McKesson 2015 Annual Report Download - page 87

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McKESSON CORPORATION
FINANCIAL NOTES (Continued)
to purchase Mediq Apotheken Beheer B.V., which owns and operates pharmacies in the Netherlands. This
acquisition is subject to customary closing conditions including regulatory clearances and approval of the
relevant competition authorities but is expected to close during the first half of 2016.
During 2013, we committed to a plan to sell our 49% equity interest in Nadro, S.A. de C.V. (“Nadro”) and
in the fourth quarter of 2013 we recorded a pre-tax impairment charge of $191 million reducing the investment’s
carrying value to its estimated fair value. Cumulative foreign currency translation losses of $69 million were
included in the assessment of the investment’s carrying value for purposes of calculating the impairment charge.
The impairment charge was recorded in impairment of an equity investment in the consolidated statements of
operations within our Distribution Solutions segment.
In September 2013, we completed the sale of our 49% equity interest in Nadro. Under the terms of the
agreement, we received $41 million in total cash consideration. There was no material gain or loss on the
disposition based on the adjusted fair value of the investment at the time of the sale. Prior to the sale, our
investment in Nadro was accounted for under the equity method of accounting within our Distribution Solutions
segment.
7. Share-Based Compensation
We provide share-based compensation to our employees, officers and non-employee directors, including
stock options, an employee stock purchase plan, restricted stock units (“RSUs”), performance-based restricted
stock units (“PeRSUs”) and total shareholder return units (“TSRUs”) (collectively, “share-based awards”). Most
of our share-based awards are granted in the first quarter of each fiscal year.
Compensation expense for the share-based awards is recognized for the portion of awards ultimately
expected to vest. We estimate the number of share-based awards that will ultimately vest primarily based on
historical experience. The estimated forfeiture rate established upon grant is re-assessed throughout the requisite
service period and is adjusted when actual forfeitures occur. The actual forfeitures in future reporting periods
could be higher or lower than current estimates.
The compensation expense recognized has been classified in the consolidated statements of operations or
capitalized in the consolidated balance sheets in the same manner as cash compensation paid to our employees.
There was no material share-based compensation expense capitalized as part of the cost of an asset in 2015, 2014
and 2013.
Impact on Net Income
The components of share-based compensation expense and related tax benefits are as follows:
Years Ended March 31,
(In millions) 2015 2014 2013
Restricted stock unit awards (1) $137 $126 $132
Stock options 24 22 24
Employee stock purchase plan 13 12 11
Share-based compensation expense 174 160 167
Tax benefit for share-based compensation expense (2) (61) (55) (59)
Share-based compensation expense, net of tax $113 $105 $108
82