<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
(AMENDMENT NO. 2)
Current Report
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
October 19, 1998
- --------------------------------------------------------------------------------
(Date of Report)
October 17, 1998
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(Date of earliest event reported)
McKESSON CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Delaware 1-13252 94-3207296
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
McKesson Plaza
One Post Street
San Francisco, California 94104
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(Address of principal executive offices) (Zip Code)
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Registrant's telephone number, including area code (415) 983-8300
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
- --------------------------------------------------------------------------
The undersigned Registrant hereby amends Item 7(b) Pro Forma Combined
Condensed Consolidated Financial Data of McKesson and HBOC in its Current Report
on Form 8-K/A.
Item 7(b) is hereby amended by deleting it in its entirety and replacing
it with Item 7(b) attached hereto and filed herewith.
The purpose of this amendment is to reclassify certain noncurrent asset
balances in the Pro Forma Combined Condensed Balance Sheet at September 30,
1998. Total asset balances did not change.
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned hereunto duly authorized.
McKESSON CORPORATION
(Registrant)
Dated: November 6, 1998 By /s/ Richard H. Hawkins
--------------------------------
Richard H. Hawkins
Vice President and
Chief Financial Officer
By /s/ Heidi E. Yodowitz
--------------------------------
Heidi E. Yodowitz
Controller
3
<PAGE>
UNAUDITED PRO FORMA COMBINED CONDENSED
CONSOLIDATED FINANCIAL DATA OF
McKESSON AND HBOC
On October 18, 1998, McKesson Corporation ("McKesson") announced an
agreement to acquire HBO & Company ("HBOC"). Terms of the merger call for each
HBOC stockholder to receive .37 of a share of McKesson common stock for each
share of HBOC common stock in a tax-free exchange. The merger is subject to
regulatory approval, McKesson and HBOC stockholder approval and other customary
conditions. HBOC and McKesson intend that the merger will be accounted for as a
pooling of interests and expect that it will close in the first quarter of 1999.
HBOC and Access Health, Inc. ("Access"), a provider of care management
products and services to the healthcare industry through telephonic care
centers, entered into a merger agreement dated September 28, 1998, as amended.
The merger is subject to certain conditions, including the approval by Access
stockholders.
The following financial data present on a combined pro forma basis the
condensed balance sheet of McKesson and the pro forma combined condensed balance
sheet of HBOC and Access and the condensed statements of income of McKesson and
the pro forma combined condensed statements of income of HBOC and Access. The
pro forma financial data do not reflect any cost savings or other synergies
anticipated by McKesson or HBOC management as a result of the merger. Also in
connection with the merger, the companies expect to incur charges for merger-
related costs which will be expensed in the period in which the merger is
consummated. Management has not estimated the amount of such merger-related
costs and the pro forma financial data do not reflect any such costs. The
companies may have performed differently if they had always been combined. You
should not rely on the pro forma information as being indicative of the
historical results the combined companies would have had or the results that
they will experience in the future.
McKesson's fiscal year ends on March 31. HBOC's fiscal year ends on December
31. For purposes of combining HBOC's financial data with McKesson's historical
financial data, the financial information of HBOC has been reported on a
combined pro forma basis with Access using the twelve-month periods ended March
31, 1998, 1997 and 1996 and the six-month period ended September 30, 1998. In
addition, the financial information of HBOC has been reported assuming the
merger between HBOC and Access is consummated.
The unaudited pro forma combined condensed consolidated
financial data should be read in conjunction with the historical financial
statements of McKesson and HBOC.
4
<PAGE>
PRO FORMA COMBINED CONDENSED BALANCE SHEET
AT SEPTEMBER 30, 1998
(in millions)
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
MCKESSON HBOC(1) COMBINED
----------- ----------- -----------
ASSETS
<S> <C> <C> <C>
Current Assets:
Cash and Cash Equivalents................................................... $ 103.5 $ 602.6 $ 706.1
Marketable Securities Available for Sale.................................... 28.1 36.3 64.4
Receivables................................................................. 1,948.7 537.3 2,486.0
Inventories................................................................. 3,207.2 5.7 3,212.9
Prepaid Expenses............................................................ 42.2 70.3 112.5
----------- ----------- -----------
Total Current Assets...................................................... 5,329.7 1,252.2 6,581.9
Property, Plant and Equipment, net............................................ 479.8 138.8 618.6
Capitalized Software(2)....................................................... 4.7(3) 83.2 87.9
Goodwill and Other Intangibles................................................ 828.2 160.4 988.6
Other Assets.................................................................. 374.5(3) 47.7 422.2
----------- ----------- -----------
TOTAL ASSETS.............................................................. $ 7,016.9 $ 1,682.3 $ 8,699.2
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Drafts and Accounts Payable................................................. $ 2,848.4 $ 108.4 $ 2,956.8
Short-term Loans and Current Portion of Long-Term Debt...................... 484.9 1.2 486.1
Other Current Liabilities................................................... 475.4 277.0 752.4
----------- ----------- -----------
Total Current Liabilities................................................. 3,808.7 386.6 4,195.3
Postretirement Obligations and Other Noncurrent Liabilities................... 240.4 7.7 248.1
Long-Term Debt................................................................ 1,141.5 0.9 1,142.4
McKesson-obligated mandatorily redeemable convertible preferred securities
of subsidiary grantor trust whose sole assets are junior subordinated
debentures of McKesson....................................................... 195.5 -- 195.5
Stockholders' Equity.......................................................... 1,630.8 1,287.1 2,917.9
----------- ----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY................................ $ 7,016.9 $ 1,682.3 $ 8,699.2
=========== =========== ===========
</TABLE>
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(1) HBOC amounts are reported on a pro forma combined basis with Access, and
have been reclassified from the historical HBOC presentation to conform to
the McKesson financial statement presentation.
(2) Capitalized software represents costs to develop software for sale to
customers.
(3) McKesson amounts have been reclassified from the historical McKesson
presentation to conform to the HBOC financial statement presentation.
5
<PAGE>
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1998
(in millions, except per share amounts)
<TABLE>
<CAPTION>
PRO FORMA
------------------------
HISTORICAL
MCKESSON HBOC(1) ADJUSTMENTS COMBINED
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues......................................................... $12,812.4 $ 863.6 $ $13,676.0
Cost and Expenses:
Cost of Sales and Operations..................................... 11,981.4(2) 352.3 12,333.7
Selling, Marketing, Distribution and Administration.............. 684.1(2) 172.7 856.8
Research and Development......................................... -- 55.4 55.4
Nonrecurring Charge.............................................. -- 6.0(3) 6.0
Interest......................................................... 57.4 -- 57.4
----------- ----------- ----------- -----------
Total Cost and Expenses.................................... 12,722.9 586.4 -- 13,309.3
----------- ----------- ----------- -----------
Income before Income Taxes and Dividends on Convertible Preferred
Securities of Subsidiary Trust................................. 89.5(2) 277.2 366.7
Income Taxes..................................................... (34.9) (110.6) (145.5)
Dividends on Convertible Preferred Securities of Subsidiary
Trust, net of tax benefit...................................... (3.1) -- (3.1)
----------- ----------- ----------- -----------
Net Income............................................... $ 51.5 $ 166.6 $ -- $ 218.1
=========== =========== =========== ===========
Earnings Per Common Share:
Diluted.......................................................... $ 0.51 $ 0.35 $ 0.78
Basic............................................................ $ 0.54 $ 0.36 $ 0.82
Shares on which Earnings Per Common Share were based:
Diluted.......................................................... 106.2 477.7 (301.0)(4) 282.9
Basic............................................................ 95.6 463.4 (292.0)(4) 267.0
</TABLE>
------------------------
(1) HBOC amounts are reported on a pro forma combined basis with Access, and
have been reclassified from the historical HBOC presentation to conform to
the McKesson financial statement presentation.
(2) Includes $80.1 million in charges ($0.7 million in Cost of Sales and
Operations and $79.4 million in Selling, Marketing, Distribution and
Administration) for transaction costs, employee benefit change of control
provisions and restructuring, integration and system installation costs
associated primarily with acquisition-related activities, $52.3 million
after-tax.
(3) Includes acquisition charges related to HBOC's acquisition of HPR, Inc. and
Access' acquisition of InterQual, Inc., $3.8 million after-tax.
(4) Reflects the effect of the exchange ratio of 0.37 of a share of McKesson
common stock for each share of HBOC common stock.
6
<PAGE>
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED MARCH 31, 1998
(in millions, except per share amounts)
<TABLE>
<CAPTION>
PRO FORMA
-----------------------
HISTORICAL
MCKESSON HBOC(1) ADJUSTMENTS COMBINED
---------- --------- ----------- ----------
<S> <C> <C> <C> <C>
Revenues....................................................... $ 20,857.3 $ 1,438.6 $ $ 22,295.9
Cost and Expenses:
Cost of Sales and Operations................................. 19,336.0 610.2 19,946.2
Selling, Marketing, Distribution and Administration.......... 1,159.1(2) 314.9 1,474.0
Research and Development..................................... -- 100.6 100.6
Nonrecurring Charge.......................................... -- 107.9(4) 107.9
Interest..................................................... 102.5 -- 102.5
---------- --------- ----------- ----------
Total Cost and Expenses.................................. 20,597.6 1,133.6 -- 21,731.2
---------- --------- ----------- ----------
Income before Income Taxes and Dividends on Convertible
Preferred Securities of Subsidiary Trust..................... 259.7 (2) 305.0 564.7
Income Taxes................................................... (98.6)(3) (118.2) (216.8)
Dividends on Convertible Preferred Securities of Subsidiary
Trust, net of tax benefit.................................... (6.2) (6.2)
---------- --------- ----------- ----------
Net Income............................................... $ 154.9 $ 186.8 $ -- $ 341.7
========== ========= =========== ==========
Earnings Per Common Share:
Diluted...................................................... $ 1.59 $ 0.40 $ 1.27
Basic........................................................ $ 1.69 $ 0.41 $ 1.32
Shares on which Earnings Per Common Share were based:
Diluted...................................................... 101.2 469.2 (295.6)(5) 274.8
Basic........................................................ 91.5 452.5 (285.1)(5) 258.9
</TABLE>
------------------------
(1) HBOC amounts are reported on a pro forma combined basis with Access, and
have been reclassified from the historical HBOC presentation to conform to
the McKesson financial statement presentation.
(2) Includes $16.7 million in charges for the terminated merger with AmeriSource
Health Corporation and $13.9 million in costs associated primarily with the
integration and rationalization of recent acquisitions, $25.4 million
after-tax in the aggregate.
(3) Includes a non-recurring $4.6 million favorable tax adjustment.
(4) Includes acquisition charges related to HBOC's acquisitions of AMISYS
Managed Care Systems, Inc., Enterprise Systems, Inc., HPR, Inc. and National
Health Enhancement Systems, Inc. and the merger of Access Health, Inc. and
Informed Access Systems Inc., $61.4 million after-tax.
(5) Reflects the effect of the exchange ratio of 0.37 of a share of McKesson
common stock for each share of HBOC common stock.
7
<PAGE>
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED MARCH 31, 1997
(in millions, except per share amounts)
<TABLE>
<CAPTION>
PRO FORMA
-----------------------
HISTORICAL
MCKESSON HBOC(1) ADJUSTMENTS COMBINED
---------- --------- ----------- ----------
<S> <C> <C> <C> <C>
Revenues....................................................... $ 15,710.8 $ 1,123.9 $ $ 16,834.7
Cost and Expenses:
Cost of Sales and Operations................................... 14,673.5 487.3 15,160.8
Selling, Marketing, Distribution and Administration............ 944.5(2) 290.9 1,235.4
Research and Development....................................... -- 97.5 97.5
Nonrecurring Charge............................................ -- 83.5(3) 83.5
Interest....................................................... 55.7 -- 55.7
---------- --------- ----------- ----------
Total Cost and Expenses.................................. 15,673.7 959.2 -- 16,632.9
---------- --------- ----------- ----------
Income before Income Taxes and Dividends on Convertible
Preferred Securities of Subsidiary Trust..................... 37.1(2) 164.7 201.8
Income Taxes................................................... (31.3) (67.5) (98.8)
Dividends on Convertible Preferred Securities of Subsidiary
Trust, net of tax benefit.................................... (0.7) -- (0.7)
---------- --------- ----------- ----------
Income after Taxes:
Continuing Operations.......................................... 5.1(2) 97.2 -- 102.3
Discontinued Operations........................................ 8.6 -- 8.6
Discontinued Operations--Gain on Sale of Armor All Stock....... 120.2 -- 120.2
---------- --------- ----------- ----------
Net Income............................................... $ 133.9 $ 97.2 $ -- $ 231.1
========== ========= =========== ==========
Earnings Per Common Share:
Diluted:
Continuing Operations.......................................... $ 0.06 $ 0.21 $ 0.40
Discontinued Operations........................................ 0.10 -- 0.03
Discontinued Operations--Gain on Sale of Armor All Stock....... 1.35 -- 0.46
---------- --------- ----------
Total.................................................... $ 1.51 $ 0.21 $ 0.89
========== ========= =========== ==========
Basic:
Continuing Operations.......................................... $ 0.06 $ 0.22 $ 0.42
Discontinued Operations........................................ 0.10 -- 0.03
Discontinued Operations--Gain on Sale of Armor All Stock....... 1.41 -- 0.49
---------- --------- ----------
Total.................................................... $ 1.57 $ 0.22 $ 0.94
========== ========= =========== ==========
Shares on which Earnings Per Common Share were based:
Diluted........................................................ 89.4 458.5 (288.9)(4) 259.0
Basic.......................................................... 85.5 434.7 (273.8)(4) 246.4
</TABLE>
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<PAGE>
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED MARCH 31, 1997 (CONTINUED)
- ------------------------
(1) HBOC amounts are reported on a pro forma combined basis with Access, and
have been reclassified from the historical HBOC presentation to conform to
the McKesson financial statement presentation.
(2) Includes $98.8 million in charges for restructuring, asset impairment and
other operating items and $48.2 million for the write-off of in-process
technology related to the acquisition of McKesson Automated Healthcare Inc.,
$109.5 million after-tax in the aggregate.
(3) Includes acquisition charges related to HBOC's acquisitions of CyCare
Systems, Inc., Management Software, Inc. and GMIS, Inc. and the merger of
Access Health, Inc. and Informed Access System Inc., $50.2 million
after-tax.
(4) Reflects the effect of the exchange ratio of 0.37 of a share of McKesson
common stock for each share of HBOC common stock.
9
<PAGE>
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED MARCH 31, 1996
(in millions, except per share amounts)
<TABLE>
<CAPTION>
PRO FORMA
-------------------------
HISTORICAL
MCKESSON HBOC(1) ADJUSTMENTS COMBINED
---------- ----------- ------------- ----------
<S> <C> <C> <C> <C>
Revenues....................................................... $ 12,964.8 $ 835.9 $ $ 13,800.7
Cost and Expenses:
Cost of Sales and Operations................................... 12,049.3 384.5 12,433.8
Selling, Marketing, Distribution and Administration............ 674.2 239.5 913.7
Research and Development....................................... -- 78.1 78.1
Nonrecurring Charge............................................ -- 136.5(2) 136.5
Interest....................................................... 44.4 -- 44.4
---------- ----------- ------ ----------
Total Cost and Expenses.................................. 12,767.9 838.6 -- 13,606.5
---------- ----------- ------ ----------
Income (Loss) Before Income Taxes.............................. 196.9 (2.7) 194.2
Income Taxes................................................... (76.2) 0.6 (75.6)
---------- ----------- ------ ----------
Income (Loss) After Taxes:
Continuing Operations.......................................... 120.7 (2.1) 118.6
Discontinued Operations........................................ 14.7 14.7
---------- ----------- ------ ----------
Net Income (Loss)........................................ $ 135.4 $ (2.1) $ -- $ 133.3
========== =========== ====== ==========
Earnings (Loss) Per Common Share:
Diluted:
Continuing Operations.......................................... $ 1.29 $ (0.01) $ 0.48
Discontinued Operations........................................ 0.16 -- 0.06
---------- ----------- ----------
Total.................................................... $ 1.45 $ (0.01) $ 0.54
========== =========== ==========
Basic:
Continuing Operations.......................................... $ 1.36 $ (0.01) $ 0.51
Discontinued Operations........................................ 0.17 -- 0.06
---------- ----------- ----------
Total.................................................... $ 1.53 $ (0.01) $ 0.57
========== =========== ==========
Shares on which Earnings (Loss) Per Common Share were based:
Diluted........................................................ 93.2 394.7 (238.7)(3) 249.2
Basic.......................................................... 88.8 394.7 (248.7)(3) 234.8
</TABLE>
------------------------
(1) HBOC amounts are reported on a pro forma combined basis with Access, and
have been reclassified from the historical HBOC presentation to conform to
the McKesson financial statement presentation.
(2) Includes acquisition charges related to HBOC's acquisitions of First Data
Health Systems Corporation and CliniCom Incorporated, $81.9 million
after-tax.
(3) Reflects the effect of the exchange ratio of 0.37 of a share of McKesson
common stock for each share of HBOC common stock.
10
