McKesson 2008 Annual Report Download - page 82

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McKESSON CORPORATION
FINANCIAL NOTES (Continued)
75
Restructuring Activities – Liabilities Related to Acquisitions
In connection with our OTN acquisition within our Distribution Solutions segment, we recorded other liabilities
of $6 million relating to employee severance costs. In connection with our Per-Se acquisition within our
Technology Solutions segment, we recorded a total of $19 million of employee severance costs and $5 million of
facility exit and contract termination costs in 2008 and 2007. In connection with our D&K acquisition within our
Distribution Solutions segment, we recorded $10 million of liabilities relating to employee severance costs and $28
million for facility exit and contract termination costs during 2006. In 2007, in connection with the Company’ s
investment in Parata, $13 million of contract termination costs that were initially estimated as part of the D&K
acquisition were extinguished and, as a result, the Company decreased goodwill and its restructuring liability.
With the exception of our OTN acquisition which we are currently evaluating certain restructuring initiatives, as
of March 31, 2008, all actions related to the above noted restructuring activities have been substantially completed.
Approximately 520 employees, consisting primarily of distribution, general and administrative staff, were
terminated as part of our restructuring plans over the last three years. As of March 31, 2008, restructuring accruals
of $28 million, which primarily consist of employee severance costs and facility exit and contract termination costs,
are anticipated to be disbursed from 2009 through 2015. Restructuring expenses were primarily recorded in
operating expenses in our consolidated statements of operations. Accrued restructuring liabilities are included in
other accrued liabilities in the consolidated balance sheets.
5. Other Income, Net
Years Ended March 31,
(In millions) 2008 2007 2006
Interest income $ 89 $ 103 $ 105
Equity in earnings, net 21 23 20
Other, net 11 6 14
Total $ 121 $ 132 $ 139
6. Earnings Per Share
Basic earnings per share is computed by dividing net income by the weighted average number of common
shares outstanding during the reporting period. Diluted earnings per share is computed similar to basic earnings per
share except that it reflects the potential dilution that could occur if dilutive securities or other obligations to issue
common stock were exercised or converted into common stock.