<PAGE>
Form 10-K/A
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the fiscal year ended March 31, 1999
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File Number 1-13252
McKESSON HBOC, INC.
A Delaware Corporation
I.R.S. Employer Identification Number
94-3207296
McKesson Plaza
One Post Street
San Francisco, California 94104
Telephone - Area Code (415) 983-8300
McKesson HBOC, Inc. hereby amends the following exhibits of its Annual
Report for the fiscal year ended March 31, 1999 on Form 10-K as set forth in the
pages attached hereto:
(1) Exhibit 99.4 Annual Report on Form 11-K for the McKesson HBOC, Inc. Profit
Sharing Investment Plan for the plan year ended March 31, 1999.
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, thereunto duly authorized on the 12th day of October, 1999.
McKESSON HBOC, INC.
By /s/ Ivan D. Meyerson
---------------------
Ivan D. Meyerson
Senior Vice President, General Counsel
and Secretary
October 12, 1999
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
2.1 Agreement and Plan of Merger, dated as of October 17, 1998, by and
among McKesson Corporation ("McKesson"), McKesson Merger Sub, Inc.
("Merger Sub") and HBO & Company ("HBOC") (Exhibit 2.1 (1)).
2.2 Amendment Agreement to Agreement and Plan of Merger, dated as of
November 9, 1998, by and among McKesson, Merger Sub and HBOC (Exhibit
2.2 (1)).
2.3 Second Amendment Agreement to that certain Agreement and Plan of
Merger dated October 17, 1998, as amended by an Amendment Agreement
dated as of November 9, 1998 (Exhibit 2.1 (2)).
3.1 Restated Certificate of Incorporation of the Company as filed with the
office of the Delaware Secretary of State on July 30, 1998 (Exhibit
3.2 (3)).
3.2 Certificate of Amendment to the Restated Certificate of Incorporation
of Registrant as filed with the office of the Delaware Secretary of
State on January 12, 1999 (Exhibit 4.3 (4)).
3.3 Restated By-Laws of the Company, as amended through April 26, 1999.
3.4 Amendment to Restated By-Laws of the Company dated April 26, 1999.
4.1 Rights Agreement dated as of October 21, 1994 between McKesson and
First Chicago Trust Company of New York, as Rights Agent (the "Rights
Agreement") (Exhibit 4.1 (5)).
4.2 Amendment No. 1 to the Rights Agreement dated October 19, 1998
(Exhibit 99.1 (6)).
4.3 Indenture, dated as of March 11, 1997, by and between McKesson, as
Issuer, and The First National Bank of Chicago, as Trustee (Exhibit
4.4 (7)).
4.4 Amended and Restated Declaration of Trust of McKesson Financing Trust,
dated as of February 20, 1997, among McKesson, as Sponsor, The First
National Bank of Chicago, as Institutional Trustee, First Chicago
Delaware, Inc., as Delaware Trustee and William A. Armstrong, Ivan D.
Meyerson and Nancy A. Miller, as Regular Trustees (Exhibit 4.2 (8)).
4.5 McKesson Corporation Preferred Securities Guarantee Agreement, dated
as of February 20, 1997, between McKesson, as Guarantor, and The First
National Bank of Chicago, as Preferred Guarantor (Exhibit 4.7 (9)).
4.6 Registrant agrees to furnish to the Commission upon request a copy of
each instrument defining the rights of security holders with respect
to issues of long-term debt of the Registrant, the authorized
principal amount of which does not exceed 10% of the total assets of
the Registrant.
10.1* Form of Employment Agreement, dated as of March 31, 1999, by and
between the Company and certain designated Executive Officers.
10.2* Employment Agreement, dated as of March 31, 1999, by and between the
Company and a former Executive Vice President who was also the
President and Chief Executive Officer of the Company's Information
Technology Business.
10.3* Amended and Restated Employment Agreement, dated March 26, 1999, by
and between the Company and its former President and Chief Executive
Officer.
10.4* Form of Termination Agreement by and between the Company and certain
designated Corporate Officers (Exhibit 10.23 (10)).
10.5* McKesson HBOC, Inc. 1994 Stock Option and Restricted Stock Plan (as
amended through January 27, 1999).
10.6* McKesson HBOC, Inc. 1997 Non-Employee Directors' Equity Compensation
and Deferral Plan, as amended through January 27, 1999.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
10.7* McKesson HBOC, Inc. Supplemental PSIP.
10.8* McKesson HBOC, Inc. Deferred Compensation Administration Plan amended
as of January 27, 1999.
10.9* McKesson HBOC, Inc. Deferred Compensation Administration Plan II, as
amended effective January 27, 1999.
10.10* McKesson HBOC, Inc. 1994 Option Gain Deferral Plan, as amended
effective January 27, 1999.
10.11* McKesson HBOC, Inc. Directors' Deferred Compensation Plan, as amended
effective January 27, 1999.
10.12* McKesson HBOC, Inc. 1985 Executives' Elective Deferred Compensation
Plan, amended as of January 27, 1999.
10.13* McKesson HBOC, Inc. Management Deferred Compensation Plan, amended as
of January 27, 1999.
10.14* McKesson HBOC, Inc. 1984 Executive Benefit Retirement Plan, as amended
through January 27, 1999.
10.15* McKesson HBOC, Inc. 1988 Executive Survivor Benefits Plan, as amended
effective January 27, 1999.
10.16* McKesson HBOC, Inc. Executive Medical Plan Summary.
10.17* McKesson HBOC, Inc. Severance Policy for Executive Employees (as
amended through January 27, 1999).
10.18* McKesson HBOC, Inc. 1989 Management Incentive Plan, as amended through
January 27, 1999.
10.19* McKesson HBOC, Inc. Long-Term Incentive Plan, as amended through
January 27, 1999.
10.20* McKesson HBOC, Inc. Stock Purchase Plan, as amended through January
27, 1999.
10.21* McKesson HBOC, Inc. 1999 Executive Stock Purchase Plan (Exhibit 99.1
(11)).
10.22* Form of Consulting Agreement, dated as of March 28, 1997, by and
between McKesson and its former Chairman and retired Chief Executive
Officer (Exhibit 10.32 (7)).
10.23* Amendment No. 1 to Consulting Agreement, entered into as of March 25,
1998, by and between McKesson and its Chairman and retired Chief
Executive Officer (Exhibit 10.1(3)).
10.24* HBO & Company 1990 Executive Incentive Plan (Exhibit 4 (12) and
Exhibit 4(a) (12)).
10.25* HBO & Company 1993 Stock Option Plan for Nonemployee Directors
(Exhibit 4 (13)).
10.26* HBO & Company Omnibus Stock Incentive Plan (Exhibit 4 (14)).
10.27* McKesson HBOC, Inc. 1998 Employee Stock Purchase Plan (as amended and
restated effective January 12, 1999 (Exhibit 99.25 (4)).
10.28* Statement of Terms and Conditions Applicable to Certain Stock Options
Granted on January 27, 1999.
10.29 Credit Agreement dated as of November 10, 1998 among McKesson, Medis
Health and Pharmaceutical Services Inc., an Ontario corporation and
indirect wholly owned subsidiary of McKesson, Bank of America National
Trust and Savings Association, as Agent, Bank of America Canada, as
Canadian Administrative Agent, The Chase Manhattan Bank, as
documentation agent, First Union National Bank, as documentation
agent, The First National Bank of Chicago, as documentation agent, and
the other financial institutions party thereto.
10.30 Stock Option Agreement, dated October 17, 1998, between McKesson and
HBOC (Exhibit 99.1 (1)).
10.31 Stock Option Agreement, dated October 17, 1998, between HBOC and
McKesson (Exhibit 99.2 (1)).
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
21 List of Subsidiaries of the Company.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Arthur Andersen LLP.
24 Power of Attorney.
27.1 Financial Data Schedule.
27.2 Financial Data Schedule.
27.3 Financial Data Schedule.
99.1 Registration Rights Agreement dated as of June 22, 1998 by McKesson
and the other undersigned parties thereto (Exhibit 10.1(15)).
99.2 Registration Rights Agreement dated as of August 27, 1998, by McKesson
and the other undersigned parties thereto.
99.3 Annual Report on Form 11-K for HBO & Company Profit-Sharing and
Savings Plan.
99.4 Annual Report on Form 11-K for the McKesson HBOC, Inc. Profit Sharing
Investment Plan for the plan year ended March 31, 1999.
Exhibit 99.4
Form 10-K for 1999
File No. 1-13252
</TABLE>
- --------
Footnotes to Exhibit Index:
* Denotes management contract or compensatory plan, contract or arrangement.
(1) Incorporated by reference to designated exhibit to Amendment No. 1 to
McKesson's Form S-4 Registration Statement No. 333-67299 filed on
November 27, 1998.
(2) Incorporated by reference to designated exhibit to the Company's Current
Report on Form 8-K dated January 14, 1999.
(3) Incorporated by reference to designated exhibit to McKesson's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1998.
(4) Incorporated by reference to designated exhibit to the Company's Form S-8
Registration Statement No. 333-70501 filed on January 12, 1999.
(5) Incorporated by reference to designated exhibit to Amendment No. 3 to
McKesson's Registration Statement on Form 10 filed on October 27, 1994.
(6) Incorporated by reference to designated exhibit to McKesson's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1998.
(7) Incorporated by reference to designated exhibit to McKesson's Annual
Report on Form 10-K for the fiscal year ended March 31, 1997.
(8) Incorporated by reference to designated exhibit to Amendment No. 1 to
McKesson's Form S-3 Registration Statement No. 333-26433 filed on June
18, 1997.
(9) Incorporated by reference to designated exhibit to McKesson's Form S-3
Registration Statement No. 333-26433 filed on May 2, 1997.
(10) Incorporated by reference to designate exhibit to McKesson's Annual
Report on Form 10-K for the fiscal year ended March 31, 1995.
(11) Incorporated by reference to designated exhibit to the Company's Form S-8
Registration Statement No. 333-71917 filed on February 5, 1999.
(12) Incorporated by reference to designated exhibits to HBOC's Form S-8
Registration Statement No. 33-82962 filed on August 1, 1994 and its Form
S-8 Registration Statement No. 333-05759 filed on June 12, 1996.
(13) Incorporated by reference to designated exhibit to HBOC's Form S-8
Registration Statement No. 33-67300 filed on August 12, 1993.
(14) Incorporated by reference to designated exhibit to HBOC's Form S-8
Registration Statement No. 333-26885 filed on May 12, 1997.
(15) Incorporated by reference to designated exhibit to McKesson's Form S-3
Registration Statement No. 333-66359 filed on October 30, 1998.
4
<PAGE>
EXHIBIT 99.4
File No. 001-13252
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the plan year ended March 31, 1999
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ____ to ____
A. Full title of the plan and address of the plan, if different
from that of the issuer named below:
McKesson HBOC, Inc. Profit Sharing
Investment Plan, formerly
the HBO & Company Profit Sharing and
Savings Plan
B. Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office:
McKesson HBOC, Inc.
McKesson Plaza
One Post Street
San Francisco, CA 94104
(415) 983-8300
<PAGE>
HBO & COMPANY
PROFIT SHARING AND SAVINGS PLAN
Financial Statements with Supplementary Schedules
March 31, 1999 and December 31, 1998
<PAGE>
Independent Auditors' Report
----------------------------
Administrative Committee
HBO & Company Profit Sharing and Savings Plan
We have audited the accompanying statement of net assets available for benefits
of HBO & Company Profit Sharing and Savings Plan as of March 31, 1999, and the
related statement of changes in net assets available for benefits for the three
months then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audit. The statement of net assets available
for benefits as of December 31, 1998 was audited by Snyder, Camp, Stewart & Co.,
LLP, who merged with Crisp Hughes Evans LLP in June 1999, and whose report
dated June 7, 1999 expressed an unqualified opinion on those statements.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of HBO & Company
Profit Sharing and Savings Plan as of March 31, 1999, and the changes in net
assets available for benefits for the three months then ended, in conformity
with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules are presented
for the purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Securities and Exchange Commission and the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedules have been subjected to the
auditing procedures applied in our audit of the basic financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
Atlanta, Georgia
October 8, 1999
<PAGE>
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
Statements of Net Assets Available for Benefits
March 31, 1999 and December 31, 1998
March 31, December 31,
1999 1998
------------ ------------
Assets:
Investments, at fair value:
HBO & Company Common Stock Fund $ - $ 87,974,789
McKesson HBOC, Inc. Common Stock Fund 73,157,676 -
Fidelity Magellan Fund 53,687,858 47,569,294
Fidelity Growth and Income Fund 53,756,909 49,911,771
Fidelity Retirement Money Market Fund 10,379,420 9,838,027
Fidelity Asset Manager Fund 7,344,403 7,078,608
Fidelity Managed Income Fund 3,099,562 2,917,735
Fidelity Intermediate Bond Fund 4,038,081 3,781,383
Fidelity International Growth and Income Fund 2,668,437 2,778,598
Fidelity Blue Chip Growth Fund 22,898,342 19,543,406
Fidelity Equity Income II Fund 12,793,647 11,525,386
Janus Balanced Fund 2,119,500 936,587
Templeton Foreign A Fund 1,196,080 835,527
------------ ------------
Total investments 247,139,915 244,691,111
Contributions receivable from employer 1,652,030 562,078
Contributions receivable from participants 2,303,798 1,276,770
Loans receivable from participants 3,167,430 3,066,897
Accrued investment income 67,762 61,332
------------ ------------
Total assets 254,330,935 249,658,188
Liabilities - -
------------ ------------
Net assets available for benefits $254,330,935 $249,658,188
============ ============
See accompanying notes to financial statements.
<PAGE>
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
Statement of Changes in Net Assets Available for Benefits
For the Three Months Ended March 31, 1999
Additions to net assets attributed to:
Investment income $ 562,336
Unrealized depreciation in fair value
of investments (9,500,069)
Realized gain on sale of investments 2,641,331
------------
Net decrease from investment activities (6,296,402)
Contributions:
Employer 3,205,294
Participants 11,593,734
Interest income on loans to participants 61,816
------------
Total additions 8,564,442
Deductions from net assets attributed to:
Benefits paid directly to participants (3,887,720)
Administrative fees (3,975)
------------
Net increase 4,672,747
Net assets available for benefits:
Beginning of period 249,658,188
------------
End of period $254,330,935
============
See accompanying notes to financial statements.
<PAGE>
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
March 31, 1999 and December 31, 1998
(1) Description of Plan
-------------------
The following description of HBO & Company Profit Sharing and Savings Plan
(the "Plan") provides only general information. The Plan document should be
referred to for a more complete description of the Plan's provisions.
The Plan is a defined contribution plan which covers all employees of HBO &
Company and HBO & Company of Georgia (jointly referred to herein as the
"Company") who have completed six months of service (12 months for pre-1995
plan years) and have attained age 21 as of a Plan entry date. The Plan's
entry dates are January 1, April 1, July 1, and October 1.
Each eligible employee can elect to defer a percentage of pretax
compensation, as defined, of from one to a maximum of fifteen percent and
may contribute such amounts to the Plan. Such deferral elections must be
made in whole percentages. If necessary, the salary deferral contributions
allowed by a participant will be reduced by the Plan's Administrative
Committee so that such contributions do not cause the Plan to be
discriminatory or exceed the limitations of the Internal Revenue Code.
The Company may also contribute to the Plan at the election of the Board of
Directors through matching contributions and/or discretionary
contributions. Each participant's share of Company discretionary
contributions is related to the participant's compensation, as defined.
Company contributions may not exceed the maximum allowable as a deduction
as defined by the Internal Revenue Code. During 1999, the Company
contributed $.75 for each $1 contributed by employees; however, this
Company matching contribution was only applicable for employee
contributions of up to 4% of pretax compensation. No Company discretionary
contributions were authorized for the three months ended March 31, 1999.
Participants are 100% vested in their pretax compensation contributions and
earnings thereon at all times. Company matching and discretionary
contributions credited to a participant's account and earnings thereon vest
on a graded basis. A participant becomes 20% vested in his/her Company
account after one year of service and an additional 20% becomes vested in
each of the following four years until a participant fully vests after five
years of service (effective January 1, 1995). Prior to January 1, 1995, a
participant became 20% vested in his/her Company account after three years
of service and an additional 20% vested in each of the following four years
until a participant fully vests after seven years of service. Further, a
participant is automatically 100% vested without regard to years of service
in the event of termination due to death, disability, or attainment of age
65. Allocation of Plan earnings/losses is based on a participant's account
balance in the respective fund.
Forfeitures of terminated participants' nonvested accounts are allocated
among the remaining Plan participants at the end of the Plan year as if the
forfeitures are additional matching contributions, as designated by the
Administrative Committee. At March 31, 1999, forfeited nonvested accounts
amounted to $1,501,878. These accounts may be used to reduce future
employer contributions.
Participants have the option to direct the investment of their accounts
among eleven investment funds: the Fidelity Retirement Money Market Fund,
the Fidelity Managed Income Fund, the Fidelity Intermediate Bond Fund, the
Fidelity Growth and Income Fund, the Fidelity Magellan Fund, the Fidelity
Asset Manager Fund, the Fidelity Blue Chip Growth Fund, the Fidelity Equity
Income II Fund , the Janus Balanced Fund, the Templeton Foreign A Fund, and
the McKesson HBOC, Inc. Common Stock Fund. On July 1, 1998 contributions to
the Fidelity International Growth and Income Fund were discontinued.
<PAGE>
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
March 31, 1999 and December 31, 1998
(1) Description of Plan, Continued
------------------------------
Participants may borrow from their fund accounts a minimum of $1,000 up to
a maximum equal to the lesser of $50,000 or 50% of their vested account
balance. Loan terms range up to 5 years, except that loan terms for the
purchase of a primary residence are at the discretion of the Administrative
Committee. The loans are secured by the balance in the participant's
account and bear interest at a rate determined by the Administrative
Committee. Principal and interest is paid ratably through monthly payroll
deductions.
Upon termination, participants under age 65 with account balances totaling
more than $5,000 may elect to (1) delay the distribution of accounts or (2)
receive vested benefits generally in a lump sum distribution. The full
value of benefits (regardless of amount) are payable upon normal or
postponed retirement or to beneficiaries upon death of the participant.
Participants with balances totaling less than $5,000 or on total or
permanent disability receive a lump sum distribution of vested benefits.
Under a provision of the Plan, the Company, through actions of its Board of
Directors, reserves the right to terminate the Plan. If the Plan is
terminated, each participant becomes fully vested as of the termination
date.
(2) Summary of Significant Accounting Policies
------------------------------------------
The accounting records of the Plan are maintained on the accrual basis.
Common stock and investment funds held for investment by the Plan are
stated at quoted market values from independent published sources. Loans
receivable from participants are stated at cost which approximates fair
value.
The change in the difference between current value and the cost of the
investments is reflected in the statement of changes in net assets
available for benefits as unrealized appreciation (depreciation) in fair
value of investments.
Realized gain (loss) on sale of investments is the difference between the
proceeds received and the average cost of investments sold.
Benefits are recorded when paid.
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Plan administrator to make
estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results may differ from those estimates.
(3) Administration
--------------
The Company's Employee Benefits Administrative Committee (the
"Administrative Committee") is the Plan administrator. Fidelity Management
Trust Company is the Trustee, with custodial responsibility for the Plan's
assets. The Plan is liable for all administrative expenses not paid by the
Company. At the direction of the Administrative Committee, the Plan's
administrative expenses for the three months ended March 31, 1999, except
for certain investment fees, were paid by the Company.
(4) Income Tax Status
-----------------
The Plan is intended to be qualified under the Internal Revenue Code (the
"IRC"). A favorable ruling was obtained from the IRS as to the tax-exempt
status of the Plan in May 1997.
<PAGE>
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
March 31, 1999 and December 31, 1998
(5) Transactions with Parties-In-Interest
-------------------------------------
During the three months ended March 31, 1999, the Plan purchased 19,516
shares of the Common Stock of HBO & Company, the Plan Sponsor, for
$610,675, and sold 25,019 shares of the Common Stock of HBO & Company
for $779,456 in accordance with the terms of the Plan.
During the three months ended March 31, 1999, the Plan purchased 51,372
shares of the Common Stock of McKesson HBOC, Inc., the Plan sponsor
subsequent to the merger of HBO & Company and McKesson Corporation, for
$3,389,196, and sold 75,530 shares of the Common Stock of McKesson HBOC,
Inc. for $4,984,525 in accordance with the terms of the Plan.
In January, 1999, in conjunction with the merger of HBO & Company and
McKesson Corporation, 3,061,102 shares of the Common Stock of HBO &
Company, valued at $94,128,887 were exchanged for 1,132,608 shares of the
Common Stock of McKesson HBOC, Inc.
(6) Investments
-----------
During the three months ended March 31, 1999, the Plan's investments
(including investments bought and sold as well as held during the year)
appreciated (depreciated) in fair value as follows:
<TABLE>
<CAPTION>
Net
Appreciation
(Depreciation) Fair Value
in Fair Value at End
During Period of Period
------------- ---------
<S> <C> <C>
Three months ended March 31, 1999:
Fair value as determined by quoted market price:
HBO & Company Common Stock Fund $ 6,322,879 -
McKesson HBOC, Inc. Common Stock Fund (19,375,882) 73,157,676
Fidelity Magellan Fund 3,609,244 53,687,858
Fidelity Growth and Income Fund 912,505 53,756,909
Fidelity Retirement Money Market Fund - 10,379,420
Fidelity Asset Manager Fund 62,600 7,344,403
Fidelity Managed Income Fund - 3,099,562
Fidelity Intermediate Bond Fund (41,367) 4,038,081
Fidelity International Growth and Income Fund 83,441 2,668,437
Fidelity Blue Chip Growth Fund 1,180,864 22,898,342
Fidelity Equity Income II Fund 220,709 12,793,647
Janus Balanced Fund 97,636 2,119,500
Templeton Foreign A Fund 68,633 1,196,080
------------ -----------
$ (6,858,738) 247,139,915
============ ===========
</TABLE>
The current value of the McKesson HBOC, Inc. Common Stock Fund, Fidelity
Magellan Fund, Fidelity Growth and Income Fund, Fidelity Blue Chip Growth
Fund, and Fidelity Equity Income II Fund held for investment at March 31,
1999 was $73,157,676, $53,687,858, $53,756,909, $22,898,342 and
$12,793,647, respectively, each of which represented an investment greater
than 5% of the Plan's net assets.
<PAGE>
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
March 31, 1999 and December 31, 1998
(6) Investments, Continued
----------------------
The current value of the HBO & Company Common Stock Fund, Fidelity Magellan
Fund, Fidelity Growth and Income Fund and Fidelity Blue Chip Growth Fund
held for investment at December 31, 1998 was $87,974,789, $47,569,294,
$49,911,771, and $19,543,406, respectively, each of which represented an
investment greater than 5% of the Plan's net assets.
The realized gain on the sale of investments during the three months ended
March 31, 1999 was determined as follows:
Aggregate proceeds $ 106,788,079
Aggregate cost (104,146,748)
--------------
Realized gain $ 2,641,331
==============
During the three months ended March 31, 1999, the balance of unrealized
appreciation (depreciation) in the fair value of investments changed as
follows:
Balance, December 31, 1998 $ 86,568,174
Current unrealized depreciation of investments,
net of realized gains (losses) (9,500,069)
---------------
Balance, March 31, 1999 $ 77,068,105
===============
(7) Sale of Company and Merger of Plan
----------------------------------
In January, 1999 the Company merged with McKesson Corporation and a
decision was made to merge the profit sharing plans of both Companies. The
plans were merged effective April 1, 1999 forming the McKesson HBOC, Inc.
Profit Sharing Investment Plan. In conjunction with the merger, several
amendments were made to Plan provisions, including a change to Company
matching contributions consisting entirely of Company common stock and a
change in Plan eligibility requirements.
(8) Excess Contributions
--------------------
Excess deferral contributions were made during the short plan year ended
March 31, 1999. These contributions, totaling $1,374,038, will be
distributed during the next plan year as benefit distributions to certain
active participants as required to satisfy the relevant nondiscrimination
provisions of the Plan.
(9) Subsequent Event
----------------
Subsequent to March 31, 1999, the Plan's investment in the common stock of
McKesson HBOC, Inc. had a significant decline in market value.
(10) Investment Funds
----------------
The Plan provides for separate investment funds for participants as
described in note 1 to the financial statements. The following pages
summarize the net assets available for benefits for each fund as of March
31, 1999 and December 31, 1998 and the changes in net assets available for
benefits for each fund for the three months ended March 31, 1999.
<PAGE>
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
Net Assets Available for Benefits by Investment Program
<TABLE>
<CAPTION>
HBO & McKesson Fidelity Fidelity Fidelity Fidelity
Company HBOC Fidelity Growth & Retirement Asset Managed
Common Common Magellan Income Money Mkt Manager Income
Stock Stock Fund Fund Fund Fund Fund
----- ----- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
March 31, 1999
- --------------
Assets:
Investments at fair value $ - 73,157,676 53,687,858 53,756,909 10,379,420 7,344,403 3,099,562
Contributions receivable from
employer company - 1,652,030 - - - - -
Contributions receivable from
participants - 370,249 440,105 459,259 112,937 77,930 24,887
Loans receivable from participants - 39,952 680,485 1,095,142 542,666 351,909 126,797
Accrued investment income - 67,762 - - - - -
----------- ---------- ---------- ---------- ---------- --------- ---------
Total assets - 75,287,669 54,808,448 55,311,310 11,035,023 7,774,242 3,251,246
----------- ---------- ---------- ---------- ---------- --------- ---------
Liabilities - - - - - - -
----------- ---------- ---------- ---------- ---------- --------- ---------
Net assets available for benefits $ - 75,287,669 54,808,448 55,311,310 11,035,023 7,774,242 3,251,246
=========== ========== ========== ========== ========== ========= =========
December 31, 1998
- -----------------
Assets:
Investments at fair value $87,974,789 - 47,569,294 49,911,771 9,838,027 7,078,608 2,917,735
Contributions receivable from
employer company 119,012 - 102,362 109,905 39,204 20,254 8,715
Contributions receivable from
participants 251,273 - 231,916 260,624 67,797 50,755 18,958
Loans receivable from participants 69,831 - 610,242 1,088,987 618,142 334,402 110,641
Accrued investment income 61,332 - - - - - -
----------- ---------- ---------- ---------- ---------- --------- ---------
Total Assets 88,476,237 - 48,513,814 51,371,287 10,563,170 7,484,019 3,056,049
----------- ---------- ---------- ---------- ---------- --------- ---------
Liabilities - - - - - - -
----------- ---------- ---------- ---------- ---------- --------- ---------
Net assets available for benefits $88,476,237 - 48,513,814 51,371,287 10,563,170 7,484,019 3,056,049
=========== ========== ========== ========== ========== ========= =========
<CAPTION>
Fidelity
Fidelity Int'l Fidelity Fidelity
Intermediate Growth Blue Chip Equity Janus Templeton
Bond & Income Growth Income II Balanced Foreign A
Fund Fund Fund Fund Fund Fund Total
---- ---- ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C>
March 31, 1999
- --------------
Assets:
Investments at fair value 4,038,081 2,668,437 22,898,342 12,793,647 2,119,500 1,196,080 247,139,915
Contributions receivable from
employer company - - - - - - 1,652,030
Contributions receivable from
participants 61,846 - 417,188 177,372 95,977 66,048 2,303,798
Loans receivable from participants 179,879 7,478 72,983 83,147 4,287 (17,295) 3,167,430
Accrued investment income - - - - - - 67,762
--------- --------- ---------- ---------- --------- --------- -----------
Total assets 4,279,806 2,675,915 23,388,513 13,054,166 2,219,764 1,244,833 254,330,935
--------- --------- ---------- ---------- --------- --------- -----------
Liabilities - - - - - - -
--------- --------- ---------- ---------- --------- --------- -----------
Net assets available for benefits 4,279,806 2,675,915 23,388,513 13,054,166 2,219,764 1,244,833 254,330,935
========= ========= ========== ========== ========= ========= ===========
December 31, 1998
- -----------------
Assets:
Investments at fair value 3,781,383 2,778,598 19,543,406 11,525,386 936,587 835,527 244,691,111
Contributions receivable from
employer company 15,431 - 79,572 42,392 10,492 14,739 562,078
Contributions receivable from
participants 37,268 - 193,394 103,118 27,427 34,240 1,276,770
Loans receivable from participants 156,559 6,411 34,652 56,171 (18,019) (1,122) 3,066,897
Accrued investment income - - - - - - 61,332
--------- --------- ---------- ---------- --------- --------- -----------
Total Assets 3,990,641 2,785,009 19,851,024 11,727,067 956,487 883,384 249,658,188
--------- --------- ---------- ---------- --------- --------- -----------
Liabilities - - - - - - -
--------- --------- ---------- ---------- --------- --------- -----------
Net assets available for benefits 3,990,641 2,785,009 19,851,024 11,727,067 956,487 883,384 249,658,188
========= ========= ========== ========== ========= ========= ===========
</TABLE>
<PAGE>
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
Changes in Net Assets Available for Benefits by Investment Program
For the Three Months Ended March 31, 1999
<TABLE>
<CAPTION>
Fidelity
HBO & McKesson Fidelity Fidelity Retirement Fidelity Fidelity
Company HBOC Magellan Growth & Money Mkt. Asset Managed
Common Stock Common Stock Fund Income Fund Fund Manager Fund Income Fund
------------ ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income $ (19) 67,762 - 101,624 119,129 62,028 40,250
Unrealized appreciation
(depreciation) in fair value
of investments 5,947,303 (20,683,662) 3,272,691 506,006 - 48,228 -
Realized gain (loss) on sale of
investments 375,576 1,307,780 336,553 406,499 - 14,372 -
------------ ------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) from investment
activities 6,322,860 (19,308,120) 3,609,244 1,014,129 119,129 124,628 40,250
Contributions:
Employer - 1,951,964 291,361 309,570 116,755 55,105 20,640
Participants 136,841 2,141,551 2,094,232 2,272,853 560,660 406,766 122,784
Interest income on loans
to participants 6,202 11,778 11,846 12,197 4,792 1,831 436
------------ ------------ ------------ ------------ ------------ ------------ ------------
Total additions 6,465,903 (15,202,827) 6,006,683 3,608,749 801,336 588,330 184,110
Deductions from net assets attributed to:
Benefits expense (321,122) (1,086,216) (627,491) (807,421) (240,369) (123,572) (119,036)
Administrative expense - - (825) (1,050) (525) (150) (75)
Interfund transfers (94,621,018) 91,576,712 916,267 1,139,745 (88,589) (174,385) 130,198
------------ ------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) (88,476,237) 75,287,669 6,294,634 3,940,023 471,853 290,223 195,197
Net assets available for benefits:
Beginning of period 88,476,237 - 48,513,814 51,371,287 10,563,170 7,484,019 3,056,049
------------ ------------ ------------ ------------ ------------ ------------ ------------
End of period $ - 75,287,669 54,808,448 55,311,310 11,035,023 7,774,242 3,251,246
============ ============ ============ ============ ============ ============ ============
<CAPTION>
Fidelity Fidelity Fidelity
Fidelity Int'l Fidelity Equity Janus Templeton
Intermediate Growth & Blue Chip Income II Balanced Foreign A
Bond Fund Income Fund Growth Fund Fund Fund Fund Total
------------ ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income 56,681 - - 105,865 9,016 - 562,336
Unrealized appreciation
(depreciation) in fair value
of investments (41,850) 70,243 1,047,542 171,183 91,163 71,084 (9,500,069)
Realized gain (loss) on sale of
investments 483 13,198 133,322 49,526 6,473 (2,451) 2,641,331
------------ ------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease)
from investment activities 15,314 83,441 1,180,864 326,574 106,652 68,633 (6,296,402)
Contributions:
Employer 37,368 - 233,583 107,199 34,983 46,766 3,205,294
Participants 335,639 3,471 1,890,904 925,600 414,542 287,891 11,593,734
Interest income on loans
to participants 1,929 - 6,379 2,753 625 1,048 61,816
------------ ------------ ------------ ------------ ------------ ------------ ------------
Total additions 390,250 86,912 3,311,730 1,362,126 556,802 404,338 8,564,442
Deductions from net assets attributed to:
Benefits expense (52,575) (65,836) (332,124) (91,984) (9,473) (10,501) (3,887,720)
Administrative expense (225) - (450) (600) - (75) (3,975)
Interfund transfers (48,285) (130,170) 558,333 57,557 715,948 (32,313) -
------------ ------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) 289,165 (109,094) 3,537,489 1,327,099 1,263,277 361,449 4,672,747
Net assets available for benefits:
Beginning of period 3,990,641 2,785,009 19,851,024 11,727,067 956,487 883,384 249,658,188
------------ ------------ ------------ ------------ ------------ ------------ ------------
End of period 4,279,806 2,675,915 23,388,513 13,054,166 2,219,764 1,244,833 254,330,935
============ ============ ============ ============ ============ ============ ============
</TABLE>
<PAGE>
SUPPLEMENTARY INFORMATION
<PAGE>
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
FEI # 37-0986839 - Plan #001
Item 27a - Schedule of Assets Held for Investment Purposes
March 31, 1999
--------------
<TABLE>
<CAPTION>
(a) Identity of (e) Current
Party Involved (b) Identity of Issue (c) Description (d) Cost Value
-------------- ----------------- ----------- ---- -----
<S> <C> <C> <C> <C>
Fidelity Investments Shares
- -------------------- ------
Fidelity Magellan Fund 413,779 $ 35,287,642 53,687,858
Fidelity Growth & Income Fund 1,152,592 37,070,827 53,756,909
Fidelity Retirement Money Market Fund 10,379,420 10,379,420 10,379,420
Fidelity Asset Manager Fund 418,723 7,125,451 7,344,403
Fidelity Managed Income Fund 3,099,562 3,099,562 3,099,562
Fidelity Intermediate Bond Fund 397,449 4,052,677 4,038,081
Fidelity International Growth & Income
Fund 123,768 2,475,548 2,668,437
Fidelity Blue Chip Growth Fund 429,854 17,062,828 22,898,342
Fidelity Equity Income II Fund 418,914 11,153,482 12,793,647
Janus Investments Shares
- ----------------- ------
Janus Janus Balanced Fund 101,073 1,929,345 2,119,500
Templeton Investments Shares
- --------------------- ------
Templeton Templeton Foreign A Fund 134,240 1,159,366 1,196,080
------------ ------------
130,796,148 173,982,239
Company Stock Fund Shares
- ------------------ ------
* McKesson HBOC, Inc. Common Stock 1,108,450 39,275,662 73,157,676
Interest
--------
Participant Loans Participant Loans 7-13% - 3,167,430
- ----------------- ------------ ------------
Total investments held $170,071,810 250,307,345
============ ============
</TABLE>
* Party in interest.
* See independent auditors' report.
<PAGE>
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 33-39034) pertaining to the HBO & Company Profit Sharing and Savings
Plan of our report dated October 8, 1999, with respect to the financial
statements and schedules of the HBO & Company Profit Sharing and Savings Plan
included in this Annual Report (Form 11-K) for the three months ended March 31,
1999.
Atlanta, Georgia
October 11, 1999
<PAGE>
SIGNATURES
----------
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
McKesson HBOC, Inc. Profit Sharing
Investment Plan
By: /s/ Ivan D. Meyerson
------------------------
Ivan D. Meyerson
DATE: October 12, 1999
