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73
McKESSON CORPORATION
FINANCIAL NOTES (Continued)
Non-employee directors receive an annual grant of RSUs, which vest immediately and are expensed upon grant. The
director may choose to receive payment immediately or defer receipt of the underlying shares if they meet director stock
ownership guidelines. At March 31, 2013, 140,000 RSUs for our directors are vested, but shares have not been issued.
PeRSUs are RSUs for which the number of RSUs awarded may be conditional upon the attainment of one or more
performance objectives over a specified period. PeRSUs are accounted for as variable awards until the performance goals are
reached and the grant date is established. Total compensation expense for PeRSUs is determined by the product of the number
of shares eligible to be awarded and expected to vest, and the market price of the Company's common stock, commencing at
the inception of the requisite service period. During the performance period, the compensation expense for PeRSUs is re-
computed using the market price and the performance modifier at the end of a reporting period. At the end of the performance
period, if the goals are attained, the awards are granted and classified as RSUs and accounted for on that basis. We recognize
compensation expense of these awards on a straight-line basis over the requisite aggregate service period of generally four
years.
The following table summarizes RSU activity during 2013, 2012 and 2011:
(In millions, except per share data) Shares
Weighted-
Average
Grant Date Fair
Value Per Share
Nonvested, March 31, 2010 4 $ 49.21
Granted 3 67.84
Vested (1) 61.05
Nonvested, March 31, 2011 6 $ 57.79
Granted 2 82.71
Vested (1) 57.95
Nonvested, March 31, 2012 7 $ 65.14
Granted 1 87.86
Vested (2) 41.80
Nonvested, March 31, 2013 6 $ 76.20
The following table provides data related to RSU activity:
Years Ended March 31,
(In millions) 2013 2012 2011
Total fair value of shares vested $ 66 $ 44 $ 43
Total compensation cost, net of estimated forfeitures, related to
nonvested RSU awards not yet recognized, pre-tax $ 128 $ 143 $ 131
Weighted-average period in years over which RSU cost is
expected to be recognized 2 3 2
In May 2012, 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 2014 (the “2013 PeRSU”).
These target share units are not included in the table above as they have not been granted in the form of RSUs. As of
March 31, 2013, the total pre-tax compensation expense, net of estimated forfeitures, related to nonvested 2013 PeRSUs not
yet recognized was approximately $82 million, (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 three years.