Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yesþ Noo

     Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yesþ Noo

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yeso Noþ

     Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

     Basis of Presentation:The condensed consolidated financial statements of McKesson Corporation (“McKesson,” the “Company,” or “we” and other similar pronouns) include the financial statements of all wholly-owned subsidiaries and majority-owned or controlled companies. Intercompany transactions and balances have been eliminated. The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial reporting and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) and, therefore, do not include all information and footnote disclosures normally included in the annual consolidated financial statements.

     To prepare the financial statements in conformity with GAAP, management must make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of these financial statements and income and expenses during the reporting period. Actual amounts may differ from these estimated amounts. In our opinion, these unaudited condensed consolidated financial statements include all adjustments necessary for a fair presentation of the Company’s financial position as of JuneSeptember 30, 2010, the results of operations for the quarters and six months ended JuneSeptember 30, 2010 and 2009 and cash flows for the threesix months ended JuneSeptember 30, 2010 and 2009.

     The results of operations for the quarter and six months ended JuneSeptember 30, 2010 are not necessarily indicative of the results that may be expected for the entire year. These interim financial statements should be read in conjunction with the annual audited financial statements, accounting policies and financial notes included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2010 previously filed with the SEC on May 4, 2010 (“2010 Annual Report”). Certain prior period amounts have been reclassified to conform to the current period presentation.

     The Company’s fiscal year begins on April 1 and ends on March 31. Unless otherwise noted, all references to a particular year shall mean the Company’s fiscal year.

     Recently Adopted Accounting Pronouncements

     Accounting for Transfers of Financial Assets:On April 1, 2010, we adopted amended accounting guidance for transfers of financial assets, including securitization transactions, in which entities have continued exposure to risks related to transferred financial assets. This amendment changed the requirements for derecognizing financial assets and expanded the disclosure requirements for such transactions. As a result of the amended accounting guidance, from April 1, 2010 forward, accounts receivable transactions under our accounts receivable securitization facility are accounted for as secured borrowings rather than asset sales. Refer to Financial Note 6,8, “Financing Activities,” for additional information.

     Consolidations:On April 1, 2010, we adopted amended accounting guidance for consolidation of Variable Interest Entities (“VIEs”). The new guidance eliminates the quantitative approach previously required for determining the primary beneficiary of a VIE and requires ongoing qualitative reassessments of whether an enterprise is the primary beneficiary, including ongoing assessments of control over such entities. The adoption of this amended guidance did not have a material effect on our condensed consolidated financial statements.

     Newly Issued Accounting Pronouncements

     In October 2009, the Financial Accounting Standards Board (“FASB”) issued amended accounting guidance for multiple-deliverable revenue arrangements. The amended guidance affects the determination of when individual deliverables included in a multiple-element arrangement may be treated as separate units of accounting. In addition, the amended guidance modifies the manner in which the transaction consideration is allocated across separately identified deliverables, eliminates the use of the residual value method of allocating arrangement consideration and requires expanded disclosure. The amended guidance will become effective for us for multiple-element arrangements entered into or materially modified on or after April 1, 2011. Earlier application is permitted with required transition disclosures based on the period of adoption. We are currently evaluating the application date and the effect of the amended guidance on our condensed consolidated financial statements.

     In October 2009, the FASB issued amended accounting guidance for certain revenue arrangements that include software elements. The guidance amends pre-existing software revenue recognition guidance by removing from its scope tangible products that contain both software and non-software components that function together to deliver the product’s functionality. The amended guidance will become effective for us for revenue arrangements entered into or materially modified on or after April 1, 2011. Earlier application is permitted with required transition disclosures based on the period of adoption. We are currently evaluating the application date and the effect of the amended guidance on our condensed consolidated financial statements. Both the revenue recognition guidance for multiple-element arrangements and this software guidance must be adopted in the same period and must use the same transition disclosures.

     In April 2010, the FASB issued amended accounting guidance for vendors who apply the milestone method of revenue recognition to research and development arrangements. The amended guidance applies to arrangements with payments that are contingent upon achieving substantively uncertain future events or circumstances. The amended guidance is effective on a prospective basis for us for milestones achieved on or after April 1, 2011. Earlier application is permitted. We are currently evaluating the application date and the effect of the amended guidance on our condensed consolidated financial statements.

     In July 2010, the FASB issued amended accounting guidance which expands disclosures regarding the credit quality of an entity’s receivables portfolio and its related allowance for credit losses. The amended guidance is effective for us commencing in the third quarter of 2011. We are currently evaluating the effect of the amended guidance on our condensed consolidated financial statements.

     We provide share-based compensation for our employees, officers and non-employee directors, including stock options, an employee stock purchase plan, restricted stock (“RS”), restricted stock units (“RSUs”) and performance-based restricted stock units (“PeRSUs”) (collectively, “share-based awards”).

     Compensation expense for stock options is recognized on a straight-line basis over the requisite service period and is based on the grant-date fair value for the portion of the awards that is ultimately expected to vest.

     RS and RSUs, which entitle the holder to receive, at the end of a vesting term, a specified number of shares of the Company’s common stock are accounted for at fair value at the date of grant. The fair value of RS and RSUs under our stock plans is determined by the product of the number of shares that are expected to vest and the grant date market price of the Company’s common stock. These awards generally vest in four years. We recognize expense for RS and RSUs with a single vest date on a straight-line basis over the requisite service period. We have elected to expense the grant date fair value of RS and RSUs with only graded vesting and service conditions on a straight-line basis over the requisite service period. RS contains certain restrictions on transferability and may not be transferred until such restrictions lapse.

     The components of share-based compensation expense and the related tax benefit for the quarters and six months ended JuneSeptember 30, 2010 and 2009 are shown in the following table:

     Basic earnings per common share are computed by dividing net income by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per common share are computed similar to basic earnings per common 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.

     Changes in the carrying amount of goodwill were as follows:

     Interests in the pool of accounts receivable that are sold to the Purchaser Groups and accounts receivable retained by the Company are carried at face value which, due to the short-term nature of our accounts receivable and terms of the Facility, approximates fair value. McKesson receives cash in the amount of the face value for the undivided interests sold. No gain or loss is recorded upon the utilization of the facility as fee charges from the Purchaser Groups are based upon a floating yield rate and the period the undivided interests remain outstanding.

     The Facility contains requirements relating to the performance of the accounts receivable and covenants relating to the SPE and the Company. If we do not comply with these covenants, our ability to use the Facility may be suspended and repayment of any outstanding balances under the Facility may be required. At JuneSeptember 30, 2010 and March 31, 2010, we were in compliance with all covenants. Should we default under the Facility, the Purchaser Groups are entitled to receive only collections on the accounts receivable owned by the SPE.

     Prior to 2011, transactions in the Facility were accounted for as sales because we met the requirements of the existing accounting guidance, including relinquishing control of the accounts receivable. Accordingly, accounts receivable sold would have been excluded from accounts receivable, net in the accompanying March 31, 2010 condensed consolidated balance sheet had any balances been outstanding in the Facility at that date. On April 1, 2010, the Company adopted the new accounting standard for transfers of financial assets. Transactions under the Facility no longer meet the requirements for sale as defined in the new accounting standard primarily because the Company’s retained interest in the pool of accounts receivable is subordinated to the Purchaser Groups to the extent there is any outstanding balance in the Facility. Consequently, the related accounts receivable would continue to be recognized on the Company’s condensed consolidated balance sheets and proceeds from the Purchaser Groups would be shown as secured borrowings. Commencing in 2011, fees charged from the Purchaser Groups are recorded in interest expense within the condensed consolidated statements of operations. Prior to 2011, these fees were recorded in Corporate administrative expenses. These fees were not material to our condensed consolidated financial statements. Additionally, any proceeds from these accounts receivable transactions would be reflected in the financing section within the condensed statements of cash flows.

     We continue servicing the accounts receivable sold. No servicing asset is recorded at the time of utilization of the facility because we do not receive any servicing fees from third parties or other income related to servicing the receivable. We do not record any servicing liability at the time of the utilization of the facility as the accounts receivable collection period is relatively short and the costs of servicing the accounts receivable over the servicing period are insignificant. Servicing costs are recognized as incurred over the servicing period.

     At JuneSeptember 30, 2010, there were no securitized accounts receivable balances or secured borrowings outstanding under the Facility. As of March 31, 2010, there were no accounts receivable sold under the Facility. Additionally, there were no sales of interests to the Purchaser Groups in the quartersquarter and six months ended JuneSeptember 30, 2010 or 2009.

     Revolving Credit Facility

     We have a syndicated $1.3 billion five-year senior unsecured revolving credit facility, which expires in June 2012. Borrowings under this credit facility bear interest based upon either a Prime rate or the London Interbank Offering Rate. There were no borrowings under this facility for the first quarterssix months of 2011 and 2010. As of JuneSeptember 30, 2010 and March 31, 2010, there werewas no amounts outstandingdebt balance under this facility.facility; however, there was $41 million in letters of credit issued under this facility which reduces the amount available for borrowing.

     Net periodic expense for the Company’s defined pension and other postretirement benefit plans was $10$8 million and $8$18 million for the second quarter and first quarterssix months of 2011 compared to $4 million and 2010.$12 million for the comparable prior year periods. Cash contributions to these plans for the first quarterssix months of 2011 and 2010 were $5 million and $10$11 million.

     At JuneSeptember 30, 2010 and March 31, 2010, the carrying amounts of cash and cash equivalents, restricted cash, marketable securities, receivables, drafts and accounts payable and other current liabilities approximated their estimated fair values because of the short maturity of these financial instruments. All highly liquid debt instruments purchased with original maturity of three months or less at the date of acquisition are included in cash and cash equivalents. Included in cash and cash equivalents at JuneSeptember 30, 2010 and March 31, 2010 were money market fund investments of $1.6$1.5 billion and $2.3 billion, which are reported at fair value. The fair value of these investments was determined by using quoted prices for identical investments in active markets which are considered to be Level 1 inputs under the fair value measurements and disclosure guidance. The carrying value of all other cash equivalents approximates fair value due to their relatively short-term nature.

     The carrying amounts and estimated fair values of our long-term debt and other financing were $2.3 billion and $2.6 billion at JuneSeptember 30, 2010, and $2.3 billion and $2.5 billion at March 31, 2010. The estimated fair value of our long-term debt and other financing was determined using quoted market prices and other inputs that were derived from available market information, which are considered to be Level 2 inputs under the fair value measurements and disclosure guidance, and may not be representative of actual values that could have been realized or that will be realized in the future.

     Warranties

     In the normal course of business, we provide certain warranties and indemnification protection for our products and services. For example, we provide warranties that the pharmaceutical and medical-surgical products we distribute are in compliance with the U.S. Federal Food, Drug, and Cosmetic Act and other applicable laws and regulations. We have received the same warranties from our suppliers, which customarily are the manufacturers of the products. In addition, we have indemnity obligations to our customers for these products, which have also been provided to us from our suppliers, either through express agreement or by operation of law.

     We also provide warranties regarding the performance of software and automation products we sell. Our liability under these warranties is to bring the product into compliance with previously agreed upon specifications. For software products, this may result in additional project costs, which are reflected in our estimates used for the percentage-of-completion method of accounting for software installation services within these contracts.contracts and our estimates of recoverability of capitalized software held for sale. In addition, most of our customers who purchase our software and automation products also purchase annual maintenance agreements. Revenues from these maintenance agreements are recognized on a straight-line basis over the contract period and the cost of servicing product warranties is charged to expense when claims become estimable. Accrued warranty costs were not material to the condensed consolidated balance sheets.

     As previously reported regarding the coordinated public payor Average Wholesale Price (“AWP”) actions, collectivelyIn re McKesson Governmental Entities Average Wholesale Price Litigation, filed against the Company in the United States District Court for Massachusetts and relating to alleged misstatements and manipulations of a benchmark for drug reimbursement known as AWP,Board of County Commissioners of Douglas County, Kansas et al. v. McKesson Corporation,Civil Action No. 1:08-CV-11349-PBS (“Douglas County, Kansas Action”);San Francisco Health Plan v. McKesson Corporation, Civil Action No. 1:08-CV-10843-PBS (“San Francisco Action”); andState of Connecticut v. McKesson Corporation, Civil Action No. 1:08-CV-10900-PBS (“Connecticut Action”), the briefing regardinghearing on class certification in theDouglas County, KansasandSan Francisco Actions is complete and the hearingwas held on class certification in these cases is now scheduled for August 31, 2010.2010, but the court has not yet issued its ruling. On July 8,August 5, 2010, the court vacated the July 19, 2010set a trial date previously setof January 24, 2011 for the claims asserted by the State of Oklahoma on behalf of its Medicaid program in theDouglas County, Kansascase, or, in the alternative, the claims asserted by the State of Montana on behalf of its Medicaid program in theDouglas County, Kansascase if the Oklahoma Medicaid claims are resolved before the final pretrial conference scheduled for January 19, 2011.

     On October 15, 2010, the Company executed an agreement to settle theConnecticut Actionfor $26 million. The settlement, which is not subject to court approval, includes an express denial of liability and a release by the State of Connecticut of the Company as to all matters alleged or which could have been alleged in the action. As a result, during the second quarter of 2011, we recorded an additional $24 million pre-tax charge for this settlement.

     On September 13, 2010, an action was filed in the Kansas state court of Wyandotte County by the State of Kansas against the Company and First DataBank, Inc. based on essentially the same factual allegations as alleged inIn re McKesson Governmental Entities Average Wholesale Price Litigation, asserting claims under the Kansas Restraint of Trade Act, the Kansas Consumer Protection Act, and the Kansas False Claims Act, and for civil conspiracy, fraud, unjust enrichment, and breach of contract, and seeking damages and treble damages, civil penalties, as well as injunctive relief, interest, disgorgement of profits, attorneys’ fees and costs of suit, all in unspecified amounts,State of Kansas ex rel. Steve Six v. McKesson Corporation, et al., Case No. 10CV1491. The Company has not yet setresponded to the complaint in this matter.

     On October 18, 2010, the Company was informed that a new trial datequi tamaction was previously filed by four law firms in that case.Wisconsin state court of Dane County, purportedly on behalf of the State of Wisconsin against the Company based on essentially the same factual allegations as alleged inIn re McKesson Governmental Entities Average Wholesale Price Litigation,asserting claims under the Wisconsin False Claims for Medical Assistance statute, and seeking damages, treble damages, civil penalties, as well as attorneys’ fees and costs of suit, all in unspecified amounts,State of Wisconsin ex rel. Hagens Berman Sobol Shapiro LLP, et al. v. McKesson Corporation,Case No. 10CV3411. The court has not yet ruled on a motion to dismiss filed by the Wisconsin Department of Justice on August 26, 2010.

     As also previously reported, on October 3, 2008 the United States (“USA”)B. Other Matters

     On September 15, 2010, an action was filed a complaint in intervention in a pending qui tam action in the United States District Court for the NorthernWestern District of Mississippi, naming as defendants, among others,Wisconsin against the Company by Independent Pharmacy Cooperative, a Wisconsin based cooperative purchasing organization for independent pharmacies, alleging that the Company has breached, and continues to breach, a February 21, 2003 supply agreement between the parties,Independent Pharmacy Cooperative, v. McKesson Corporation,Case No. 10-CV-00527 (BC). In addition to alleging breach of contract, plaintiff alleges breach of the implied covenant of good faith and fair dealing in connection with the supply agreement and intentional interference with contractual relations between plaintiff and its members. In its complaint, plaintiff claims that the Company has caused certain pharmacies to terminate their memberships in plaintiff’s cooperative and has entered into separate agreements intended to cause members to terminate in the future. Plaintiff seeks declaratory and injunctive relief, monetary damages in an unspecified amount, punitive damages, attorneys’ fees and costs of suit. The Company has not yet responded to the complaint in the matter.

     In August of 2010, the Company was notified by the United States Attorneys’ Office that aqui tamaction had been filed on an unidentified date by two Relators, a former pharmacy customer of the Company and its former indirect subsidiary, McKesson Medical-Surgical MediNet Inc. (“MediNet”), now merged intothe customer’s advisor, in which the Relators allege that in or about January of 2006 the Company and doing business as McKesson Medical-Surgical MediMart Inc.,United States v. McKesson Corporation, et al., (Civil Action No. 2:08-CV-00214-SA). The USA assertsa competitor drug wholesaler engaged in conduct that violated the federal Anti-Kickback Statute, causing subsequent claims based on violationsby the customer Relator to be submitted in violation of the federal False Claims Act, 31 U.S.C Sections 3729-33, in connection with billing and supply services rendered by MediNet to certain long-term care facility operator co-defendants. On June 2, 2010, the USA filed a motion for partial summary judgment, seeking a findingSaleaumua et al. v. McKesson Corporation et al.,Case No. 4:08-CV-0848 (ODS). The complaint alleges that the defendants’ conduct prior to the Company’s co-defendant, a Medicare Part B supplier, failedlosing the account to comply with certainthe competitor in January of 2006 caused the customer Relator to file subsequent claims in violation of the 21 Supplier Standards (“Standards”) established by federal regulation for such Medicare suppliers,False Claims Act. The complaint seeks monetary damages in an unspecified amount, as well as attorneys’ fees and thatcosts. The complaint has not been served on the relevantCompany. The United States Attorney’s Office is investigating the Relators’ claims for which MediNet provided contract billing and/or supply services were rendered “false” by reason of such non-compliance. On July 2, 2010and has informed the Company and MediNet filed their oppositionthat it has made no decision to the USA’s motion and themselves moved for summary judgment as to certain counts of the government’s complaint arguing that the USA cannot, as a matter of law, establish that the co-defendant Medicare Part B supplier failed to meet the Standards, that defendants did not knowingly file any false claims, that the relevant claims cannot be rendered “false” by failure to meet any of the Standards under the circumstances of the action and that the USA is estopped from taking the position that the Standards were not met because that issue has been previously decided against the USA and in favor of co-defendant in administrative proceedings to which the USA was a party. Briefing on the summary judgment motions is expected to be complete by August 10, 2010, and whether a hearing will be set by the court for argument on the motions is not known at this time.

Stock repurchases may be made from time-to-time in open market transactions, privately negotiated transactions, through accelerated share repurchase programs, or by any combination of such methods. The timing of any repurchases and the actual number of shares repurchased will depend on a variety of factors, including our stock price, corporate and regulatory requirements, restrictions under our debt obligations and other market and economic conditions.

     Dividend Policy

     The Company has paid quarterly cash dividends at the rate of $0.12 per share on its common stock since the second quarter of 2009. In May 2010, the quarterly dividend was raised from twelve cents$0.12 to eighteen cents$0.18 per common share. The Company anticipates that it will continue to pay quarterly cash dividends in the future. However, the payment and amount of future dividends remain within the discretion of the Board and will depend upon the Company’s future earnings, financial condition, capital requirements and other factors.

     Comprehensive Income

     Comprehensive income is as follows:

     We report our operations in two operating segments: McKesson Distribution Solutions and McKesson Technology Solutions. The factors for determining the reportable segments included the manner in which management evaluates the performance of the Company combined with the nature of the individual business activities. We evaluate the performance of our operating segments based on operating profit before interest expense, income taxes and results from discontinued operations. Financial information relating to our reportable operating segments and reconciliations to the condensed consolidated totals is as follows:

     Management’s discussion and analysis of financial condition and results of operations, referred to as the Financial Review, is intended to assist the reader in the understanding and assessment of significant changes and trends related to the results of operations and financial position of the Company together with its subsidiaries. This discussion and analysis should be read in conjunction with the condensed consolidated financial statements and accompanying financial notes in Item 1 of Part I of this Quarterly Report on Form 10-Q and in Item 8 of Part II of our 2010 Annual Report on Form 10-K.

     Certain statements in this report constitute forward-looking statements. See “Factors Affecting Forward-Looking Statements” included in this Quarterly Report on Form 10-Q.

     Direct distribution and services revenues increased primarily due to a shift of revenues from sales to customers’ warehouses to direct store delivery and from market growth, which includes price increases and increased volume from new and existing customers.customers, and a shift of revenues from sales to customers’ warehouses to direct store delivery. Sales to customers’ warehouses decreased primarily due to reduced revenues associated with two customers and a shift of revenues to direct store delivery and reduceddelivery. In addition, our U.S. pharmaceutical distribution revenues were impacted by price deflation associated with two customers.brand to generic drug conversions.

     Canadian pharmaceutical distribution and services revenues increased for the second quarter and first six months of 2011 primarily due to a change in the foreign currency exchange rate of 15%,5% and 10%. On a constant currency basis, revenues decreased 1% in the second quarter of 2011 primarily due to a government-imposed price reduction for generic pharmaceuticals in two provinces and a brand to generic conversion for one drug. The decrease was partially offset by market growth, which includes increased volume from newexisting and existingnew customers and a small acquisition in the second quarter of 2011. On a constant currency basis, revenues grew 2% in the first six months of 2011 primarily reflecting the reasons previously noted and due to the impact of one more day of sales compared to the first quarter of 2010. Onsame period a constant currency basis, revenues grew 5%.year ago.

     Medical-Surgical distribution and services revenues approximatedincreased 5% and 3% for the second quarter and first six months of 2011 compared to the same periodperiods a year ago. Revenueago primarily due to market growth of approximately 2%rates and the benefit from two small acquisitions in mid-2010 and for the first six months of 2011, were fullypartially offset by a decrease in demand associated with the H1N1 flu virus.

     Technology Solutions revenues increaseddecreased in 2011 compared to the same periods a year ago primarily due to the sale of MAP in July 2010. In addition, in the second quarter of 2010 McKesson’s Horizon Enterprise Revenue Management^TM (“HzERM”) solution became generally available and as a result we recognized previously deferred revenue. These decreases were partially offset by higher maintenance revenuesrevenue reflecting the segment’s expanded customer base and higher installations.

     Distribution Solutions segment’s gross profit margin increased in 2011 primarily reflecting more sales of higher margin generic drugs and an increase in buy side margin, partially offset by a modest decrease in sell margin. The buy side margin primarily reflects volume and timing of compensation from branded pharmaceutical manufacturers. The first six months of 2011 were also favorably affected by the receipt of a $51 million antitrust settlement.

     As previously reported in our 2010 Annual Report, the McKesson Corporation Profit Sharing Investment Plan (“PSIP”)PSIP was a member of the settlement class in the Consolidated Securities Litigation Action. On October 9, 2009, the PSIP received approximately $119 million of the Consolidated Securities Litigation Action proceeds. Approximately $42 million of the proceeds were attributable to the allocated shares of McKesson common stock owned by the PSIP participants during the Consolidated Securities Litigation Action class-holding period and were allocated to the respective participants on that basis in the third quarter of 2010. Approximately $77 million of the proceeds were attributable to the unallocated shares (the “Unallocated Proceeds”) of McKesson common stock owned by the PSIP in an employee stock ownership plan (“ESOP”) suspense account. In accordance with the plan terms, the PSIP distributed all of the Unallocated Proceeds to current PSIP participants after the close of the plan year in April 2010. The receipt of the Unallocated Proceeds by the PSIP was reimbursement for the loss in value of the Company’s common stock held by the PSIP in its ESOP suspense account during the Consolidated Securities Litigation Action class holding period and was not a contribution made by the Company to the PSIP or ESOP. Accordingly, there were no accounting consequences to the Company’s financial statements relating to the receipt of the Unallocated Proceeds by the PSIP. The

     As a result of the PSIP’s receipt of the $119 million settlement, in 2010 the Company contributed $1 million to the PSIP. Accordingly, PSIP expense for 2010 was nominal. In 2011 the Company resumed its contributions to the PSIP, and the expense for 2011 is expected to be approximately $60 million.

     Corporate expenses increased for the second quarter of 2011 primarily due to an asset impairment charge for certain tangible property, partially offset by lower employee compensation and benefits costs and lower fees associated with our accounts receivable facility. Corporate expenses for the first six months of 2011 increased primarily due to the asset impairment charge, higher employee compensation and benefits costs and other business initiatives.initiatives, partially offset by lower fees associated with our accounts receivable facility. As a result of our adoption of a new accounting standard for transfers of financial assets on April 1, 2010, fees associated with our accounts receivable securitization facility are now recorded in interest expense. Prior to 2011 these fees were recorded in Corporate administrative expenses. See Financial Note 8, “Financing Activities,” for further information.

     Other income, net for 2011 approximated the prior year.

     Segment Operating Profit and Corporate Expenses, Net:

     Income Taxes:OurThe Company’s reported income tax rates for the firstsecond quarters of 2011 and 2010 were 32.3%32.2% and 31.6%.

     Weighted Average Diluted Common Shares Outstanding (“WASO”):Discontinued Operation:Diluted earnings per common share were calculated based on a weighted average number of shares outstanding of 272 million for the first quarters of 2011 and 2010. Our WASO remained unchanged compared with the same period a year ago as the impact of our stock repurchases were fully offset by the exercise of share-based awards and an increase in common stock equivalents, primarily reflecting our higher stock price.

     New accounting pronouncements that we have recently adopted as well as those that have been recently issued but not yet adopted by us are included in Financial Note 1, “Significant Accounting Policies,” to the accompanying condensed consolidated financial statements appearing in this Quarterly Report on Form 10-Q.