Exhibit 99.1
| | |
| 7000 Cardinal Place | | |
Dublin,OH 43017 www.cardinalhealth.com | | FOR IMMEDIATE RELEASE |
Contacts:
| | | | | | | | |
Media: | | Jim Mazzola (614) 757-3690 jim.mazzola@cardinalhealth.com | | Investors: | | Sally Curley (614) 757-7115 sally.curley@cardinalhealth.com |
CARDINAL HEALTH REPORTS THIRD QUARTER RESULTS
| | • | | Revenue increases 5 percent to $22.9 billion |
| | • | | GAAP earnings from continuing operations reach $366 million from a loss of $5 million in the prior-year period |
| | • | | GAAP diluted earnings per share from continuing operations rise to $1.02 from a loss of $0.01 in prior-year period |
| | • | | Non-GAAP diluted EPS from continuing operations increases 13 percent to $1.08 |
DUBLIN, Ohio, May 1, 2008 — Cardinal Health, a global provider of products and services that improve the safety and productivity of health care, today reported a revenue increase of 5 percent for its third quarter to nearly $23 billion, with GAAP earnings per share (EPS) reaching $1.02 from a $0.01 loss in the prior-year period.
Special items related to acquisition integration, litigation and restructuring, and impairment charges and other items had a $0.06 dilutive impact on GAAP earnings for the quarter, bringing non-GAAP EPS to $1.081, an increase of 13 percent from the prior-year period.
Chairman and Chief Executive Officer R. Kerry Clark said, “Our consolidated business and three of our four operating segments are performing to our expectations. We saw a healthy revenue increase in our clinical and medical products sector, with excellent leverage to the profit line. And our supply chain medical segment continued the turnaround we began earlier this year with a strong quarter of profitable growth.
“Within our supply chain pharmaceutical segment, we are managing the same issues we outlined last quarter, including the re-pricing of large retail accounts and the impact of our controlled substance anti-diversion efforts. However, we have renewed all of our major contracts through fiscal 2009 and, with respect to our anti-diversion efforts, we are putting in place new systems that we believe will return us to a strong position in managing this important industry issue.”
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Cardinal Health Reports Third Quarter Results
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Q3 and FY08 Year-to-Date Summary
| | | | | | | | | | | | | | | | |
| | | Q3 FY08 | | Q3 FY07 | | | Y/Y | | | FY08 YTD | | Y/Y | |
Revenue | | $ | 22.9 billion | | $ | 21.9 billion | | | 5 | % | | $ | 68.2 billion | | 6 | % |
GAAP Operating Earnings | | $ | 577 million | | $ | (10) million | | | n.m. | | | $ | 1.6 billion | | 66 | % |
Non-GAAP Operating Earnings2 | | $ | 613 million | | $ | 606 million | | | 1 | % | | $ | 1.7 billion | | 2 | % |
GAAP Earnings from Continuing Operations | | $ | 366 million | | $ | (5) million | | | n.m. | | | $ | 1 billion | | 65 | % |
Non-GAAP Earnings from Continuing Operations3 | | $ | 390 million | | $ | 390 million | | | — | | | $ | 1 billion | | — | |
GAAP Diluted EPS from Continuing Operations | | $ | 1.02 | | $ | (0.01 | ) | | n.m. | | | $ | 2.72 | | 85 | % |
Non-GAAP Diluted EPS from Continuing Operations | | $ | 1.08 | | $ | 0.96 | | | 13 | % | | $ | 2.83 | | 11 | % |
Third quarter segment results
Healthcare Supply Chain Services Sector
TheHealthcare Supply Chain Services – Pharmaceutical segment reported a 3 percent increase in revenue to $19.9 billion. Sales to bulk customers increased 8 percent to $9.1 billion, while sales to non-bulk customers were even with the prior year at $10.8 billion. Revenue growth was dampened by several factors, including customer disruption as the company enhances anti-diversion controls and strengthens its offerings, and by slower overall market growth. Segment profit declined 21 percent to $300 million, primarily from the continued impact of re-pricing several large contracts and the impact of anti-diversion initiatives.
Revenue for theHealthcare Supply Chain Services – Medical segment grew 8 percent to $2.1 billion, with increased sales penetration and growth of existing hospital, lab and ambulatory customers. As expected, the segment returned to positive profit growth during the quarter, with profit increasing 5 percent to $93 million, driven by increased sales volume. Segment profit growth was dampened by a previously disclosed change in corporate cost allocation and by continued softness in the surgical kitting business.
Clinical and Medical Products Sector
“Our Clinical and Medical products sector continued to deliver strong year-over-year growth, reflecting our leadership positions in medication dispensing, infusion, respiratory and infection prevention products,” Clark said. “We will continue to invest in these businesses to strengthen our offerings for the future.”
TheMedical Products and Technologies segment grew revenue by 48 percent to $679 million, driven by the acquisition of VIASYS Healthcare and strong growth within the core infection prevention and medical specialty businesses. Segment profit grew 72 percent to $80 million on the VIASYS addition, strong organic growth and the benefit of foreign exchange. The VIASYS integration remains on schedule to deliver $85 million to $100 million in synergies by fiscal 2010.
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Cardinal Health Reports Third Quarter Results
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Revenue for theClinical Technologies and Services segment increased by 11 percent to $747 million, driven by continued growth in customer installations for medication and supply dispensing products and infusion pumps. Segment profit increased by 29 percent to $127 million from a favorable product mix and improved operating leverage from expense management initiatives. Segment profit for the quarter was partially offset by a $6.5 million reserve for a recall of integrated circuits and connectors on certain Alaris® System modules. The company believes it is fully reserved for remediation efforts on all Alaris product recalls and expects to complete them by the end of the calendar year.
Additional third quarter and recent highlights
| | • | | Reached a definitive agreement to acquire the assets of privately held Enturia Inc. for $490 million. The cash transaction includes Enturia’s leading line of infection prevention products sold under the ChloraPrep® brand name. The acquisition, which is subject to regulatory approvals, is expected to close in Cardinal Health’s fourth quarter and be $0.01 to $0.02 dilutive to earnings in fiscal 2008 and accretive in fiscal 2009. |
| | • | | Introduced several new products and services, including Rxe-view™, a new service for small hospitals to improve medication safety and clinician productivity through Web-based medication order management and a clinical intervention tool; a new surgical gown made from a unique and proprietary fabric that is softer than other surgical gowns, improving comfort for clinicians; and an agreement with ClearCount Medical Solutions to distribute the first system cleared by the Food and Drug Administration using radio-frequency identification to count and detect sponges during surgeries. |
| | • | | Appointed Michael C. Kaufmann and Craig S. Morford to key executive posts. Kaufmann, 45, was named group president of the Healthcare Supply Chain Services – Pharmaceutical segment after most recently being responsible for Cardinal Health’s medical supply chain business. Morford, 49, was formerly acting deputy U.S. attorney general and will join the company on May 5 as chief compliance officer. |
| | • | | Repurchased $150 million of Cardinal Health shares during the quarter, bringing total repurchases for the first nine months of fiscal 2008 to $1.1 billion. |
| | • | | Announced recipients of Cardinal Health’s Patient Safety Grants totaling $1 million for new and innovative programs at 34 hospitals, health systems and community health clinics across the country. More than 10 percent of the nation’s hospitals applied for the grants in the largest and first-of-its-kind program by a health care company. |
Outlook
The company reaffirmed its non-GAAP EPS range of $3.75 to $3.85 for fiscal 2008. Clark stated, “As the remainder of the year unfolds, we expect full-year, non-GAAP EPS to be about in the middle of the range, excluding the potential dilutive impact of the Enturia acquisition of 1 to 2 cents.”
Conference Call
Cardinal Health will host a conference call and webcast at 8:30 a.m. EDT to discuss the results. To access the call and corresponding slide presentation, go to the Investor page at www.cardinalhealth.com. The conference call may also be accessed by calling 617-213-4853, passcode 66621966. An audio replay will be available until 11:30 p.m. EDT on May 3 at 617-801-6888, passcode 39214175. A transcript and audio replay will also be available at www.cardinalhealth.com.
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Cardinal Health Reports Third Quarter Results
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About Cardinal Health
Headquartered in Dublin, Ohio, Cardinal Health, Inc. (NYSE: CAH) is an $87 billion, global company serving the health care industry with products and services that help hospitals, physician offices and pharmacies reduce costs, improve safety, productivity and profitability, and deliver better care to patients. With a focus on making supply chains more efficient, reducing hospital-acquired infections and breaking the cycle of harmful medication errors, Cardinal Health develops market leading technologies, including Alaris® IV pumps, Pyxis® automated dispensing systems, MedMined™ infection surveillance services and the CareFusion™ patient identification system. The company also manufactures medical and surgical products and is one of the largest distributors of pharmaceuticals and medical supplies worldwide. Ranked No. 19 on the Fortune 500, Cardinal Health employs more than 40,000 people on five continents. More information about the company may be found atwww.cardinalhealth.com.
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1 | Non-GAAP diluted EPS from continuing operations: Non-GAAP earnings from continuing operations divided by diluted weighted average shares outstanding. |
2 | Non-GAAP operating earnings: Operating earnings/(loss) excluding special items and impairment charges and other. |
3 | Non-GAAP earnings from continuing operations: Earnings/(loss) from continuing operations excluding special items and impairment charges and other, both net of tax. |
A reconciliation of the differences between these non-GAAP financial measures and their most directly comparable GAAP financial measures is provided in the attached tables and at http://www.cardinalhealth.com.
This news release contains forward-looking statements addressing expectations, prospects, estimates and other matters that are dependent upon future events or developments. These matters are subject to risks and uncertainties that could cause actual results to differ materially from those projected, anticipated or implied. The most significant of these uncertainties are described in Cardinal Health’s Form 10-K, Form 10-Q and Form 8-K reports (including all amendments to those reports) and exhibits to those reports, and include (but are not limited to) the following: competitive pressures in Cardinal Health’s various lines of business; the loss of one or more key customer or supplier relationships or changes to the terms of those relationships; uncertainties relating to timing of generic and branded pharmaceutical introductions and the frequency or rate of branded pharmaceutical price appreciation or generic pharmaceutical price deflation; changes in the distribution patterns or reimbursement rates for health-care products and/or services; the results, consequences, effects or timing of any inquiry or investigation by any regulatory authority or any legal or administrative proceedings; future actions of regulatory bodies or government authorities relating to Cardinal Health’s manufacturing or sale of products and other costs or claims that could arise from its manufacturing, compounding or repackaging operations or from its other services; the costs, difficulties and uncertainties related to the integration of acquired businesses; and conditions in the pharmaceutical market and general economic and market conditions. This news release reflects management’s views as of May 1, 2008. Except to the extent required by applicable law, Cardinal Health undertakes no obligation to update or revise any forward-looking statement.
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CARDINAL HEALTH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
| | | | | | | | | | | |
| | | Third Quarter | | | | |
| (in millions, except per Common Share amounts) | | 2008 | | | 2007 | | | % Change | |
Revenue | | $ | 22,909.6 | | | $ | 21,867.1 | | | 5 | % |
Cost of products sold | | | 21,441.8 | | | | 20,479.6 | | | 5 | % |
| | | | | | | | | | | |
Gross margin | | | 1,467.8 | | | | 1,387.5 | | | 6 | % |
Selling, general and administrative expenses | | | 854.5 | | | | 781.7 | | | 9 | % |
Impairment charges and other | | | 1.2 | | | | 3.6 | | | N.M. | |
Special items: | | | | | | | | | | | |
Restructuring charges | | | 8.5 | | | | 6.6 | | | N.M. | |
Acquisition integration charges | | | 4.4 | | | | 2.9 | | | N.M. | |
Litigation and other | | | 22.7 | | | | 602.5 | | | N.M. | |
| | | | | | | | | | | |
Operating earnings / (loss) | | | 576.5 | | | | (9.8 | ) | | N.M. | |
Interest expense and other | | | 31.1 | | | | 32.2 | | | (3 | )% |
| | | | | | | | | | | |
Earnings / (loss) before income taxes and discontinued operations | | | 545.4 | | | | (42.0 | ) | | N.M. | |
Provision for income taxes | | | 179.5 | | | | (37.1 | ) | | N.M. | |
| | | | | | | | | | | |
Earnings / (loss) from continuing operations | | | 365.9 | | | | (4.9 | ) | | N.M. | |
Earnings / (loss) from discontinued operations (net of tax expense of $26.3 and $8.1 for the third quarter of fiscal 2008 and 2007, respectively) | | | (9.9 | ) | | | 23.9 | | | N.M. | |
| | | | | | | | | | | |
Net earnings | | $ | 356.0 | | | $ | 19.0 | | | N.M. | |
| | | | | | | | | | | |
Basic earnings / (loss) per Common Share: | | | | | | | | | | | |
Continuing operations | | $ | 1.03 | | | $ | (0.01 | ) | | N.M. | |
Discontinued operations | | | (0.03 | ) | | | 0.06 | | | N.M. | |
| | | | | | | | | | | |
Net basic earnings per Common Share | | $ | 1.00 | | | $ | 0.05 | | | N.M. | |
| | | | | | | | | | | |
Diluted earnings / (loss) per Common Share: | | | | | | | | | | | |
Continuing operations | | $ | 1.02 | | | $ | (0.01 | ) | | N.M. | |
Discontinued operations | | | (0.03 | ) | | | 0.06 | | | N.M. | |
| | | | | | | | | | | |
Net diluted earnings per Common Share | | $ | 0.99 | | | $ | 0.05 | | | N.M. | |
| | | | | | | | | | | |
Weighted average number of Common Shares outstanding: | | | | | | | | | | | |
Basic | | | 355.5 | | | | 394.6 | | | | |
Diluted1 | | | 360.2 | | | | 394.6 | | | | |
1 | Due to the loss from continuing operations during the third quarer of fiscal 2007, potential dilutive Common Shares have not been included in the denominator of the dilutive per share computation due to their antidilutive effect. |
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CARDINAL HEALTH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
| | | | | | | | | | |
| | | Year-to-Date | | | |
| (in millions, except per Common Share amounts) | | 2008 | | | 2007 | | % Change | |
Revenue | | $ | 68,165.8 | | | $ | 64,589.1 | | 6 | % |
Cost of products sold | | | 64,001.1 | | | | 60,701.3 | | 5 | % |
| | | | | | | | | | |
Gross margin | | | 4,164.7 | | | | 3,887.8 | | 7 | % |
Selling, general and administrative expenses | | | 2,513.5 | | | | 2,263.0 | | 11 | % |
Impairment charges and other | | | (22.0 | ) | | | 17.9 | | N.M. | |
Special items: | | | | | | | | | | |
Restructuring charges | | | 54.7 | | | | 28.4 | | N.M. | |
Acquisition integration charges | | | 19.9 | | | | 14.0 | | N.M. | |
Litigation and other | | | 13.1 | | | | 611.4 | | N.M. | |
| | | | | | | | | | |
Operating earnings | | | 1,585.5 | | | | 953.1 | | 66 | % |
Interest expense and other | | | 124.0 | | | | 102.2 | | 21 | % |
| | | | | | | | | | |
Earnings before income taxes and discontinued operations | | | 1,461.5 | | | | 850.9 | | 72 | % |
Provision for income taxes | | | 467.2 | | | | 248.9 | | 88 | % |
| | | | | | | | | | |
Earnings from continuing operations | | | 994.3 | | | | 602.0 | | 65 | % |
Earnings / (loss) from discontinued operations (net of tax (expense) / benefit of ($29.1) and $427.8 for fiscal 2008 and 2007 year-to-date, respectively) | | | (11.7 | ) | | | 426.9 | | N.M. | |
| | | | | | | | | | |
Net earnings | | $ | 982.6 | | | $ | 1,028.9 | | (5 | )% |
| | | | | | | | | | |
Basic earnings / (loss) per Common Share: | | | | | | | | | | |
Continuing operations | | $ | 2.77 | | | $ | 1.50 | | 85 | % |
Discontinued operations | | | (0.03 | ) | | | 1.07 | | N.M. | |
| | | | | | | | | | |
Net basic earnings per Common Share | | $ | 2.74 | | | $ | 2.57 | | 7 | % |
| | | | | | | | | | |
Diluted earnings / (loss) per Common Share: | | | | | | | | | | |
Continuing operations | | $ | 2.72 | | | $ | 1.47 | | 85 | % |
Discontinued operations | | | (0.03 | ) | | | 1.04 | | N.M. | |
| | | | | | | | | | |
Net diluted earnings per Common Share | | $ | 2.69 | | | $ | 2.51 | | 7 | % |
| | | | | | | | | | |
Weighted average number of Common Shares outstanding: | | | | | | | | | | |
Basic | | | 359.1 | | | | 400.5 | | | |
Diluted | | | 365.7 | | | | 409.5 | | | |
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CARDINAL HEALTH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
| | | | | | |
| (in millions) | | March 31,
2008 | | June 30,
2007 |
Assets | | | | | | |
Cash and equivalents | | $ | 1,529.0 | | $ | 1,308.8 |
Short-term investments available for sale | | | — | | | 132.0 |
Trade receivables, net | | | 4,974.3 | | | 4,714.4 |
Current portion of net investment in sales-type leases | | | 381.2 | | | 354.8 |
Inventories | | | 7,256.7 | | | 7,383.2 |
Prepaid expenses and other | | | 578.0 | | | 651.3 |
Assets held for sale | | | 187.9 | | | — |
| | | | | | |
Total current assets | | | 14,907.1 | | | 14,544.5 |
| | | | | | |
Property and equipment, net | | | 1,679.5 | | | 1,647.0 |
Net investment in sales-type leases, less current portion | | | 878.2 | | | 820.7 |
Goodwill and other intangibles, net | | | 5,681.0 | | | 5,860.9 |
Other assets | | | 457.6 | | | 280.7 |
| | | | | | |
Total assets | | $ | 23,603.4 | | $ | 23,153.8 |
| | | | | | |
Liabilities and Shareholders’ Equity | | | | | | |
Current portion of long-term obligations and other short-term borrowings | | $ | 355.3 | | $ | 16.0 |
Accounts payable | | | 8,987.9 | | | 9,162.2 |
Other accrued liabilities | | | 1,778.2 | | | 2,247.3 |
Liabilities from businesses held for sale and discontinued operations | | | 20.6 | | | 34.2 |
| | | | | | |
Total current liabilities | | | 11,142.0 | | | 11,459.7 |
| | | | | | |
Long-term obligations, less current portion and other short-term borrowings | | | 3,450.1 | | | 3,457.3 |
Deferred income taxes and other liabilities | | | 1,618.1 | | | 859.9 |
Total shareholders’ equity | | | 7,393.2 | | | 7,376.9 |
| | | | | | |
Total liabilities and shareholders’ equity | | $ | 23,603.4 | | $ | 23,153.8 |
| | | | | | |
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CARDINAL HEALTH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
| | | | | | | | | | | | | | | | |
| | | Third Quarter | | | Year-to-date | |
| (in millions) | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
Cash Flows From Operating Activities: | | | | | | | | | | | | | | | | |
Net earnings | | $ | 356.0 | | | $ | 19.0 | | | $ | 982.6 | | | $ | 1,028.9 | |
(Earnings) / loss from discontinued operations | | | 9.9 | | | | (23.9 | ) | | | 11.7 | | | | (426.9 | ) |
| | | | | | | | | | | | | | | | |
Earnings from continuing operations | | | 365.9 | | | | (4.9 | ) | | | 994.3 | | | | 602.0 | |
Adjustments to reconcile earnings from continuing operations to net cash provided by operating activities: | | | | | | | | | | | | | | | | |
Depreciation and amortization | | | 93.1 | | | | 81.7 | | | | 284.9 | | | | 237.1 | |
Asset impairments and other | | | 2.4 | | | | 3.6 | | | | (20.8 | ) | | | 18.0 | |
Equity compensation | | | 32.2 | | | | 39.0 | | | | 86.7 | | | | 109.3 | |
Provision for bad debts | | | 11.9 | | | | 9.2 | | | | 22.3 | | | | 17.0 | |
Change in operating assets and liabilities, net of effects from acquisitions: | | | | | | | | | | | | | | | | |
Increase in trade receivables | | | (144.2 | ) | | | (227.6 | ) | | | (294.8 | ) | | | (819.6 | ) |
(Increase) / decrease in inventories | | | 367.3 | | | | (172.7 | ) | | | 113.7 | | | | 11.4 | |
Increase in net investment in sales-type leases | | | (25.2 | ) | | | (32.6 | ) | | | (83.8 | ) | | | (77.0 | ) |
Increase / (decrease) in accounts payable | | | (37.4 | ) | | | 417.0 | | | | (217.2 | ) | | | 493.1 | |
Increase in other accrued liabilities and operating items, net | | | 231.2 | | | | 563.6 | | | | 427.0 | | | | 703.3 | |
| | | | | | | | | | | | | | | | |
Net cash provided by operating activities - continuing operations | | | 897.2 | | | | 676.3 | | | | 1312.3 | | | | 1,294.6 | |
Net cash provided by / (used in) operating activities - discontinued operations | | | (10.0 | ) | | | 93.7 | | | | (42.5 | ) | | | 115.2 | |
| | | | | | | | | | | | | | | | |
Net cash provided by operating activities | | | 887.2 | | | | 770.0 | | | | 1269.8 | | | | 1,409.8 | |
| | | | | | | | | | | | | | | | |
Cash Flows From Investing Activities: | | | | | | | | | | | | | | | | |
Acquisition of subsidiaries, net of divestitures and cash acquired | | | 0.2 | | | | (28.0 | ) | | | (39.0 | ) | | | (149.0 | ) |
Proceeds from sale of property and equipment | | | 2.9 | | | | (9.6 | ) | | | 10.3 | | | | 3.7 | |
Additions to property and equipment | | | (79.6 | ) | | | (89.1 | ) | | | (251.6 | ) | | | (243.1 | ) |
Sale of investment securities available for sale, net | | | — | | | | 167.2 | | | | 131.9 | | | | 198.4 | |
| | | | | | | | | | | | | | | | |
Net cash provided by / (used in) investing activities - continuing operations | | | (76.5 | ) | | | 40.5 | | | | (148.4 | ) | | | (190.0 | ) |
Net cash used in investing activities - discontinued operations | | | — | | | | (72.2 | ) | | | — | | | | (80.1 | ) |
| | | | | | | | | | | | | | | | |
Net cash used in investing activities | | | (76.5 | ) | | | (31.7 | ) | | | (148.4 | ) | | | (270.1 | ) |
| | | | | | | | | | | | | | | | |
Cash Flows From Financing Activities: | | | | | | | | | | | | | | | | |
Net change in commercial paper and short-term borrowings | | | (317.2 | ) | | | 250.8 | | | | 202.2 | | | | 254.5 | |
Reduction of long-term obligations | | | (2.7 | ) | | | (43.6 | ) | | | (15.9 | ) | | | (732.9 | ) |
Proceeds from long-term obligations, net of issuance costs | | | — | | | | — | | | | — | | | | 851.7 | |
Proceeds from issuance of Common Shares | | | 44.8 | | | | 243.5 | | | | 209.2 | | | | 318.8 | |
Tax benefits from exercises of stock options | | | 1.3 | | | | 11.6 | | | | 15.3 | | | | 28.7 | |
Dividends on Common Shares | | | (42.7 | ) | | | (36.1 | ) | | | (130.4 | ) | | | (109.5 | ) |
Purchase of Common Shares in treasury | | | (149.6 | ) | | | (1,280.0 | ) | | | (1,181.6 | ) | | | (2,025.2 | ) |
| | | | | | | | | | | | | | | | |
Net cash used in financing activities - continuing operations | | | (466.1 | ) | | | (853.8 | ) | | | (901.2 | ) | | | (1,413.9 | ) |
Net cash used in financing activities - discontinued operations | | | — | | | | (22.7 | ) | | | — | | | | (46.6 | ) |
| | | | | | | | | | | | | | | | |
Net cash used in financing activities | | | (466.1 | ) | | | (876.5 | ) | | | (901.2 | ) | | | (1,460.5 | ) |
| | | | | | | | | | | | | | | | |
Net increase / (decrease) in cash and equivalents | | | 344.6 | | | | (138.2 | ) | | | 220.2 | | | | (320.8 | ) |
Cash and equivalents at beginning of period | | | 1,184.4 | | | | 1,004.7 | | | | 1,308.8 | | | | 1,187.3 | |
| | | | | | | | | | | | | | | | |
Cash and equivalents at end of period | | $ | 1,529.0 | | | $ | 866.5 | | | $ | 1,529.0 | | | $ | 866.5 | |
| | | | | | | | | | | | | | | | |
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CARDINAL HEALTH, INC. AND SUBSIDIARIES
BUSINESS ANALYSIS
TOTAL COMPANY
| | | | | | | | | | | | | | | | |
| | | Third Quarter | | | Non-GAAP
Third Quarter | |
| (in millions) | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
Revenue | | | | | | | | | | | | | | | | |
Amount | | $ | 22,910 | | | $ | 21,867 | | | | | | | | | |
Growth Rate | | | 5 | % | | | 8 | % | | | | | | | | |
Operating Earnings / (Loss) | | | | | | | | | | | | | | | | |
Amount | | $ | 577 | | | | ($10 | ) | | $ | 613 | | | $ | 606 | |
Growth Rate | | | N.M. | | | | (102 | )% | | | 1 | % | | | 9 | % |
Earnings / (Loss) from Continuing Operations | | | | | | | | | | | | | | | | |
Amount | | $ | 366 | | | | ($5 | ) | | $ | 390 | | | $ | 390 | |
Growth Rate | | | N.M. | | | | (101 | )% | | | — | | | | 10 | % |
| | |
| | | Year-to-Date | | | Non-GAAP
Year-to-Date | |
| (in millions) | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
Revenue | | | | | | | | | | | | | | | | |
Amount | | $ | 68,166 | | | $ | 64,589 | | | | | | | | | |
Growth Rate | | | 6 | % | | | 11 | % | | | | | | | | |
Operating Earnings | | | | | | | | | | | | | | | | |
Amount | | $ | 1,586 | | | $ | 953 | | | $ | 1,651 | | | $ | 1,625 | |
Growth Rate | | | 66 | % | | | (30 | )% | | | 2 | % | | | 15 | % |
Earnings from Continuing Operations | | | | | | | | | | | | | | | | |
Amount | | $ | 994 | | | $ | 602 | | | $ | 1,037 | | | $ | 1,039 | |
Growth Rate | | | 65 | % | | | (30 | )% | | | — | | | | 16 | % |
Refer to the GAAP / Non-GAAP Reconciliation for definitions and calculations supporting the non-GAAP balances.
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CARDINAL HEALTH, INC. AND SUBSIDIARIES
SEGMENT BUSINESS ANALYSIS
| | | | | | | | | | | | | | | | | | |
| HEALTHCARE SUPPLY CHAIN SERVICES | | | CLINICAL AND MEDICAL PRODUCTS | |
| | | |
| | | Third Quarter | | | | | Third Quarter | |
| (in millions) | | 2008 | | | 2007 | | | (in millions) | | 2008 | | | 2007 | |
PHARMACEUTICAL | | | | | | | | | | CLINICAL TECHNOLOGIES AND SERVICES | | | | | | | | |
Revenue | | | | | | | | | | Revenue | | | | | | | | |
Amount | | $ | 19,894 | | | $ | 19,246 | | | Amount | | $ | 747 | | | $ | 674 | |
Growth Rate | | | 3 | % | | | 8 | % | | Growth Rate | | | 11 | % | | | 12 | % |
Mix | | | 85 | % | | | 86 | % | | Mix | | | 3 | % | | | 3 | % |
Segment Profit | | | | | | | | | | Segment Profit | | | | | | | | |
Amount | | $ | 300 | | | $ | 380 | | | Amount | | $ | 127 | | | $ | 98 | |
Growth Rate | | | (21 | )% | | | 15 | % | | Growth Rate | | | 29 | % | | | 12 | % |
Mix | | | 50 | % | | | 62 | % | | Mix | | | 21 | % | | | 16 | % |
Segment Profit Margin | | | 1.51 | % | | | 1.97 | % | | Segment Profit Margin | | | 16.98 | % | | | 14.58 | % |
MEDICAL | | | | | | | | | | MEDICAL PRODUCTS AND TECHNOLOGIES | | | | | | | | |
Revenue | | | | | | | | | | Revenue | | | | | | | | |
Amount | | $ | 2,066 | | | $ | 1,907 | | | Amount | | $ | 679 | | | $ | 458 | |
Growth Rate | | | 8 | % | | | 4 | % | | Growth Rate | | | 48 | % | | | 11 | % |
Mix | | | 9 | % | | | 9 | % | | Mix | | | 3 | % | | | 2 | % |
Segment Profit | | | | | | | | | | Segment Profit | | | | | | | | |
Amount | | $ | 93 | | | $ | 89 | | | Amount | | $ | 80 | | | $ | 47 | |
Growth Rate | | | 5 | % | | | (5 | )% | | Growth Rate | | | 72 | % | | | 4 | % |
Mix | | | 16 | % | | | 14 | % | | Mix | | | 13 | % | | | 8 | % |
Segment Profit Margin | | | 4.51 | % | | | 4.65 | % | | Segment Profit Margin | | | 11.80 | % | | | 10.20 | % |
Refer to definitions for an explanation of calculations.
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CARDINAL HEALTH, INC. AND SUBSIDIARIES
SEGMENT BUSINESS ANALYSIS
| | | | | | | | | | | | | | | | | | |
| HEALTHCARE SUPPLY CHAIN SERVICES | | | CLINICAL AND MEDICAL PRODUCTS | |
| | | |
| | | Year-to-Date | | | | | Year-to-Date | |
| (in millions) | | 2008 | | | 2007 | | | (in millions) | | 2008 | | | 2007 | |
PHARMACEUTICAL | | | | | | | | | | CLINICAL TECHNOLOGIES AND SERVICES | | | | | | | | |
Revenue | | | | | | | | | | Revenue | | | | | | | | |
Amount | | $ | 59,465 | | | $ | 57,017 | | | Amount | | $ | 2,110 | | | $ | 1,931 | |
Growth Rate | | | 4 | % | | | 11 | % | | Growth Rate | | | 9 | % | | | 8 | % |
Mix | | | 85 | % | | | 87 | % | | Mix | | | 3 | % | | | 3 | % |
Segment Profit | | | | | | | | | | Segment Profit | | | | | | | | |
Amount | | $ | 863 | | | $ | 996 | | | Amount | | $ | 341 | | | $ | 242 | |
Growth Rate | | | (13 | )% | | | 20 | % | | Growth Rate | | | 41 | % | | | 8 | % |
Mix | | | 53 | % | | | 62 | % | | Mix | | | 21 | % | | | 15 | % |
Segment Profit Margin | | | 1.45 | % | | | 1.75 | % | | Segment Profit Margin | | | 16.14 | % | | | 12.51 | % |
MEDICAL | | | | | | | | | | MEDICAL PRODUCTS AND TECHNOLOGIES | | | | | | | | |
Revenue | | | | | | | | | | Revenue | | | | | | | | |
Amount | | $ | 6,001 | | | $ | 5,585 | | | Amount | | $ | 1,969 | | | $ | 1,336 | |
Growth Rate | | | 7 | % | | | 4 | % | | Growth Rate | | | 47 | % | | | 12 | % |
Mix | | | 9 | % | | | 8 | % | | Mix | | | 3 | % | | | 2 | % |
Segment Profit | | | | | | | | | | Segment Profit | | | | | | | | |
Amount | | $ | 222 | | | $ | 235 | | | Amount | | $ | 206 | | | $ | 140 | |
Growth Rate | | | (5 | )% | | | 2 | % | | Growth Rate | | | 47 | % | | | 17 | % |
Mix | | | 14 | % | | | 14 | % | | Mix | | | 12 | % | | | 9 | % |
Segment Profit Margin | | | 3.70 | % | | | 4.20 | % | | Segment Profit Margin | | | 10.45 | % | | | 10.45 | % |
Refer to the definitions for an explanation of calculations.
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CARDINAL HEALTH, INC. AND SUBSIDIARIES
ASSET MANAGEMENT ANALYSIS
| | | | | | | | | | | | |
| | | Third Quarter | | | Year-to-Date | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
Receivable Days | | 20.4 | | | 18.9 | | | | | | | |
Days Inventory on Hand | | 27 | | | 29 | | | | | | | |
Debt to Total Capital | | 34 | % | | 29 | % | | | | | | |
Net Debt to Capital | | 24 | % | | 21 | % | | | | | | |
Return on Equity | | 19.6 | % | | 0.9 | % | | 18.1 | % | | 16.3 | % |
Non-GAAP Return on Equity | | 21.3 | % | | 20.9 | % | | 19.3 | % | | 16.8 | % |
Return on Invested Capital | | 7.60 | % | | 0.36 | % | | 7.06 | % | | 6.49 | % |
Non-GAAP Return on Invested Capital | | 8.68 | % | | 8.63 | % | | 8.09 | % | | 7.11 | % |
Effective Tax Rate from Continuing Operations | | 32.9 | % | | 88.2 | % | | 32.0 | % | | 29.3 | % |
Non-GAAP Effective Tax Rate from Continuing Operations | | 33.1 | % | | 32.0 | % | | 32.2 | % | | 32.0 | % |
Refer to the GAAP / Non-GAAP Reconciliation for non-GAAP calculations.
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CARDINAL HEALTH, INC. AND SUBSIDIARIES
SCHEDULE OF NOTABLE ITEMS
| | | | | | | | | | | | | | | | |
| | | Third Quarter | | | Year-to-Date | |
| (in millions, except per Common Share amounts) | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
Special Items | | | | | | | | | | | | | | | | |
Restructuring charges | | $ | (8.5 | ) | | $ | (6.6 | ) | | $ | (54.7 | ) | | $ | (28.4 | ) |
Acquisition integration charges | | | (4.4 | ) | | | (2.9 | ) | | | (19.9 | ) | | | (14.0 | ) |
Litigation and other | | | (22.7 | ) | | | (602.5 | ) | | | (13.1 | ) | | | (611.4 | ) |
| | | | | | | | | | | | | | | | |
Total special items | | | (35.6 | ) | | | (612.0 | ) | | | (87.7 | ) | | | (653.8 | ) |
Tax benefit | | | 12.9 | | | | 219.7 | | | | 31.8 | | | | 232.7 | |
| | | | | | | | | | | | | | | | |
Special items, net of tax | | $ | (22.7 | ) | | $ | (392.3 | ) | | $ | (55.9 | ) | | $ | (421.1 | ) |
| | | | | | | | | | | | | | | | |
Decrease to diluted EPS from continuing operations | | $ | (0.06 | ) | | $ | (0.96 | ) | | $ | (0.15 | ) | | $ | (1.03 | ) |
| | | | | | | | | | | | | | | | |
Impairment Charges and Other | | | | | | | | | | | | | | | | |
Impairment charges and other | | $ | (1.2 | ) | | $ | (3.6 | ) | | $ | 22.0 | | | $ | (17.9 | ) |
Tax benefit / (expense) | | | 0.4 | | | | 1.2 | | | | (8.5 | ) | | | 1.8 | |
| | | | | | | | | | | | | | | | |
Impairment charges and other, net of tax | | $ | (0.8 | ) | | $ | (2.4 | ) | | $ | 13.5 | | | $ | (16.1 | ) |
| | | | | | | | | | | | | | | | |
Increase / (decrease) to diluted EPS from continuing operations | | $ | — | | | $ | (0.01 | ) | | $ | 0.04 | | | $ | (0.04 | ) |
| | | | | | | | | | | | | | | | |
Weighted Average Number of Shares Outstanding | | | | | | | | | | | | | | | | |
Weighted average number of diluted shares outstanding | | | 360.2 | | | | 394.6 | | | | 365.7 | | | | 409.5 | |
Antidilutive effect due to loss from continuing operations | | | — | | | | 10.5 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | |
Weighted average number of diluted shares outstanding for non-GAAP calculations | | | 360.2 | | | | 405.1 | | | | 365.7 | | | | 409.5 | |
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CARDINAL HEALTH, INC. AND SUBSIDIARIES
GAAP / NON-GAAP RECONCILIATION
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Third Quarter 2008 | | | Year-to-Date 2008 | |
| (in millions, except per Common Share amounts) | | GAAP | | | Special Items | | Impairment
Charges and
Other | | Non-GAAP | | | GAAP | | | Special Items | | Impairment
Charges and
Other | | | Non-GAAP | |
Operating Earnings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Amount | | $ | 577 | | | $ | 36 | | $ | 1 | | $ | 613 | | | $ | 1,586 | | | $ | 88 | | | ($22 | ) | | $ | 1,651 | |
Growth Rate | | | N.M. | | | | | | | | | | 1 | % | | | 66 | % | | | | | | | | | | 2 | % |
Provision for Income Taxes | | $ | 180 | | | $ | 13 | | | — | | $ | 192 | | | $ | 467 | | | $ | 32 | | | ($9 | ) | | $ | 491 | |
Earnings from Continuing Operations | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Amount | | $ | 366 | | | $ | 23 | | $ | 1 | | $ | 390 | | | $ | 994 | | | $ | 56 | | | ($14 | ) | | $ | 1,037 | |
Growth Rate | | | N.M. | | | | | | | | | | — | | | | 65 | % | | | | | | | | | | — | |
Diluted EPS from Continuing Operations | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Amount | | $ | 1.02 | | | $ | 0.06 | | | — | | $ | 1.08 | | | $ | 2.72 | | | $ | 0.15 | | | ($0.04 | ) | | $ | 2.83 | |
Growth Rate | | | N.M. | | | | | | | | | | 13 | % | | | 85 | % | | | | | | | | | | 11 | % |
| | |
| | | Third Quarter 2007 | | | Year-to-Date 2007 | |
| | | GAAP | | | Special Items | | Impairment
Charges and
Other | | Non-GAAP | | | GAAP | | | Special Items | | Impairment
Charges and
Other | | | Non-GAAP | |
Operating Earnings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Amount | | | ($10 | ) | | $ | 612 | | $ | 4 | | $ | 606 | | | $ | 953 | | | $ | 654 | | $ | 18 | | | $ | 1,625 | |
Growth Rate | | | (102 | )% | | | | | | | | | 9 | % | | | (30 | )% | | | | | | | | | | 15 | % |
Provision for Income Taxes | | | ($37 | ) | | $ | 220 | | $ | 2 | | $ | 184 | | | $ | 249 | | | $ | 233 | | $ | 2 | | | $ | 483 | |
Earnings from Continuing Operations | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Amount | | | ($5 | ) | | $ | 392 | | $ | 2 | | $ | 390 | | | $ | 602 | | | $ | 421 | | $ | 16 | | | $ | 1,039 | |
Growth Rate | | | (101 | )% | | | | | | | | | 10 | % | | | (30 | )% | | | | | | | | | | 16 | % |
Diluted EPS from Continuing Operations | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Amount | | | ($0.01 | ) | | $ | 0.96 | | $ | 0.01 | | $ | 0.96 | | | $ | 1.47 | | | $ | 1.03 | | $ | 0.04 | | | $ | 2.54 | |
Growth Rate | | | (101 | )% | | | | | | | | | 16 | % | | | (27 | )% | | | | | | | | | | 22 | % |
The sum of the components may not equal the total due to rounding
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CARDINAL HEALTH, INC. AND SUBSIDIARIES
GAAP / NON-GAAP RECONCILIATION
| | | | | | | | | | | | | | | | |
| | | Third Quarter | | | Year-to-Date | |
| (in millions) | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
GAAP Return on Equity | | | 19.6 | % | | | 0.9 | % | | | 18.1 | % | | | 16.3 | % |
Non-GAAP Return on Equity | | | | | | | | | | | | | | | | |
Net earnings | | $ | 356.0 | | | $ | 19.0 | | | $ | 982.6 | | | $ | 1,028.9 | |
Special items, net of tax, in continuing operations | | | 22.7 | | | | 392.3 | | | | 55.9 | | | | 421.1 | |
Special items, net of tax, in discontinued operations | | | — | | | | 1.3 | | | | — | | | | 4.4 | |
(Gain)/loss on sale of PTS, net of tax, in discontinued operations3 | | | 7.6 | | | | 24.7 | | | | 7.6 | | | | (392.9 | ) |
| | | | | | | | | | | | | | | | |
Adjusted net earnings | | $ | 386.3 | | | $ | 437.3 | | | $ | 1,046.1 | | | $ | 1,061.5 | |
Annualized | | $ | 1,545.2 | | | $ | 1,749.2 | | | $ | 1,394.8 | | | $ | 1,415.3 | |
Divided by average shareholders’ equity1 | | $ | 7,250.7 | | | $ | 8,388.6 | | | $ | 7,236.6 | | | $ | 8,422.3 | |
Non-GAAP return on equity | | | 21.3 | % | | | 20.9 | % | | | 19.3 | % | | | 16.8 | % |
| | |
| | | Third Quarter | | | Year-to-Date | |
| (in millions) | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
GAAP Return on Invested Capital | | | 7.60 | % | | | 0.36 | % | | | 7.06 | % | | | 6.49 | % |
Non-GAAP Return on Invested Capital | | | | | | | | | | | | | | | | |
Net earnings | | $ | 356.0 | | | $ | 19.0 | | | $ | 982.6 | | | $ | 1,028.9 | |
Special items, net of tax, in continuing operations | | | 22.7 | | | | 392.3 | | | | 55.9 | | | | 421.1 | |
Special items, net of tax, in discontinued operations | | | — | | | | 1.3 | | | | — | | | | 4.4 | |
Interest expense and other, net of tax | | | 19.9 | | | | 20.6 | | | | 79.4 | | | | 65.4 | |
(Gain)/loss on sale of PTS, net of tax, in discontinued operations3 | | | 7.6 | | | | 24.7 | | | | 7.6 | | | | (392.9 | ) |
| | | | | | | | | | | | | | | | |
Adjusted net earnings | | $ | 406.2 | | | $ | 457.9 | | | $ | 1,125.5 | | | $ | 1,126.9 | |
Annualized | | $ | 1,624.8 | | | $ | 1,831.6 | | | $ | 1,500.7 | | | $ | 1,502.5 | |
Divided by average total invested capital2 | | $ | 18,727.9 | | | $ | 21,206.0 | | | $ | 18,546.9 | | | $ | 21,128.5 | |
Non-GAAP return on invested capital | | | 8.68 | % | | | 8.63 | % | | | 8.09 | % | | | 7.11 | % |
1 | The average shareholders’ equity shown above is calculated using the average of the prior and current quarters except for year-to-date which is calculated as the average of shareholders’ equity at the end of the prior years’ fourth quarter plus each of the current year quarters. |
2 | Total invested capital is calculated as the sum of the current portion of long-term obligations and other short-term borrowings, long-term obligations, current portion of long-term obligations and other short-term borrowings in discontinued operations, long-term obligations in discontinued operations, total shareholders’ equity and unrecorded goodwill. The average total invested capital is calculated using the average of total invested capital at the end of the prior and current quarters except for year-to-date which is calculated as the average at the end of the prior years’ fourth quarter plus each of the current year quarters. Unrecorded goodwill is $7.5 billion and $9.7 billion, respectively, for the March 31, 2008 and 2007 calculations. Current portion of long-term obligations and other short-term borrowings in discontinued operations, and long-term obligations in discontinued operations were $59.2 million, $46.6 million, $41.3 million and $12.3 million at June 30, 2006, September 30, 2006, December 31, 2006 and March 31, 2007, respectively. |
3 | The amounts previously reported for the three and nine months ended March 31, 2007, have been adjusted by $24.7 million and $32.1 million, respectively, to include additional amounts identified as direct costs associated with the disposition of the PTS Business. |
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CARDINAL HEALTH, INC. AND SUBSIDIARIES
GAAP / NON-GAAP RECONCILIATION
| | | | | | | | | | | | | | | | |
| | | Third Quarter | | | Year-to-Date | |
| (in millions) | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
GAAP Effective Tax Rate from Continuing Operations | | | 32.9 | % | | | 88.2 | % | | | 32.0 | % | | | 29.3 | % |
Non-GAAP Effective Tax Rate from Continuing Operations | | | | | | | | | | | | | | | | |
Earnings before income taxes and discontinued operations | | $ | 545.4 | | | $ | (42.0 | ) | | $ | 1,461.5 | | | $ | 850.9 | |
Special items | | | 35.6 | | | | 612.0 | | | | 87.7 | | | | 653.8 | |
| | | | | | | | | | | | | | | | |
Adjusted earnings before income taxes and discontinued operations | | $ | 581.0 | | | $ | 570.0 | | | $ | 1,549.2 | | | $ | 1,504.7 | |
Provision for income taxes | | $ | 179.5 | | | $ | (37.1 | ) | | $ | 467.2 | | | $ | 248.9 | |
Special items tax benefit | | | 12.9 | | | | 219.7 | | | | 31.8 | | | | 232.7 | |
| | | | | | | | | | | | | | | | |
Adjusted provision for income taxes | | $ | 192.4 | | | $ | 182.6 | | | $ | 499.0 | | | $ | 481.6 | |
Non-GAAP effective tax rate from continuing operations | | | 33.1 | % | | | 32.0 | % | | | 32.2 | % | | | 32.0 | % |
| | |
| | | Third Quarter | | | | |
| | | 2008 | | | 2007 | | | | | | | |
Debt to Total Capital | | | 34 | % | | | 29 | % | | | | | | | | |
Net Debt to Capital | | | | | | | | | | | | | | | | |
Current portion of long-term obligations and other short-term borrowings | | $ | 355.3 | | | $ | 296.9 | | | | | | | | | |
Long-term obligations, less current portion and other short-term borrowings | | | 3,450.1 | | | | 2,899.0 | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Debt | | $ | 3,805.4 | | | $ | 3,195.9 | | | | | | | | | |
Cash and equivalents | | | (1,529.0 | ) | | | (866.5 | ) | | | | | | | | |
Short-term investments available for sale | | | — | | | | (300.0 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | |
Net debt | | $ | 2,276.4 | | | $ | 2,029.4 | | | | | | | | | |
Total shareholders’ equity | | $ | 7,393.2 | | | $ | 7,869.5 | | | | | | | | | |
Capital | | $ | 9,669.6 | | | $ | 9,898.9 | | | | | | | | | |
Net debt to capital | | | 24 | % | | | 21 | % | | | | | | | | |
Forward-Looking Non-GAAP Financial Measures
The Company presents non-GAAP earnings from continuing operations, non-GAAP return on equity, and non-GAAP effective tax rate from continuing operations (and presentations derived from these financial measures) on a forward-looking basis. The most directly comparable forward-looking GAAP measures are earnings from continuing operations, return on equity and effective tax rate from continuing operations. The Company is unable to provide a quantitative reconciliation of these forward-looking non-GAAP measures to the most comparable forward-looking GAAP measures because the Company cannot reliably forecast special items and impairment charges and other, which are difficult to predict and estimate and are primarily dependent on future events. Please note that the unavailable reconciling items could significantly impact the Company’s future financial results.
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CARDINAL HEALTH, INC. AND SUBSIDIARIES
DEFINITIONS
GAAP
Debt:long-term obligations plus short-term borrowings
Debt to Total Capital:debt divided by (debt plus total shareholders’ equity)
Diluted EPS from Continuing Operations: earnings / (loss) from continuing operations divided by diluted weighted average shares outstanding
Effective Tax Rate from Continuing Operations: provision for income taxes divided by earnings / (loss) before income taxes and discontinued operations
Operating Cash Flow: net cash provided by / (used in) operating activities from continuing operations
Segment Profit: segment revenue minus (segment cost of products sold and segment selling, general and administrative expenses)
Segment Profit Margin:segment profit divided by segment revenue
Segment Profit Mix: segment profit divided by total segment profit for all segments
Return on Equity:annualized net earnings divided by average shareholders’ equity
Return on Invested Capital: annualized net earnings divided by (average total shareholders’ equity plus debt plus unrecorded goodwill)
Revenue Mix:segment revenue divided by total segment revenue for all segments
NON-GAAP
Net Debt to Capital: net debt divided by (net debt plus total shareholders’ equity)
Net Debt:debt minus (cash and equivalents and short-term investments available for sale)
Non-GAAP Diluted EPS from Continuing Operations: non-GAAP earnings from continuing operations divided by diluted weighted average shares outstanding
Non-GAAP Diluted EPS from Continuing Operations Growth Rate: (current period non-GAAP diluted EPS from continuing operations minus prior period non-GAAP diluted EPS from continuing operations) divided by prior period non-GAAP diluted EPS from continuing operations
Non-GAAP Earnings from Continuing Operations:earnings / (loss) from continuing operations excluding special items and impairment charges and other, both net of tax
Non-GAAP Earnings from Continuing Operations Growth Rate: (current period non-GAAP earnings from continuing operations minus prior period non-GAAP earnings from continuing operations) divided by prior period non-GAAP earnings from continuing operations
Non-GAAP Effective Tax Rate from Continuing Operations: (provision for income taxes adjusted for special items) divided by (earnings / (loss) before income taxes and discontinued operations adjusted for special items)
Non-GAAP Operating Earnings: operating earnings / (loss) excluding special items and impairment charges and other
Non-GAAP Operating Earnings Growth Rate:(current period non-GAAP operating earnings minus prior period non-GAAP operating earnings) divided by prior period non-GAAP operating earnings
Non-GAAP Return on Equity:(annualized current period net earnings plus special items minus special items tax benefit) divided by average shareholders’ equity1
Non-GAAP Return on Invested Capital: (annualized net earnings plus special items minus special items tax benefit plus interest expense and other) divided by (average total shareholders’ equity plus debt plus unrecorded goodwill)1
1 | For the three months ended March 31, 2008 and 2007, the numerator in calculating this non-GAAP financial measure also excludes the respective $7.6 million and $24.7 million (gain) / loss, net of tax, on the sale of PTS recorded in discontinued operations. For the nine months ended March 31, 2008 and 2007, the numerator in calculating this non-GAAP financial measure also excludes the respective $7.6 million and $(392.9) million (gain) / loss, net of tax, on the sale of PTS recorded in discontinued operations. |
