File No. 001-13252

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 11-K

(Mark One)

þ		ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)

For the plan year ended March 31, 2005

o		TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

For the transition period from                                          to                                         

A. Full title of the plan and address of the plan, if different from that of the issuer named below:                   

McKesson 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
(415) 983-8300

 

 

McKESSON CORPORATION
PROFIT-SHARING INVESTMENT PLAN

TABLE OF CONTENTS		Page
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			1
FINANCIAL STATEMENTS as of and for the Years Ended March 31, 2005 and 2004:
Statements of Net Assets Available for Benefits			2
Statements of Changes in Net Assets Available for Benefits			3
Notes to Financial Statements			4-15
SUPPLEMENTAL SCHEDULE as of and for the Year Ended March 31, 2005:
Form 5500, Schedule H, Part IV, Line 4i — Schedule of Assets (Held at Year End)			16-22
EXHIBIT 23.1

All other schedules required by section 2520.103-10 of the Department of Labor’s Rules and Regulations for the Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because they are not applicable.

EXHIBITS:

23.1		Consent of Independent Registered Public Accounting Firm

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

McKesson Corporation Profit-Sharing Investment Plan
San Francisco, California

We have audited the accompanying statements of net assets available for benefits of the McKesson Corporation Profit-Sharing Investment Plan (the “Plan”) as of March 31, 2005 and 2004, 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. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the procedures that are appropriate in 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, 2005 and 2004, 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.

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule listed in the Table of Contents is presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan’s management. Such supplemental schedule has been subjected to the auditing procedures applied in our audit of the basic 2005 financial statements and, in our opinion, is fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole.

Deloitte & Touche LLP

San Francisco, California
September 23, 2005

McKESSON CORPORATION

PROFIT-SHARING INVESTMENT PLAN

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF MARCH 31, 2005 AND 2004 (IN THOUSANDS)

		2005												2004
						Non-												Non-
		Participant				Participant				Plan				Participant				Participant				Plan
		Directed				Directed				Total				Directed				Directed				Total
ASSETS:
Cash and cash equivalents:
Allocated		$				$	922			$	922			$				$				$
Unallocated							184				184								464				464
Total cash and cash equivalents			—				1,106				1,106				—				464				464
Investments:
Participant Directed Investments			915,125								915,125				814,630								814,630
McKesson Corporation common stock:
Allocated							336,090				336,090								285,250				285,250
Unallocated							103,631				103,631								107,325				107,325
Total investments			915,125				439,721				1,354,846				814,630				392,575				1,207,205
Receivables:
Contributions							3,064				3,064
Dividends and interest on:
Allocated							533				533								526				526
Unallocated							173				173								263				263
Due from broker for securities sold – allocated																			446				446
Total receivables			—				3,770				3,770				—				1,235				1,235
Total assets			915,125				444,597				1,359,722				814,630				394,274				1,208,904
LIABILITIES:
Line of credit – On unallocated stock							3,600				3,600								3,600				3,600
ESOP promissory notes payable – On unallocated stock							32,544				32,544								48,907				48,907
Accrued interest expense – On unallocated stock							1,421				1,421								2,088				2,088
Accrued other							603				603								464				464
Total liabilities			—				38,168				38,168				—				55,059				55,059
NET ASSETS AVAILABLE FOR BENEFITS		$	915,125			$	406,429			$	1,321,554			$	814,630			$	339,215			$	1,153,845

See notes to financial statements.

McKESSON CORPORATION

PROFIT-SHARING INVESTMENT PLAN

STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED MARCH 31, 2005 AND 2004 (IN THOUSANDS)

		2005												2004
						Non-												Non-
		Participant				Participant								Participant				Participant
		Directed				Directed				Plan Total				Directed				Directed				Plan Total
INVESTMENT INCOME:
Net appreciation in fair value of investments		$	45,572			$	89,887			$	135,459			$	159,083			$	74,268			$	233,351
Dividends and interest			16,563				3,172				19,735				12,588				3,326				15,914
Investment income			62,135				93,059				155,194				171,671				77,594				249,265
CONTRIBUTIONS:
Participants			74,290								74,290				66,751								66,751
Employer							23,899				23,899								12,344				12,344
Total contributions			74,290				23,899				98,189				66,751				12,344				79,095
DEDUCTIONS:
Benefits paid to participants			69,784				20,530				90,314				58,678				19,072				77,750
Interest expense							4,896				4,896								4,356				4,356
Administrative fees			1,047								1,047				1,007								1,007
Total deductions			70,831				25,426				96,257				59,685				23,428				83,113
INCREASE IN NET ASSETS BEFORE INTERFUND TRANSFERS AND MERGERS			65,594				91,532				157,126				178,737				66,510				245,247
INTERFUND TRANSFERS			24,318				(24,318	)			—				21,259				(21,259	)			—
TRANSFER OF NET ASSETS FROM OTHER PLANS			10,583								10,583				1,733								1,733
INCREASE IN NET ASSETS			100,495				67,214				167,709				201,729				45,251				246,980
Net assets at beginning of year			814,630				339,215				1,153,845				612,901				293,964				906,865
Net assets at end of year		$	915,125			$	406,429			$	1,321,554			$	814,630			$	339,215			$	1,153,845

See notes to financial statements.

McKESSON CORPORATION

PROFIT-SHARING INVESTMENT PLAN

NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED MARCH 31, 2005 AND 2004

1.		PLAN DESCRIPTION
		The following brief description of the McKesson Corporation Profit-Sharing Investment Plan (the “PSIP” or the “Plan”) is provided for general information 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 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 a participating subsidiary, except those covered by a collectively bargained pension plan. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). Certain administrative costs incurred by the PSIP are paid by the Company.
		Fidelity Management Trust Company (“Fidelity”) is the trustee of the Plan.
		The Plan is comprised of Participant Directed and Non-Participant Directed Investments, as described below:

	A.		Participant Directed Investments
			Contributions — For the years ended March 31, 2005 and 2004, participants were allowed to make basic contributions ranging from 1%-4% of compensation for employees of McKesson Information Solutions LLC (“MIS”), a subsidiary of the Company, and Medical Management Group employees, or 1%-6% for all other Company employees. Participants who made basic contributions of 6% (4% for MIS and Medical Management Group participants) could elect to make supplemental contributions of up to an additional 14% of compensation (16% for MIS and Medical Management Group participants). A participant’s pretax contributions generally were limited to $14,000 per year for calendar year 2005 and $13,000 for calendar year 2004. Total contributions are limited to the lesser of $42,000 for calendar year 2005 ($41,000 for calendar year 2004) or 100% of taxable compensation per calendar year. Participants 50 years of age or older may also elect to make catch-up contributions of up to 67% of pay. Pretax catch-up contributions are limited to $4,000 per year for calendar year 2005 and $3,000 for calendar year 2004. Additional limits may apply to individuals classified as highly compensated employees. Participants may also contribute amounts representing distributions from other qualified plans.
			Participant Accounts — Individual accounts are maintained for each Plan participant. Each participant’s account is credited with the participant’s contribution and an allocation of earnings, and charged with withdrawals and an allocation of losses and administrative expenses. Allocations are based on participant earnings, or account balances, as defined in the Plan document. The participant is entitled to a benefit upon retirement or separation from employment based upon the vested portion of the participant’s account.
			Vesting — Participant contributions and earnings thereon are 100% vested at all times.

McKESSON CORPORATION

PROFIT-SHARING INVESTMENT PLAN

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED MARCH 31, 2005 AND 2004

Investment Options — Upon enrollment in the PSIP, a participant may direct contributions in 1% increments to any of the investments within the Plan. The following are descriptions from each fund’s prospectus or fund manager’s report:

Standish Mellon Stable Value Fund (formerly Certus Stable Value Fund) invests in fixed-income investments issued by life insurance companies and financial institutions. This is a separately managed account, not a mutual fund.

Dodge & Cox Large Cap Value Fund invests in the common stock of companies when the fund managers believe the long-term earnings prospects are not reflected in the current price. This is a separately managed account, not a mutual fund.

Fidelity Magellan Fund is a growth mutual fund that seeks capital appreciation and normally invests in common stocks.

Fidelity Diversified International Fund invests primarily in a diversified portfolio of equity securities of companies located outside of the United States. This fund replaced Putnam International Equity Fund Y on January 9, 2004.

MFS Institutional Large Cap Growth Fund invests primarily in common stocks, with a goal of long-term capital growth.

SSgA Balanced Fund (formerly State Street Balanced Fund) is a custom mix of commingled pools that invests 60% in SSgA S&P 500 Index Fund and 40% in SSgA Bond Market Index Fund.

SSgA Bond Index Fund (formerly State Street Bond Index Fund) is a commingled pool that seeks to provide investment results that correspond to the total return of the bonds in the Lehman Brothers Aggregate Bond Index.

SSgA S&P 500 Index Fund (formerly State Street S&P 500 Index Fund) is a commingled pool that invests in stocks in the benchmark S&P 500 Index and attempts to duplicate the investment results of that index.

Wellington Management Small Cap Portfolio invests in stocks within the market capitalization range of the Russell 2000 Index. This is a separately managed account, not a mutual fund, which seeks long-term growth by investing in the stocks of small companies.

McKesson Corporation Employee Company Stock Fund (the “Employee Stock Fund”) represents shares invested in Company common stock.

Mutual Fund Window provides access to approximately 270 mutual fund options from more than 20 investment companies.

Brokerage Link provides access to a discount brokerage account which allows participants to develop a self-directed brokerage option. Commissions and transaction fees are charged to the participant’s account. Effective January 1, 2005, Fidelity waived the account maintenance fees.

McKESSON CORPORATION

PROFIT-SHARING INVESTMENT PLAN

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED MARCH 31, 2005 AND 2004

Loans — Participants may apply for a loan from the Plan. The total amount owed to the Plan by an individual participant cannot exceed the lowest of 50% of such participant’s vested account balance, $50,000 as adjusted for certain items specified in the Plan document, or the value of the participant’s account attributable to basic, supplemental, catch-up and rollover contributions. The loans bear interest at the then current prime rate of interest at the loan date plus 1%. Contractual interest rates ranged from 5% to 11% in fiscal 2005 and 2004. Loans may be repaid over a period not to exceed 5 years, except for residential loans, which must not exceed a term of 10 years. 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 via monthly coupon payments.

Payment of Benefits — Participants have the right to receive a total distribution of the value of their vested accounts from the PSIP at the time of retirement, death, disability or termination of employment. In general, benefit payments are made in a lump sum cash amount. Former employees may remain participants in the Plan.

Transfers from Other Qualified Plans — In fiscal 2005 and 2004, the following net assets available for benefits were merged into the Plan (in thousands):

					Transferred
		Effective Date			Amount
Fiscal 2005:
Moore Medical 401(k) Plan		January 31, 2005			$	10,583
Fiscal 2004:
SI/Baker 401(k) Plan		February 2, 2004			$	1,733

McKESSON CORPORATION

PROFIT-SHARING INVESTMENT PLAN

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED MARCH 31, 2005 AND 2004

	B.		Non-Participant Directed Investments
			General — The McKesson Corporation Employer Company Stock Funds (Allocated and Unallocated) (the “Employer Stock Funds”) consist of a leveraged Employee Stock Ownership Plan (“ESOP”). In fiscal year 2005, employer contributions were funded with 822,000 shares from the ESOP and $3,065,000 in cash. In fiscal 2004, 1,463,000 shares from the ESOP were used to fund all employer contributions for the year.

ESOP I — In January 1985, the Company amended the Plan to add a leveraged ESOP for the benefit of persons eligible to participate in the PSIP. In July 1986, the PSIP purchased from the Company 2,000,000 shares of Company common stock, par value $0.01, for $30,250,000, originally financed by a ten-year term loan from a bank, guaranteed by the Company. Additionally, in connection with a fiscal 1995 transaction involving a reorganization and a sale of a business unit of the Company (the “PCS Transaction”), the ESOP purchased 1,087,754 additional common shares in fiscal 1996. In fiscal 1997, the Company extended the existing term of the outstanding loan balance from its original maturity to fiscal 2005. The loan was paid in full on August 29, 2004.

ESOP II — The loan supporting the October 1987 purchase of Company common stock by the ESOP was paid in full as of March 31, 2003.

ESOP III — In June 1989, the Company amended the Plan to add an additional leveraged ESOP. In June 1989, the Plan purchased from the Company 2,849,003 shares of McKesson Corporation Series B ESOP Convertible Preferred Stock ($43.875 stated value) for $125,000,000, financed by a twenty-year term loan from the Company. During fiscal 1995, in connection with the PCS Transaction, all shares of Series B ESOP Convertible Preferred Stock held by the Plan were converted into 5,440,914 shares of Company common stock. In fiscal 1996, in connection with the PCS Transaction, the ESOP purchased 6,259,080 additional shares of Company common stock.

Employer Matching Contributions and Participants Accounts — Effective the last business day of each month throughout the fiscal year, participant accounts are credited with matching Company contributions, in the form of the Company’s common stock based on a percentage of the participants’ basic contributions. An additional annual matching contribution may be granted at the discretion of the Company. In fiscal 2005 and 2004, employees were eligible for matching Company contributions of up to 3.6% of their eligible compensation.

Retirement Share Plan Contribution — The Retirement Share Plan (“RSP”) provided for the contribution to each eligible participant a percentage of the participant’s compensation. Such percentage depended on the participant’s combined age and years of service, or RSP “points” as defined in the Plan document. Employees hired after December 31, 1999, were not eligible to participate in the RSP. At the Company’s election, this contribution could be made in the form of cash or shares of Company common stock. This benefit was discontinued after March 31, 2004.

McKESSON CORPORATION

PROFIT-SHARING INVESTMENT PLAN

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED MARCH 31, 2005 AND 2004

PSIP-PLUS Contribution — The “PSIP-PLUS contribution” was a per capita contribution of up to 30 shares of Company common stock per year made to certain employees who contributed at least 2% of their total compensation to the PSIP. Employees hired after December 31, 1999, were not eligible for the PSIP-PLUS. This benefit was discontinued after March 31, 2004.

Employer Contributions — Dividends on unallocated ESOP I, and on allocated and unallocated ESOP III shares, of Company common stock, are used to pay the obligations under the ESOP loans. Under the terms of the loan agreements, the Company is required to make cash contributions to each ESOP to the extent that the dividends are not sufficient to service the debt. To pay down such debt obligations, cash contributions amounted to $20,834,000 and $12,344,000 in the years ended March 31, 2005 and 2004.

Vesting — Employer contributions made before April 1, 2005 vest over five years of service (20% annually over five years). Generally, 100% vesting is provided upon retirement, disability, death, termination of the Plan, or a substantial reduction in work force initiated by the Company for affected participants. Dividends automatically reinvested in McKesson common stock on and after January 1, 2003 are also 100% vested at all times.

Forfeitures — A rehired employee who has met certain levels of service prior to termination may be entitled to have forfeited interests in the PSIP reinstated. Each plan year, forfeited interests are used to reinstate previously forfeited amounts of rehired employees and to pay other Plan expenses as appropriate. Forfeitures for the years ended March 31, 2005 and 2004 were $1,289,000 and $1,266,000.

Diversification of Stock Fund —Participants who completed five years of service could elect to transfer 50% of the Company contribution that was invested in the McKesson Corporation Employer Company Stock Fund (Allocated) to one or more of the other investment funds offered. After ten years of service, participants could elect to transfer up to 75% of the portion of their account representing the Company contributions. Participants who reached age 50 and completed five years of service were allowed to transfer up to 100% of their balance related to the Company contributions, in one percent increments or in whole dollars.

Payment of Benefits — Distributions are made only upon participant retirement, death (in which case, payment shall be made to the participant’s beneficiary), or other termination of employment with the Company. Distributions are made in cash or, if a participant elects, in the form of Company common shares plus cash for any fractional share.

McKESSON CORPORATION

PROFIT-SHARING INVESTMENT PLAN

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED MARCH 31, 2005 AND 2004

McKesson Corporation Employer Company Stock Funds (Allocated and Unallocated) – The following ESOP information regarding the shares of McKesson Corporation common stock held is as of March 31 (in thousands):

		2005												2004
		Number of				Cost				Fair Value				Number of				Cost				Fair Value
		Shares				Basis				of Shares				Shares				Basis				of Shares
Allocated			8,903			$	236,838			$	336,090				9,480			$	245,701			$	285,250
Unallocated			2,745				51,719				103,631				3,567				67,338				107,325
Total			11,648			$	288,557			$	439,721				13,047			$	313,039			$	392,575

The per share fair market value of McKesson Corporation common stock at March 31, 2005 and 2004 was $37.75 and $30.09.

The following is a reconciliation of the allocated and unallocated net assets of the Non-Participant Directed Investments at fair value for the years ended March 31 (in thousands):

		2005												2004
		Allocated				Unallocated				Total				Allocated				Unallocated				Total
Net Assets (beginning of year)		$	285,758			$	53,457			$	339,215			$	231,822			$	62,142			$	293,964
Net Appreciation			70,292				19,595				89,887				47,639				26,629				74,268
Dividends and Interest			2,359				813				3,172				1,932				1,394				3,326
Employer Contributions							23,899				23,899								12,344				12,344
Benefits Paid to Participants			(20,530	)							(20,530	)			(19,072	)							(19,072	)
Interest Expense							(4,896	)			(4,896	)							(4,356	)			(4,356	)
Allocation of 1,463 shares, at market															44,696				(44,696	)
Allocation of 822 shares, at market			26,446				(26,446	)
Transfers			(24,318	)							(24,318	)			(21,259	)							(21,259	)
Net Assets (end of year)		$	340,007			$	66,422			$	406,429			$	285,758			$	53,457			$	339,215

McKESSON CORPORATION

PROFIT-SHARING INVESTMENT PLAN

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED MARCH 31, 2005 AND 2004

2.

SUMMARY OF 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.

Reclassifications — Certain prior year amounts have been reclassified to conform to the current year presentation.

Cash Equivalents — The Plan considers all highly liquid debt instruments purchased with remaining maturities of less than three months to be cash equivalents.

Use of Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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.

Risk & Concentration — The Plan utilizes various investment instruments, including mutual funds and investment contracts. Investment securities, in general, are exposed to various risks, such as interest rate, credit, 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 — Investments are stated at fair value which is based on independent valuations or publicly quoted market prices, except for investments in the Standish Mellon Stable Value Fund which are stated at contract value (or cost) plus accrued interest. Contract value represents contributions made under the contracts, plus earnings, less participant withdrawals and administrative expenses. Shares of registered investment companies are valued at quoted market prices, which represent the net asset value of shares held by the Plan at year-end. Shares of McKesson Corporation common stock are valued at quoted market prices on March 31, 2005 and 2004. Certain administrative expenses are allocated to the individual funds based upon daily balances invested in each fund and are reflected as a reduction of net appreciation in fair market value of investments and are not separately reflected. Consequently, these management fees and operating expenses are reflected as a reduction of investment return for such investments. All other activity is recorded in the Plan based on the elections of the individual participants in the Plan. Participant loans are valued at the outstanding loan balance. Purchases and sales of securities are recorded on a trade-date basis. Realized gains and losses from security transactions are reported on the average cost method. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date.

Administrative Fees — Administrative fees of the Plan are paid by either McKesson or the Plan, as provided by the Plan document.

Benefits — Benefits are recorded when paid.

McKESSON CORPORATION

PROFIT-SHARING INVESTMENT PLAN

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED MARCH 31, 2005 AND 2004

3.

INVESTMENTS

The recorded values of individual investments that represent 5% or more of the Plan’s net assets at March 31 were as follows (in thousands):

		2005				2004
McKesson Corporation Employer Company Stock Funds (Allocated and Unallocated) *		$	439,721			$	392,575
SSgA S&P 500 Index			155,948				156,534
Dodge & Cox Large Cap Value Fund			114,841				104,453
Standish Mellon Stable Value Fund			111,371				106,819

The Standish Mellon Stable Value Fund contains benefit-responsive guaranteed investment contracts with several insurance companies carried at contract value plus accrued interest totaling $11,484,000 at March 31, 2005. The guaranteed rates range from 3.63% to 5.66% and the contracts mature at various dates through April 2008. The Standish Mellon Stable Value Fund also includes synthetic investment contracts that are benefit-responsive and are carried at contract value plus accrued interest totaling $93,820,000 at March 31, 2005. There are no reserves against these contract values for credit risk of the contract issuer or otherwise. Certain of the contracts contain limitations on contract value guarantees for liquidation other than to pay benefits. The contracts mature at various dates through November 2011. The Plan’s investment guidelines require these contracts to be with companies rated AA- or better, with no more than 10% of the pool invested with one traditional Guaranteed Income Contract issuer and no more than 40% invested with any one synthetic wrap provider.

During fiscal 2005 and 2004, the Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated in value as follows (in thousands):

		2005				2004
Institutional Commingled Funds		$	11,774			$	48,547
Registered Investment Companies			13,458				61,345
Separately Managed Accounts			12,423				42,873
McKesson Corporation Common Stock:
Employer Company Stock Fund (Allocated and Unallocated)*			89,887				74,268
Employee Company Stock Fund			7,917				6,318
Total		$	135,459			$	233,351

McKESSON CORPORATION

PROFIT-SHARING INVESTMENT PLAN

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED MARCH 31, 2005 AND 2004

4.

LINE OF CREDIT

In fiscal 1998, the Plan obtained a $35 million line of credit with ABN AMRO Bank N.V. in order to refinance a portion of the principal payable under the ESOP loans and reduce the number of shares that would be released to fund the employee benefits. In fiscal 2005 and 2004, the Plan released only the shares required to fund the annual ESOP benefits. The line of credit bears interest at London Interbank Offered Rate (“LIBOR”) multiplied by the applicable LIBOR adjustment. The line of credit matures on June 1, 2009. On March 31, 2005 and 2004, interest rates were 2.497% and 0.98% on both outstanding loans totaling $3,600,000. At March 31, 2005 and 2004, the line of credit was collateralized by 225,874 unallocated shares of McKesson Corporation common stock.

5.

ESOP PROMISSORY NOTES PAYABLE

The ESOP I promissory note supporting the July 1986 stock purchase was payable to a bank in increasing annual installments (ranging from 2% to 3% of original principal) over an 18-year term that ended in fiscal 2005 (see Note 1, B). The interest rate was LIBOR plus 0.4%, with an option to the Plan to fix the LIBOR rate for a period ranging from 1 month to 1 year. On March 31, 2004, the interest rate was 1.53%, and the outstanding balance was $949,000. The note was guaranteed by the Company, without recourse to the participants’ accounts and was collateralized by 129,385 unallocated shares of McKesson Corporation common stock at March 31, 2004. The note was paid in full in August 2004 and all shares of McKesson common stock were released for employer contributions.

The ESOP II promissory note was paid in full as of March 31, 2003.

The ESOP III promissory note supporting the ESOP III purchase is payable to the Company in annual installments plus interest at 8.6% over a twenty-year term ending in fiscal 2010. On March 31, 2005, the outstanding balance of the note was $32,544,604 ($47,958,000 at March 31, 2004). This note is collateralized by 2,519,312 unallocated shares of McKesson Corporation common stock (3,211,021 at March 31, 2004). In July 2005 and April 2004, additional principal payments of $6,000,000 and $9,000,000 were made to enable the release of additional shares for employer contributions, and each of the scheduled subsequent loan repayment installments was reduced.

McKESSON CORPORATION

PROFIT-SHARING INVESTMENT PLAN

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED MARCH 31, 2005 AND 2004

Future minimum principal payments required on the ESOP notes (including the July 2005 additional payment) are as follows (in thousands):

Fiscal Year		Amount
2006		$	11,561
2007			5,378
2008			5,851
2009			6,365
2010			3,389
Total		$	32,544

6.

FEDERAL INCOME TAX STATUS

The Internal Revenue Service (“IRS”) has determined and informed the Company by letter dated January 21, 2004, that the Plan is qualified and the trust established under the Plan is tax-exempt, in accordance with the applicable sections of the Internal Revenue Code. This was in response to the Plan’s Sponsor’s request for an updated determination letter to incorporate certain regulatory changes to the Plan as required by the Uruguay Round Agreements Act, the Uniformed Services Employment and Reemployment Rights Act of 1994, the Small Business Job Protection Act of 1996, the Taxpayer Relief Act of 1997, the IRS Restructuring and Reform Act of 1998, and the Community Renewal Tax Relief Act of 2000 (collectively referred to as “GUST”). The Company and the Plan administrator believe that the Plan is currently designed and operated in compliance with the applicable requirements of the Internal Revenue Code and 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.

During fiscal year 2002, the Department of Labor (the “DOL”) initiated a review of the Plan’s operations. The DOL has not issued any report on its findings. The Plan’s Sponsor is cooperating with the DOL and will address matters, if any, requiring corrective action.

7.

PLAN TERMINATION

The Company’s Board of Directors reserves the right to terminate the Plan. If termination should occur, all participant accounts will immediately vest and each account would receive a distribution equal to the vested account balance. In addition, the unallocated common stock would be liquidated to repay the ESOP promissory notes payable. If the stock liquidation is insufficient to satisfy the notes payable, the Company is obligated to fund the difference.

McKESSON CORPORATION

PROFIT-SHARING INVESTMENT PLAN

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED MARCH 31, 2005 AND 2004

8.

PENDING LITIGATION

The Plan’s report on Form 11-K for the fiscal year ended March 31, 2004, included a description of an action in the United States District Court for the Northern District of California captioned In re McKesson HBOC, Inc. ERISA Litigation (N.D. Cal. C-00-20030 RMW) (the “ERISA Action”). The ERISA Action is brought on behalf of two putative classes: an “HBOC Sub-Class,” and a “McKesson Sub-Class.” The HBOC Sub-Class includes “all participants in the former HBO & Company Profit-Sharing and Savings Plan (the “HBOC Plan”) and their beneficiaries in the period from March 31, 1996 to April 1, 1999 (the date of the merger of the HBOC Plan into the Plan), for whose benefit the HBOC Plan held and acquired HBO & Company (“HBOC”) stock (and, after January 12, 1999, McKesson stock).”  The McKesson Sub-Class includes “all participants in the Plan (excluding employees of HBOC who became participants in the Plan by virtue of the merger of the HBOC Plan into the Plan on or about April 1, 1999) whose accounts were invested in McKesson stock at any time, who maintained an account balance under the Plan as of April 27, 1999, which included McKesson stock, and who had not received a distribution from the Plan as of April 27, 1999.”

Plaintiffs’ Consolidated Amended Complaint (the “CAC”), filed December 31, 2002, names as defendants HBOC, the HBOC Administrative Committee, certain members of the HBOC Administrative Committee, certain former officers, directors or employees of HBOC, the HBOC Board of Directors, the Company, certain current or former officers or directors of the Company and the Plan (as a nominal defendant only), and contains thirteen causes of action, referred to as “Counts.” Counts one through six are asserted on behalf of the HBOC Plan for the benefit of the HBOC Sub-Class and allege that HBOC or alleged fiduciaries of the HBOC Plan breached their fiduciary duties and engaged in transactions prohibited by ERISA. Counts seven through thirteen are asserted on behalf of the Plan for the benefit of the McKesson Sub-Class and allege that McKesson or alleged fiduciaries of the Plan breached their fiduciary duties by, among other things, (i) failing to adequately investigate the potential effects of the January 12, 1999, merger transaction with HBOC (the “Merger”) on the Plan, (ii) failing to adequately determine whether the Plan’s heavy concentration in McKesson stock was appropriate in light of the Merger, (iii) failing to diversify the Plan’s holding of McKesson stock in light of the Merger, (iv) placing themselves in a conflicted position which prevented them from acting with complete loyalty to the Plan, (v) failing to diversify the Plan’s McKesson stock in light of the Company’s announcement on April 28, 1999, that certain software sales transactions at its Information Technology Business Unit were improperly recorded as revenue because they were subject to contingencies and were reversed, and (vi) failing to contribute cash, as opposed to Company stock, to the Plan in the Company’s annual contribution for the Plan year ended March 31, 1999.

On May 6, 2005, the Company reached an agreement to settle counts one through six (consisting of all claims for the benefit of the HBOC Sub-Class) in the ERISA Action for approximately $18.2 million, in exchange for releases in favor of all defendants, including releases of claims the HBOC Sub-Class might have under ERISA, the federal securities laws, or which relate to the holding, voting or acquisition of McKesson or HBOC securities. Judge Whyte granted preliminary approval to that settlement on May 10, 2005, and stayed any further proceedings in connection with counts one through six of the CAC pending the court’s ruling on approval of the settlement. On September 9, 2005, Judge Whyte granted final approval to the settlement as fair, adequate and reasonable to the HBOC Sub-Class.

McKESSON CORPORATION

PROFIT-SHARING INVESTMENT PLAN

NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
FOR THE YEARS ENDED MARCH 31, 2005 AND 2004

Also on September 9, 2005, Judge Whyte granted that portion of the Company’s previously-reported motion to dismiss, which, because the claims for the benefit of the HBOC Sub-Class have been settled, related only to the claims by the Plan for the benefit of the McKesson Sub-Class (described above as counts seven through thirteen). Judge Whyte dismissed with prejudice all counts asserted for the benefit of the McKesson Sub-Class against the alleged fiduciaries of the Plan, including the Company, except the Court did not dismiss a portion of one of Plaintiffs’ counts that alleged the Company breached its fiduciary duties under ERISA to the Plan participants by contributing Company stock, as opposed to cash, to the Plan in the Company’s annual contribution for the Plan fiscal year ended March 31, 1999. The Company and Plaintiff are presently in discussions regarding a date by which the Company will be required to respond to the CAC.

The Company does not believe it is feasible to determine the outcome or resolution of this proceeding or the effect, if any, on the Plan.

9.

RELATED-PARTY TRANSACTIONS

At March 31, 2005 and 2004, the Plan held approximately 12,603,000 and 14,164,000 common shares of McKesson Corporation, the Plan’s sponsor. The shares are held within the McKesson Corporation Employer and Employee Stock Funds and the Leveraged ESOP. At March 31, 2005 and 2004, the Employer Stock Funds held approximately 8,903,000 and 9,480,000 common shares and the Leveraged ESOP held 2,745,000 and 3,567,000 common shares as collateral for the ESOP loans. At March 31, 2005 and 2004, the Employee Stock Fund held approximately 955,000 and 1,117,000 shares.

McKesson Corporation declared dividends of $0.24 per share for both fiscal 2005 and 2004. During the years ended March 31, 2005 and 2004, the Employer Stock Funds recorded dividend income from McKesson Corporation common shares of approximately $3,172,000 and $3,326,000. During each of the years ended March 31, 2005 and 2004, the Employee Company Stock Fund recorded dividend income from McKesson Corporation common shares of approximately $246,000 and $291,000.

Certain investment options are managed by Fidelity, which also serves as the Plan’s record-keeper and trustee. Therefore, these transactions qualify as party-in-interest transactions. Fees for investment management services are allocated to the participants with balances in those funds.

10.

SUBSEQUENT EVENTS

Certain Plan provisions were amended to enable the Plan to qualify as a safe harbor plan as described in Internal Revenue Code sections 401(k)(12) and 401(m)(11). Effective April 1, 2005, the Plan provides for Company matching contributions to all participants who make elective deferrals in an amount equal to 100% of the employee’s deferral for the first 3% of pay deferred, and 50% of the employee’s deferral for the next 2% of pay deferred. Employer contributions on or after April 1, 2005, are 100% vested immediately.

Effective April 1, 2005, participants may transfer matching contributions from McKesson stock to other investment funds as soon as they are made. In addition, participants can diversify past Company contributions with no restrictions.

*****

McKESSON CORPORATION

PROFIT-SHARING INVESTMENT PLAN

FORM 5500, SCHEDULE H, PART IV, LINE 4i
SCHEDULE OF ASSETS (HELD AT YEAR END)
MARCH 31, 2005

Investment/Fund Name		Cost Basis				Shares/Units				Fair Value
BROKERAGELINK		$	7,209,562				7,209,562			$	7,209,562
SSGA BOND INDEX			11,295,600				966,954				15,432,591
SSGA BALANCED			35,133,493				3,664,546				39,980,193
WELLNGTON MGMT SMCAP			22,449,497				2,185,189				30,852,688
SSGA S&P 500 INDEX			112,360,564				8,901,125				155,947,703
DODGE & COX LG VAL			76,833,739				7,243,189				114,840,760
PIMCO TOT RETURN ADM			4,331,918				404,008				4,270,368
TMPL FOREIGN SM CO A			234,978				13,497				288,438
ABF BALANCED PA			487,108				38,377				528,066
ABF LARGE CAP VAL PA			1,358,145				75,425				1,447,405
ABF INTL EQUITY PA			159,208				8,689				174,572
ABF SH TERM BOND PA			103,060				11,019				97,848
MUTUAL DISCOVERY A			831,713				40,955				996,035
BARON GROWTH			6,273,426				169,878				7,731,157
BARON ASSET FUND			230,616				4,434				231,463
UBS GLOBAL EQ Y			379				32				374
MSI EQUITY GROWTH B			79,559				5,424				85,544
CALVERT NEWVIS SM CP			36,697				2,171				39,521
CALVERT SIF BALNCD A			29,172				1,159				31,510
CALVERT CAP ACC A			29,520				1,362				31,745
CALVERT INTL EQTY A			14,649				806				15,145
FMA SMALL COMPANY IS			323,034				16,591				348,584
FPA CRESCENT			3,164,451				149,900				3,624,589
RHJ MICRO CAP			1,492,301				75,058				1,473,382
LOOMIS SM CAP VAL R			23,077				895				22,604
PBHG EMERGING GROWTH			130,524				10,635				132,090
ARIEL FUND			5,479,919				124,489				6,597,908
ARIEL APPRECIATION			3,695,511				92,438				4,288,204
ARIEL PREM BOND INV			283,046				27,252				276,885
ALGER CAP APPREC I			525,135				46,320				552,139
ALGER MIDCAP GRTH I			1,795,742				124,511				2,045,717
ALGER SMALL CAP I			274,125				18,112				315,154
FKLN SMMIDCAP GRTH A			448,829				15,884				522,435
DREY FNDRS BALNCED F			40,901				5,412				45,192
DREY FNDRS EQ GRTH F			61,257				13,613				65,617
DREY FNDRS GROWTH F			153,115				15,667				160,747
DREY FNDRS MC GRTH F			171,254				48,077				199,039
DREY FNDRS WW GRTH F			16,370				1,310				16,685
PBHG GROWTH FUND			100,008				5,447				100,003
AIM DYNAMICS INV			145,629				10,619				172,236
AIM SM CO GRTH INV			94,155				8,583				101,369
TEMPLETON FOREIGN A			5,380,877				535,455				6,570,034
JANUS FLEXIBLE BOND			1,035,677				107,430				1,022,733
DREY FNDRS DISCVRY F			221,676				8,915				238,751

McKESSON CORPORATION

PROFIT-SHARING INVESTMENT PLAN

FORM 5500, SCHEDULE H, PART IV, LINE 4i
SCHEDULE OF ASSETS (HELD AT YEAR END)
MARCH 31, 2005

Investment/Fund Name		Cost Basis				Shares/Units				Fair Value
MSI INTL MAGNUM B			10,389				997				11,708
MUTUAL SHARES CL A			908,643				43,323				995,568
MANAGERS SPECIAL EQ			1,403				16				1,391
MSI GLOBAL VAL EQ B			38,244				2,512				43,939
MSIFT BALANCED ADV			26,165				2,475				27,822
MSIFT CP FX INC ADV			167,200				14,387				166,309
MSIFT HIGH YIELD ADV			21,002				3,901				21,065
MSIFT MIDCAP GTH ADV			308,048				18,505				370,845
MSIFT VALUE ADVISER			270,663				17,975				317,617
MSI SM CO GROWTH B			85,065				8,371				98,774
MSI ACTIVE INTL B			31,702				3,086				33,974
MSI EMERGING MKTS B			178,823				11,240				215,692
NB FOCUS TRUST			214,601				8,726				229,838
NB GENESIS TR CL			3,983,187				111,195				4,877,019
NB MANHATTAN TRUST			65,136				6,791				70,763
NB PARTNERS TRUST			177,164				9,639				189,886
NB SOCIALLY RESP TR			194,093				14,077				209,467
OAKMARK FUND I			128,358				3,117				127,317
ALLNZ CCM CAP AP ADM			340,019				22,569				399,023
ALLNZ CCM MID CAP ADM			265,021				13,141				313,013
PIM GLBBND AD UNHDGD			693,325				68,820				699,216
PIMCO HIGH YIELD ADM			846,253				88,051				854,091
PIMCO LOW DUR ADM			288,739				28,159				284,683
PIMCO LT US GOVT ADM			1,022,155				93,374				1,005,638
WFA ULTRA ST INC INV			153,517				16,584				152,076
WFA SHRTTERM BND INV			214,788				24,066				207,447
WFA DISCOVERY INV			344,211				17,837				342,834
WFA GROWTH INV			354,467				21,362				393,701
WFA COMMON STOCK Z			222,811				10,743				239,558
WFA OPPORTUNITY INV			620,842				16,496				742,487
WFA LG CAP GRTH INV			193,852				9,400				203,421
WFA GOVT SECURITY INV			710,939				64,923				689,481
TEMPLETON DEV MKTS A			462,023				28,653				540,105
TEMPLETON GROWTH A			1,209,789				60,905				1,398,387
TMPL GLOBAL BOND A			925,447				91,655				988,953
TEMPLETON WORLD A			843,796				52,112				924,986
USAA CORNERSTONE			159,931				6,354				167,751
USAA GNMA TRUST			196,289				19,569				189,627
USAA INCOME FUND			740,801				60,088				737,274
USAA INCOME STOCK			219,597				14,543				237,925
USAA INTERNATIONAL			106,573				5,406				117,786
USAA GROWTH FUND			73,116				5,952				78,390
USAA EMERGING MKTS			164,012				20,253				253,775
AIM CONSTELLATION A			22,489				1,001				22,088

McKESSON CORPORATION

PROFIT-SHARING INVESTMENT PLAN

FORM 5500, SCHEDULE H, PART IV, LINE 4i
SCHEDULE OF ASSETS (HELD AT YEAR END)
MARCH 31, 2005

Investment/Fund Name		Cost Basis				Shares/Units				Fair Value
CS CAP APPREC COM			78,970				4,680				73,376
CS MID CAP GRTH COM			92,398				3,850				117,358
RS EMERGING GROWTH			2,709				89				2,639
ARTISAN INTL			121,207				5,563				122,502
MSI INTL EQUITY B			14,811				698				14,596
AIM TOTAL RETURN INV			67,615				2,934				69,530
NB GUARDIAN TRUST			24,062				2,263				29,105
SCUDDER INTL FUND S			353				8				342
DOMINI SOCIAL EQUITY			161,222				5,991				168,454
AIM CORE STOCK INV			133,152				12,235				126,264
SCUDDER GLOBAL DISC			5,238				154				5,408
AIM BLUE CHIP A			203				18				200
AM CENT ULTRA INV			20,514				715				20,056
TCW GAL SM CAP GR N			189				13				183
MSI VALUE EQUITY B			42				4				42
AIM BALANCED A			6,656				265				6,615
AIM GBL AGGR GRTH A			17,176				905				17,265
MANAGERS BOND FUND			66,185				2,687				65,071
MANAGERS VALUE			1,852				62				1,849
TCW GALILEO SEL EQ N			120,572				6,412				110,934
CS LARGE CAP VALUE A			1,002				50				1,032
AIM BASIC VALUE A			56,095				1,729				55,160
GARTMORE VAL OPPS A			274				19				274
LM VALUE TRUST FI CL			126,559				1,860				123,092
ARTISAN MID CAP INV			116,615				4,028				115,398
CS SMALL CAP VAL COM			688,134				33,069				762,250
OAKMARK EQ & INC I			342,028				14,731				343,977
ROYCE LOW PRICED STK			138,718				9,285				135,839
VK GROWTH & INCOME A			85,526				4,232				84,650
SCUDDER/D HIGH RTN A			128,385				2,966				127,186
AIM MIDCAP CORE EQ A			11,519				392				11,280
WEST ASSET CORE FI			12,670				1,111				12,542
MFS INST LG CAP GRTH			2,224,006				416,082				2,508,976
ALLNZ NFJ SMCPVAL AD			256,433				8,783				256,115
LD ABBETT MIDCPVAL P			132,197				6,147				133,211
COL/ACORN SELECT Z			186,052				9,184				183,773
COLUMBIA HIGH YLD Z			11,980				1,366				11,641
CRM MID CAP VAL INV			211,497				8,352				213,725
ABF SM CAP VAL PA			197,729				10,212				198,427
AM CEN LG CO VAL INV			15,355				2,395				15,304
STANDISH STABLEVALUE			102,897,158				110,949,170				111,371,285
*MCKESSON EMPLOYEE STK			30,570,792				955,179				36,354,766
*MCKESSON EMPLOYER STK (ALLOCATED)			236,838,000				8,903,040				336,089,760

McKESSON CORPORATION

PROFIT-SHARING INVESTMENT PLAN

FORM 5500, SCHEDULE H, PART IV, LINE 4i
SCHEDULE OF ASSETS (HELD AT YEAR END)
MARCH 31, 2005

Investment/Fund Name		Cost Basis				Shares/Units				Fair Value
*MCKESSON EMPLOYER STK (UNALLOCATED)			51,719,000				2,745,186				103,630,772
*FIDELITY FUND			924,686				34,268				1,008,158
*FIDELITY PURITAN			2,045,548				114,041				2,131,427
*FIDELITY TREND			119,892				2,550				133,348
*FIDELITY SEL COMPUTERS			2				0				2
*FIDELITY SEL ELECTRONICS			36				1				36
*FIDELITY SEL FOOD & AG			785				16				793
*FIDELITY VALUE STRATEGIES			17,057				469				16,497
*FIDELITY GINNIE MAE			1,724,551				155,352				1,704,210
*FIDELITY MAGELLAN			57,162,205				529,373				53,472,673
*FIDELITY CONTRAFUND			1,071,231				19,043				1,083,912
*FIDELITY EQUITY INCOME			2,209,314				45,520				2,333,354
*FIDELITY GROWTH COMPANY			2,229,529				46,521				2,460,017
*FIDELITY INVST GR BD			715,885				95,522				710,686
*FIDELITY GROWTH & INCOME			45,346,151				1,147,480				42,766,571
*FIDELITY SEL SOFTWARE			7,233				155				7,248
*FIDELITY INTERMED BOND			6,432,521				623,322				6,451,382
*FIDELITY SEL AIR TRANSPRT			1,037				31				1,041
*FIDELITY CAPITAL & INCOME			1,391,088				175,734				1,456,831
*FIDELITY VALUE			5,257,108				86,424				6,206,984
*FIDELITY MORTGAGE SEC			56,519				5,082				56,464
*FIDELITY SEL GOLD			47,740				1,786				46,945
*FIDELITY SEL BIOTECH			29,601				558				27,004
*FIDELITY SEL ENERGY SVCS			178,461				3,735				183,285
*FIDELITY SEL INSURANCE			16,861				270				16,191
*FIDELITY SEL RETAILING			6,367				121				6,269
*FIDELITY US GOVT RES			1,414,213				1,414,213				1,414,213
*FIDELITY GOVT INCOME			877,320				85,304				864,133
*FIDELITY CASH RESRVE			5,001,510				5,001,510				5,001,510
*FIDELITY SEL ENERGY			1,491,330				40,648				1,554,376
*FIDELITY SEL LEISURE			8,431				111				8,207
*FIDELITY SEL HEALTHCARE			138,200				1,087				137,591
*FIDELITY SEL TECHNOLOGY			22,155				387				21,587
*FIDELITY SEL UTILITIES GR			14,281				361				14,433
*FIDELITY SEL FINANCIAL			20,269				177				19,381
*FIDELITY SEL DEFENSE			102,260				1,522				103,934
*FIDELITY SEL BROKERAGE			1,004				18				969
*FIDELITY SEL CHEMICAL			128,719				1,833				128,601
*FID INDEPENDENCE			171,199				11,164				192,689
*FIDELITY OTC PORTFOLIO			245,888				7,920				257,785
*FIDELITY OVERSEAS			259,936				8,928				311,043
*FIDELITY SEL HOME FINANCE			13,027				212				11,800
*FIDELITY LEVERAGED CO STK			941,852				40,433				959,875

McKESSON CORPORATION

PROFIT-SHARING INVESTMENT PLAN

FORM 5500, SCHEDULE H, PART IV, LINE 4i
SCHEDULE OF ASSETS (HELD AT YEAR END)
MARCH 31, 2005

Investment/Fund Name		Cost Basis				Shares/Units				Fair Value
*FIDELITY EUROPE			460,052				16,174				563,515
*FIDELITY PACIFIC BASIN			126,747				6,821				134,655
*FID REAL ESTATE INVS			5,237,362				218,910				6,085,704
*FIDELITY BALANCED			5,225,149				328,521				5,795,116
*FIDELITY INTL DISCOVERY			2,825,753				120,670				3,392,027
*FIDELITY CAP APPRECIATION			2,549,208				104,947				2,604,775
*FIDELITY CONVERTIBLE SEC			782,185				39,724				825,872
*FIDELITY CANADA			2,532,681				84,915				3,009,399
*FIDELITY UTILITIES			246,400				20,884				284,863
*FIDELITY BLUE CHIP GROWTH			29,451,479				661,425				26,490,079
*FID ASSET MANAGER			8,234,671				511,064				8,100,359
*FIDELITY DISCIPLINED EQUITY			201,332				8,905				226,178
*FIDELITY LOW PR STK			13,100,229				401,802				16,015,823
*FIDELITY WORLDWIDE			148,802				9,452				169,470
*FIDELITY EQUITY INCOME II			13,834,797				612,870				14,279,883
*FIDELITY STOCK SELECTOR			40,034				1,953				43,611
*FID ASSET MGR GROWTH			466,953				33,578				481,849
*FIDELITY EMERG MRKTS			403,669				35,832				476,919
*FIDELITY AGGR GROWTH			1,654,710				106,967				1,634,463
*FIDELITY DIVERSIFIED INTL			21,551,757				855,460				24,534,584
*FID ASSET MGR INCOME			371,467				31,039				389,232
*FIDELITY DIVIDEND GROWTH			4,861,443				183,735				5,012,303
*FIDELITY NEW MARKETS INC			2,226,690				168,526				2,302,070
*FIDELITY EXP & MULTINATL			1,459,065				83,603				1,617,719
*FID FOCUSED STOCK			177,579				19,427				202,036
*FIDELITY GLOBAL BALANCED			213,400				11,314				235,555
*FID AGGRESSIVE INT’L			313,618				21,827				361,013
*FID SM CAP INDEPEND			422,065				23,626				460,464
*FIDELITY MID-CAP STOCK			4,395,781				208,814				4,721,280
*FIDELITY LARGE CAP STOCK			397,607				30,470				429,620
*FIDELITY DISCOVERY			577,150				58,638				608,668
*FIDELITY SMALL CAP STOCK			2,701,830				168,277				2,968,403
*FIDELITY EUROPE CAP APP			259,857				14,191				310,362
*FIDELITY NORDIC			288,223				11,309				316,195
*FID ASSET MGR AGGRES			429,616				42,650				460,190
*FIDELITY LATIN AMERICA			1,438,935				71,371				1,547,314
*FIDELITY JAPAN			310,345				28,317				357,933
*FIDELITY SOUTHEAST ASIA			148,210				10,660				181,439
*FIDELITY CHINA REGION			589,211				38,968				660,500
*FIDELITY SEL MED EQ & SYS			126,648				5,382				123,510
*FID FOUR IN ONE IDX			295,011				13,046				322,241
*FIDELITY JAPAN SMALLER CO			1,248,194				108,085				1,365,112
*FIDELITY GROWTH & INC II			421,938				47,930				454,858
*FIDELITY STRATEGIC INCOME			1,430,652				137,174				1,434,845

McKESSON CORPORATION

PROFIT-SHARING INVESTMENT PLAN

FORM 5500, SCHEDULE H, PART IV, LINE 4i
SCHEDULE OF ASSETS (HELD AT YEAR END)
MARCH 31, 2005

Investment/Fund Name		Cost Basis				Shares/Units				Fair Value
*FID FREEDOM INCOME			239,263				22,193				248,341
*FID FREEDOM 2000			207,221				17,574				210,885
*FID FREEDOM 2010			2,200,452				170,011				2,286,646
*FID FREEDOM 2020			3,642,059				279,278				3,828,901
*FID FREEDOM 2030			1,651,300				127,481				1,760,508
*FID SMALL CAP RTMT			667,525				51,653				809,918
SPTN TOTAL MKT INDEX			1,777,999				59,869				1,934,976
SPTN EXTND MKT INDEX			406,746				14,807				457,231
SPARTAN INTL INDEX			442,634				14,863				473,968
*FIDELITY SHORT TERM BOND			704,747				78,533				698,942
*FIDELITY INTM GOVT INCOME			320,775				31,471				317,233
*FIDELITY HIGH INCOME			627,345				71,834				631,420
*FIDELITY FIFTY			1,100,729				61,701				1,220,438
*FIDELITY SEL AUTOMOTIVE			23				1				22
*FIDELITY SEL MULTIMEDIA			6				0				6
*FIDELITY SEL MEDICAL DEL			599,885				13,036				622,856
*FIDELITY SEL BANKING			33,819				873				32,334
*FIDELITY SEL INDUST MATER			66,214				1,587				63,751
*FIDELITY SEL INDUST EQUIP			3				0				3
*FIDELITY SEL CONSTR/HOUSE			160,199				3,600				154,260
*FIDELITY SEL TRANSPORT			1,121				27				1,108
*FIDELITY SEL NATURAL GAS			1,154,976				35,299				1,203,335
*FIDELITY SEL NATURAL RES			223,735				11,529				226,308
*FIDELITY SEL CYCLICAL IND			34,512				1,755				33,019
*FIDELITY SEL ENVIRONMENT			116				8				112
*FIDELITY SEL DEVELOP COMM			2,000				112				1,923
*FIDELITY SEL PHARMACEUTICAL			4,808				546				4,587
*FIDELITY RETIRE MMKT			7,338,928				7,338,928				7,338,928
*FIDELITY RET GOVT MM			5,751,376				5,751,376				5,751,376
SPARTAN US EQ INDEX			3,524,067				89,313				3,744,907
*FIDELITY US BD INDEX			2,036,294				183,099				2,010,426
*FID INST SH-INT GOVT			193,924				20,097				191,923
*FID STR LGCAP VALUE			12,676				1,033				12,553
*FID FREEDOM 2040			506,037				64,988				526,398
*FID STR MDCAP VALUE			56,755				4,004				56,212
*FID STR LGCAP GROWTH			53,250				5,092				52,603
*FID STR MDCAP GROWTH			25,467				2,181				25,388
*FID INFLAT PROT BOND			203,291				17,959				203,294
*FID ULTRASHORT BOND			101,172				10,077				101,077
*FID FLOAT RT HI INC			40,474				4,059				40,471
*FID INTL SMALL CAP			458,839				18,827				463,141
*FID TOTAL BOND			10,710				1,003				10,493
*FID VALUE DISCOVERY			28,165				2,084				28,970
*FID REAL ESTATE INC			46,077				3,943				45,779