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, 2017
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, 2017 and 2016:
 
 
 
 
 
Supplemental Schedule as of March 31, 2017:
 
 
 
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, 2017 and 2016, 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, 2017 and 2016, 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, 2017 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 25, 2017




3


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

 
March 31,  
 
2017
 
2016
 
Participant- 
Directed  
 
Non-Participant 
Directed  
 
Plan Total  
 
Participant- 
Directed  
 
Non-Participant 
Directed  
 
Plan Total
ASSETS
 
 
 
 
 
 
 
 
 
 
 
Investments at Fair Value:
 
 
 
 
 
 
 
 
 
 
 
Fidelity BrokerageLink
$
228,027

 
$

 
$
228,027

 
$
209,617

 
$

 
$
209,617

Common/collective trusts
2,045,527

 

 
2,045,527

 
1,821,287

 

 
1,821,287

Separately managed accounts
746,736

 

 
746,736

 
655,386

 

 
655,386

McKesson Corp. common stock:
 
 
 
 
 
 
 
 
 
 
 
Employer Stock Fund

 
401,910

 
401,910

 

 
502,073

 
502,073

Employee Stock Fund
163,344

 

 
163,344

 
193,551

 

 
193,551

Investments at Contract Value:
 
 
 
 
 
 
 
 
 
 
 
BNY Mellon Stable Value Portfolio
250,141

 

 
250,141

 
251,884

 

 
251,884

Total Investments
3,433,775

 
401,910

 
3,835,685

 
3,131,725

 
502,073

 
3,633,798

Receivables:
 
 
 
 
 
 
 
 
 
 
 
Notes receivable from participants
43,919

 

 
43,919

 
46,629

 

 
46,629

Employer contributions
5,760

 

 
5,760

 
5,830

 

 
5,830

Other receivables

 
129

 
129

 

 
1

 
1

Total Receivables
49,679

 
129

 
49,808

 
52,459

 
1

 
52,460

Total Assets
3,483,454

 
402,039

 
3,885,493

 
3,184,184

 
502,074

 
3,686,258

 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES
 
 
 
 
 
 
 
 
 
 
 
Other accrued liabilities

 
343

 
343

 

 
70

 
70

Total Liabilities

 
343

 
343

 

 
70

 
70

 
 
 
 
 
 
 
 
 
 
 
 
Net Assets Available for Benefits
$
3,483,454

 
$
401,696

 
$
3,885,150

 
$
3,184,184

 
$
502,004

 
$
3,686,188


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, 
 
2017
 
2016
 
Participant- 
Directed  
 
Non-Participant 
Directed  
 
Plan Total
 
Participant- 
Directed  
 
Non-Participant 
Directed  
 
Plan Total
INVESTMENT INCOME/(LOSS)
 
 
 
 
 
 
 
 
 
 
 
Net appreciation/(depreciation) in value of investments
$
372,374

 
$
(21,047
)
 
$
351,327

 
$
(155,726
)
 
$
(232,421
)
 
$
(388,147
)
Dividends and interest
20,637

 
3,267

 
23,904

 
22,882

 
3,658

 
26,540

Total Investment Income/(Loss)
393,011

 
(17,780
)
 
375,231

 
(132,844
)
 
(228,763
)
 
(361,607
)
 
 
 
 
 
 
 
 
 
 
 
 
CONTRIBUTIONS
 
 
 
 
 
 
 
 
 
 
 
Participants
178,908

 

 
178,908

 
188,395

 

 
188,395

Employer
79,036

 

 
79,036

 
81,626

 

 
81,626

Total Contributions
257,944

 

 
257,944

 
270,021

 

 
270,021

 
 
 
 
 
 
 
 
 
 
 
 
DEDUCTIONS
 
 
 
 
 
 
 
 
 
 
 
Benefits paid to participants
400,165

 
48,192

 
448,357

 
347,479

 
70,266

 
417,745

Administrative expenses
1,686

 
160

 
1,846

 
1,865

 
262

 
2,127

Total Deductions
401,851

 
48,352

 
450,203

 
349,344

 
70,528

 
419,872

 
 
 
 
 
 
 
 
 
 
 
 
Increase/(Decrease) in Net Assets Before Transfers and Mergers
249,104

 
(66,132
)
 
182,972

 
(212,167
)
 
(299,291
)
 
(511,458
)
Transfers to participant-directed investments
34,176

 
(34,176
)
 

 
37,499

 
(37,499
)
 

Merger of net assets from other plans
15,990

 

 
15,990

 

 

 

Increase/(Decrease) in Net Assets
299,270

 
(100,308
)
 
198,962

 
(174,668
)
 
(336,790
)
 
(511,458
)
Net Assets Available for Benefits at Beginning of Year
3,184,184

 
502,004

 
3,686,188

 
3,358,852

 
838,794

 
4,197,646

Net Assets Available for Benefits at End of Year
$
3,483,454

 
$
401,696

 
$
3,885,150

 
$
3,184,184

 
$
502,004

 
$
3,686,188

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 worked at least 1,000 hours in a 12 month period 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, or after-tax contributions from 1% to 25%, limited to $18,000 for calendar years 2017 and 2016. 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 eligible pay, limited to $6,000 for calendar years 2017 and 2016. Total employer and employee contributions are limited to the lesser of $54,000 for the plan year ended March 31, 3017 and $53,000 for the plan year ended March 31, 2016, 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, 2017 and 2016, 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, 2017, 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: 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.
PSIP Fixed Income Portfolio is comprised of investments in 3 common/collective trusts. 40% of the portfolio is invested in the Voya Core Plus Trust Fund, 40% of the portfolio is invested in the Loomis Sayles Core Plus Fixed Income Fund, and 20% of the portfolio is invested in the Manulife Asset Management Company Strategic Fixed Income Fund.
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-oriented 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 McKesson's 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, 2017 and 2016, respectively. 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 deductions. 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 $43,919,000 and $46,629,000 at March 31, 2017 and 2016, 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: During the year ended March 31, 2017, $9,223,000 of net assets from the Vantage Oncology LLC 401(k) Plan and $6,767,000 of net assets from the Biologics, Inc. 401(k) Profit Sharing Plan were merged into the Plan effective February 13, 2017 and March 31, 2017, respectively . Vantage Oncology Holdings LLC and Biologics, Inc., the sponsors of the plans, were acquired by McKesson in April 2016. There were no transfers from other qualified plans during the year ended March 31, 2016.
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, 2017 and 2016 were $34,176,000 and $37,499,000, respectively. As of March 31, 2017 and 2016, non-participant directed amounts historically reported as cash and cash equivalents have been reclassified and included in the Employer Stock Fund on the statements of net trust assets available for benefits. The amounts reclassified were $2,588,000 and $4,255,000 as of March 31, 2017 and 2016, 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 $79,036,000 and $81,626,000 for the years ended March 31, 2017 and 2016, 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 options 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 table includes information regarding the allocated shares of McKesson common stock, at fair value, held as of March 31 (in thousands):  
2017
 
2016
Number of Shares
 
Cost Basis
 
Fair Value of Shares 
 
Number of Shares
 
Cost Basis
 
Fair Value of Shares 
2,693

 
$
97,772

 
$
399,322

 
3,166

 
$
114,910

 
$
497,818

The per share fair value of McKesson common stock at March 31, 2017 and 2016 was $148.26 and $157.25, respectively. The Fair Value of Shares reported above excludes interest bearing cash of $2,588,000 and $4,255,000 as of March 31, 2017 and 2016, 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.
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.
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.

8


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

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, 2017 and 2016. 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 appreciation/(depreciation) 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 May 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("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. We adopted this guidance in the 2017 plan year on a retrospective basis. Refer to Financial Note 4, “Fair Value Measurement,” for the presentation of assets under this amended guidance. Adoption of the amended guidance did not have an effect on the Plan's financial statements.
In February 2017, FASB issued ASU 2017-06, Plan Accounting-Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): Employee Benefit Plan Master Trust Reporting (A Consensus of the Emerging Issues Task Force).  ASU 2017-06 amended the presentation and disclosure requirements relating to master trusts in accordance with GAAP.  The amendments are effective for all plan years beginning after December 15, 2018, and are to be applied retrospectively.  Early adoption is permitted.  The Plan is currently evaluating the impact that the guidance will have on the Plan's financial statements.
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.


9


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

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.


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):  
 
 
2017
 
2016
 
 
Investment at Contract Value
 
Investment at Contract Value
Cash/Cash Equivalents:
 
 
 
 
Fidelity Management Trust Company
 
$
8,691

 
$
15,622

Traditional GIC:
 
 
 
 
Metropolitan Life Insurance Company
 

 
2,017

Fixed Maturity Synthetic GIC:
 
 
 
 
American General Life
 
33,504

 
29,174

Constant Duration Synthetic GICs:
 
 
 
 
Pacific Life
 
43,840

 
47,619

RGA Reinsurance Company
 
24,664

 
21,111

Prudential
 
49,552

 
48,313

Transamerica Premier Life
 
46,090

 
45,088

Voya Retirement Insurance & Annuity Company
 
21,497

 
21,155

Separate Account GICs:
 
 
 
 
New York Life
 
22,303

 
21,785

Total
 
$
250,141

 
$
251,884


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):
 
2017
 
Total 
 
Level 1 
 
Level 2 
Fidelity BrokerageLink:
 
 
 
 
 
Mutual funds
$
140,280

 
$
140,280

 
$

Common and preferred stock
83,100

 
83,100

 

Fixed income investments
3,035

 

 
3,035

Other
1,612

 
1,327

 
285

Separately managed accounts:
 
 
 
 
 
Common and preferred stock
730,276

 
730,276

 

Mutual funds
16,460

 
16,460

 

Employer and Employee Stock Funds
565,254

 
565,254

 
 
Total
$
1,540,017

 
$
1,536,697

 
$
3,320

Assets held at NAV practical expedient (1)
 
 
 
 
 
Common/collective trusts
2,045,527

 
 
 
 
Total plan assets
$
3,585,544

 


 


 
 
 
 
 
 
 

 
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

Separately managed accounts:
 
 
 
 
 
Common and preferred stock
642,997

 
642,997

 

Mutual funds
12,389

 
12,389

 

Employer and Employee Stock Funds
695,624

 
695,624

 
 
Total
$
1,560,627

 
$
1,558,180

 
$
2,447

Assets held at NAV practical expedient (1)
 
 
 
 
 
Common/collective trusts
1,821,287

 
 
 
 
Total plan assets
$
3,381,914

 
 
 
 

(1) Common/collective trusts for which fair value is measured using the NAV per share as a practical expedient are not leveled within the fair value hierarchy and are included as a reconciling item to total investments measured at fair value presented in the statements of net assets available for benefits.

For the years ended March 31, 2017 and 2016, 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.

12


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

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.
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):  
 
2017
 
2016
 
Fair Value 
 
Redemption Frequency 
 
Redemption Notice Period
 
Fair Value 
 
Redemption Frequency 
 
Redemption Notice Period
Common/collective trusts
$
2,045,527

 
As needed
 
1-5 days
 
$
1,821,287

 
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.
Plan management evaluates tax positions taken by the Plan and recognizes 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, 2017, 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 2014.
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, 2017 and 2016, respectively, the Plan held approximately 3,784,000 and 4,382,000 common shares of McKesson Corporation, the Plan Sponsor, with a cost basis of $218,097,000 and $245,487,000. The shares were held within the Plan’s Employer and Employee Stock Funds. At March 31, 2017 and 2016, the Employer Stock Fund held 2,693,000 and 3,166,000 common shares, respectively. At March 31, 2017 and 2016, the Employee Stock Fund held 1,091,000 and 1,216,000 common shares, respectively. These transactions qualify as exempt party-in-interest transactions.
McKesson declared dividends of $1.12 and $1.08 per share during the years ended March 31, 2017 and 2016, respectively. During the years ended March 31, 2017 and 2016, the Employer Stock Fund recognized dividend income from McKesson common shares of $3,256,000 and $3,650,000, respectively. During the years ended March 31, 2017 and 2016, the Employee Stock Fund recognized dividend income from McKesson common shares of $1,296,000 and $1,353,000, respectively. McKesson dividends received by the Plan were reinvested respectively in the Employer and Employee Stock Funds.


13


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

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.
8. Subsequent Event
Effective April 3, 2017, $7,021,000 of net assets from the Laboratory Supply Company 401(k) Plan were merged into the Plan. McKesson acquired Laboratory Supply Company in May 2016.
9. Reconciliation of Financial Statements to Form 5500
Net assets available for benefits reported in the financial statements at March 31, 2017 and 2016 agree to net assets available for benefits reported at March 31, 2017 and 2016 in the Form 5500. There were no reconciling adjustments in either year.


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, 2017

Investment/Fund Name
 
Cost Basis
 
Shares/Units/Interest Rate 
 
Current Value 
*MCKESSON EMPLOYER STOCK FUND (allocated)
 
 
 
 
 
 
*MCKESSON CORP
 
$
97,771,823

 
2,693,389

 
$
399,321,853

FID INSTL CASH US GOVT FD (INTEREST BEARING CASH)
 
2,589,175

 
2,589,175

 
2,589,175

*MCKESSON EMPLOYEE STOCK FUND
 
 
 
 
 
 
*MCKESSON CORP
 
120,325,145

 
1,090,681

 
161,704,365

FID INSTL CASH US GOVT FD (INTEREST BEARING CASH)
 
679,858

 
679,858

 
679,858

            SETTLEMENT ADJUSTMENTS
 
**

 
**

 
959,229

TOTAL MCKESSON STOCK FUNDS
 
 
 
 
 
565,254,480

 
 
 
 
 
 
 
*PSIP INTERNATIONAL
 
 
 
 
 
 
EATON VANCE TRUST COMPANY COLLECTIVE INV TRUST FOR EMPLOYEE BENEFIT PLANS - EMERGING MARKETS EQUITY FUND
 
25,856,601

 
2,433,180

 
26,590,482

FIDELITY DIVERSIFIED INTERNATIONAL COMPANY

 
104,897,956

 
9,588,029

 
106,361,930

*PSIP FIXED INCOME PORTFOLIO
 
 
 
 
 
 
LOOMIS SAYLES CORE PLUS FIXED INCOME FUND

 
3,766,314

 
51,315,215

 
52,991,803

VOYA CORE PLUS TRUST FUND

 
5,214,327

 
52,205,370

 
52,991,803

MANULIFE ASSET MANAGEMENT TRUST COMPANY STRATEGIC FIXED INCOME FUND

 
2,491,997

 
25,898,999

 
26,495,902

*SSGA S&P 500 INDEX
 
247,479,251

 
10,722,708

 
487,643,475

*VANGUARD TARGET INCOME
 
25,988,665

 
694,528

 
27,690,844

*VANGUARD TARGET 2010
 
17,822,600

 
451,474

 
18,912,264

*VANGUARD TARGET 2015
 
49,934,397

 
1,207,068

 
54,100,782

*VANGUARD TARGET 2020
 
181,235,731

 
4,197,069

 
197,765,896

*VANGUARD TARGET 2025
 
218,605,045

 
4,932,152

 
240,590,373

*VANGUARD TARGET 2030
 
213,119,104

 
4,679,733

 
236,045,744

*VANGUARD TARGET 2035
 
177,044,080

 
3,790,068

 
197,386,741

*VANGUARD TARGET 2040
 
131,010,136

 
2,760,804

 
146,709,127

*VANGUARD TARGET 2045
 
80,562,677

 
1,692,007

 
90,183,961

*VANGUARD TARGET 2050
 
48,345,426

 
1,012,316

 
53,976,702

*VANGUARD TARGET 2055
 
18,463,607

 
383,638

 
20,428,739

*VANGUARD TARGET 2060
 
7,814,302

 
270,328

 
8,660,294

TOTAL COMMON/COLLECTIVE TRUSTS
 
 
 
 
 
2,045,526,862

 
 
 
 
 
 
 
*DODGE & COX LARGE CAP VALUE PORTFOLIO
 
 
 
 
 
 
            AEGON NV (NY REGD) NY REG SH
 
1,588,755

 
284,700

 
1,460,511

            ALNYLAM PHARMACEUTICALS
 
912,386

 
20,000

 
1,025,000

            ALPHABET INC CL A
 
359,845

 
1,000

 
847,800

            ALPHABET INC CL C
 
3,540,576

 
7,523

 
6,240,780

            AMERICAN EXPRESS CO
 
5,399,419

 
80,000

 
6,328,800

            ANADARKO PETROLEUM CORP
 
3,040,689

 
58,700

 
3,639,400

            ANTHEM INC
 
1,334,102

 
10,900

 
1,802,642

            APACHE CORP
 
5,594,262

 
82,000

 
4,213,980

            ASTRAZENECA PLC SPONS ADR
 
4,741,781

 
157,500

 
4,904,550

            BAKER HUGHES INC
 
3,450,855

 
72,100

 
4,313,022

            BANK OF AMERICA CORPORATION
 
6,015,596

 
495,900

 
11,698,281

            BANK OF NEW YORK MELLON CORP
 
3,410,652

 
121,400

 
5,733,722

            BB&T CORP
 
1,806,240

 
66,000

 
2,950,200

            BRISTOL-MYERS SQUIBB CO
 
3,605,112

 
63,500

 
3,453,130

            CAPITAL ONE FINANCIAL CORP
 
4,982,377

 
121,000

 
10,485,860

            CELANESE CORP SER A
 
1,900,752

 
39,500

 
3,549,075


15


McKESSON CORPORATION PROFIT-SHARING INVESTMENT PLAN
FORM 5500, SCHEDULE H, PART IV, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
MARCH 31, 2017 (CONTINUED)



Investment/Fund Name
 
Cost Basis
 
Shares/Units/Interest Rate 
 
Current Value 
            CHARTER COMM INC A
 
6,433,496

 
28,082

 
9,191,800

            CIGNA CORP
 
3,315,146

 
37,500

 
5,493,375

            CISCO SYSTEMS INC
 
4,800,489

 
176,000

 
5,948,800

            COACH INC
 
2,132,466

 
42,000

 
1,735,860

            COMCAST CORP CL A
 
2,048,502

 
204,000

 
7,668,360

            CONCHO RESOURCES INC
 
1,593,431

 
16,200

 
2,079,108

            CORNING INC
 
1,390,224

 
94,400

 
2,548,800

            DANAHER CORP
 
996,116

 
16,000

 
1,368,480

            DELL TECH INC CL V
 
1,217,161

 
25,102

 
1,608,536

            DISH NETWORK CORP A
 
1,265,049

 
37,700

 
2,393,573

            EXPRESS SCRIPTS HLDG CO
 
5,370,361

 
71,000

 
4,679,610

            FEDEX CORP
 
2,732,240

 
32,500

 
6,342,375

            GOLDMAN SACHS GROUP INC
 
4,854,269

 
38,000

 
8,729,360

            HARLEY-DAVIDSON INC
 
1,583,973

 
30,000

 
1,815,000

            HEWLETT PACKARD ENTERPRISE CO
 
5,940,256

 
394,900

 
9,359,130

            HP INC
 
4,519,448

 
342,800

 
6,129,264

            JOHNSON CONTROLS INTERNAT
 
1,999,704

 
50,053

 
2,108,232

            JPMORGAN CHASE & CO
 
3,776,503

 
74,800

 
6,570,432

            JUNIPER NETWORKS INC
 
1,328,523

 
53,500

 
1,488,905

            LIBERTY INTERACTIVE CORP CL A
 
751,759

 
68,200

 
1,365,364

            MAXIM INTEGRATED PRODUCTS INC
 
1,259,655

 
55,000

 
2,472,800

            MEDTRONIC PLC
 
2,421,987

 
33,000

 
2,658,480

            MERCK & CO INC NEW
 
1,148,613

 
37,000

 
2,350,980

            METLIFE INC
 
5,008,237

 
116,000

 
6,127,120

            MICROSOFT CORP
 
3,101,389

 
112,000

 
7,376,320

            NATIONAL OILWELL VARCO INC
 
4,135,671

 
82,900

 
3,323,461

            NETAPP INC
 
1,350,413

 
39,800

 
1,665,630

            NEWS CORP NEW CL A
 
157,220

 
26,225

 
340,925

            NOVARTIS AG SPON ADR
 
6,575,993

 
106,000

 
7,872,620

            PRICELINE GROUP INC
 
2,485,649

 
2,000

 
3,559,940

            SANOFI SPON ADR
 
8,092,541

 
200,000

 
9,050,000

            SCHLUMBERGER LTD
 
5,023,463

 
72,000

 
5,623,200

            SCHWAB CHARLES CORP
 
4,650,824

 
262,300

 
10,704,463

            SPRINT CORP
 
2,378,814

 
456,043

 
3,958,453

            SYNOPSYS INC
 
908,339

 
35,000

 
2,524,550

            TARGET CORP
 
1,874,186

 
30,500

 
1,683,295

            TE CONNECTIVITY LTD
 
1,223,621

 
44,000

 
3,280,200

            TIME WARNER INC
 
2,784,996

 
87,900

 
8,588,709

            TWENTY FIRST CENTURY FOX CL B
 
1,157,989

 
40,000

 
1,271,200

            TWENTY FIRST CENTURY FOX INC-A
 
3,259,380

 
195,000

 
6,316,050

            UNION PACIFIC CORP
 
3,069,418

 
39,500

 
4,183,840

            UNITEDHEALTH GROUP INC
 
2,126,597

 
26,200

 
4,297,062

            VMWARE INC CL A
 
1,395,594

 
24,700

 
2,275,858

            WAL MART STORES INC
 
4,196,437

 
63,000

 
4,541,040

            WEATHERFORD INTERNATIONAL PLC
 
1,611,181

 
114,800

 
763,420

            WELLS FARGO & CO
 
8,160,839

 
194,100

 
10,803,606

            ZAYO GROUP HOLDINGS INC
 
1,282,254

 
39,500

 
1,299,550

            SSBK STIF FUND (INTEREST BEARING CASH)
 
3,298,004

 
3,298,004

 
3,298,004

            SETTLEMENT ADJUSTMENTS
 
**

 
**

 
1,160,864

*PSIP LG CAP GROWTH PORTFOLIO
 
 
 
 
 
 

16


McKESSON CORPORATION PROFIT-SHARING INVESTMENT PLAN
FORM 5500, SCHEDULE H, PART IV, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
MARCH 31, 2017 (CONTINUED)



Investment/Fund Name
 
Cost Basis
 
Shares/Units/Interest Rate 
 
Current Value 
            ACTIVISION BLIZZARD INC
 
2,277,834

 
61,435

 
3,063,149

            ACUITY BRANDS INC
 
3,022,978

 
13,561

 
2,766,444

            ADOBE SYSTEMS INC
 
3,902,471

 
49,229

 
6,406,170

            AKAMAI TECHNOLOGIES INC
 
2,012,522

 
31,238

 
1,864,909

            ALEXION PHARMACEUTICALS INC
 
2,213,922

 
15,679

 
1,900,922

            ALPHABET INC CL A
 
546,342

 
1,304

 
1,105,531

            ALPHABET INC CL C
 
7,291,416

 
13,714

 
11,376,586

            AMAZON.COM INC
 
5,548,083

 
13,628

 
12,081,767

            AMPHENOL CORPORATION CL A
 
1,910,156

 
48,881

 
3,478,861

            ANSYS INC
 
961,602

 
12,144

 
1,297,829

            APPLE INC
 
3,888,398

 
39,798

 
5,717,381

            APPLIED MATERIALS INC
 
1,681,128

 
57,233

 
2,226,364

            BECTON DICKINSON & CO
 
2,012,945

 
12,032

 
2,207,150

            BOSTON SCIENTIFIC CORP
 
1,950,029

 
86,252

 
2,145,087

            BROADCOM LTD
 
1,382,859

 
16,730

 
3,663,201

            CELGENE CORP
 
266,304

 
3,220

 
400,665

            COGNIZANT TECH SOLUTIONS CL A
 
1,202,164

 
27,026

 
1,608,588

            COMCAST CORP CL A
 
2,604,940

 
117,532

 
4,418,028

            CONSTELLATION BRANDS INC CL A
 
940,672

 
7,638

 
1,237,891

            COSTCO WHOLESALE CORP
 
2,003,029

 
17,142

 
2,874,542

            DANAHER CORP
 
1,961,576

 
35,443

 
3,031,440

            DELTA AIR INC
 
2,338,513

 
71,930

 
3,305,903

            DEXCOM INC
 
2,140,254

 
25,296

 
2,143,330

            ECOLAB INC
 
3,401,293

 
36,606

 
4,588,196

            EDWARDS LIFESCIENCES CORP
 
1,407,774

 
15,674

 
1,474,453

            ELECTRONIC ARTS INC
 
1,959,593

 
23,448

 
2,099,065

            EQUINIX INC
 
932,965

 
2,527

 
1,011,735

            ESTEE LAUDER COS INC CL A
 
1,847,335

 
27,067

 
2,295,011

            FACEBOOK INC A
 
3,684,296

 
59,549

 
8,458,935

            FLEETCOR TECHNOLOGIES INC
 
2,090,799

 
13,340

 
2,020,076

            FORTIVE CORP
 
1,656,865

 
38,070

 
2,292,575

            GENPACT LTD
 
1,211,860

 
68,766

 
1,702,646

            GILEAD SCIENCES INC
 
461,633

 
8,183

 
555,789

            HOME DEPOT INC
 
2,759,306

 
35,383

 
5,195,286

            HONEYWELL INTL INC
 
1,345,104

 
15,673

 
1,957,088

            HUMANA INC
 
668,544

 
3,209

 
661,503

            ILLUMINA INC
 
912,763

 
6,477

 
1,105,235

            INCYTE CORP
 
527,452

 
4,950

 
661,667

            INTERCONTINENTAL EXCHANGE INC
 
1,629,685

 
31,359

 
1,877,463

            INTUITIVE SURGICAL INC
 
4,920,561

 
8,884

 
6,809,319

            LAS VEGAS SANDS CORP
 
954,879

 
16,165

 
922,537

            LYONDELLBASELL INDS CLASS A
 
383,553

 
5,445

 
496,530

            MASTERCARD INC CL A
 
2,650,801

 
44,633

 
5,019,874

            MEAD JOHNSON NUTRITION CO
 
1,389,274

 
17,860

 
1,590,969

            MERCADOLIBRE INC
 
1,162,830

 
6,775

 
1,432,709

            MICROSOFT CORP
 
3,291,038

 
62,117

 
4,091,026

            MONSTER BEVERAGE CORP NEW
 
1,802,389

 
37,716

 
1,741,348

            MORGAN STANLEY
 
1,054,646

 
24,330

 
1,042,297

            NETFLIX INC
 
1,251,096

 
15,992

 
2,363,778

            NEWELL BRANDS INC
 
1,307,122

 
24,662

 
1,163,307


17


McKESSON CORPORATION PROFIT-SHARING INVESTMENT PLAN
FORM 5500, SCHEDULE H, PART IV, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
MARCH 31, 2017 (CONTINUED)



Investment/Fund Name
 
Cost Basis
 
Shares/Units/Interest Rate 
 
Current Value 
            NORTHROP GRUMMAN CORP
 
747,741

 
4,184

 
995,123

            NVIDIA CORP
 
2,125,306

 
43,076

 
4,692,269

            NXP SEMICONDUCTORS NV
 
2,269,280

 
27,620

 
2,858,670

            PAYPAL HLDGS INC
 
3,239,638

 
85,665

 
3,685,308

            PIONEER NATURAL RESOURCES CO
 
1,216,514

 
7,487

 
1,394,304

            PRICELINE GROUP INC
 
1,972,403

 
1,451

 
2,582,736

            REGENERON PHARMACEUTICALS INC
 
589,159

 
1,878

 
727,744

            REYNOLDS AMERICAN INC
 
290,834

 
6,542

 
412,277

            ROCKWELL AUTOMATION INC
 
716,122

 
4,700

 
731,837

            ROPER TECHNOLOGIES INC
 
3,587,574

 
20,942

 
4,324,314

            ROSS STORES INC
 
1,525,879

 
26,301

 
1,732,447

            S&P GLOBAL INC
 
1,751,379

 
13,969

 
1,826,307

            SALESFORCE.COM INC
 
2,125,773

 
42,800

 
3,530,572

            SBA COMMUNICATIONS CORP CL A
 
1,925,614

 
20,002

 
2,407,641

            SCHWAB CHARLES CORP
 
2,840,672

 
86,824

 
3,543,287

            SERVICENOW INC
 
2,041,639

 
27,972

 
2,446,711

            SHERWIN WILLIAMS CO
 
874,265

 
4,684

 
1,452,930

            SMITH (AO) CORP
 
1,443,300

 
29,595

 
1,514,080

            SNAP INC - A
 
853,124

 
42,350

 
954,146

            SOUTHWEST AIRLINES CO
 
1,685,843

 
32,738

 
1,759,995

            SPLUNK INC
 
578,768

 
8,786

 
547,280

            STARBUCKS CORP
 
1,228,500

 
36,922

 
2,155,876

            SVB FINL GROUP
 
586,350

 
3,370

 
627,123

            TESLA MOTORS INC
 
770,154

 
4,130

 
1,149,379

            THERMO FISHER SCIENTIFIC INC
 
3,051,721

 
20,382

 
3,130,675

            TJX COMPANIES INC NEW
 
1,660,990

 
21,740

 
1,719,199

            TRIPADVISOR INC
 
2,917,384

 
43,281

 
1,868,008

            ULTA SALON COSMETICS & FRG INC
 
2,812,265

 
13,123

 
3,743,073

            UNITED RENTALS INC
 
1,086,399

 
8,720

 
1,090,436

            UNITEDHEALTH GROUP INC
 
1,297,391

 
8,121

 
1,331,925

            VANTIV INC
 
1,923,778

 
36,216

 
2,322,170

            VERISIGN INC
 
664,474

 
7,975

 
694,702

            VERTEX PHARMACEUTICALS INC
 
1,525,022

 
15,199

 
1,662,011

            VISA INC CL A
 
3,415,934

 
73,383

 
6,521,547

            VULCAN MATERIALS CO
 
1,106,190

 
9,825

 
1,183,716

            WESTINGHOUSE AIR BRAKE TEC CRP
 
1,633,684

 
23,247

 
1,813,266

            SSBK GOVT STIF FUND (INTEREST BEARING CASH)
 
8,960,498

 
8,960,498

 
8,960,498

            SETTLEMENT ADJUSTMENTS
 
**

 
**

 
(385,201
)
*PSIP SMALL CAP GROWTH PORTFOLIO
 
 
 
 
 
 
            ACADIA PHARMACEUTICALS
 
1,232,919

 
43,797

 
1,505,741

            ADVISORY BOARD CO
 
1,161,743

 
27,472

 
1,285,690

            AERIE PHARMACEUTICALS INC
 
298,765

 
15,300

 
693,855

            BOFI HOLDING INC
 
2,780,498

 
130,579

 
3,412,029

            CANADA GOOSE HLDGS (US)
 
893,756

 
54,258

 
865,958

            CHUY'S HOLDINGS INC
 
1,283,722

 
44,920

 
1,338,616

            COTIVITI HOLDINGS INC
 
1,954,243

 
78,558

 
3,270,370

            DIPLOMAT PHARMACY INC
 
578,030

 
31,612

 
504,211

            DORMAN PRODUCTS INC
 
15,868

 
291

 
23,900

            EBIX INC
 
3,252,198

 
55,678

 
3,410,278

            EPAM SYSTEMS INC
 
1,721,161

 
28,246

 
2,133,138


18


McKESSON CORPORATION PROFIT-SHARING INVESTMENT PLAN
FORM 5500, SCHEDULE H, PART IV, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
MARCH 31, 2017 (CONTINUED)



Investment/Fund Name
 
Cost Basis
 
Shares/Units/Interest Rate 
 
Current Value 
            EVERBRIDGE INC
 
2,558,548

 
156,666

 
3,216,353

            FINANCIAL ENGINES INC
 
443,627

 
11,243

 
489,633

            FIRSTSERVICE CORP (US)
 
2,870,693

 
101,141

 
6,098,802

            FRANCESCA'S HOLDINGS CORP
 
1,290,056

 
79,527

 
1,220,739

            GLOBANT SA
 
1,280,050

 
37,590

 
1,368,276

            GOPRO INC A
 
1,552,107

 
105,977

 
922,000

            GREENLIGHT CAPITAL RE A
 
569,741

 
23,099

 
510,488

            GTT COMMUNICATIONS INC
 
3,004,960

 
150,735

 
3,670,397

            H&E EQUIPMENT SVCS INC
 
1,471,192

 
70,169

 
1,720,544

            HEICO CORP
 
1,864,881

 
33,244

 
2,898,877

            HUBSPOT INC
 
1,179,355

 
22,123

 
1,339,548

            INDEPENDENT BANK GROUP
 
1,490,930

 
31,423

 
2,020,499

            INSULET CORP
 
3,777,547

 
106,296

 
4,580,295

            IPG PHOTONICS CORP
 
1,593,952

 
19,320

 
2,331,924

            MACOM TECH SOLN HLDS INC
 
4,422,406

 
105,465

 
5,093,960

            MEDPACE HOLDINGS INC
 
44,979

 
1,634

 
48,775

            MIDDLEBY CORP
 
3,201,335

 
32,125

 
4,383,456

            NORD ANGLIA EDUCATION INC
 
1,187,104

 
54,852

 
1,389,950

            OLLIES BARGAIN OUTLET HLD
 
1,577,176

 
66,400

 
2,224,400

            PAYLOCITY HOLDING CORP
 
4,019,845

 
122,342

 
4,726,071

            PLANET FITNESS INC CL A
 
1,983,844

 
98,293

 
1,894,106

            PORTOLA PHARMACEUTICALS
 
1,838,192

 
80,739

 
3,164,161

            PROTO LABS INC
 
460,019

 
7,571

 
386,878

            PUMA BIOTECHNOLOGY INC
 
2,259,066

 
34,068

 
1,267,330

            REALPAGE INC
 
305,912

 
15,072

 
526,013

            SIGNATURE BANK
 
2,887,844

 
22,358

 
3,317,704

            SITEONE LANDSCAPE SUPPLY
 
1,878,832

 
54,272

 
2,627,308

            SPS COMMERCE INC
 
654,904

 
11,469

 
670,822

            STAMPS.COM INC
 
3,494,032

 
38,907

 
4,604,643

            STRATASYS LTD
 
238,096

 
10,788

 
221,046

            TRADE DESK INC
 
1,191,073

 
32,253

 
1,201,424

            ULTIMATE SOFTWARE GROUP
 
3,764,502

 
22,352

 
4,363,334

            ULTRAGENYX PHARMA INC
 
1,584,422

 
21,555

 
1,460,998

            US PHYSICAL THERAPY INC
 
1,854,128

 
32,270

 
2,107,231

            VIRTUS INVESTMENT PARTNER
 
2,495,318

 
17,160

 
1,817,244

            WAGEWORKS INC
 
1,609,726

 
33,249

 
2,403,903

            WAYFAIR INC
 
3,406,814

 
94,150

 
3,812,134

            XPO LOGISTICS INC
 
2,339,221

 
65,017

 
3,113,664

            2U INC
 
950,217

 
29,660

 
1,176,316

            BBH STIF FUND (INTEREST BEARING CASH)
 
3,910,404

 
3,910,404

 
3,910,404

            SETTLEMENT ADJUSTMENTS
 
**

 
**

 
(454,026
)
*FISHER SMALL CAP VALUE PORTFOLIO
 
 
 
 
 
 
            AAR CORP
 
393,032

 
15,200

 
511,176

            ACADIA RLTY TR REIT
 
539,189

 
29,225

 
878,504

            ANIXTER INTL INC
 
660,921

 
11,293

 
895,535

            ARTISAN PARTNERS ASSET MG
 
1,287,386

 
37,600

 
1,037,760

            ASPEN TECHNOLOGIES
 
1,149,942

 
30,046

 
1,770,310

            ATLAS AIR WORLD
 
750,094

 
19,000

 
1,053,550

            AVISTA CORP
 
213,262

 
9,984

 
389,875

            BANCORPSOUTH INC
 
1,001,888

 
49,225

 
1,489,056


19


McKESSON CORPORATION PROFIT-SHARING INVESTMENT PLAN
FORM 5500, SCHEDULE H, PART IV, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
MARCH 31, 2017 (CONTINUED)



Investment/Fund Name
 
Cost Basis
 
Shares/Units/Interest Rate 
 
Current Value 
            BEACON ROOFING SUPPLY INC
 
1,078,641

 
28,366

 
1,394,473

            BIO RAD LABS CL A
 
531,743

 
5,212

 
1,038,960

            BOSTON BEER COMPANY CL A
 
1,322,316

 
8,800

 
1,272,920

            CALATLANTIC GROUP INC
 
1,037,651

 
39,362

 
1,474,107

            CAPITOL FED FINL (2ND STE
 
527,985

 
44,375

 
649,206

            CAVIUM INC
 
1,017,954

 
15,500

 
1,110,730

            CHEMED CORP
 
934,737

 
9,300

 
1,699,017

            CONMED CORP
 
1,159,095

 
28,000

 
1,243,480

            CORELOGIC INC
 
1,411,352

 
37,733

 
1,536,488

            CORPORATE OFFC PROPERTIES
 
501,498

 
12,751

 
422,058

            DARLING INGREDIENTS INC
 
443,189

 
25,725

 
373,527

            DOMINOS PIZZA INC
 
940,401

 
24,611

 
4,535,807

            DRIL-QUIP INC
 
416,577

 
7,150

 
390,033

            DST SYSTEMS INC
 
1,538,597

 
13,900

 
1,702,750

            DUPONT FABROS TECH INC
 
588,392

 
22,650

 
1,123,214

            EAST WEST BANCORP INC
 
1,097,911

 
42,541

 
2,195,541

            EDUCATION REALTY TR INC
 
581,868

 
18,011

 
735,749

            FINISAR CORP
 
1,245,092

 
78,375

 
2,142,773

            FIRST AMERICAN FIN CORP
 
1,232,026

 
31,089

 
1,221,176

            GLACIER BANCORP INC
 
613,597

 
39,273

 
1,332,533

            GREENHILL & CO INC
 
1,461,646

 
38,485

 
1,127,611

            HEICO CORP
 
1,221,305

 
22,200

 
1,935,840

            HELEN OF TROY LTD
 
1,633,824

 
17,353

 
1,634,653

            HELMERICH & PAYNE INC
 
278,449

 
6,608

 
439,895

            HILL-ROM HOLDINGS INC
 
1,022,113

 
35,150

 
2,481,590

            HUB GROUP INC CL A
 
1,115,973

 
27,100

 
1,257,440

            IDACORP INC
 
208,167

 
5,848

 
485,150

            INFINERA CORP
 
1,211,250

 
127,400

 
1,303,302

            INGREDION INC
 
739,468

 
13,848

 
1,667,715

            INTEGER HOLDINGS CORP
 
1,009,528

 
27,500

 
1,105,500

            INTEGRA LIFESCIENCES HLDS
 
1,230,519

 
60,950

 
2,567,824

            ISHRES TR RUSL 2000 VAL E
 
959,273

 
9,354

 
1,105,269

            JANUS CAPITAL GROUP INC
 
789,017

 
75,784

 
1,000,349

            KANSAS CITY SOUTHERN
 
479,086

 
8,569

 
734,877

            KB HOME
 
1,072,477

 
66,200

 
1,316,056

            LANCASTER COLONY CORP
 
965,685

 
8,795

 
1,133,148

            LIFE STORAGE INC
 
781,778

 
15,202

 
1,248,388

            LITTELFUSE INC
 
1,315,002

 
10,600

 
1,695,046

            MAGELLAN HEALTH INC
 
838,000

 
14,300

 
987,415

            MEREDITH CORP.
 
776,673

 
19,125

 
1,235,475

            MERITAGE HOMES CORP
 
1,404,082

 
32,300

 
1,188,640

            MID AMERICA APT CMNTY INC
 
606,323

 
10,851

 
1,103,981