[July 28, 2011] |
|
McKesson Reports Fiscal 2012 First-Quarter Results
SAN FRANCISCO --(Business Wire)--
McKesson Corporation (NYSE: MCK) today reported that revenues for the
first quarter ended June 30, 2011 were up 9% to $30.0 billion compared
to $27.5 billion a year ago. On the basis of U.S. generally accepted
accounting principles ("GAAP"), first-quarter earnings per diluted share
was $1.13 compared to $1.10 a year ago.
McKesson separately reports financial results on the basis of Adjusted
Earnings in addition to GAAP. Adjusted Earnings is a non-GAAP financial
measure defined as GAAP earnings from continuing operations, excluding
acquisition-related expenses, amortization of acquisition-related
intangible assets, and certain litigation reserve adjustments. A
reconciliation of McKesson's financial results determined in accordance
with GAAP to Adjusted Earnings is provided in Schedules 2, 3 and 4 of
the financial statement tables included with this release. First-quarter
Adjusted Earnings per diluted share was $1.27 compared to $1.16 a year
ago.
For the first quarter, McKesson generated cash from operations of $326
million and ended the quarter with cash and cash equivalents of $3.1
billion. During the quarter, McKesson entered into an accelerated share
buyback agreement to repurchase $650 million of common stock, leaving
$850 million on its current share repurchase authorization. The company
also paid $47 million in dividends and made a $105 million acquisition
during the first quarter.
The company's tax rate for the first quarter, and its revised estimated
tax rate for the full year, was 32%, down from the 33% provided as
initial guidance.
"I am pleased with McKesson's strong first quarter financial results,
which provide a solid foundation for the remainder of our fiscal year,"
said John H. Hammergren, chairman and chief executive officer. "In
addition, our continued strong cash flow allowed us to execute an
accelerated share repurchase program. Due to the change in our estimated
full-year tax rate, we are raising our previous outlook for the fiscal
year and now expect Adjusted Earnings between $6.09 and $6.29 per
diluted share for the fiscal year ending March 31, 2012."
Distribution Solutions revenues were up 9% in the first quarter, driven
mainly by strong growth in U.S. pharmaceutical direct distribution and
services revenues, reflecting market growth and our mix of business, as
well as the acquisition of US Oncology.
Canadian revenues, on a constant currency basis, were flat for the
quarter due to the impact of government imposed price restrictions on
generic drugs. Including a favorable currency impact of 7%, Canadian
revenues increased 7% for the quarter. Medical-Surgical distribution
revenues were up 7% for the quarter.
In the first quarter, Distribution Solutions gross profit improved due
to the positive impact of our acquisition of US Oncology. In last year's
first quarter, gross profit was positively impacted by receipt of the
proceeds from a $51 million anti-trust settlement.
Distribution Solutions GAAP operating profit was $475 million for the
quarter and the GAAP operating margin was 1.63%. Adjusted operating
profit was $514 million for the quarter and the adjusted operating
margin was 1.76%.
In Technology Solutions, revenues were up 6% for the quarter. GAAP
operating profit in the first quarter was $100 million and the GAAP
operating margin was 12.47%. Adjusted operating profit in the first
quarter was $119 million and the adjusted operating margin was 14.84%.
Technology Solutions performance was aided by stronger than expected
progress on achieving certain customer implementation milestones, as
well as the timing of payments from customers.
Fiscal Year 2012 Outlook
McKesson expects Adjusted Earnings between $6.09 and $6.29 per diluted
share for the fiscal year ending March 31, 2012, which excludes the
following GAAP items:
-
Amortization of acquisition-related intangible assets of approximately
47 cents per diluted share in Fiscal 2012.
-
Acquisition-related expenses of approximately seven cents per diluted
share in Fiscal 2012.
Risk Factors
Except for historical information contained in this press release,
matters discussed may constitute "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934, as amended, that involve risks and
uncertainties that could cause actual results to differ materially from
those projected, anticipated or implied. These statements may be
identified by their use of forward-looking terminology such as
"believes", "expects", "anticipates", "may", "will", "should", "seeks",
"approximately", "intends", "plans", "estimates" or the negative of
these words or other comparable terminology. The discussion of financial
trends, strategy, plans or intentions may also include forward-looking
statements. It is not possible to predict or identify all such risks and
uncertainties; however, the most significant of these risks and
uncertainties are described in the company's Form 10-K, Form 10-Q and
Form 8-K reports filed with the Securities and Exchange Commission and
include, but are not limited to: material adverse resolution of pending
legal proceedings; changes in the U.S. healthcare industry and
regulatory environment; changes in the Canadian healthcare industry and
regulatory environment; competition; substantial defaults in payment or
a material reduction in purchases by, or the loss of, a large customer
or group purchasing organization; the loss of government contracts as a
result of compliance or funding challenges; public health issues in the
U.S. or abroad; implementation delay, malfunction or failure of internal
information systems; the adequacy of insurance to cover property loss or
liability claims; the company's failure to attract and retain customers
for its software products and solutions due to integration and
implementation challenges, or due to an inability to keep pace with
technological advances; the company's proprietary products and services
may not be adequately protected, and its products and solutions may be
found to infringe on the rights of others; system errors or failure of
our technology products and solutions to conform to specifications;
disaster or other event causing interruption of customer access to data
residing in our service centers; the delay or extension of our sales or
implementation cycles for external software products; changes in
circumstances that could impair our goodwill or intangible assets;
foreign currency fluctuations or disruptions to our foreign operations;
new or revised tax legislation or challenges to our tax positions; the
company's ability to successfully identify, consummate and integrate
strategic acquisitions; general economic conditions, including changes
in the financial markets that may affect the availability and cost of
credit to the company, its customers or suppliers; and changes in
accounting principles generally accepted in the United States of
America. The reader should not place undue reliance on forward-looking
statements, which speak only as of the date they are first made. Except
to the extent required by law, the company undertakes no obligation to
publicly release the result of any revisions to these forward-looking
statements to reflect events or circumstances after the date hereof, or
to reflect the occurrence of unanticipated events.
A web cast of the company's regular conference call to review
financial results with the financial community is available through
McKesson's website, www.mckesson.com/earningscall,
live at 5 PM ET today and on replay afterwards. Shareholders are
encouraged to review SEC filings and more information about McKesson,
which are located on the company's website.
About McKesson
McKesson Corporation, currently ranked 15th on the FORTUNE 500, is a
healthcare services and information technology company dedicated to
making the business of healthcare run better. We partner with payers,
hospitals, physician offices, pharmacies, pharmaceutical companies and
others across the spectrum of care to build healthier organizations that
deliver better care to patients in every setting. McKesson helps its
customers improve their financial, operational, and clinical performance
with solutions that include pharmaceutical and medical-surgical supply
management, healthcare information technology, and business and clinical
services. For more information, visit http://www.mckesson.com.
|
|
|
|
|
Schedule 1
|
|
McKESSON CORPORATION
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - GAAP
|
(unaudited)
|
(in millions, except per share amounts)
|
|
|
|
Quarter Ended June 30,
|
|
|
|
|
|
|
2011
|
|
2010
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
29,980
|
|
$
|
27,450
|
|
9
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales (1)
|
|
|
28,471
|
|
|
26,058
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
1,509
|
|
|
1,392
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
1,037
|
|
|
918
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
472
|
|
|
474
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income, net
|
|
|
8
|
|
|
9
|
|
(11)
|
|
|
Interest expense
|
|
|
(64)
|
|
|
(43)
|
|
49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
416
|
|
|
440
|
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
(130)
|
|
|
(142)
|
|
(8)
|
|
|
Net income
|
|
$
|
286
|
|
$
|
298
|
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share (2)
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
$
|
1.13
|
|
$
|
1.10
|
|
3
|
|
%
|
Basic
|
|
$
|
1.15
|
|
$
|
1.12
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares on which earnings per common share were based
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
254
|
|
|
272
|
|
(7)
|
|
%
|
Basic
|
|
|
249
|
|
|
266
|
|
(6)
|
|
|
|
|
(1)
|
Cost of sales for fiscal year 2011 includes a credit of $51
million in our Distribution Solutions segment representing our
share of a settlement of an antitrust class action lawsuit brought
against a drug manufacturer.
|
|
|
(2)
|
Certain computations may reflect rounding adjustments.
|
|
Schedule 2
|
|
McKESSON CORPORATION
|
RECONCILIATION OF GAAP OPERATING RESULTS TO ADJUSTED EARNINGS
(NON-GAAP)
|
(unaudited)
|
(in millions, except per share amounts)
|
|
|
|
|
|
Change
|
|
|
Quarter Ended June 30, 2011
|
|
Vs. Prior Quarter
|
|
|
As Reported (GAAP)
|
|
Amortization of Acquisition- Related Intangibles
|
|
Acquisition- Related Expenses
|
|
Litigation Reserve Adjustments
|
|
Adjusted Earnings (Non-GAAP)
|
|
As Reported (GAAP)
|
|
|
Adjusted Earnings (Non- GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
29,980
|
|
|
$
|
|
-
|
|
|
$
|
|
-
|
|
|
$
|
|
-
|
|
$
|
29,980
|
|
|
9
|
|
%
|
|
9
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$
|
1,509
|
|
|
$
|
|
5
|
|
|
$
|
|
-
|
|
|
$
|
|
-
|
|
$
|
1,514
|
|
|
8
|
|
|
|
8
|
|
|
Operating expenses
|
|
|
(1,037
|
)
|
|
|
|
43
|
|
|
|
|
10
|
|
|
|
|
-
|
|
|
(984
|
)
|
|
13
|
|
|
|
10
|
|
|
Other income, net
|
|
|
8
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
8
|
|
|
(11
|
)
|
|
|
(11
|
)
|
|
Interest expense
|
|
|
(64
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
(64
|
)
|
|
49
|
|
|
|
49
|
|
|
Income before income taxes
|
|
|
416
|
|
|
|
|
48
|
|
|
|
|
10
|
|
|
|
|
-
|
|
|
474
|
|
|
(5
|
)
|
|
|
1
|
|
|
Income tax expense
|
|
|
(130
|
)
|
|
|
|
(18
|
)
|
|
|
|
(3
|
)
|
|
|
|
-
|
|
|
(151
|
)
|
|
(8
|
)
|
|
|
(1
|
)
|
|
Net income
|
|
$
|
286
|
|
|
$
|
|
30
|
|
|
$
|
|
7
|
|
|
$
|
|
-
|
|
$
|
323
|
|
|
(4
|
)
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common share (1)
|
|
$
|
1.13
|
|
|
$
|
|
0.12
|
|
|
$
|
|
0.02
|
|
|
$
|
|
-
|
|
$
|
1.27
|
|
|
3
|
|
%
|
|
9
|
|
%
|
Diluted weighted average shares
|
|
|
254
|
|
|
|
|
254
|
|
|
|
|
254
|
|
|
|
|
|
254
|
|
|
(7
|
)
|
%
|
|
(7
|
)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended June 30, 2010
|
|
|
|
|
|
|
|
|
As Reported (GAAP)
|
|
Amortization of Acquisition- Related Intangibles
|
|
Acquisition- Related Expenses
|
|
Litigation Reserve Adjustments
|
|
Adjusted Earnings (Non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
27,450
|
|
|
$
|
|
-
|
|
|
$
|
|
-
|
|
|
$
|
|
-
|
|
$
|
27,450
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$
|
1,392
|
|
|
$
|
|
4
|
|
|
$
|
|
-
|
|
|
$
|
|
-
|
|
$
|
1,396
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
(918
|
)
|
|
|
|
24
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
(894
|
)
|
|
|
|
|
|
|
Other income, net
|
|
|
9
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
9
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(43
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
(43
|
)
|
|
|
|
|
|
|
Income before income taxes
|
|
|
440
|
|
|
|
|
28
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
468
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
(142
|
)
|
|
|
|
(11
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
(153
|
)
|
|
|
|
|
|
|
Net income
|
|
$
|
298
|
|
|
$
|
|
17
|
|
|
$
|
|
-
|
|
|
$
|
|
-
|
|
$
|
315
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common share (1)
|
|
$
|
1.10
|
|
|
$
|
|
0.06
|
|
|
$
|
|
-
|
|
|
$
|
|
-
|
|
$
|
1.16
|
|
|
|
|
|
|
|
Diluted weighted average shares
|
|
|
272
|
|
|
|
|
272
|
|
|
|
|
|
|
|
272
|
|
|
|
|
|
|
|
|
(1) Certain computations may reflect rounding adjustments.
|
|
|
Adjusted Earnings (Non-GAAP) Financial
Information
|
|
Adjusted Earnings represents income from continuing operations,
excluding the effects of the following items from the Company's GAAP
financial results, including the related income tax effects:
|
|
Amortization of acquisition-related
intangibles - Amortization expense of acquired intangible
assets purchased in connection with acquisitions by the Company.
|
|
Acquisition-related expenses -
Transaction and integration expenses that are directly related to
acquisitions by the Company. Examples include transaction closing
costs, professional service fees, restructuring or severance
charges, retention payments, employee relocation expenses,
facility or other exit-related expenses, recoveries of
acquisition-related expenses or post-closing expenses, or bridge
loan fees.
|
|
Litigation reserve adjustments -
Adjustments to the Company's reserves for estimated probable
losses for its Average Wholesale Price and Securities Litigation
matters, as such terms were defined in the Company's Annual
Reports on Form 10-K for the fiscal years ended March 31, 2011 and
2009, respectively.
|
|
Income taxes on Adjusted Earnings are calculated in accordance
with Accounting Standards Codification 740, "Income Taxes," which
is the same accounting principles used by the Company when
presenting its GAAP financial results.
|
|
Adjusted Earnings is a non-GAAP measure. McKesson believes the
presentation of Adjusted Earnings will provide useful information
to investors in understanding its core operating performance, as
well as assisting with the comparison of past financial
performance to future financial results. McKesson also believes
that the presentation of Adjusted Earnings will assist investors'
ability to compare McKesson's financial results to those of other
companies. Finally, McKesson uses Adjusted Earnings internally as
one measure for assessing the performance of the organization and
its operating segments. However, any such non-GAAP financial
results and measures disclosed by McKesson should not be
considered a substitute for, nor superior to, financial results
and measures as determined or calculated in accordance with GAAP.
Each and every GAAP to non-GAAP reconciliation of McKesson's
financial results should be carefully evaluated.
|
|
Schedule 3
|
|
McKESSON CORPORATION
|
RECONCILIATION OF GAAP SEGMENT FINANCIAL RESULTS TO ADJUSTED
EARNINGS (NON-GAAP)
|
(unaudited)
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended June 30, 2011
|
|
|
Quarter Ended June 30, 2010
|
|
|
Change
|
|
|
|
|
|
As Reported (GAAP)
|
|
Adjust.
|
|
|
|
|
Adjusted Earnings (Non- GAAP)
|
|
|
As Reported (GAAP)
|
|
Adjust.
|
|
|
|
|
Adjusted Earnings (Non- GAAP)
|
|
|
As Reported (GAAP)
|
|
Adjusted Earnings (Non- GAAP)
|
|
REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution Solutions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct distribution & services
|
|
$
|
20,827
|
|
|
|
$
|
|
|
-
|
|
|
|
|
$
|
20,827
|
|
|
|
$
|
18,702
|
|
|
$
|
|
|
-
|
|
|
|
|
$
|
18,702
|
|
|
|
11
|
|
%
|
|
11
|
|
%
|
|
|
Sales to customers' warehouses
|
|
|
4,891
|
|
|
|
|
|
|
-
|
|
|
|
|
|
4,891
|
|
|
|
|
4,743
|
|
|
|
|
|
-
|
|
|
|
|
|
4,743
|
|
|
|
3
|
|
|
|
3
|
|
|
|
|
|
Total U.S. pharmaceutical distribution
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
& services
|
|
|
25,718
|
|
|
|
|
|
|
-
|
|
|
|
|
|
25,718
|
|
|
|
|
23,445
|
|
|
|
|
|
-
|
|
|
|
|
|
23,445
|
|
|
|
10
|
|
|
|
10
|
|
|
|
|
Canada pharmaceutical distribution & services
|
|
|
2,729
|
|
|
|
|
|
|
-
|
|
|
|
|
|
2,729
|
|
|
|
|
2,560
|
|
|
|
|
|
-
|
|
|
|
|
|
2,560
|
|
|
|
7
|
|
|
|
7
|
|
|
|
|
Medical-Surgical distribution & services
|
|
|
731
|
|
|
|
|
|
|
-
|
|
|
|
|
|
731
|
|
|
|
|
686
|
|
|
|
|
|
-
|
|
|
|
|
|
686
|
|
|
|
7
|
|
|
|
7
|
|
|
|
|
|
Total Distribution Solutions
|
|
|
29,178
|
|
|
|
|
|
|
-
|
|
|
|
|
|
29,178
|
|
|
|
|
26,691
|
|
|
|
|
|
-
|
|
|
|
|
|
26,691
|
|
|
|
9
|
|
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology Solutions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Services
|
|
|
630
|
|
|
|
|
|
|
-
|
|
|
|
|
|
630
|
|
|
|
|
595
|
|
|
|
|
|
-
|
|
|
|
|
|
595
|
|
|
|
6
|
|
|
|
6
|
|
|
|
|
Software & software systems
|
|
|
144
|
|
|
|
|
|
|
-
|
|
|
|
|
|
144
|
|
|
|
|
135
|
|
|
|
|
|
-
|
|
|
|
|
|
135
|
|
|
|
7
|
|
|
|
7
|
|
|
|
|
Hardware
|
|
|
28
|
|
|
|
|
|
|
-
|
|
|
|
|
|
28
|
|
|
|
|
29
|
|
|
|
|
|
-
|
|
|
|
|
|
29
|
|
|
|
(3
|
)
|
|
|
(3
|
)
|
|
|
|
|
Total Technology Solutions
|
|
|
802
|
|
|
|
|
|
|
-
|
|
|
|
|
|
802
|
|
|
|
|
759
|
|
|
|
|
|
-
|
|
|
|
|
|
759
|
|
|
|
6
|
|
|
|
6
|
|
|
|
|
|
Revenues
|
|
$
|
29,980
|
|
|
|
$
|
|
|
-
|
|
|
|
|
$
|
29,980
|
|
|
|
$
|
27,450
|
|
|
$
|
|
|
-
|
|
|
|
|
$
|
27,450
|
|
|
|
9
|
|
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution Solutions
|
|
$
|
1,131
|
|
|
|
$
|
|
|
-
|
|
|
|
|
$
|
1,131
|
|
|
|
$
|
1,067
|
|
|
$
|
|
|
-
|
|
|
|
|
$
|
1,067
|
|
|
|
6
|
|
|
|
6
|
|
|
|
Technology Solutions
|
|
|
378
|
|
|
|
|
|
|
5
|
|
|
|
|
|
383
|
|
|
|
|
325
|
|
|
|
|
|
4
|
|
|
|
|
|
329
|
|
|
|
16
|
|
|
|
16
|
|
|
|
|
|
Gross profit
|
|
$
|
1,509
|
|
|
|
$
|
|
|
5
|
|
|
|
|
$
|
1,514
|
|
|
|
$
|
1,392
|
|
|
$
|
|
|
4
|
|
|
|
|
$
|
1,396
|
|
|
|
8
|
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution Solutions
|
|
$
|
(661
|
)
|
|
|
$
|
|
|
39
|
|
|
|
|
$
|
(622
|
)
|
|
|
$
|
(568
|
)
|
|
$
|
|
|
12
|
|
|
|
|
$
|
(556
|
)
|
|
|
16
|
|
|
|
12
|
|
|
|
Technology Solutions
|
|
|
(279
|
)
|
|
|
|
|
|
14
|
|
|
|
|
|
(265
|
)
|
|
|
|
(262
|
)
|
|
|
|
|
12
|
|
|
|
|
|
(250
|
)
|
|
|
6
|
|
|
|
6
|
|
|
|
Corporate
|
|
|
(97
|
)
|
|
|
|
|
|
-
|
|
|
|
|
|
(97
|
)
|
|
|
|
(88
|
)
|
|
|
|
|
-
|
|
|
|
|
|
(88
|
)
|
|
|
10
|
|
|
|
10
|
|
|
|
|
|
Operating expenses
|
|
$
|
(1,037
|
)
|
|
|
$
|
|
|
53
|
|
|
|
|
$
|
(984
|
)
|
|
|
$
|
(918
|
)
|
|
$
|
|
|
24
|
|
|
|
|
$
|
(894
|
)
|
|
|
13
|
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME, NET
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution Solutions
|
|
$
|
5
|
|
|
|
$
|
|
|
-
|
|
|
|
|
$
|
5
|
|
|
|
$
|
6
|
|
|
$
|
|
|
-
|
|
|
|
|
$
|
6
|
|
|
|
(17
|
)
|
|
|
(17
|
)
|
|
|
Technology Solutions
|
|
|
1
|
|
|
|
|
|
|
-
|
|
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
|
|
-
|
|
|
|
|
|
1
|
|
|
|
-
|
|
|
|
-
|
|
|
|
Corporate
|
|
|
2
|
|
|
|
|
|
|
-
|
|
|
|
|
|
2
|
|
|
|
|
2
|
|
|
|
|
|
-
|
|
|
|
|
|
2
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
Other income, net
|
|
$
|
8
|
|
|
|
$
|
|
|
-
|
|
|
|
|
$
|
8
|
|
|
|
$
|
9
|
|
|
$
|
|
|
-
|
|
|
|
|
$
|
9
|
|
|
|
(11
|
)
|
|
|
(11
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING PROFIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution Solutions
|
|
$
|
475
|
|
|
|
$
|
|
|
39
|
|
|
|
|
$
|
514
|
|
|
|
$
|
505
|
|
|
$
|
|
|
12
|
|
|
|
|
$
|
517
|
|
|
|
(6
|
)
|
|
|
(1
|
)
|
|
|
Technology Solutions
|
|
|
100
|
|
|
|
|
|
|
19
|
|
|
|
|
|
119
|
|
|
|
|
64
|
|
|
|
|
|
16
|
|
|
|
|
|
80
|
|
|
|
56
|
|
|
|
49
|
|
|
|
|
|
Operating profit
|
|
|
575
|
|
|
|
|
|
|
58
|
|
|
|
|
|
633
|
|
|
|
|
569
|
|
|
|
|
|
28
|
|
|
|
|
|
597
|
|
|
|
1
|
|
|
|
6
|
|
|
|
Corporate
|
|
|
(95
|
)
|
|
|
|
|
|
-
|
|
|
|
|
|
(95
|
)
|
|
|
|
(86
|
)
|
|
|
|
|
-
|
|
|
|
|
|
(86
|
)
|
|
|
10
|
|
|
|
10
|
|
|
|
|
|
Income before interest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and income taxes
|
|
$
|
480
|
|
|
|
$
|
|
|
58
|
|
|
|
|
$
|
538
|
|
|
|
$
|
483
|
|
|
$
|
|
|
28
|
|
|
|
|
$
|
511
|
|
|
|
(1
|
)
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATISTICS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit as a % of revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution Solutions
|
|
|
1.63
|
|
%
|
|
|
|
|
|
|
|
|
|
|
1.76
|
|
%
|
|
|
1.89
|
|
%
|
|
|
|
|
|
|
|
|
|
1.94
|
|
%
|
|
(26
|
)
|
bp
|
(18
|
)
|
bp
|
|
Technology Solutions
|
|
|
12.47
|
|
|
|
|
|
|
|
|
|
|
|
|
14.84
|
|
|
|
|
8.43
|
|
|
|
|
|
|
|
|
|
|
|
10.54
|
|
|
|
404
|
|
|
|
430
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule 4
|
|
McKESSON CORPORATION
|
RECONCILIATION OF GAAP SEGMENT FINANCIAL RESULTS TO ADJUSTED
EARNINGS (NON-GAAP) - BY ADJUSTMENT TYPE
|
(unaudited)
|
(in millions)
|
|
|
|
|
Quarter Ended June 30, 2011
|
|
|
Quarter Ended June 30, 2010
|
|
|
Distribution Solutions
|
|
Technology Solutions
|
|
Corporate & Interest Expense
|
|
Total
|
|
|
Distribution Solutions
|
|
Technology Solutions
|
|
Corporate & Interest Expense
|
|
Total
|
As Reported (GAAP):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
29,178
|
|
|
$
|
802
|
|
|
$
|
-
|
|
|
$
|
29,980
|
|
|
|
$
|
26,691
|
|
|
$
|
759
|
|
|
$
|
-
|
|
|
$
|
27,450
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$
|
1,131
|
|
|
$
|
378
|
|
|
$
|
-
|
|
|
$
|
1,509
|
|
|
|
$
|
1,067
|
|
|
$
|
325
|
|
|
$
|
-
|
|
|
$
|
1,392
|
|
Operating expenses
|
|
|
(661
|
)
|
|
|
(279
|
)
|
|
|
(97
|
)
|
|
|
(1,037
|
)
|
|
|
|
(568
|
)
|
|
|
(262
|
)
|
|
|
(88
|
)
|
|
|
(918
|
)
|
Other income, net
|
|
|
5
|
|
|
|
1
|
|
|
|
2
|
|
|
|
8
|
|
|
|
|
6
|
|
|
|
1
|
|
|
|
2
|
|
|
|
9
|
|
Operating profit before tax
|
|
|
475
|
|
|
|
100
|
|
|
|
(95
|
)
|
|
|
480
|
|
|
|
|
505
|
|
|
|
64
|
|
|
|
(86
|
)
|
|
|
483
|
|
Interest expense
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
(62
|
)
|
|
|
(64
|
)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(43
|
)
|
|
|
(43
|
)
|
Income before income taxes
|
|
$
|
474
|
|
|
$
|
99
|
|
|
$
|
(157
|
)
|
|
$
|
416
|
|
|
|
$
|
505
|
|
|
$
|
64
|
|
|
$
|
(129
|
)
|
|
$
|
440
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-Tax Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$
|
-
|
|
|
$
|
5
|
|
|
$
|
-
|
|
|
$
|
5
|
|
|
|
$
|
-
|
|
|
$
|
4
|
|
|
$
|
-
|
|
|
$
|
4
|
|
Operating expenses
|
|
|
31
|
|
|
|
12
|
|
|
|
-
|
|
|
|
43
|
|
|
|
|
12
|
|
|
|
12
|
|
|
|
-
|
|
|
|
24
|
|
Amortization of acquisition-
related intangibles
|
|
|
31
|
|
|
|
17
|
|
|
|
-
|
|
|
|
48
|
|
|
|
|
12
|
|
|
|
16
|
|
|
|
-
|
|
|
|
28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses - Acquisition-related expenses
|
|
|
8
|
|
|
|
2
|
|
|
|
-
|
|
|
|
10
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Litigation reserve adjustments
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total pre-tax adjustments
|
|
$
|
39
|
|
|
$
|
19
|
|
|
$
|
-
|
|
|
$
|
58
|
|
|
|
$
|
12
|
|
|
$
|
16
|
|
|
$
|
-
|
|
|
$
|
28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings (Non-GAAP):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
29,178
|
|
|
$
|
802
|
|
|
$
|
-
|
|
|
$
|
29,980
|
|
|
|
$
|
26,691
|
|
|
$
|
759
|
|
|
$
|
-
|
|
|
$
|
27,450
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$
|
1,131
|
|
|
$
|
383
|
|
|
$
|
-
|
|
|
$
|
1,514
|
|
|
|
$
|
1,067
|
|
|
$
|
329
|
|
|
$
|
-
|
|
|
$
|
1,396
|
|
Operating expenses
|
|
|
(622
|
)
|
|
|
(265
|
)
|
|
|
(97
|
)
|
|
|
(984
|
)
|
|
|
|
(556
|
)
|
|
|
(250
|
)
|
|
|
(88
|
)
|
|
|
(894
|
)
|
Other income, net
|
|
|
5
|
|
|
|
1
|
|
|
|
2
|
|
|
|
8
|
|
|
|
|
6
|
|
|
|
1
|
|
|
|
2
|
|
|
|
9
|
|
Operating profit before tax
|
|
|
514
|
|
|
|
119
|
|
|
|
(95
|
)
|
|
|
538
|
|
|
|
|
517
|
|
|
|
80
|
|
|
|
(86
|
)
|
|
|
511
|
|
Interest expense
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
(62
|
)
|
|
|
(64
|
)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(43
|
)
|
|
|
(43
|
)
|
Income before income taxes
|
|
$
|
513
|
|
|
$
|
118
|
|
|
$
|
(157
|
)
|
|
$
|
474
|
|
|
|
$
|
517
|
|
|
$
|
80
|
|
|
$
|
(129
|
)
|
|
$
|
468
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule 5
|
|
McKESSON CORPORATION
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(unaudited)
|
(in millions)
|
|
|
|
|
|
|
June 30,
|
|
|
March 31,
|
|
|
|
|
|
2011
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
$
|
3,116
|
|
|
$
|
3,612
|
Receivables, net
|
|
|
|
|
|
9,372
|
|
|
|
9,187
|
Inventories, net
|
|
|
|
|
|
9,530
|
|
|
|
9,225
|
Prepaid expenses and other
|
|
|
|
|
|
356
|
|
|
|
333
|
Total
|
|
|
|
|
|
22,374
|
|
|
|
22,357
|
|
|
|
|
|
|
|
|
|
|
|
Property, Plant and Equipment, Net
|
|
|
|
|
|
988
|
|
|
|
991
|
Capitalized Software Held for Sale, Net
|
|
|
|
|
|
153
|
|
|
|
152
|
Goodwill
|
|
|
|
|
|
4,439
|
|
|
|
4,364
|
Intangible Assets, Net
|
|
|
|
|
|
1,414
|
|
|
|
1,456
|
Other Assets
|
|
|
|
|
|
1,649
|
|
|
|
1,566
|
Total Assets
|
|
|
|
|
$
|
31,017
|
|
|
$
|
30,886
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
|
|
Drafts and accounts payable
|
|
|
|
|
$
|
14,547
|
|
|
$
|
14,090
|
Deferred revenue
|
|
|
|
|
|
1,290
|
|
|
|
1,321
|
Deferred tax liabilities
|
|
|
|
|
|
1,071
|
|
|
|
1,037
|
Current portion of long-term debt
|
|
|
|
|
|
414
|
|
|
|
417
|
Other accrued liabilities
|
|
|
|
|
|
1,820
|
|
|
|
1,861
|
Total
|
|
|
|
|
|
19,142
|
|
|
|
18,726
|
|
|
|
|
|
|
|
|
|
|
|
Long-Term Debt
|
|
|
|
|
|
3,575
|
|
|
|
3,587
|
Other Noncurrent Liabilities
|
|
|
|
|
|
1,383
|
|
|
|
1,353
|
Stockholders' Equity
|
|
|
|
|
|
6,917
|
|
|
|
7,220
|
Total Liabilities and Stockholders' Equity
|
|
|
|
|
$
|
31,017
|
|
|
$
|
30,886
|
|
|
|
|
|
|
|
|
|
|
|
Schedule 6
|
|
McKESSON CORPORATION
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(unaudited)
|
(in millions)
|
|
|
|
|
|
Quarter Ended June 30,
|
|
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
286
|
|
|
|
$
|
298
|
|
Adjustments to reconcile to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
135
|
|
|
|
|
120
|
|
Share-based compensation expense
|
|
|
|
|
39
|
|
|
|
|
33
|
|
Other non-cash items
|
|
|
|
|
39
|
|
|
|
|
12
|
|
Changes in operating assets and liabilities, net of business
acquisition:
|
|
|
|
|
|
|
|
|
|
Receivables
|
|
|
|
|
(195
|
)
|
|
|
|
172
|
|
Inventories
|
|
|
|
|
(303
|
)
|
|
|
|
(28
|
)
|
Drafts and accounts payable
|
|
|
|
|
445
|
|
|
|
|
80
|
|
Deferred revenue
|
|
|
|
|
(50
|
)
|
|
|
|
(69
|
)
|
Other
|
|
|
|
|
(70
|
)
|
|
|
|
(90
|
)
|
Net cash provided by operating activities
|
|
|
|
|
326
|
|
|
|
|
528
|
|
|
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Property acquisitions
|
|
|
|
|
(58
|
)
|
|
|
|
(52
|
)
|
Capitalized software expenditures
|
|
|
|
|
(51
|
)
|
|
|
|
(35
|
)
|
Acquisitions of business, less cash and cash equivalents acquired
|
|
|
|
|
(105
|
)
|
|
|
|
-
|
|
Other
|
|
|
|
|
60
|
|
|
|
|
8
|
|
Net cash used in investing activities
|
|
|
|
|
(154
|
)
|
|
|
|
(79
|
)
|
|
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Repayments of debt
|
|
|
|
|
(16
|
)
|
|
|
|
-
|
|
Common stock repurchases, including shares surrendered for tax
withholding
|
|
|
|
|
(672
|
)
|
|
|
|
(1,016
|
)
|
Common stock transactions - other
|
|
|
|
|
72
|
|
|
|
|
144
|
|
Dividends paid
|
|
|
|
|
(47
|
)
|
|
|
|
(33
|
)
|
Other
|
|
|
|
|
(5
|
)
|
|
|
|
2
|
|
Net cash used in financing activities
|
|
|
|
|
(668
|
)
|
|
|
|
(903
|
)
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
|
|
-
|
|
|
|
|
(12
|
)
|
Net decrease in cash and cash equivalents
|
|
|
|
|
(496
|
)
|
|
|
|
(466
|
)
|
Cash and cash equivalents at beginning of period
|
|
|
|
|
3,612
|
|
|
|
|
3,731
|
|
Cash and cash equivalents at end of period
|
|
|
|
$
|
3,116
|
|
|
|
$
|
3,265
|
|
[ Back To TMCnet.com's Homepage ]
|