McKesson 2012 Annual Report Download - page 73

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McKESSON CORPORATION
FINANCIAL NOTES (Continued)
69
Weighted-average assumptions used to estimate the fair value of employee stock options were as follows:
Years Ended March 31,
2012 2011 2010
Expected stock price volatility 27% 29% 33%
Expected dividend yield 1.0% 1.1% 0.7%
Risk-free interest rate 2% 3% 2%
Expected life (in years) 5 5 5
The following is a summary of options outstanding at March 31, 2012:
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
$ 27.35 - $ 41.02 3 3 $ 38.09 1 $ 36.52
$ 41.03 - $ 54.70 1 1 45.99 1 46.36
$ 54.71 - $ 68.37 3 4 63.01 2 61.20
$ 68.38 - $ 84.41 1 6 83.04 — 74.57
8 4
The following table summarizes stock option activity during 2012, 2011 and 2010:
(In millions, except per share data and years) Shares
Weighted-
Average Exercise
Price
Weighted-
Average
Remaining
Contractual
Term (Years)
Aggregate
Intrinsic
Value (2)
Outstanding, March 31, 2009 19 $ 39.28 3 $ 33
Granted 2 40.59
Exercised (5) 33.34
Outstanding, March 31, 2010 16 $ 41.26 3 $ 394
Granted 1 67.95
Exercised (8) 37.63
Outstanding, March 31, 2011 9 $ 49.01 4 $ 269
Granted 1 83.30
Exercised (2) 42.20
Outstanding, March 31, 2012 8 $ 56.88 4 $ 226
Vested and expected to vest
(
1
)
7 $ 56.71 4 $ 225
Vested and exercisable, March 31, 2012 4 49.86 3 142
(1) The number of options expected to vest takes into account an estimate of expected forfeitures.
(2) The intrinsic value is calculated as the difference between the period-end market price of the Company’s common stock and
the exercise price of “in-the-money” options.