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McKESSON CORPORATION
FINANCIAL NOTES (Continued)
101
The following table summarizes RS and RSU activity during 2008, 2007 and 2006:
(In millions, except per share data) Shares
Weighted-
Average
Grant Date Fair
Value Per Share
Nonvested, March 31, 2005 1 33.99
Granted - 47.06
Nonvested, March 31, 2006 1 38.01
Granted 1 49.56
Nonvested, March 31, 2007 2 45.18
Granted 1 61.92
Nonvested, March 31, 2008 3 54.13
The following table provides data related to RS and RSU activity:
Years Ended March 31,
(In millions) 2008 2007 2006
Total fair value of shares vested $ 20 $ 5 $ 11
Total compensation cost, net of estimated forfeitures,
related to nonvested RSU awards not yet recognized,
pre-tax (1) $49$32$45
Weighted-average period in years over which RSU cost
is expected to be recognized 1 2 3
(1) Compensation cost in 2006 did not reflect any forfeiture assumptions as required under APB Opinion No. 25.
In May 2007, the Compensation Committee approved 1 million PeRSU target share units representing the base
number of awards that could be granted, if goals are attained, and would be granted in the first quarter of 2009 (the
“2008 PeRSU”). These target share units are not included in the table above as they have not been granted in the
form of a RSU. As of March 31, 2008, the total compensation cost, net of estimated forfeitures, related to nonvested
2008 PeRSUs not yet recognized was approximately $44 million, pre-tax (based on the period-end market price of
the Company’ s common stock), and the weighted-average period over which the cost is expected to be recognized is
2 years.
In accordance with the provisions of SFAS No. 128, “Earnings per Share,” the 2008 PeRSUs are included in the
calculation of diluted weighted average shares for the year ended March 31, 2008 as the performance goals have
been achieved.
V. Employee Stock Purchase Plan (“ESPP”)
The ESPP allows eligible employees to purchase shares of our common stock through payroll deductions. The
deductions occur over three-month purchase periods and the shares are then purchased at 85% of the market price at
the end of each purchase period. Employees are allowed to terminate their participation in the ESPP at any time
during the purchase period prior to the purchase of the shares, and any amounts accumulated during that period are
refunded.
The 15% discount provided to employees on these shares is included in compensation expense. The funds
outstanding at the end of a quarter are included in the calculation of diluted weighted average shares outstanding.
These amounts have not been significant.