McKesson 2008 Annual Report Download - page 106

Download and view the complete annual report

Please find page 106 of the 2008 McKesson annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 119

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119

McKESSON CORPORATION
FINANCIAL NOTES (Continued)
99
Weighted-average assumptions used to estimate the fair value of employee stock options were as follows:
Years Ended March 31,
2008 2007 2006
Expected stock price volatility 24% 27% 36%
Expected dividend yield 0.4% 0.5% 0.5%
Risk-free interest rate 5% 5% 4%
Expected life (in years) 5 5 6
The following is a summary of options outstanding at March 31, 2008:
Options Outstanding Options Exercisable
Range of Exercise
Prices
Number of
Options
Outstanding At
Year End
(In millions)
Weighted-
Average
Remaining
Contractual Life
(Years)
Weighted-
Average
Exercise
Price
Number of
Options
Exercisable at
Year End
(In millions)
Weighted-
Average
Exercise Price
$ 13.67 - $ 27.35 1 2 $ 21.46 1 $ 21.35
$ 27.36 - $ 41.02 13 4 33.94 13 33.93
$ 41.03 - $ 54.70 4 4 45.92 3 45.31
$ 54.71 - $ 68.37 1 6 62.48 - 66.27
$ 68.38 - $ 82.04 6 1 73.15 6 73.15
$ 82.05 - $ 95.72 1 - 90.74 1 90.74
26 3 48.59 24 48.10
The following table summarizes stock option activity during 2008, 2007 and 2006:
(In millions, except per share data) Shares
Weighted-
Average Exercise
Price
Weighted-
Average
Remaining
Contractual
Term (Years)
Aggregate
Intrinsic
Value (2)
Outstanding, March 31, 2005 59 $ 40.37
Granted 5 44.93
Exercised (17) 31.15
Cancelled and forfeited (1) 69.40
Outstanding, March 31, 2006 46 43.38
Granted 1 48.13
Exercised (11) 33.71
Outstanding, March 31, 2007 36 46.32 4 $ 601
Granted 1 62.12
Exercised (9) 36.43
Cancelled and forfeited (2) 69.35
Outstanding, March 31, 2008 26 48.59 3 $ 298
Vested and expected to vest (1) 26 48.27 3 298
Exercisable, March 31, 2008 24 48.10 3 292
(1) The number of options expected to vest takes into account an estimate of expected forfeitures.
(2) The aggregate intrinsic value is calculated as the difference between the period-end market price of the Company’ s common
stock and the option exercise price, times the number of “in-the-money” option shares.