MCKESSON CORP | 2013 | FY | 3


Related Party Balances and Transactions
Notes receivable outstanding from certain of our current and former officers totaled $7 million and $15 million at March 31, 2013 and 2012. These notes related to purchases of common stock under our various employee stock purchase plans. The notes bear interest at rates ranging from 4.7% to 7.1% and were due at various dates through February 2004. Interest income on these notes is recognized only to the extent that cash is received. These notes, which are included in other capital in the consolidated balance sheets, were issued for amounts equal to the market value of the stock on the date of the purchase and are at full recourse to the borrower. At March 31, 2013, the value of the underlying stock collateral was $6 million. The collectability of these notes is evaluated on an ongoing basis. At March 31, 2013 and 2012, we provided a reserve of $1 million and nil for the outstanding notes.
In April 2012, we purchased the remaining ownership interest in our corporate headquarters building which was previously accounted for as an equity method investment. As a result, there was no annual rental expense paid in 2013. We incurred $10 million in 2012 and $11 million in 2011 of annual rental expense paid to this equity-held investment.

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