McKesson 2005 Annual Report Download - page 31

McKESSON CORPORATION
FINANCIAL REVIEW (Continued)
Operating expenses included the following significant items:
2005
2004
2003
Other Income and Gain (Loss) on Investments, net:
Other income increased in 2005 primarily due to greater Corporate interest income and increases in equity in earnings of our investments. In
2004, other income increased nominally as increases in Corporate interest income were almost fully offset by decreases in our Pharmaceutical
Solutions segment, which primarily reflected decreases in equity earnings of our investments and gains on sales of investments.
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– a $1.2 billion charge relating to the Securities Litigation as well as incremental legal costs which were included in Corporate expenses, and
– approximately $12 million of settlement charges pertaining to a non-qualified pension plan, which were primarily included in Corporate
expenses.
– a $21.0 million charge for uncollected balances on loans made to former employees for the purchase of McKesson common stock
primarily in February 1999, which were included in Corporate expenses,
– increases in pension expense of $13.9 million primarily for our U.S. defined benefit pension plans. In 2004 and 2003, we reduced the
assumed long-term rate of asset return and the discount rate for our U.S. defined benefit pension plans to better reflect long-term
expectations for the plans’ portfolios and rates for high-quality corporate long-term bonds,
– a $66.4 million credit pertaining to the reversal of a portion of customer settlement reserves in our Provider Technologies segment.
Information regarding this and other restructuring programs is included under the caption “Restructuring Activities,” included in this
Financial Review,
– a net decrease in bad debt expense of $14.1 million; however, bad debt expense varied greatly by operating segment, and
– $14.8 million of gains on the sales of three surplus properties, recorded primarily in Corporate expenses.
– a $22.3 million credit for the reversal of a portion of customer settlement reserves within our Provider Technologies segment.
Years Ended March 31,
(In millions) 2005 2004 2003
Other Income, net $ 68.7 $ 49.4 $ 45.1
Gain (Loss) on Investments, net — (1.2) 1.4
Total $68.7 $ 48.2 $46.5
B
y
Se
g
ment
Pharmaceutical Solutions $24.9 $ 22.5 $31.6
Medical-Surgical Solutions 4.3 3.7 2.3
Provider Technologies 12.7 11.5 17.9
Corporate 26.8 10.5 (5.3)
Total $68.7 $ 48.2 $46.5