Agreement dated as of January 15, 1990 by and between the Registrant and its Vice President Government Relations (Exhibit (10)FF to the Registrant's Annual Report on Form 10-K for the fiscal year ended March 31, 1993).
EXHIBIT (11) MCKESSON CORPORATION - CONSOLIDATED COMPUTATION OF EARNINGS PER COMMON SHARE FOR THE FIVE YEARS ENDED MARCH 31 (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
1 Net of certain related tax benefits. 2 1992 fully diluted earnings per share computation excludes the effect of convertible securities which were anti-dilutive. 3 Represents the assumed additional ESOP contribution expense that the Company would have incurred if the Series B ESOP convertible preferred stock had been converted at the beginning of the period presented. 4 Common shares outstanding have been computed by adding the monthly average (beginning of the month plus end of the month divided by 2), dividing the aggregate by 12 and adjusting this total for dilutive stock options using the treasury stock method.
DATA STATED IN MILLIONS
VOLUNTARY SCHEDULE - CERTAIN FINANCIAL INFORMATION