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8-K - FORM 8-K - MCKESSON CORP | f59653e8vk.htm |
Exhibit 99.1
McKESSON REPORTS FISCAL 2012 FIRST-QUARTER RESULTS
| Revenues of $30.0 billion for the first quarter, up 9%. | |
| First-quarter GAAP earnings per diluted share of $1.13, up 3%. | |
| First-quarter Adjusted Earnings per diluted share of $1.27, up 9%. | |
| Fiscal 2012 Outlook: Adjusted Earnings of $6.09 to $6.29 per diluted share. |
SAN FRANCISCO, July 28, 2011 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 McKessons 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 companys 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 McKessons 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 years 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.
2
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. |
3
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
companys 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 companys 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 companys 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
4
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 companys 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 companys regular conference call to review financial results with the
financial community is available through McKessons 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 companys website.
5
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.
###
Contact:
Ana Schrank, 415-983-7153 (Investors and Financial Media)
Ana.Schrank@McKesson.com
Kris Fortner, 415-983-8352 (General and Business Media)
Kris.Fortner@McKesson.com
Ana Schrank, 415-983-7153 (Investors and Financial Media)
Ana.Schrank@McKesson.com
Kris Fortner, 415-983-8352 (General and Business Media)
Kris.Fortner@McKesson.com
6
Schedule 1
McKESSON CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS GAAP
(unaudited)
(in millions, except per share amounts)
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)
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 | |||||||||||||||||||||||||||
Amortization | ||||||||||||||||||||||||||||
of Acquisition- | Acquisition- | Litigation | Adjusted | As | Adjusted | |||||||||||||||||||||||
As Reported | Related | Related | Reserve | Earnings | Reported | Earnings | ||||||||||||||||||||||
(GAAP) | Intangibles | Expenses | Adjustments | (Non-GAAP) | (GAAP) | (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 | ||||||||||||||||||||||||||||
Amortization | ||||||||||||||||||||||||||||
of Acquisition- | Acquisition- | Litigation | Adjusted | |||||||||||||||||||||||||
As Reported | Related | Related | Reserve | Earnings | ||||||||||||||||||||||||
(GAAP) | Intangibles | Expenses | Adjustments | (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 Companys 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 Companys reserves for estimated probable losses for its Average Wholesale Price and Securities
Litigation matters, as such terms were defined in the Companys 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 McKessons 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 McKessons financial results should be carefully evaluated.
Schedule 3
McKESSON CORPORATION
RECONCILIATION OF GAAP SEGMENT FINANCIAL RESULTS TO ADJUSTED EARNINGS (NON-GAAP)
(unaudited)
(in millions)
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 | ||||||||||||||||||||||||||||||
Adjusted | Adjusted | Adjusted | ||||||||||||||||||||||||||||||
As | Earnings | As | Earnings | As | Earnings | |||||||||||||||||||||||||||
Reported | (Non- | Reported | (Non- | Reported | (Non- | |||||||||||||||||||||||||||
(GAAP) | Adjust. | GAAP) | (GAAP) | Adjust. | GAAP) | (GAAP) | 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)
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 | |||||||||||||||||||||||||||||||
Corporate | Corporate | |||||||||||||||||||||||||||||||
Distribution | Technology | & Interest | Distribution | Technology | & Interest | |||||||||||||||||||||||||||
Solutions | Solutions | Expense | Total | Solutions | Solutions | 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)
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)
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 | ||||