McKesson 2010 Annual Report Download - page 39

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McKESSON CORPORATION
FINANCIAL REVIEW (Continued)
33
The Company’s PSIP expense for the full year is negligible, as the Company did not make additional
contributions to the PSIP or ESOP. As a result, our compensation expense in 2010 was lower than 2009. During
2009 and 2008, PSIP expense was $53 million and $13 million. The expense for 2008 was lower than 2009 due to
the utilization of lower cost basis shares from the ESOP to fund our matching contributions. The expense for 2011
is expected to be approximately $58 million.
PSIP expense by segment for the last three years was as follows:
Years Ended March 31,
(In millions) 2010 2009 2008
Distribution Solutions $ — $ 23 $ 5
Technology Solutions 1 28 7
Corporate — 2 1
PSIP expense $ 1 $ 53 $ 13
Cost of sales (1) $ — $ 12 $ 3
Operating expenses 1 41 10
PSIP expense $ 1 $ 53 $ 13
(1) Amounts recorded to cost of sales pertain solely to our Technology Solutions segment.
Over the last three years, we recorded the following reduction in workforce and restructuring charges:
Years Ended March 31,
(In millions) 2010 2009 2008
Other workforce reduction charges, net (1)
Distribution Solutions $ 9 $ 7 $ —
Technology Solutions 11 25 8
Total 20 32 8
Restructuring charges (credits), net
Distribution Solutions (2) 1 4 8
Technology Solutions (3) — (2) 9
Corporate 1 (1) 2
Total 2 1 19
Total reduction in workforce and restructuring charges $ 22 $ 33 $ 27
Cost of sales (4) $ 5 $ 5 $ 7
Operating expenses 17 28 20
Total reduction in workforce and restructuring charges $ 22 $ 33 $ 27
(1) Although other workforce reduction actions do not constitute a restructuring plan as defined under U.S. GAAP, they do
represent independent actions taken from time-to-time, as appropriate. Other workforce reduction charges also reflected
related facility exit costs of $4 million and $3 million in 2010 and 2009 for our Technology Solutions segment.
(2) In 2008, we incurred $4 million of severance costs associated with the closure of two facilities and $1 million and $3 million
of severance and asset impairments associated with the integration of OTN.
(3) In 2008, we incurred $5 million of severance and exit-related costs and a $4 million asset impairment charge for the write-
off of capitalized software costs associated with the termination of a software project.
(4) Amounts recorded to cost of sales generally pertain to our Technology Solutions segment.