Express Scripts 8-K Other Events

Exhibit 99.5

C o m b i n e d F i n a n c i a l
S t a t e m e n t s ( U n a u d i t e d )

Pharmacy Benefit Management Business of WellPoint, Inc.
Three Months Ended March 31, 2009 and 2008

Pharmacy Benefit Management Business of WellPoint, Inc.

Combined Financial Statements

Three Months Ended March 31, 2009 and 2008
(Unaudited)

Contents

Unaudited Combined Financial Statements
Unaudited Combined Balance Sheets	1
Unaudited Combined Statements of Income	2
Unaudited Combined Statements of Cash Flows	3
Unaudited Combined Statements of Parent Company’s Net Investment	4
Notes to Unaudited Combined Financial Statements	5

Pharmacy Benefit Management Business of WellPoint, Inc.

Combined Balance Sheets
(Unaudited)

(In Thousands)

	March 31
	2009		2008
Assets
Current assets:
Cash and cash equivalents	$	6,659	$	14,602
Rebates receivable, net		749,597		674,356
Other receivables, net		78,720		101,988
Drug inventories		61,057		52,374
Receivable from related parties		519,117		300,201
Deferred tax assets, net		20,077		14,446
Prepaid expenses		2,189		1,605
Total current assets		1,437,416		1,159,572
Property and equipment, net		59,054		44,553
Goodwill		165,072		166,195
Other intangible assets		127,583		135,662
Other noncurrent assets		567		303
Total assets	$	1,789,692	$	1,506,285
Liabilities and parent company’s net investment
Liabilities
Current liabilities:
Rebates payable:
Rebates payable to related parties	$	630,103	$	530,556
Rebates payable to unrelated parties		87,895		68,911
Total rebates payable		717,998		599,467
Claims and drugs payable		90,910		65,243
Unearned income		10,796		5,899
Unearned discounts, current portion		1,380		1,365
Income taxes payable		149,341		88,669
Other current liabilities		56,680		76,467
Total current liabilities		1,027,105		837,110
Unearned discounts		592		1,312
Deferred tax liability, net		53,517		52,309
Other noncurrent liabilities		2,905		2,005
Total liabilities		1,084,119		892,736
Total parent company’s net investment		705,573		613,549
Total liabilities and parent company’s net investment	$	1,789,692	$	1,506,285

See accompanying notes.

1

Pharmacy Benefit Management Business of WellPoint, Inc.

Combined Statements of Income
(Unaudited)

(In Thousands)

	Three Months Ended March 31
	2009		2008
Revenues
Retail pharmacy revenue	$	3,571,671	$	3,629,425
Mail order revenue		705,863		627,082
Administrative fees		39,805		37,582
Total operating revenue		4,317,339		4,294,089
Other revenue		96		599
Total revenues		4,317,435		4,294,688
Expenses
Cost of drugs		4,107,176		4,109,286
General and administrative expense		108,706		94,413
Amortization of other intangible assets		1,977		2,100
Total expenses		4,217,859		4,205,799
Income before income tax expense		99,576		88,889
Income tax expense		33,150		32,214
Net income	$	66,426	$	56,675

See accompanying notes.

2

Pharmacy Benefit Management Business of WellPoint, Inc.

Combined Statements of Cash Flows
(Unaudited)

(In Thousands)

	Three Months Ended March 31
	2009			2008
Operating activities
Net income	$	66,426		$	56,675
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation		1,774			1,528
Amortization		2,993			2,531
Deferred income taxes		(1,580	)		5,611
Changes in operating assets and liabilities:
Accounts receivable, net		(37,413	)		(105,435	)
Drug inventories		8,116			(2,470	)
Receivable from related parties		(58,546	)		(90,172	)
Prepaid expenses and other assets		(173	)		338
Rebates payable		76,542			34,372
Claims and drugs payable		(22,953	)		(7,559	)
Unearned income		3,902			340
Unearned discounts		(345	)		(300	)
Income taxes payable		34,069			18,965
Other liabilities		(67,334	)		(78,717	)
Net cash provided by (used in) operating activities		5,478			(164,293	)
Investing activities
Purchases of property and equipment		(5,626	)		(7,348	)
Net cash used in investing activities		(5,626	)		(7,348	)
Net change in cash and cash equivalents		(148	)		(171,641	)
Cash and cash equivalents at beginning of period		6,807			186,243
Cash and cash equivalents at March 31	$	6,659		$	14,602

See accompanying notes.

3

Pharmacy Benefit Management Business of WellPoint, Inc.

Combined Statements of Parent Company’s Net Investment
(Unaudited)

(In Thousands)

	Total Parent
	Company’s Net
	Investment
January 1, 2008	$	556,874
Net income		56,675
March 31, 2008	$	613,549
January 1, 2009	$	639,147
Net income		66,426
March 31, 2009	$	705,573

See accompanying notes.

4

Pharmacy Benefit Management Business of WellPoint, Inc.

Notes to Combined Financial Statements
(Unaudited)

March 31, 2009
(In Thousands)

1. Basis of Presentation

The Pharmacy Benefit Management business, or PBM business, of WellPoint, Inc., or WellPoint, provides integrated PBM services to affiliated WellPoint health plans as well as to unaffiliated health insurers and third-party administrators. PBM services include retail pharmacy network development and management; retail network claims processing; mail order pharmacy services; formulary development and management; distribution of specialty drugs; and rebate negotiation and management.

References to the terms “we,” “us,” “our” or the “PBM business” used throughout these notes to unaudited combined financial statements refer to WellPoint’s combined PBM operations.

The accompanying unaudited combined financial statements are presented on a carve-out basis and reflect the assets, liabilities, revenues and expenses that were directly attributable to the PBM business, and include the accounts of the legal entities of NextRx, LLC, NextRx, Inc. and NextRx Services, Inc., each of which is ultimately wholly owned by WellPoint and is directly wholly owned by certain of WellPoint’s consolidated subsidiaries.

The unaudited combined financial statements are prepared in conformity with U.S. generally accepted accounting principles, or GAAP, for interim reporting. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring adjustments, necessary for a fair statement of the unaudited combined financial statements as of and for the three months ended March 31, 2009 and 2008 have been recorded. The results of operations for the three months ended March 31, 2009 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2009. These unaudited combined financial statements should be read in conjunction with our audited combined financial statements for the year ended December 31, 2008. Significant intercompany accounts and transactions within the PBM business have been eliminated. Transactions between the PBM business and WellPoint have been included in the unaudited combined financial statements. Parent Company’s Net Investment represents the interest of WellPoint in the net carrying value of the assets and liabilities of the PBM business and is presented in lieu of stockholder’s equity.

5

Pharmacy Benefit Management Business of WellPoint, Inc.

Notes to Combined Financial Statements (continued)
(Unaudited)

1. Basis of Presentation (continued)

On April 9, 2009, WellPoint signed a definitive agreement to sell its PBM business to Express Scripts, Inc., or Express. The accompanying unaudited combined financial statements have been prepared as a requirement of that definitive agreement, and represent the financial condition, results of operations and cash flows of our PBM business as of and for the three months ended March 31, 2009 and 2008. As the PBM business represents operations of subsidiaries of WellPoint, in accordance with normal operating policies of WellPoint, certain shared services and corporate costs have been allocated to the PBM business in these unaudited combined financial statements. Accordingly, the accompanying unaudited combined financial statements may not necessarily reflect the financial condition, results of operations and cash flows of the PBM business as if it had operated as a stand-alone entity. In addition, the unaudited combined financial statements may not necessarily be indicative of future results of the PBM business.

Whenever possible, the direct costs associated with the PBM business are reflected in the unaudited combined financial statements. In addition, as discussed in the preceding paragraph, certain costs are allocated to the PBM business by WellPoint. Such allocations include employee costs of shared service personnel, WellPoint management, lease costs, share-based compensation, enterprise-wide information technology and eBusiness support, public relations and actuarial services. These costs approximate the actual cost of providing these services and are allocated based on pharmacy membership or employee headcount, and management of the PBM business believes the allocations are reasonable. See Note 5, Related-Party Transactions, for further discussion of allocated costs.

2. Income Taxes

During the three months ended March 31, 2009 and 2008, we recognized income tax expense of $33,150 and $32,214, respectively, which represents effective tax rates of 33.3% and 36.2%, respectively. The 290 basis point decrease in the effective tax rate in 2009 was primarily due to a third-party court decision which entitled us to a state tax refund, which we received in the first quarter of 2009.

6

Pharmacy Benefit Management Business of WellPoint, Inc.

Notes to Combined Financial Statements (continued)
(Unaudited)

3. Fair Value

Assets and liabilities recorded at fair value in the unaudited combined balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The only balance subject to Statement of Financial Accounting Standards No. 157,Fair Value Measurements, in our unaudited combined balance sheets is cash equivalents. Money market funds that are classified as cash equivalents in our unaudited combined balance sheets are purchased daily at par value with specified yield rates. Due to the high ratings and short-term nature of the funds, we consider all cash equivalents as Level I inputs.

4. Other Current Liabilities

Other current liabilities include $27,623, and $52,719 at March 31, 2009 and 2008, respectively, for outstanding checks not yet presented to our bank.

5. Related-Party Transactions

We have agreements with affiliated WellPoint health plans to provide PBM products and services to the health plans’ members. The financial provisions in these agreements vary and range from reimbursements at cost to reimbursements at cost plus a profit margin. For purposes of these unaudited combined financial statements, revenues from affiliated health plans are based on internal rates that, in management’s judgment, reflect a reasonable and consistent profit margin and which have been used historically by WellPoint in its internal management and segment reporting of the PBM business. This approach increased income before income tax expense by $46,807 and $35,644 for the three months ended March 31, 2009 and 2008, respectively. These adjustments are reflected as intercompany transactions. The cumulative impact of these and other carve-out adjustments in the amount of $352,389 and $143,861 at March 31, 2009 and 2008, respectively, are recognized in receivable from related parties. WellPoint is required to settle this receivable in connection with provisions contained in the definitive agreement with Express.

7

Pharmacy Benefit Management Business of WellPoint, Inc.

Notes to Combined Financial Statements (continued)
(Unaudited)

5. Related-Party Transactions (continued)

We provide integrated PBM services to affiliated companies. We recorded revenues for PBM services provided to affiliates of $3,767,143 and $3,719,646 in the three months ended March 31, 2009 and 2008, respectively. This includes co-payment revenue associated with retail pharmacy revenues of $782,046 and $795,614 in the three months ended March 31, 2009 and 2008, respectively.

We reimburse affiliated companies for certain administrative services provided to us. Administrative expenses charged by affiliated companies were $18,113 and $18,937 in the three months ended March 31, 2009 and 2008, respectively, which are included in general and administrative expense in the unaudited combined statements of income.

PBM business associates participate in WellPoint sponsored defined benefit pension plans and postretirement benefit plans. PBM business associates also participate in WellPoint sponsored defined contribution pension plans and related costs are allocated to the PBM business based on headcount. We were allocated costs related to these employee benefits of $1,539 and $1,516 in the three months ended March 31, 2009 and 2008, respectively, which are recorded in general and administrative expenses in our unaudited combined statements of income.

The PBM business will not assume any portion of the defined benefit pension or postretirement benefit plan obligations or plan assets nor will any of the WellPoint benefit plans, which the PBM business participates in, transfer to the PBM business upon its sale.

We participate in the WellPoint Management and Key Associate Stock Plan, which provides WellPoint restricted stock and stock options to select key associates as a reward for performance and contribution. In addition, certain PBM business associates participate in WellPoint’s Employee Stock Purchase Plan, which allows for the purchase of WellPoint common stock at a discount. WellPoint accounts for all share-based compensation plans in accordance with FAS No. 123 (revised December 2004),Share-Based Payment. During the three months ended March 31, 2009 and 2008, we recorded share-based compensation expense of $812 and $1,002, respectively, via an allocation from WellPoint.

We did not pay any distributions to WellPoint and/or certain of its consolidated subsidiaries during the three months ended March 31, 2009 and 2008, respectively.

8

Pharmacy Benefit Management Business of WellPoint, Inc.

Notes to Combined Financial Statements (continued)
(Unaudited)

6. Commitments and Contingencies

We are involved in pending and threatened litigation of the character incidental to the business transacted and are, from time to time, involved as a party in various governmental and administrative proceedings. We believe that any liability that may result from any one of these actions is unlikely to have a material adverse effect on our financial position or results of operations.

9