Document

 
 
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
For the fiscal year ended March 31, 2016
OR
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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 Corporation Profit-Sharing Investment Plan
B.
Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:
McKesson Corporation
McKesson Plaza
One Post Street, San Francisco, CA 94104
Telephone (415) 983-8300

 






McKESSON CORPORATION PROFIT-SHARING INVESTMENT PLAN
TABLE OF CONTENTS

Item
 
 
Page 
 
Financial Statements as of and for the Years Ended March 31, 2016 and 2015:
 
 
 
 
 
Supplemental Schedule as of March 31, 2016:
 
 
 
EXHIBITS:
23.1 Consent of Independent Registered Public Accounting Firm
All other schedules required by Section 2520.103-10 of the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, as amended, have been omitted because they are not applicable.



2


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Participants of the
McKesson Corporation Profit-Sharing Investment Plan:

We have audited the accompanying statements of net assets available for benefits of McKesson Corporation Profit-Sharing Investment Plan (the “Plan”) as of March 31, 2016 and 2015, and the related statements of changes in net assets available for benefits for the years 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 audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of March 31, 2016 and 2015, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America.

The supplemental schedule of assets (held at end of year) as of March 31, 2016 has been subjected to audit procedures performed in conjunction with the audit of the Plan's financial statements. The supplemental schedule is the responsibility of the Plan's management. Our audit procedures included determining whether the supplemental schedule reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental schedule. In forming our opinion on the supplemental schedule, we evaluated whether the supplemental schedule, including the form and content, is presented in compliance with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, such schedule is fairly stated, in all material respects, in relation to the financial statements as a whole.

/s/ Deloitte & Touche LLP

San Francisco, California
September 21, 2016

3


 McKESSON CORPORATION PROFIT-SHARING INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
(In thousands)  

 
March 31,  
 
2016
 
2015
 
Participant- 
Directed  
 
Non-Participant 
Directed  
 
Plan Total  
 
Participant- 
Directed  
 
Non-Participant 
Directed  
 
Plan Total
ASSETS
 
 
 
 
 
 
 
 
 
 
 
Cash and Cash Equivalents
$

 
$
4,255

 
$
4,255

 
$

 
$
7,285

 
$
7,285

Investments at Fair Value:
 
 
 
 
 
 
 
 
 
 
 
Fidelity BrokerageLink
209,617

 

 
209,617

 
224,960

 

 
224,960

Common/collective trusts
1,821,287

 

 
1,821,287

 
1,808,939

 

 
1,808,939

Separately managed accounts
655,386

 

 
655,386

 
732,216

 

 
732,216

McKesson Corp. common stock:
 
 
 
 
 
 
 
 
 
 
 
Employer Stock Fund

 
497,818

 
497,818

 

 
831,913

 
831,913

Employee Stock Fund
193,551

 

 
193,551

 
294,797

 

 
294,797

Investments at Contract Value:
 
 
 
 
 
 
 
 
 
 
 
BNY Mellon Stable Value Portfolio
251,884

 

 
251,884

 
244,150

 

 
244,150

Total Investments
3,131,725

 
497,818

 
3,629,543

 
3,305,062

 
831,913

 
4,136,975

Receivables:
 
 
 
 
 
 
 
 
 
 
 
Notes receivable from participants
46,629

 

 
46,629

 
47,984

 

 
47,984

Employer contributions
5,830

 

 
5,830

 
5,806

 

 
5,806

Other receivables

 
1

 
1

 

 
1

 
1

Total Receivables
52,459

 
1

 
52,460

 
53,790

 
1

 
53,791

Total Assets
3,184,184

 
502,074

 
3,686,258

 
3,358,852

 
839,199

 
4,198,051

 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES
 
 
 
 
 
 
 
 
 
 
 
Other accrued liabilities

 
70

 
70

 

 
405

 
405

Total Liabilities

 
70

 
70

 

 
405

 
405

 
 
 
 
 
 
 
 
 
 
 
 
Net Assets Available for Benefits
$
3,184,184

 
$
502,004

 
$
3,686,188

 
$
3,358,852

 
$
838,794

 
$
4,197,646


See Financial Notes



4


 McKESSON CORPORATION PROFIT-SHARING INVESTMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
(In thousands)

 
Years Ended March 31, 
 
2016
 
2015
 
Participant- 
Directed  
 
Non-Participant 
Directed  
 
Plan Total
 
Participant- 
Directed  
 
Non-Participant 
Directed  
 
Plan Total
INVESTMENT (LOSS)/INCOME
 
 
 
 
 
 
 
 
 
 
 
Net (depreciation)/appreciation in value of investments
$
(155,726
)
 
$
(232,421
)
 
$
(388,147
)
 
$
266,131

 
$
193,106

 
$
459,237

Dividends and interest
22,882

 
3,658

 
26,540

 
23,283

 
3,737

 
27,020

Total Investment (Loss)/Income
(132,844
)
 
(228,763
)
 
(361,607
)
 
289,414

 
196,843

 
486,257

 
 
 
 
 
 
 
 
 
 
 
 
CONTRIBUTIONS
 
 
 
 
 
 
 
 
 
 
 
Participants
188,395

 

 
188,395

 
185,472

 

 
185,472

Employer
81,626

 

 
81,626

 
81,420

 

 
81,420

Total Contributions
270,021

 

 
270,021

 
266,892

 

 
266,892

 
 
 
 
 
 
 
 
 
 
 
 
DEDUCTIONS
 
 
 
 
 
 
 
 
 
 
 
Benefits paid to participants
347,479

 
70,266

 
417,745

 
281,514

 
65,266

 
346,780

Administrative expenses
1,865

 
262

 
2,127

 
944

 
101

 
1,045

Total Deductions
349,344

 
70,528

 
419,872

 
282,458

 
65,367

 
347,825

 
 
 
 
 
 
 
 
 
 
 
 
(Decrease)/Increase in Net Assets Before Transfers and Mergers
(212,167
)
 
(299,291
)
 
(511,458
)
 
273,848

 
131,476

 
405,324

Transfers to participant-directed investments
37,499

 
(37,499
)
 

 
32,160

 
(32,160
)
 

Merger of net assets from other plans

 

 

 
200,746

 

 
200,746

(Decrease)/Increase in Net Assets
(174,668
)
 
(336,790
)
 
(511,458
)
 
506,754

 
99,316

 
606,070

Net Assets Available for Benefits at Beginning of Year
3,358,852

 
838,794

 
4,197,646

 
2,852,098

 
739,478

 
3,591,576

Net Assets Available for Benefits at End of Year
$
3,184,184

 
$
502,004

 
$
3,686,188

 
$
3,358,852

 
$
838,794

 
$
4,197,646

See Financial Notes
 



5


McKESSON CORPORATION PROFIT-SHARING INVESTMENT PLAN
FINANCIAL NOTES



1. Plan Description
The following description of the McKesson Corporation Profit-Sharing Investment Plan (the “PSIP” or the “Plan”) is provided for general informational purposes only. Participants should refer to the plan document for more complete information. The PSIP is a defined contribution plan covering all persons who have completed two months of service and are regular or part-time employees or are casual or temporary employees who have completed a year of service in which they worked at least 1,000 hours in a year at McKesson Corporation (the “Company” or “McKesson” or “Plan Sponsor”) or a participating subsidiary, except seasonal and collectively bargained employees (unless the collective bargaining agreement provides for participation). The plan year is April 1 through March 31. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The Company controls and manages the operation and administration of the Plan.
Fidelity Management Trust Company (“Fidelity”) is the trustee and record-keeper of the Plan.
The Plan is comprised of participant-directed and non-participant directed investments, as described below:
A.    Participant-Directed Investments
Contributions: The Plan qualifies as a safe harbor plan as described in Internal Revenue Code (the “Code”) Sections 401(k) (12) and 401(m) (11). Participants may make pre-tax and/or Roth 401(k) contributions from 1% to 75% of eligible pay, limited to $18,000 for calendar years 2016 and 2015. Participants 50 years of age or older may also elect to make additional pre-tax and/or Roth 401(k) catch-up contributions of up to 75% of pay, limited to $6,000 for calendar years 2016 and 2015. Total employer and employee contributions are limited to the lesser of $53,000 for the plan years ended March 31, 2016 and 2015 or 100% of taxable compensation. Participants may also contribute amounts representing distributions from other eligible retirement plans.
Participant Accounts: Individual accounts are maintained for each plan participant. Each participant’s account is credited with the contributions and an allocation of earnings and charged with withdrawals and an allocation of losses and administrative expenses paid by the Plan. Allocations are based on participant earnings, or account balances, as defined in the plan document. The participant is entitled to a benefit upon separation from employment based upon the vested portion of the participant's account.
Vesting: In general, for the plan years ended March 31, 2016 and 2015, employer contributions were 100% vested immediately. Dividends automatically reinvested in McKesson common stock are also 100% vested at all times. Certain participants from plans that were merged into the Plan may receive employer contributions that maintain their original vesting schedules.
Investment Options: Upon enrollment in the PSIP, a participant may direct contributions in 1% increments to any of the investment options offered under the Plan and change his/her investment options at any time. At March 31, 2016, the Plan allowed participants to direct their accounts into any one or combination of the following investment options:
PSIP International Equity Portfolio is comprised of two common/collective trusts at March 31, 2016: 20% of the portfolio is invested in the Eaton Vance Parametric Emerging Markets Equity Commingled Fund, and 80% of the portfolio is invested in the Fidelity® Diversified International Commingled Pool.
Fidelity BrokerageLink is an investment option that provides access to a self-directed brokerage account.
SSgA Bond Index Fund is a commingled pool that seeks to provide investment results that correspond to the return of the Barclays Capital U.S. Aggregate Bond Index. This is a common/collective trust.
SSgA S&P 500 Index Fund is a commingled pool that seeks to provide investment results that correspond to the return of the S&P 500 Index. This is a common/collective trust.

6


McKESSON CORPORATION PROFIT-SHARING INVESTMENT PLAN
FINANCIAL NOTES (CONTINUED)

Vanguard Target Retirement Trusts are 12 commingled pool options designed for investors expecting to retire around the year indicated in each option’s name. The trusts, which are the Plan’s default investment options, are managed to gradually become more conservative over time. These options are common/collective trusts.
Fisher Investments Small Cap Value Portfolio invests primarily in stocks of value companies that are part of the Russell 2000 Value Index. This is a separately managed account.
PSIP Small Cap Growth Portfolio invests primarily in smaller growth U.S. companies that demonstrate the potential to meet certain strategic growth expectations as established by Weatherbie Capital, LLC, the investment manager. This is a separately managed account.
Dodge & Cox Large Cap Value Portfolio primarily invests in the stock of large companies where the fund manager believes the long-term earnings prospects are not reflected in the current prices. This is a separately managed account.
PSIP Large Cap Growth Portfolio is comprised of two separately managed accounts which invest primarily in the stock of large U.S. companies: 65% of the portfolio is managed by J.P. Morgan Asset Management, and 35% is managed by Brown Advisory.
BNY Mellon Stable Value Portfolio (the “Stable Value Portfolio”) invests in fixed income investments, insurance wrap contracts, and guaranteed investment contracts (“GICs”). This is a separately managed account.
McKesson Employee Stock Fund (the “Employee Stock Fund”) primarily represents investments in Company common stock.
Loans: Participants may apply for one loan from the Plan at a time. The total amount loaned to an individual participant cannot exceed the lowest of: (i) 50% of such participant’s vested account balance, (ii) $50,000 less the participant's highest outstanding loan balance under the PSIP in the 12 months preceding the loan date, or (iii) the value of the participant’s account attributable to pre-tax, Roth, after-tax, catch-up, and rollover contributions. Most loans bear interest at the then current prime rate of interest on the loan date plus 1%. Loan interest rates ranged from 4.25% to 10.50% at March 31, 2016 and 2015. Generally, loans may be repaid over a period not to exceed five years, except for residential home loans, which may be repaid over a term not to exceed ten years. Certain loans under qualified plans of acquired companies that were merged into the Plan may have longer repayment terms. Principal repayments and interest are paid through payroll deduction. For participants who have been terminated or are on leave and are no longer receiving a paycheck, loan repayments may be made by electronic fund transfer or check. Notes receivable from participants totaled $46,629,000 and $47,984,000 at March 31, 2016 and 2015, respectively.
Payment of Benefits: Participants have the right to receive a full or partial distribution of their vested PSIP account balance at the time of retirement, death, disability, or termination of employment. In general, when requested by a participant, benefit payments are made in a lump sum cash amount, but participants also may elect a distribution in-kind in the form of McKesson common stock and/or in the form of installments. The Plan also provides for in-service withdrawals on account of financial hardship or attainment of age 59½. In-service distributions cannot exceed a participant's vested account balance less applicable tax withholdings and penalties. Former employees may remain participants in the Plan and continue directing their investments without taking a distribution until age 70½.
Transfers from Other Qualified Plans: There were no transfers from other qualified plans during the year ended March 31, 2016. During the year ended March 31, 2015, $200,746,000 of net assets from the PSS World Medical, Inc. Savings Plan was merged into the PSIP. PSS World Medical, Inc., the sponsor of the PSS World Medical, Inc. Savings Plan, was acquired by McKesson in February 2013.
B.    Non-Participant Directed Investments
General: The McKesson Employer Stock Fund consists of an Employee Stock Ownership Plan (the “ESOP”) with shares of McKesson common stock that were allocated to participants through employer matching contributions made prior to April 2009 and not yet directed to other investment options by the participants. This fund is classified as “non-participant directed” because only the Company has the ability to direct contributions into this fund. Participants have the ability to transfer contributions from this fund to participant-directed investments, including the Employee Stock Fund. Total transfers to participant-directed investments for the years ended March 31, 2016 and 2015 were $37,499,000 and $32,160,000, respectively.



7


McKESSON CORPORATION PROFIT-SHARING INVESTMENT PLAN
FINANCIAL NOTES (CONTINUED)

C.    Other
Employer Matching Contributions to Participant Accounts: Each pay period, the Plan provides for Company matching contributions to all participants who make elective deferrals in an amount equal to 100% of the first 3% of pay contributed as elective deferrals to the Plan and 50% of the next 2% of pay contributed as elective deferrals to the Plan. An additional annual matching contribution may be allocated to plan participants at the discretion of the Company. The Plan also provides for a true-up matching employer contribution in an amount equal to the difference between (1) a participant’s matching contributions determined based on the participant’s compensation and eligible contributions for the entire plan year and (2) the amount of the participant’s matching contributions actually contributed to the Plan for the plan year. Employer matching contributions were $81,626,000 and $81,420,000 for the years ended March 31, 2016 and 2015, respectively.
Forfeitures of Unvested Participant Account Balances: A rehired employee who has met certain levels of service prior to termination may be entitled to have previously forfeited amounts in the PSIP reinstated. Each plan year, forfeited amounts are used to reinstate previously forfeited amounts of rehired employees, to pay other plan administrative expenses, or to reduce employer contributions.
Diversification out of McKesson Employer Stock Fund and McKesson Employee Stock Fund: Participants may divest their accounts of McKesson common stock and invest in other investment funds at any time without restriction.
Payment of Benefits: Distributions are made only upon a participant’s retirement, death (in which case, payment shall be made to the participant’s beneficiary), or other termination of employment with the Company and its affiliates. Distributions are made in cash, or if a participant elects a distribution in-kind, in the form of Company common stock plus cash for any fractional share.
McKesson Employer Stock Fund: The following is information regarding the allocated shares of McKesson common stock, at fair value, held as of March 31 (in thousands):  
2016
 
2015
Number of Shares
 
Cost Basis
 
Fair Value of Shares 
 
Number of Shares
 
Cost Basis
 
Fair Value of Shares 
3,166

 
$
114,910

 
$
497,818

 
3,678

 
$
133,179

 
$
831,913

The per share fair value of McKesson common stock at March 31, 2016 and 2015 was $157.25 and $226.20, respectively.
2. Significant Accounting Policies
Basis of Accounting: The financial statements of the Plan are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
Investments held by a defined contribution plan are required to be reported at fair value with the exception of fully benefit-responsive investment contracts, which are required to be reported at contract value. Contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the Plan. The statements of net assets available for benefits present fully benefit-responsive investment contracts at contract value and all other investments at fair value. This presentation reflects the retrospective adoption of Part I of Accounting Standards Update No. 2015-12, Plan Accounting: (Part I) Fully Benefit-Responsive Investment Contracts, (Part II) Plan Investment Disclosures, (Part III) Measurement Date Practical Expedient. See New Accounting Pronouncements below.
Cash and Cash Equivalents: The Plan considers all highly liquid debt instruments with remaining maturities of less than three months at the date of purchase to be cash equivalents.
Use of Estimates: The preparation of financial statements in conformity with GAAP requires plan management to make estimates and assumptions that affect the reported amount of net assets available for benefits and changes therein. Actual results could differ from those estimates.




8


McKESSON CORPORATION PROFIT-SHARING INVESTMENT PLAN
FINANCIAL NOTES (CONTINUED)

Risks and Uncertainties: The Plan maintains various investment options including mutual funds, Fidelity BrokerageLink, common/collective trusts, separately managed accounts, the Employer Stock Fund, and the Employee Stock Fund. Investment securities, in general, are exposed to various risks, such as interest rate risk, credit risk, and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the financial statements.
Investment Valuation and Income Recognition: The Plan’s investments are stated at fair value or net asset value (“NAV”) as a practical expedient for fair value except for the BNY Mellon Stable Value Portfolio, which is stated at contract value. Fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Investments in mutual funds are stated at quoted market prices, which represent the NAV of shares held by the Plan at year-end. Investments entered into through Fidelity BrokerageLink are primarily stated at quoted market prices. Investments in common/collective trusts are stated at NAV. Investments in separately managed accounts are valued based on the underlying net assets, which are actively traded and primarily valued using quoted market prices.
The BNY Mellon Stable Value Portfolio is stated at contact value, which represents contributions, plus credited earnings, less participant withdrawals.
Shares of McKesson common stock are valued at quoted market prices on March 31, 2016 and 2015. Certain administrative expenses are allocated to the individual investment options based upon daily balances invested in each option and are reflected as an addition to net depreciation in fair market value of investments or a reduction of net appreciation in fair market value of investments. Consequently, these administrative expenses are reflected as a reduction of investment return for such investments. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Net (depreciation)/appreciation includes the Plan’s gains and losses on investments bought and sold as well as held during the year.
Administrative Expenses: Administrative expenses of the Plan are paid by the Plan. The Company, in its discretion, may pay all, a portion, or none of such expenses from time to time.
Benefits: Benefits are recorded when paid.
Notes Receivable: Notes receivable from participants are valued at the unpaid principal balance plus any accrued but unpaid interest. Delinquent participant loans are recorded as distributions based on the terms of the plan document.

New Accounting Pronouncements: In July 2015, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2015-12, Plan Accounting: (Part I) Fully Benefit-Responsive Investment Contracts, (Part II) Plan Investment Disclosures, (Part III) Measurement Date Practical Expedient, which amends Accounting Standards Codification (“ASC”) 960, Plan Accounting - Defined Benefit Pension Plans, ASC 962, Plan Accounting - Defined Contribution Pension Plans, and ASC 965, Plan Accounting - Health and Welfare Benefit Plans. The Topic eliminates the requirements to disclose individual investments that represent 5 percent or more of net assets available for benefits and the net appreciation or depreciation for investments by general type. Also, the Topic requires that investments of employee benefit plans be grouped only by general type, eliminating the need to disaggregate the investments in multiple ways. The new guidance is effective for reporting periods beginning after December 15, 2015, with early adoption permitted, and shall be applied retrospectively for Part I and Part II and prospectively for Part III. Only Part I and Part II are applicable to the Plan. The Plan early adopted ASU No. 2015-12 during the year ended March 31, 2016 and has applied the provisions retrospectively. The adoption of ASU No. 2015-12 has resulted in the reclassification on the statement of net assets available for benefits of the $6,011,000 adjustment from fair value to contract value for fully benefit-responsive investment contracts as of March 31, 2015. Furthermore, the Plan has eliminated certain disclosures that are no longer required. There were no other impacts on the statements of net assets available for benefits and the statements of changes in net assets available for benefits as of March 31, 2016 and 2015.
In May 2015, the FASB issued ASU No. 2015-07, Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent), which amends ASC 820, Fair Value Measurement. Under this ASU, the carrying values of investments measured using the NAV per share practical expedient are no longer required to be categorized within the fair value hierarchy. The ASU also eliminates certain disclosure requirements for investments that are eligible for fair value measurement using the NAV per share practical expedient. The new guidance is effective for reporting periods beginning after December 15, 2016 and shall be applied retrospectively. Upon adoption, the amended guidance is expected to have a limited impact on certain fair value disclosures and no impact on net assets available for benefits.

9


McKESSON CORPORATION PROFIT-SHARING INVESTMENT PLAN
FINANCIAL NOTES (CONTINUED)

3. Investments Reported at Contract Value
The Stable Value Portfolio contains investment contracts with insurance companies and financial institutions with the objective of providing participants a stable return on investment and protection of principal from changes in market interest rates.
Traditional GICs are unsecured general account obligations of insurance companies. The obligation is backed by the general account assets of the insurance company that writes the investment contract. The traditional GIC crediting rate is based upon the rate that is agreed to when the insurance company writes the contract and is generally fixed for the life of the contract.

Separate account GICs are group annuity contracts that pay a rate of return that is reset periodically (typically quarterly), offer book value accounting, and provide benefit responsiveness for participant-directed withdrawals. The crediting rate reflects the experience of assets that are separated from the insurance company’s general account assets. The liabilities associated with an insurance company separate account are paid from the assets held in that separate account. The insurance company’s general account assets back the separate accounts to fulfill separate account obligations. Separate account assets cannot be used to satisfy general account liabilities.
Fixed maturity synthetic GICs consist of an asset or pool of assets that are owned by the fund (or plan) and a benefit-responsive, book value wrap contract purchased for the portfolio. The wrap contract provides contract value accounting for the asset and assures that contract value, benefit-responsive payments will be made for participant-directed withdrawals.
Constant duration synthetic GICs consist of a portfolio of securities owned by the fund (or plan) and a benefit-responsive, book value wrap contract purchased for the portfolio. The wrap contract amortizes gains and losses of the underlying securities over the portfolio duration and assures that contract value payments will be made for participant-directed withdrawals.
The fixed maturity synthetic and constant duration synthetic GICs use wrap contracts in order to manage market risks and to alter the return characteristics of the underlying portfolio of securities owned by the Stable Value Portfolio to match certain fund objectives. There are no reserves against these contract values for credit risk of the contract issuer or otherwise.
The initial crediting rates for both the fixed maturity synthetic and constant duration synthetic GICs are established based on the market interest rates at the time the initial asset is purchased and are guaranteed to have an interest crediting rate of not less than zero percent. The fixed maturity synthetic GIC crediting rate is set at the start of the contract and typically resets on a quarterly basis. The constant duration synthetic GIC crediting rate resets every quarter based on the contract value, the market yield to maturity, the market value, and the average duration of the underlying assets. The crediting rate for constant duration synthetic GICs aims at converging the contract value with the market value; therefore, it will be affected by interest rate and market changes.
Withdrawals and transfers resulting from the following events will limit the ability of the portfolio to transact at book or contract value, though such events are not probable of occurring. Instead, fair value would likely be used in determining the payouts to the participants, should any of the following events occur:
Employer-initiated events — events within the control of the Plan or the Plan Sponsor which would have a material and adverse impact on the fund
Employer communications designed to induce participants to transfer from the fund
Competing fund transfer or violation of equity wash or equivalent rules in place
Changes of qualification status of employer or plan
Issuers may terminate the GICs and settle at other than contract value if there is a change in the qualification status of employer or plan, a breach of material obligations under the contract, misrepresentation by the contract holder, or failure of the underlying portfolio to conform to the pre-established investment guidelines.
The average yield of the Stable Value Portfolio based on actual earnings was 2.06% and 2.08% at March 31, 2016 and 2015, respectively. The average yield of the portfolio based on the interest rate credited to participants was 2.10% and 2.01% at March 31, 2016 and 2015, respectively. To calculate the yield, the amount credited to participants for the last day of the period is annualized and divided by the fair value of the investment portfolio on that date.

10


McKESSON CORPORATION PROFIT-SHARING INVESTMENT PLAN
FINANCIAL NOTES (CONTINUED)

The portfolio holdings in the BNY Mellon Stable Value Portfolio as of March 31 are shown below (in thousands):  
 
 
2016
 
2015
 
 
Investment at Contract Value
 
Investment at Contract Value
Cash/Cash Equivalents:
 
 
 
 
Fidelity Management Trust Company
 
$
15,622

 
$
6,065

Traditional GIC:
 
 
 
 
Metropolitan Life Insurance Company
 
2,017

 
4,034

Fixed Maturity Synthetic GIC:
 
 
 
 
American General Life
 
29,174

 
24,780

Constant Duration Synthetic GICs:
 
 
 
 
Pacific Life
 
47,619

 
50,379

RGA Reinsurance Company
 
21,111

 
20,613

Prudential
 
48,313

 
52,052

Transamerica Premier Life
 
45,088

 
44,128

Separate Account GICs:
 
 
 
 
New York Life
 
21,785

 
21,299

Voya Retirement Insurance & Annuity Company
 
21,155

 
20,800

Total
 
$
251,884

 
$
244,150


4. Fair Value Measurement
Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date. When determining fair value, the Plan considers the principal or most advantageous market in which the Plan would transact, and the Plan considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, redemption restrictions, and risk of non-performance.
In addition to determining fair value, the Plan is required to establish a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels, which is determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

Level 1 —
unadjusted quoted prices in active markets for identical assets or liabilities;
Level 2 —
quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means;
Level 3 —
unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of assets or liabilities.

11


McKESSON CORPORATION PROFIT-SHARING INVESTMENT PLAN
FINANCIAL NOTES (CONTINUED)

The Plan’s investments measured at fair value on a recurring basis consisted of the following types of instruments as of March 31 (in thousands):
 
2016
 
Total 
 
Level 1 
 
Level 2 
Fidelity BrokerageLink:
 
 
 
 
 
Mutual funds
$
135,966

 
$
135,966

 
$

Common and preferred stock
69,933

 
69,933

 

Fixed income investments
1,948

 

 
1,948

Other
1,770

 
1,271

 
499

Common/collective trusts
1,821,287

 

 
1,821,287

Separately managed accounts:
 
 
 
 
 
Mutual funds
12,389

 
12,389

 

Common and preferred stock
642,997

 
642,997

 

Employer and Employee Stock Funds
691,369

 
691,369

 

Total
$
3,377,659

 
$
1,553,925

 
$
1,823,734

 

 
2015
 
Total 
 
Level 1 
 
Level 2 
Fidelity BrokerageLink:
 
 
 
 
 
Mutual funds
$
150,623

 
$
150,623

 
$

Common and preferred stock
70,068

 
70,068

 

Fixed income investments
2,092

 

 
2,092

Other
2,177

 
1,768

 
409

Common/collective trusts
1,808,939

 

 
1,808,939

Separately managed accounts:
 
 
 
 
 
Mutual funds
15,907

 
15,907

 

Common and preferred stock
716,309

 
716,309

 

Employer and Employee Stock Funds
1,126,710

 
1,126,710

 

Total
$
3,892,825

 
$
2,081,385

 
$
1,811,440



For the years ended March 31, 2016 and 2015, there were no investments classified as level 3 nor were there any significant transfers in or out of levels 1, 2, or 3. Below is a description of the valuation methodologies used for the fair value measurements.
Mutual funds are publicly traded investments which are valued using NAV. The NAV of a mutual fund is a quoted price in an active market. The NAV is determined once a day after the closing of the exchange based upon the underlying assets in the fund, less the fund’s liabilities, expressed on a per-share basis.
Common/collective trusts are valued using NAV. The NAV of a common/collective trust is based on the market values of the underlying securities. The beneficial interest of each investor is represented in units. Units are issued and redeemed daily at the fund’s closing NAV.
Separately managed accounts are valued based on the fair values of the underlying securities, which are primarily valued using quoted market prices.
Investments in Fidelity BrokerageLink and McKesson common stock are stated at quoted market prices.

12


McKESSON CORPORATION PROFIT-SHARING INVESTMENT PLAN
FINANCIAL NOTES (CONTINUED)

The Plan makes certain investments where the fair value is measured by NAV per share. There were no unfunded commitments, normal course of business restrictions, or other redemption restrictions for these investments. These investments are summarized below as of March 31 (in thousands):  
 
2016
 
2015
 
Fair Value 
 
Redemption Frequency 
 
Redemption Notice Period
 
Fair Value 
 
Redemption Frequency 
 
Redemption Notice Period
Common/collective trusts
$
1,821,287

 
As needed
 
1-5 days
 
$
1,808,939

 
As needed
 
1-5 days

5. Federal Income Tax Status
On November 26, 2013, the Internal Revenue Service issued a favorable determination letter to the Plan indicating that, in its opinion, the terms of the Plan conform to the requirements of Section 401(a) of the Code. In addition, the Company and the plan administrator believe that the Plan, in form and operation, complies with the applicable requirements of the Code and that the Plan and related trust continue to be tax-exempt. Therefore, no provision for income taxes has been included in the Plan’s financial statements.
GAAP requires plan management to evaluate tax positions taken by the Plan and recognize a tax liability (or asset) if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the Internal Revenue Service. The plan administrator has analyzed the tax positions taken by the Plan and has concluded that as of March 31, 2016, there are no uncertain tax positions taken or expected to be taken that would require recognition of a liability (or asset) or disclosure in the financial statements. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. The plan administrator believes it is no longer subject to income tax examinations for years prior to 2013.
6. Plan Termination
The Company’s Board of Directors reserves the right to terminate the Plan. If termination should occur, all participant accounts would immediately vest and each account would receive a distribution equal to the vested account balance.
7. Exempt Related Party Transactions
At March 31, 2016 and 2015, respectively, the Plan held approximately 4,382,000 and 4,964,000 common shares of McKesson Corporation, the Plan Sponsor, with a cost basis of $245,487,000 and $250,730,000. The shares were held within the Plan’s Employer and Employee Stock Funds. At March 31, 2016 and 2015, the Employer Stock Fund held approximately 3,166,000 and 3,678,000 common shares, respectively. At March 31, 2016 and 2015, the Employee Stock Fund held approximately 1,216,000 and 1,286,000 common shares, respectively. These transactions qualify as exempt party-in-interest transactions.
McKesson declared dividends of $1.08 and $0.96 per share during the years ended March 31, 2016 and 2015, respectively. During the years ended March 31, 2016 and 2015, the Employer Stock Fund recognized dividend income from McKesson common shares of $3,650,000 and $3,733,000, respectively. During the years ended March 31, 2016 and 2015, the Employee Stock Fund recognized dividend income from McKesson common shares of $1,353,000 and $1,217,000, respectively.

Certain investment options are managed by Fidelity, which also serves as the Plan’s record-keeper and trustee. Therefore, these transactions qualify as exempt party-in-interest transactions. Generally, investment options (other than mutual funds and publicly offered securities) may qualify as party-in-interest transactions if the issuer, investment manager, or trustee of the investment option is a plan fiduciary or service provider. Fees for investment management services are allocated to the participants with balances in those funds. In the plan year ended March 31, 2015, Fidelity revised its fee structure to include a quarterly flat fee assessment per plan participant.



13


McKESSON CORPORATION PROFIT-SHARING INVESTMENT PLAN
FINANCIAL NOTES (CONCLUDED)

8. Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of the statements of net assets available for benefits at March 31, 2016 and 2015 and the statement of changes in net assets available for benefits at March 31, 2016 to the Form 5500 (in thousands):
Statements of Net Assets Available for Benefits:  
 
2016
 
2015
Net assets available for benefits per the financial statements
$
3,686,188

 
$
4,197,646

Adjustment from contract value to fair value for fully benefit-responsive investment contracts

 
6,011

Net assets available for benefits per the Form 5500
$
3,686,188

 
$
4,203,657

Statement of Changes in Net Assets Available for Benefits:  
 
 
 
2016
Decrease in net assets per the financial statements
 
 
$
(511,458
)
Change in adjustment from contract value to fair value for fully benefit-responsive investment contracts
 
 
(6,011
)
Net decrease in net assets available for benefits per the Form 5500
 
 
$
(517,469
)



14

McKESSON CORPORATION PROFIT-SHARING INVESTMENT PLAN

FORM 5500, SCHEDULE H, PART IV, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
MARCH 31, 2016

Investment/Fund Name
 
Cost Basis
 
Shares/Units/Interest Rate 
 
Current Value 
*MCKESSON EMPLOYER STOCK FUND (allocated)
 
$
114,909,526

 
3,165,776

 
$
497,818,276

*MCKESSON EMPLOYEE STOCK FUND
 
130,577,862

 
1,215,991

 
193,551,206

 
 
 
 
 
 
691,369,482

 
 
 
 
 
 
 
*PSIP INTERNATIONAL
 
143,525,720

 
13,152,253

 
133,678,444

*SSGA BOND INDEX
 
116,959,582

 
5,163,106

 
137,854,882

*SSGA S&P 500 INDEX
 
257,584,599

 
11,585,325

 
450,367,889

*VANGUARD TARGET INCOME
 
25,601,667

 
691,090

 
26,130,094

*VANGUARD TARGET 2010
 
19,601,929

 
503,138

 
19,954,443

*VANGUARD TARGET 2015
 
65,723,579

 
1,600,628

 
66,554,118

*VANGUARD TARGET 2020
 
172,871,487

 
4,054,868

 
174,480,982

*VANGUARD TARGET 2025
 
201,612,510

 
4,606,201

 
202,857,086

*VANGUARD TARGET 2030
 
198,730,216

 
4,411,697

 
198,746,929

*VANGUARD TARGET 2035
 
165,138,183

 
3,571,831

 
164,411,385

*VANGUARD TARGET 2040
 
120,949,459

 
2,575,005

 
119,634,750

*VANGUARD TARGET 2045
 
69,976,753

 
1,491,739

 
69,276,370

*VANGUARD TARGET 2050
 
39,519,537

 
842,542

 
39,144,517

*VANGUARD TARGET 2055
 
12,699,367

 
271,351

 
12,587,962

*VANGUARD TARGET 2060
 
5,667,697

 
200,883

 
5,606,649

 
 
 
 
 
 
1,821,286,500

 
 
 
 
 
 
 
*DODGE & COX LARGE CAP VALUE PORTFOLIO
 
 
 
 
 
 
            ADT CORP
 
1,836,614

 
47,300

 
1,951,598

            AEGON NV (NY REGD) NY REG SH
 
1,588,755

 
284,700

 
1,565,850

            ALPHABET INC CL A
 
431,814

 
1,200

 
915,480

            ALPHABET INC CL C
 
3,822,956

 
8,123

 
6,051,229

            AMERICAN EXPRESS CO
 
4,707,906

 
69,200

 
4,248,880

            ANTHEM INC
 
1,615,610

 
13,200

 
1,834,668

            APACHE CORP
 
5,744,352

 
84,200

 
4,109,802

            ASTRAZENECA PLC SPONS ADR
 
2,204,839

 
69,100

 
1,945,856

            BAKER HUGHES INC
 
4,293,227

 
89,700

 
3,931,551

            BANK OF AMERICA CORPORATION
 
6,729,414

 
557,200

 
7,533,344

            BANK OF NEW YORK MELLON CORP
 
4,011,247

 
144,300

 
5,314,569

            BB&T CORP
 
1,888,341

 
69,000

 
2,295,630

            CAPITAL ONE FINANCIAL CORP
 
5,352,967

 
130,000

 
9,010,300

            CELANESE CORP SER A
 
1,524,486

 
34,000

 
2,227,000

            CIGNA CORP
 
2,912,838

 
35,000

 
4,803,400

            CISCO SYSTEMS INC
 
4,800,489

 
176,000

 
5,010,720

            COACH INC
 
2,542,261

 
49,300

 
1,976,437

            COMCAST CORP CL A
 
2,301,552

 
114,600

 
6,999,768

            CONCHO RESOURCES INC
 
1,593,431

 
16,200

 
1,636,848

            CORNING INC
 
2,254,695

 
153,100

 
3,198,259

            DANAHER CORP
 
1,732,726

 
21,100

 
2,001,546

            DISH NETWORK CORP A
 
1,253,499

 
37,500

 
1,734,750

            EMC CORP
 
5,921,144

 
231,000

 
6,156,150

            EXPRESS SCRIPTS HLDG CO
 
4,408,768

 
57,600

 
3,956,544

            FEDEX CORP
 
2,529,963

 
32,000

 
5,207,040

            GOLDMAN SACHS GROUP INC
 
4,474,719

 
35,800

 
5,619,884

            HARLEY-DAVIDSON INC
 
1,417,341

 
27,200

 
1,396,176

            HEWLETT PACKARD ENTERPRISE CO
 
5,940,256

 
394,900

 
7,001,577


15


McKESSON CORPORATION PROFIT-SHARING INVESTMENT PLAN



Investment/Fund Name
 
Cost Basis
 
Shares/Units/Interest Rate 
 
Current Value 
            HP INC
 
4,761,531

 
365,000

 
4,496,800

            JPMORGAN CHASE & CO
 
3,546,345

 
72,000

 
4,263,840

            JUNIPER NETWORKS INC
 
88,433

 
4,100

 
104,591

            LIBERTY INTERACTIVE CORP CL A
 
553,628

 
60,000

 
1,515,000

            MAXIM INTEGRATED PRODUCTS INC
 
1,387,911

 
60,600

 
2,228,868

            MEDTRONIC PLC
 
1,953,324

 
26,100

 
1,957,500

            MERCK & CO INC NEW
 
2,194,782

 
70,700

 
3,740,737

            METLIFE INC
 
3,333,875

 
78,700

 
3,458,078

            MICROSOFT CORP
 
3,799,202

 
137,200

 
7,577,556

            NATIONAL OILWELL VARCO INC
 
3,739,804

 
68,700

 
2,136,570

            NETAPP INC
 
3,091,021

 
91,100

 
2,486,119

            NEWS CORP NEW CL A
 
157,220

 
26,225

 
334,893

            NOVARTIS AG SPON ADR
 
5,880,774

 
97,500

 
7,062,900

            PRICELINE GROUP INC
 
2,038,970

 
1,700

 
2,191,232

            SANOFI SPON ADR
 
5,941,734

 
144,000

 
5,783,040

            SCHLUMBERGER LTD
 
6,628,181

 
95,000

 
7,006,250

            SCHWAB CHARLES CORP
 
4,923,880

 
277,700

 
7,781,154

            SPRINT CORP
 
2,378,814

 
456,043

 
1,587,030

            SSBK STIF FUND
 
2,115,230

 
2,115,230

 
2,115,230

            SYMANTEC CORP
 
3,644,813

 
201,500

 
3,703,570

            SYNOPSYS INC
 
1,077,031

 
41,500

 
2,010,260

            TARGET CORP
 
1,617,168

 
27,000

 
2,221,560

            TE CONNECTIVITY LTD
 
1,265,335

 
45,500

 
2,817,360

            THERMO FISHER SCIENTIFIC INC
 
236,758

 
1,800

 
254,862

            TIME WARNER CABLE
 
3,379,382

 
48,400

 
9,903,608

            TIME WARNER INC
 
3,032,129

 
95,700

 
6,943,035

            TWENTY FIRST CENTURY FOX CL B
 
1,227,468

 
42,400

 
1,195,680

            TWENTY FIRST CENTURY FOX INC-A
 
1,541,562

 
125,000

 
3,485,000

            TYCO INTERNATIONAL PLC
 
2,159,511

 
56,600

 
2,077,786

            UNION PACIFIC CORP
 
2,243,468

 
30,900

 
2,458,095

            UNITEDHEALTH GROUP INC
 
3,206,130

 
39,500

 
5,091,550

            VMWARE INC CL A
 
1,188,697

 
20,700

 
1,082,817

            WAL MART STORES INC
 
5,378,932

 
81,100

 
5,554,539

            WEATHERFORD INTERNATIONAL PLC
 
1,611,182

 
114,800

 
893,144

            WELLS FARGO & CO
 
7,517,508

 
180,100

 
8,709,636

            SETTLEMENT ADJUSTMENTS
 
 
 
 
 
1,544,571

*PSIP LG CAP GROWTH PORTFOLIO
 
 
 
 
 
 
            ACCENTURE PLC CL A
 
1,167,348

 
11,369

 
1,311,983

            ACTIVISION BLIZZARD INC
 
1,722,991

 
47,749

 
1,615,826

            ACUITY BRANDS INC
 
831,208

 
3,657

 
797,738

            ADOBE SYSTEMS INC
 
1,978,132

 
31,767

 
2,979,745

            AKAMAI TECHNOLOGIES INC
 
1,946,444

 
29,524

 
1,640,649

            ALEXION PHARMACEUTICALS INC
 
1,992,450

 
12,602

 
1,754,450

            ALPHABET INC CL A
 
947,719

 
2,262

 
1,725,680

            ALPHABET INC CL C
 
7,577,259

 
14,794

 
11,020,790

            AMAZON.COM INC
 
6,328,788

 
16,964

 
10,070,509

            AMERISOURCEBERGEN CORP
 
1,446,346

 
21,587

 
1,868,355

            AMPHENOL CORPORATION CL A
 
2,013,507

 
51,795

 
2,994,787

            ANSYS INC
 
1,304,940

 
16,480

 
1,474,301

            APPLE INC
 
5,798,822

 
65,601

 
7,149,853


16


McKESSON CORPORATION PROFIT-SHARING INVESTMENT PLAN



Investment/Fund Name
 
Cost Basis
 
Shares/Units/Interest Rate 
 
Current Value 
            ARM HOLDINGS PLC SPON ADR
 
149,085

 
3,379

 
147,629

            ASML HLDG NV (NY REG SHS) NEW
 
143,108

 
1,903

 
191,042

            BAIDU INC SPON ADR
 
62,778

 
369

 
70,435

            BIOGEN INC
 
84,949

 
359

 
93,455

            BIOMARIN PHARMACEUTICAL INC
 
1,250,422

 
10,279

 
847,812

            BRISTOL-MYERS SQUIBB CO
 
2,442,976

 
40,134

 
2,563,760

            BROADCOM LTD
 
1,811,588

 
23,588

 
3,644,346

            CELGENE CORP
 
778,399

 
11,326

 
1,133,619

            CHIPOTLE MEXICAN GRILL INC
 
801,248

 
1,426

 
671,603

            COCA COLA CO
 
1,194,212

 
28,026

 
1,300,126

            COGNIZANT TECH SOLUTIONS CL A
 
3,012,077

 
57,908

 
3,630,832

            COMCAST CORP CL A
 
3,170,078

 
73,028

 
4,460,550

            CONSTELLATION BRANDS INC CL A
 
1,050,849

 
8,668

 
1,309,648

            COSTCO WHOLESALE CORP
 
3,754,755

 
33,569

 
5,289,803

            CVS HEALTH CORP
 
1,650,020

 
22,873

 
2,372,616

            DANAHER CORP
 
1,957,903

 
30,880

 
2,929,277

            DAVITA HEALTHCARE PARTNERS INC
 
1,426,022

 
23,921

 
1,755,323

            DELPHI AUTOMOTIVE PLC
 
1,775,357

 
28,368

 
2,128,167

            DELTA AIR INC
 
2,402,975

 
75,407

 
3,670,813

            ECOLAB INC
 
3,520,659

 
38,382

 
4,280,361

            ESTEE LAUDER COS INC CL A
 
2,115,931

 
32,184

 
3,035,273

            EXPRESS SCRIPTS HLDG CO
 
1,925,499

 
31,746

 
2,180,633

            FACEBOOK INC A
 
6,046,742

 
104,978

 
11,977,990

            FASTENAL CO
 
1,700,660

 
37,326

 
1,828,974

            FLEETCOR TECHNOLOGIES INC
 
1,947,168

 
12,557

 
1,867,854

            GENPACT LTD
 
1,350,651

 
79,059

 
2,149,614

            GILEAD SCIENCES INC
 
2,191,463

 
39,351

 
3,614,783

            HOME DEPOT INC
 
4,516,585

 
59,022

 
7,875,305

            HONEYWELL INTL INC
 
2,321,465

 
27,224

 
3,050,449

            ILLUMINA INC
 
1,475,025

 
10,599

 
1,718,204

            INCYTE CORP
 
459,612

 
4,826

 
349,740

            INTERCONTINENTAL EXCHANGE INC
 
1,105,580

 
4,356

 
1,024,270

            INTUITIVE SURGICAL INC
 
3,299,671

 
6,727

 
4,043,263

            JOHNSON & JOHNSON
 
1,185,189

 
11,380

 
1,231,316

            LIBERTY GLOBAL PLC CL C
 
662,441

 
18,005

 
676,268

            LINKEDIN CORP CL A
 
468,200

 
2,505

 
286,447

            LYONDELLBASELL INDS CLASS A
 
1,285,926

 
18,435

 
1,577,667

            MARATHON PETROLEUM CORP
 
553,832

 
12,999

 
483,303

            MASTERCARD INC CL A
 
2,890,450

 
50,435

 
4,766,108

            MEAD JOHNSON NUTRITION CO
 
2,182,064

 
28,171

 
2,393,690

            MICROSOFT CORP
 
4,105,865

 
78,256

 
4,322,079

            MONSTER BEVERAGE CORP NEW
 
2,069,606

 
14,417

 
1,922,939

            MOODYS CORP
 
1,210,608

 
18,452

 
1,781,725

            NATIONAL INSTRUMENT CORP
 
1,190,101

 
38,302

 
1,153,273

            NETFLIX INC
 
1,779,614

 
23,167

 
2,368,362

            NETSUITE INC
 
1,799,945

 
22,167

 
1,518,218

            NORTHROP GRUMMAN CORP
 
1,897,677

 
10,775

 
2,132,373

            NXP SEMICONDUCTORS NV
 
3,865,232

 
44,590

 
3,614,911

            PAYPAL HLDGS INC
 
659,418

 
16,739

 
646,125

            PIONEER NATURAL RESOURCES CO
 
149,439

 
1,025

 
144,259


17


McKESSON CORPORATION PROFIT-SHARING INVESTMENT PLAN



Investment/Fund Name
 
Cost Basis
 
Shares/Units/Interest Rate 
 
Current Value 
            PPG INDUSTRIES INC
 
500,012

 
6,244

 
696,144

            PRICELINE GROUP INC
 
214,017

 
221

 
284,860

            REGENERON PHARMACEUTICALS INC
 
2,201,655

 
7,046

 
2,539,660

            REYNOLDS AMERICAN INC
 
2,835,700

 
64,030

 
3,221,349

            ROPER TECHNOLOGIES INC
 
1,446,728

 
9,092

 
1,661,745

            ROSS STORES INC
 
993,821

 
17,210

 
996,459

            SALESFORCE.COM INC
 
3,446,609

 
70,685

 
5,218,674

            SBA COMMUNICATIONS CORP CL A
 
1,384,963

 
14,807

 
1,483,217

            SCHWAB CHARLES CORP
 
1,630,215

 
83,179

 
2,330,676

            SERVICENOW INC
 
623,350

 
8,179

 
500,391

            SHERWIN WILLIAMS CO
 
1,969,043

 
10,632

 
3,026,611

            SPLUNK INC
 
387,458

 
4,969

 
243,133

            SSBK GOVT STIF FUND
 
6,603,242

 
6,603,242

 
6,603,242

            STARBUCKS CORP
 
4,197,059

 
124,218

 
7,415,815

            STERICYCLE INC
 
2,048,580

 
19,019

 
2,400,008

            TESLA MOTORS INC
 
735,806

 
3,957

 
909,200

            THERMO FISHER SCIENTIFIC INC
 
866,325

 
6,227

 
881,681

            TRIPADVISOR INC
 
2,613,484

 
36,368

 
2,418,472

            ULTA SALON COSMETICS & FRG INC
 
923,257

 
4,890

 
947,389

            UNDER ARMOUR INC CL A
 
1,823,498

 
21,335

 
1,809,848

            VANTIV INC
 
1,266,290

 
24,539

 
1,322,161

            VERISIGN INC
 
1,213,462

 
14,546

 
1,287,903

            VERTEX PHARMACEUTICALS INC
 
1,715,677

 
17,419

 
1,384,636

            VISA INC CL A
 
5,657,047

 
121,164

 
9,266,623

            WAL MART STORES INC
 
1,798,943

 
26,921

 
1,843,819

            WALGREENS BOOTS ALLIANCE INC
 
1,355,387

 
15,883

 
1,337,984

            WESTINGHOUSE AIR BRAKE TEC CRP
 
1,562,442

 
22,424

 
1,777,999

            SETTLEMENT ADJUSTMENTS
 
 
 
 
 
290,529

*PSIP SMALL CAP GROWTH PORTFOLIO
 
 
 
 
 
 
            ACADIA PHARMACEUTICALS INC
 
2,314,141

 
83,818

 
2,343,551

            ADVISORY BOARD CO
 
1,650,158

 
34,934

 
1,126,622

            AERIE PHARMACEUTICALS INC
 
1,022,218

 
49,215

 
598,454

            BOFI HOLDING INC
 
4,017,291

 
193,838

 
4,136,503

            CHUY'S HOLDINGS INC
 
1,085,760

 
40,380

 
1,254,607

            DIPLOMAT PHARMACY INC
 
3,040,090

 
77,412

 
2,121,089

            DRIL-QUIP INC
 
247,389

 
2,860

 
173,202

            EPAM SYSTEMS INC
 
2,169,481

 
37,963

 
2,834,697

            EVERCORE PARTNERS INC CL A
 
795,799

 
14,886

 
770,351

            EXAMWORKS GROUP INC
 
2,678,325

 
88,556

 
2,617,715

            FINANCIAL ENGINES INC
 
459,703

 
11,388

 
357,925

            FIRSTSERVICE CORP (US)
 
2,190,250

 
90,527

 
3,706,175

            FLEETMATICS GROUP PLC
 
2,836,057

 
76,690

 
3,122,050

            FRANCESCA'S HOLDINGS CORP
 
1,264,832

 
78,355

 
1,501,282

            GENTHERM INC
 
1,203,513

 
29,035

 
1,207,566

            GEOSPACE TECHNOLOGIES CORP
 
458,977

 
14,145

 
174,549

            GLOBANT SA
 
1,573,143

 
52,161

 
1,609,688

            GREENLIGHT CAPITAL RE LTD A
 
1,677,624

 
65,288

 
1,422,626

            GTT COMMUNICATIONS INC
 
1,759,582

 
84,459

 
1,396,952

            H&E EQUIPMENT SERVICES INC
 
1,258,099

 
55,721

 
976,789

            HEICO CORP
 
2,341,867

 
43,200

 
2,597,616


18


McKESSON CORPORATION PROFIT-SHARING INVESTMENT PLAN



Investment/Fund Name
 
Cost Basis
 
Shares/Units/Interest Rate 
 
Current Value 
            IHS INC CL A
 
1,824,918

 
14,874

 
1,846,756

            INCONTACT INC
 
1,196,187

 
132,217

 
1,175,409

            INDEPENDENT BANK GROUP INC
 
691,376

 
16,788

 
459,991

            INSULET CORP
 
2,215,244

 
64,023

 
2,123,003

            IPG PHOTONICS CORP
 
998,234

 
12,891

 
1,238,567

            LANDSTAR SYSTEM INC
 
1,276,478

 
20,247

 
1,308,159

            M/A-COM TECH SOLN HLDGS INC
 
1,744,804

 
40,355

 
1,767,145

            MIDDLEBY CORP
 
3,342,814

 
36,513

 
3,898,493

            NATURAL GAS SERVICES GROUP
 
1,272,253

 
47,455

 
1,026,452

            NORD ANGLIA EDUCATION INC
 
2,099,528

 
97,066

 
2,027,709

            OLLIES BARGAIN OUTLET HOLDINGS
 
468,139

 
25,503

 
597,535

            PAYLOCITY HOLDING CORP
 
4,100,305

 
136,848

 
4,480,404

            PEAPACK GLADSTONE FINL CORP
 
93,475

 
4,537

 
76,675

            PLANET FITNESS INC CL A
 
529,767

 
32,178

 
522,571

            PRESS GANEY HOLDINGS INC
 
95,454

 
3,386

 
101,851

            PROTO LABS INC
 
614,548

 
9,751

 
751,705

            PUMA BIOTECHNOLOGY INC
 
2,752,523

 
23,762

 
697,890

            REALPAGE INC
 
1,938,414

 
96,422

 
2,009,434

            SIGNATURE BANK
 
3,754,234

 
29,468

 
4,011,184

            SPS COMMERCE INC
 
1,173,135

 
19,546

 
839,305

            STANTEC INC
 
113,011

 
3,667

 
92,995

            STRATASYS LTD
 
74,639

 
2,589

 
67,107

            TEXTURA CORP
 
75,007

 
3,771

 
70,254

            TRINET GROUP INC
 
130,829

 
5,135

 
73,687

            ULTIMATE SOFTWARE GROUP INC
 
3,627,524

 
23,479

 
4,543,187

            ULTRAGENYX PHARMA INC
 
2,912,568

 
36,442

 
2,307,143

            UNITED INS HLDGS CORP
 
478,440

 
22,955

 
440,966

            US PHYSICAL THERAPY INC
 
95,968

 
1,755

 
87,276

            VIRTUS INVESTMENT PARTNERS
 
2,228,884

 
13,536

 
1,057,297

            WAGEWORKS INC
 
3,150,360

 
68,823

 
3,483,132

            WASTE CONNECTIONS INC
 
3,234,510

 
65,220

 
4,212,560

            WAYFAIR INC
 
3,243,021

 
94,695

 
4,092,718

            XPO LOGISTICS INC
 
815,652

 
29,758

 
913,571

            2U INC
 
1,512,170

 
50,685

 
1,145,481

            BBH STIF FUND
 
3,247,676

 
3,247,676

 
3,247,676

            SETTLEMENT ADJUSTMENTS
 
 
 
 
 
436,208

*FISHER SMALL CAP VALUE PORTFOLIO
 
 
 
 
 
 
            AAR CORP
 
475,775

 
18,400

 
428,168

            ACADIA RLTY TR REIT
 
539,189

 
29,225

 
1,026,674

            ANIXTER INTL INC
 
660,921

 
11,293

 
588,478

            ARTISAN PARTNERS ASSET MGT A
 
1,287,386

 
37,600

 
1,159,584

            ASPEN TECHNOLOGIES
 
1,189,685

 
32,446

 
1,172,274

            ATLAS AIR WORLD
 
836,947

 
21,200

 
896,124

            AVISTA CORP
 
354,241

 
16,584

 
676,296

            BANCORPSOUTH INC
 
1,001,888

 
49,225

 
1,048,985

            BEACON ROOFING SUPPLY INC
 
1,122,348

 
29,900

 
1,226,199

            BIO RAD LABS CL A
 
531,743

 
5,212

 
712,585

            BOSTON BEER COMPANY CL A
 
1,322,316

 
8,800

 
1,628,616

            CABELAS INC
 
411,287

 
15,975

 
777,823

            CALATLANTIC GROUP INC
 
1,037,651

 
39,362

 
1,315,478


19


McKESSON CORPORATION PROFIT-SHARING INVESTMENT PLAN



Investment/Fund Name
 
Cost Basis
 
Shares/Units/Interest Rate 
 
Current Value 
            CAPITOL FED FINL (2ND STEP CV)
 
527,985

 
44,375

 
588,413

            CHEMED CORP
 
934,737

 
9,300

 
1,259,685

            CONMED CORP
 
924,552

 
22,200

 
931,068

            CORPORATE OFFICE PROPERTIES TR
 
501,498

 
12,751

 
334,586

            DARLING INGREDIENTS INC
 
443,189

 
25,725

 
338,798

            DOMINOS PIZZA INC
 
982,967

 
25,725

 
3,392,099

            DRIL-QUIP INC
 
416,577

 
7,150

 
433,004

            DUPONT FABROS TECH INC
 
588,392

 
22,650

 
918,005

            EAST WEST BANCORP INC
 
1,049,671

 
43,241

 
1,404,468

            EDUCATION REALTY TR INC
 
659,323

 
21,358

 
888,493

            FEI COMPANY
 
530,307

 
20,096

 
1,788,745

            FINISAR CORP
 
939,711

 
63,175

 
1,152,312

            FIRST AMERICAN FINANCIAL CORP
 
1,246,247

 
31,300

 
1,192,843

            GLACIER BANCORP INC
 
613,597

 
39,273

 
998,320

            GREATBATCH INC
 
282,626

 
8,400

 
299,376

            GREENHILL & CO INC
 
1,461,646

 
38,485

 
854,367

            HEARTLAND EXPRESS INC
 
664,697

 
32,500

 
602,875

            HEICO CORP
 
1,058,345

 
20,300

 
1,220,639

            HELEN OF TROY LTD
 
431,239

 
4,300

 
445,867

            HELMERICH & PAYNE INC
 
278,449

 
6,608

 
388,022

            HILL-ROM HOLDINGS INC
 
1,022,113

 
35,150

 
1,768,045

            HUB GROUP INC CL A
 
994,892

 
24,300

 
991,197

            IDACORP INC
 
350,552

 
9,848

 
734,562

            INGREDION INC
 
780,104

 
14,609

 
1,560,095

            INTEGRA LIFESCIENCES HLDS CORP
 
1,230,519

 
30,475

 
2,052,796

            ISHRES TR RUSL
 
771,145

 
11,260

 
1,049,545

            JANUS CAPITAL GROUP INC
 
885,843

 
85,084

 
1,244,779

            JARDEN CORP
 
109,033

 
5,276

 
311,020

            KANSAS CITY SOUTHERN
 
321,541

 
6,869

 
586,956

            KATE SPADE & CO
 
548,310

 
36,163

 
922,880

            KB HOME
 
1,171,301

 
72,300

 
1,032,444

            LANCASTER COLONY CORP
 
716,012

 
6,700

 
740,819

            LANDSTAR SYSTEM INC
 
493,280

 
7,000

 
452,270

            MAGELLAN HEALTH INC
 
838,000

 
14,300

 
971,399

            MEREDITH CORP
 
658,864

 
17,225

 
818,188

            MERITAGE HOMES CORP
 
1,404,082