EXHIBIT 99.1
[MCKESSON LOGO]
CONTACT: LARRY KURTZ
VICE PRESIDENT, INVESTOR RELATIONS
(415) 983-8418
MCKESSON REPORTS FISCAL 2004 THIRD QUARTER RESULTS
- - Revenues of $18.2 billion, up 22%.
- - Excluding warehouse sales, revenues up 14% with Pharmaceutical Solutions
revenues up 15%.
- - Net income of $120.2 million, down 10%, and diluted EPS of 41 cents, down
11%.
SAN FRANCISCO, JANUARY 22, 2004 - McKesson Corporation (NYSE: MCK) today
reported that revenues for the third quarter ended December 31, 2003, were $18.2
billion, an increase of 22% from $14.9 billion a year ago, including customer
warehouse sales of $5.8 billion, which increased 45% from $4.0 billion.
Excluding warehouse sales, revenues grew 14%, to $12.4 billion from $10.9
billion a year ago. Third quarter net income was $120.2 million, a decrease of
10% from $134.3 million a year ago, and diluted earnings per share was 41 cents,
a decrease of 11% from 46 cents.
CORPORATE OVERVIEW
"McKesson continued to have strong revenue growth in the third quarter,
driven by U.S. and Canadian pharmaceutical distribution," said John H.
Hammergren, chairman and chief executive officer. "While we had several unusual
issues in the quarter, which we have now addressed, our earnings are primarily
being impacted by the continued evolution of our Pharmaceutical Solutions
business model. In response, we are working with manufacturers and customers to
ensure that McKesson will be appropriately compensated for the valuable services
we provide, and we continue to focus on improvements in our operating
efficiency. We are encouraged by the progress we are making on all fronts."
McKesson's third-quarter results were impacted by a number of factors:
- An estimated $25 million pre-tax reduction to Pharmaceutical
Solutions operating profit resulting from shifts in the timing
of a significant number of pharmaceutical price increases
anticipated for the third quarter. These price increases have
now occurred and will improve fourth quarter results.
- A previously announced automation contracting change that will
delay an estimated $16 million in pre-tax Pharmaceutical
Solutions operating profit into future periods.
- A $19 million pre-tax charge in the Pharmaceutical Solutions
pharmacy outsourcing business resulting from $10 million in
losses from a fixed price contract that has since been
renegotiated and a $9 million bad debt provision.
- A $22 million pre-tax increase to Pharmaceutical Solutions
operating profit from the cash proceeds for the settlement of
an antitrust class action lawsuit brought against
manufacturers of a cardiac drug.
- A $20 million pre-tax contract charge in Information Solutions
international operations.
- An $8 million after-tax benefit resulting from certain income
tax settlements and adjustments.
Additionally, Pharmaceutical Solutions operating profit was reduced by
fewer vendor buying opportunities in the third quarter compared to a year ago.
This continues a trend previously discussed in the second quarter.
In the third quarter a year ago, McKesson's pre-tax income was reduced by
several factors netting to approximately $19 million: $51 million in estimated
contract losses for Information Solutions international operations, a $22
million credit for reversal of Information Solutions domestic customer
settlement reserves and $10 million in gains from the sale of Pharmaceutical
Solutions leases and equity investments.
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"Looking ahead in Pharmaceutical Solutions, we are very pleased with our
new contract to supply the Department of Veterans' Affairs," said Hammergren.
"This agreement, combined with recently renewed agreements for major national
distribution customers such as Rite-Aid, Omnicare and Caremark, provides a
foundation for strong U.S. revenue growth throughout the next fiscal year."
"This new contract and our contract renewals have been priced at
competitive rates designed to deliver our target returns. Improving returns
continues to be a corporate priority for shareholder value creation."
"For our fourth quarter, Pharmaceutical Solutions revenues, excluding
warehouse sales, should grow about 13%. Warehouse sales growth should be above
35%. We expect a fourth-quarter decline of 20 to 25 basis points in operating
margin. That anticipated decline includes both the positive impact of the shift
in price increases from the third quarter to the fourth quarter, and the
continued negative impacts of the automation contracting change and fewer
product buying opportunities."
"For fiscal 2005, Pharmaceutical Solutions revenue growth should be in the
mid to high teens, reflecting our new contracts and renewals. However, we expect
that operating margin will remain under near-term pressure as the business model
continues to evolve."
"In Medical-Surgical Solutions, growth among alternate site customers
remains strong, helping offset the transition of the previously announced loss
of our largest acute care customer. Our operating improvement remains on
schedule and we are pleased with the progress we are continuing to make."
"In Information Solutions, revenue growth was flat due primarily to
decreases in non-clinical software and outsourcing service revenues and the
impact of longer installation timelines required for certain large, complex
clinical implementations. In the fourth quarter, revenue growth should be up
modestly from last year's strong performance. Operating margin in the fourth
quarter should be up, in the range of 13 to 15%. This business continues to play
a key role in our One McKesson hospital strategy."
3
THIRD QUARTER SEGMENT OPERATING PERFORMANCE
PHARMACEUTICAL SOLUTIONS SEGMENT
QUARTER ENDED DECEMBER 31,
--------------------------------------------
DOLLAR AMOUNTS IN MILLIONS FY04 FY03 CHANGE
------------ ------------ ------
Revenues
U.S. Health Care direct revenues $ 10,221.8 $ 9,039.7 13%
Canada 1,199.6 886.3 35%
------------ -----------
Total direct revenues $ 11,421.4 $ 9,926.0 15%
U.S. Health Care warehouse sales 5,827.1 4,007.1 45%
------------ -----------
Total revenues $ 17,248.5 $ 13,933.1 24%
============ ===========
Operating profit $ 191.0 $ 241.0 (21)%
Operating margin ex-warehouse sales 1.67% 2.43% (76)bp
Pharmaceutical Solutions revenue growth among institutional customers was
up strongly. Revenue growth from independent pharmacy customers continued to be
solid. Institutional customers accounted for 45% of U.S. pharmaceutical
distribution revenues, retail chains accounted for 34% and independent
pharmacies, 21%. Warehouse sales were up 45% due to several new agreements.
McKesson Canada revenues increased 35% in the quarter. On a constant
currency basis, Canadian revenues would have increased 14%.
Pharmaceutical Solutions operating profit was down 21%, driven by the
series of factors described above. During the third quarter a year ago,
Pharmaceutical Solutions recorded a $5.3 million gain on the sale of customer
lease receivables and a $4.5 million gain on the sale of venture investments.
4
MEDICAL-SURGICAL SOLUTIONS SEGMENT
QUARTER ENDED DECEMBER 31,
-----------------------------------------
DOLLAR AMOUNTS IN MILLIONS FY04 FY03 CHANGE
--------- --------- -------
Revenues $ 689.1 $ 692.6 (1)%
Operating profit $ 22.3 $ 17.6 27%
Operating margin 3.24% 2.54% 70bp
Medical-Surgical Solutions revenues were down 1%. Revenue growth was
strong among alternate site customers, especially physician offices, but was
negatively impacted by the start of the transition of the previously announced
loss of the segment's largest acute care customer. Operating profit of $22.3
million was up 27%, due to improved gross margins and lower operating costs.
Operating profit was reduced by a charge of $2.0 million to restructure the
medical-surgical distribution center network to mitigate the impact of the
customer loss.
INFORMATION SOLUTIONS SEGMENT
QUARTER ENDED DECEMBER 31,
------------------------------------------
DOLLAR AMOUNTS IN MILLIONS FY04 FY03 CHANGE
--------- --------- ------
Revenues $ 294.3 $ 295.3 --%
Operating profit $ 20.6 $ 15.1 36%
Operating margin 7.00% 5.11% 189bp
Information Solutions revenues were flat compared to the prior year.
Software revenues were down 9% to $56.2 million, primarily due to decreases in
non-clinical software and the longer installation period required for certain
large, complex clinical implementations, which has the effect of delaying
revenue recognition. Services revenues were up 3% to $211.6 million. Hardware
revenues were down 3% to $26.5 million.
5
Operating profit in the third quarter was reduced by the $20 million
charge for estimated contract losses in international operations. Last year's
third quarter included a net expense of $29 million reflecting the original $51
million charge for international contract losses, offset in part by the $22
million credit for the reversal of a portion of previously recorded reserves for
domestic customer settlements.
OTHER OPERATING HIGHLIGHTS
DECEMBER 31,
------------------------------------
DOLLAR AMOUNTS IN MILLIONS FY04 FY03 CHANGE
------- ------- ------
Corporate expenses for quarter ended $ 40.5 $ 39.8 2%
Return on stockholders' equity for
four quarters ended 13.1% 12.3% 80bp
Return on committed capital for four
quarters ended 23.1% 22.4% 70bp
McKesson's reported tax rate for the quarter was 26.7%, and included the
$8 million benefit from certain income tax settlements and adjustments. The
company's estimated tax rate for the fourth-quarter should be approximately 33%.
Earnings per diluted share were based on 298.7 million average diluted shares in
the quarter.
6
AS OF AND FOR THE NINE
MONTHS ENDED DECEMBER 31,
---------------------------
DOLLAR AMOUNTS IN MILLIONS 2003 2002
------- --------
Cash and marketable securities $ 214 $ 328
Total debt 1,704 1,532
Cash flow (used in) provided by operations (276) 365
Stockholders' equity 4,970 4,332
Net debt to net capital employed 23.1% 21.8%
McKesson used cash of $276 million in operations year to date compared to
generating $365 million in the first nine months a year ago. However, McKesson
had no accounts receivable sales in this year's third quarter compared to
accounts receivable sales of $900 million in the third quarter a year ago.
The company's net debt to net capital ratio was 23.1% compared to 21.8% a
year ago. The financial statements and the net debt to net capital ratio have
been recast to effectively classify the company's trust convertible preferred
securities as debt in accordance with Financial Accounting Standards Board
Interpretation No. 46, "Consolidation of Variable Interest Entities."
The company repurchased $40 million of common shares in the quarter,
completing a previously authorized $250 million share repurchase program. As
previously announced, the company's Board of Directors has authorized a new $250
million share repurchase program. At December 31, 2003, McKesson had 291.2
million shares outstanding.
A Webcast of the company's regular conference call to review financial
results with the financial community is available through McKesson's website,
www.mckesson.com, live at 5 PM EDT today and on replay afterwards. Shareholders
are encouraged to review SEC filings and more information about McKesson, all of
which are located on the company's website.
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McKesson Corporation (NYSE: MCK) is a Fortune 20 healthcare services and
information technology company dedicated to helping its customers deliver
high-quality healthcare by reducing costs, streamlining processes and improving
the quality and safety of patient care. Over the course of its 170-year history,
McKesson has grown by providing pharmaceutical and medical-surgical supply
management across the spectrum of care; healthcare information technology for
hospitals, homecare and payors; hospital and retail pharmacy automation; and
services for manufacturers and payors designed to improve outcomes for patients.
For more information, visit us at www.mckesson.com.
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, 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", "approximates", "intends", "plans", "estimates" or the
negative of these words or other comparable terminology. 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: the resolution or outcome of pending
shareholder litigation regarding the 1999 restatement of our historical
financial statements; the changing U.S. healthcare environment, including the
impact of recently approved and potential future mandated benefits; changes in
private and governmental reimbursement or in the delivery systems for healthcare
products and services; governmental efforts to regulate the pharmaceutical
supply chain; changes in pharmaceutical and medical-surgical manufacturers'
pricing, selling, inventory, distribution or supply policies or practices;
changes in customer mix; substantial defaults in payment or a material reduction
in purchases by large customers; challenges in integrating and implementing the
company's software products, or the slowing or deferral of demand for these
products; the company's ability to
8
successfully identify, consummate and integrate strategic acquisitions; changes
in generally accepted accounting principles (GAAP); and general economic
conditions. The reader should not place undue reliance on forward-looking
statements, which speak only as of the date they are made. The company assumes
no obligation to update or revise any such statements, whether as a result of
new information or otherwise.
9
SCHEDULE I
McKESSON CORPORATION
CONDENSED CONSOLIDATED INCOME STATEMENTS (1)
(UNAUDITED)
(IN MILLIONS EXCEPT PER SHARE AMOUNTS)
Quarter Ended December 31, Nine Months Ended December 31,
--------------------------------- ------------------------------
FY04 FY03 Chg. FY04 FY03 Chg.
---- ---- ---- ---- ---- ----
Revenues
Excluding sales to customers' warehouses $12,404.8 $10,913.9 14% $35,517.1 $31,322.0 13%
Sales to customers' warehouses 5,827.1 4,007.1 45 16,049.1 10,912.5 47
--------- --------- --------- ----------
Total 18,231.9 14,921.0 22 51,566.2 42,234.5 22
Cost of sales 17,498.1 14,193.4 23 49,234.2 40,016.8 23
--------- --------- --------- ----------
Gross profit 733.8 727.6 1 2,332.0 2,217.7 5
Operating expenses 571.8 517.8 10 1,692.9 1,583.5 7
--------- --------- --------- ----------
Operating income 162.0 209.8 (23) 639.1 634.2 1
Interest expense (29.4) (30.4) (3) (87.6) (96.0) (9)
Other income 31.4 24.1 30 58.4 38.2 53
--------- --------- --------- ----------
Income before income taxes 164.0 203.5 (19) 609.9 576.4 6
Income taxes (43.8) (69.2) (37) (177.6) (195.9) (9)
--------- --------- --------- ----------
Income from continuing operations 120.2 134.3 (10) 432.3 380.5 14
Discontinued operations (2) -- -- -- -- (4.1) --
--------- --------- --------- ----------
Net income $ 120.2 $ 134.3 (10) $ 432.3 $ 376.4 15
========= ========= ========= ==========
Earnings per common share
Diluted
Continuing operations $ 0.41 $ 0.46 (11) $ 1.46 $ 1.28 14
Discontinued operations -- -- -- -- (0.01) --
--------- --------- --------- ----------
Total $ 0.41 $ 0.46 (11) $ 1.46 $ 1.27 15
========= ========= ========= ==========
Basic
Continuing operations $ 0.41 $ 0.46 (11) $ 1.49 $ 1.31 14
Discontinued operations -- -- -- -- (0.01) --
--------- --------- --------- ----------
Total $ 0.41 $ 0.46 (11) $ 1.49 $ 1.30 15
========= ========= ========= ==========
Shares on which earnings per common share were based
Diluted 298.7 298.0 -- 299.0 299.3 --
Basic 290.2 289.7 -- 290.0 289.1 --
(1) As a result of the application of Financial Accounting Standards Board
Interpretation No. 46, "Consolidation of Variable Interest Entities", the
Company no longer consolidates its investment in the McKesson Financing
Trust (the "Trust"). Accordingly, the Company now recognizes long-term
debt issued to the Trust in lieu of the preferred securities that the
Trust issued to third parties. Additionally, the consolidated financial
statements include interest expense on the long-term debt issued to the
Trust and no longer report dividends on the preferred securities, net of
tax. These changes did not have a material impact on our consolidated
financial statements, including diluted earnings per share.
For the quarters and nine months ended December 31, 2003 and 2002,
interest expense, net of related income taxes, of $1.5 million and $4.6
million, has been added to net income for purposes of calculating diluted
earnings per share. This adjustment reflects the impact of the Company's
potentially dilutive obligations.
(2) In September 2002, we sold a marketing fulfillment business, which was
included in our Pharmaceutical Solutions segment. Financial results for
this business have been presented as a discontinued operation.
SCHEDULE II
McKESSON CORPORATION
CONDENSED CONSOLIDATED INCOME INFORMATION BY BUSINESS SEGMENT
(UNAUDITED)
(IN MILLIONS)
Quarter Ended December 31, Nine Months Ended December 31,
----------------------------------- ---------------------------------
FY04 FY03 Chg. FY04 FY03 Chg.
---- ---- ---- ---- ---- ----
REVENUES
Pharmaceutical Solutions
U.S. Health Care $10,221.8 $ 9,039.7 13% $29,283.7 $25,913.8 13%
Canada 1,199.6 886.3 35 3,313.6 2,523.3 31
--------- --------- --------- ---------
Total Direct Revenues 11,421.4 9,926.0 15 32,597.3 28,437.1 15
U.S. Health Care sales to customers'
warehouses 5,827.1 4,007.1 45 16,049.1 10,912.5 47
--------- --------- --------- ---------
Total Pharmaceutical Solutions 17,248.5 13,933.1 24 48,646.4 39,349.6 24
--------- --------- --------- ---------
Medical-Surgical Solutions 689.1 692.6 (1) 2,063.4 2,059.7 --
--------- --------- --------- ---------
Information Solutions
Software 56.2 61.8 (9) 167.2 157.6 6
Services 211.6 206.2 3 614.6 595.6 3
Hardware 26.5 27.3 (3) 74.6 72.0 4
--------- --------- --------- ---------
Total Information Solutions 294.3 295.3 -- 856.4 825.2 4
--------- --------- --------- ---------
Total $18,231.9 $14,921.0 22 $51,566.2 $42,234.5 22
========= ========= ========= =========
GROSS PROFIT
Pharmaceutical Solutions $ 470.4 $ 487.6 (4) $ 1,529.0 $ 1,462.8 5
Medical-Surgical Solutions 135.8 130.1 4 398.5 389.7 2
Information Solutions 127.6 109.9 16 404.5 365.2 11
--------- --------- --------- ---------
Gross profit $ 733.8 $ 727.6 1 $ 2,332.0 $ 2,217.7 5
========= ========= ========= =========
OPERATING EXPENSES
Pharmaceutical Solutions $ 309.0 $ 269.1 15 $ 912.7 $ 814.7 12
Medical-Surgical Solutions 113.9 113.6 -- 334.7 342.6 (2)
Information Solutions 107.2 95.4 12 322.0 308.8 4
Corporate 41.7 39.7 5 123.5 117.4 5
--------- --------- --------- ---------
Operating expenses $ 571.8 $ 517.8 10 $ 1,692.9 $ 1,583.5 7
========= ========= ========= =========
OTHER INCOME
Pharmaceutical Solutions $ 29.6 $ 22.5 32 $ 47.8 $ 39.1 22
Medical-Surgical Solutions 0.4 1.1 (64) 1.8 1.4 29
Information Solutions 0.2 0.6 (67) 1.4 2.1 (33)
Corporate 1.2 (0.1) -- 7.4 (4.4) --
--------- --------- --------- ---------
Other income (loss) $ 31.4 $ 24.1 30 $ 58.4 $ 38.2 53
========= ========= ========= =========
OPERATING PROFIT
Pharmaceutical Solutions $ 191.0 $ 241.0 (21) $ 664.1 $ 687.2 (3)
Medical-Surgical Solutions 22.3 17.6 27 65.6 48.5 35
Information Solutions 20.6 15.1 36 83.9 58.5 43
--------- --------- --------- ---------
Operating profit 233.9 273.7 (15) 813.6 794.2 2
Corporate (40.5) (39.8) 2 (116.1) (121.8) (5)
--------- --------- --------- ---------
Income from continuing operations
before interest expense and income taxes $ 193.4 $ 233.9 (17) $ 697.5 $ 672.4 4
========= ========= ========= =========
STATISTICS
Operating profit as a % of revenues
Pharmaceutical Solutions 1.11% 1.73% (62)bp 1.37% 1.75% (38)bp
Pharmaceutical Solutions, excl. sales
to customers' warehouses 1.67% 2.43% (76) 2.04% 2.42% (38)
Medical-Surgical Solutions 3.24% 2.54% 70 3.18% 2.35% 83
Information Solutions 7.00% 5.11% 189 9.80% 7.09% 271
Return on Stockholders' Equity 13.1% 12.3%
Return on Committed Capital 23.1% 22.4%
SCHEDULE III
McKESSON CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (1)
(UNAUDITED)
(IN MILLIONS)
December 31, March 31,
2003 2003
---- ----
ASSETS
Current Assets
Cash and equivalents $ 200.5 $ 522.0
Marketable securities available for sale 13.7 11.5
Receivables, net 5,346.0 4,594.7
Inventories 7,106.0 6,022.5
Prepaid expenses and other 112.7 102.9
----------- -----------
Total 12,778.9 11,253.6
Property, Plant and Equipment, net 596.0 593.7
Capitalized Software Held for Sale 127.2 131.1
Notes Receivable 179.2 248.6
Goodwill and Other Intangibles 1,492.3 1,449.5
Other Assets 781.2 681.4
----------- -----------
Total Assets $ 15,954.8 $ 14,357.9
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Drafts and accounts payable $ 7,304.1 $ 6,630.7
Deferred revenue 543.9 459.7
Short-term borrowings 217.6 --
Current portion of long-term debt 16.5 10.2
Other 989.5 874.6
----------- -----------
Total 9,071.6 7,975.2
Postretirement Obligations and Other Noncurrent Liabilities 443.7 363.5
Long-Term Debt 1,469.6 1,490.7
Stockholders' Equity 4,969.9 4,528.5
----------- -----------
Total Liabilities and Stockholders' Equity $ 15,954.8 $ 14,357.9
=========== ===========
(1) See note 1 on Schedule I.
SCHEDULE IV
McKESSON CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN MILLIONS)
Nine Months Ended December 31,
------------------------------
FY04 FY03
---- ----
OPERATING ACTIVITIES
Income From Continuing Operations $ 432.3 $ 380.5
Adjustments to Reconcile to Net Cash Provided (Used) By Operating Activities:
Depreciation 73.8 76.2
Amortization 91.5 74.6
Provision for bad debts 54.3 57.3
Deferred taxes on income 139.2 18.7
Other non-cash items (20.0) 9.9
---------- --------
Total 771.1 617.2
---------- --------
Effects of Changes In:
Receivables (699.1) 155.1
Inventories (1,047.2) (522.9)
Accounts and drafts payable 622.2 (1.1)
Deferred revenue 81.7 76.2
Taxes (1.6) 78.2
Other (2.9) (36.9)
---------- --------
Total (1,046.9) (251.4)
---------- --------
Net cash provided (used) by continuing operations (275.8) 365.8
Discontinued Operations -- (0.5)
---------- --------
Net cash provided (used) by operating activities (275.8) 365.3
---------- --------
INVESTING ACTIVITIES
Property Acquisitions (71.6) (78.4)
Capitalized Software Expenditures (131.0) (135.5)
Acquisitions of Businesses, Less Cash and Short-Term Investments Acquired (45.6) (356.8)
Notes Receivable Issuances, Net (10.8) (42.4)
Proceeds from Sale of Notes Receivable 42.2 117.9
Other 19.1 (7.7)
---------- --------
Net cash used by investing activities (197.7) (502.9)
---------- --------
FINANCING ACTIVITIES
Proceeds From the Issuance of Debt 217.6 30.0
Repayment of Debt (10.7) (140.6)
Capital Stock Transactions:
Issuances 81.8 69.9
Share repurchases (115.3) (25.0)
ESOP notes and guarantees 9.1 12.8
Dividends paid (52.3) (52.3)
Other 21.8 1.1
---------- --------
Net cash provided (used) by financing activities 152.0 (104.1)
---------- --------
Net Decrease in Cash and Equivalents (321.5) (241.7)
Cash and Equivalents at Beginning of Period 522.0 557.8
---------- --------
Cash and Equivalents at End of Period $ 200.5 $ 316.1
========== ========
SCHEDULE V
McKESSON CORPORATION
RETURN ON STOCKHOLDERS' EQUITY AND COMMITTED CAPITAL
(UNAUDITED)
(IN MILLIONS)
Quarter Ended December 31,
--------------------------
FY04 FY03
---- ----
Net income- last 4 quarters $ 611.3 $ 501.8
Stockholders' equity- 5 quarter average $ 4,670.4 $ 4,070.4
Return on stockholders' equity 13.1% 12.3%
---------- ----------
Adjusted income- last 4 quarters
Income from continuing operations before interest and income taxes $ 1,001.5 $ 896.0
Amortization of intangibles 20.0 17.9
---------- ----------
Adjusted income $ 1,021.5 $ 913.9
---------- ----------
Committed capital- 5 quarter average
Long-term debt $ 1,495.4 $ 1,561.9
Short-term borrowings 76.5 65.4
Non-current portion of deferred income taxes 9.2 (15.5)
Stockholders' equity 4,670.4 4,070.4
Cash, cash equivalents and marketable securities (361.7) (358.7)
Goodwill and other intangibles (1,459.4) (1,236.2)
---------- ----------
Committed capital $ 4,430.4 $ 4,087.3
---------- ----------
Return on committed capital 23.1% 22.4%
---------- ----------
The Company utilizes return on committed capital as a measure to evaluate its
ability to generate income relative to its investment in capital. The Company
believes that the most directly comparative GAAP measure is return on
stockholders' equity.