Exhibit 99.01
[CARDINAL HEALTH LOGO]
7000 Cardinal Place
Dublin, OH 43017
www.cardinal.com
FOR IMMEDIATE RELEASE
CONTACTS:
Media: Jim Mazzola Investors: Steve Fischbach
(614) 757-3690 (614) 757-7067
jim.mazzola@cardinal.com stephen.fischbach@cardinal.com
CARDINAL HEALTH FIRST QUARTER REVENUE UP 16
PERCENT TARGETED ANNUAL CASH FLOW AND EPS GROWTH ON TRACK FOR FISCAL 2004
DUBLIN, OHIO, OCT. 23, 2003 -- Cardinal Health, Inc. (NYSE: CAH), the leading
provider of products and services supporting the health care industry, today
announced record first quarter business results marked by a double-digit revenue
increase, continued improvement in productivity and progress against its
strategy to expand healthcare products and services along the chain of care.
For the period ending Sept. 30, 2003, as reported in accordance with generally
accepted accounting principles (GAAP), revenue rose 16 percent to $13.3 billion
from $11.4 billion a year ago and earnings per diluted share from continuing
operations increased 16 percent to $0.74. GAAP operating earnings grew 12
percent to $522 million, with more than 60 percent contributed by businesses
outside the company's core pharmaceutical distribution activities.
"Performance for the quarter reflects Cardinal Health's diversified leadership
positions in a strong healthcare market," said Robert D. Walter, chairman and
chief executive officer, Cardinal Health. "Our medical products, pharmaceutical
technologies and automation businesses delivered solid earnings results, with
excellent momentum going into the remainder of the year. Pharmaceutical
distribution delivered exceptional revenue growth, while earnings growth was
affected by a challenging vendor margin environment. With strong momentum from
our other key lines of business and expected second half improvement in
pharmaceutical distribution results, Cardinal Health continues to target
earnings per share growth of mid teens or better for fiscal 2004."
Cardinal Health generated an increase of more than $300 million in operating
cash flow during the quarter and expects to generate approximately $1.3 billion
in operating cash flow for the year. In addition, the company completed a $1
billion stock buy back program that represented the repurchase of over 17
million shares.
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CARDINAL HEALTH FIRST QUARTER REVENUE UP 16 PERCENT
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"We continue to invest for the long term, with more than $26 million of
investment spending charges against current earnings during the quarter," Walter
added. "Strategic investments are a critical component of our growth strategy,
and we see significant opportunity to continue to build scale, including through
expansion in markets outside the United States that currently represent less
than 10 percent of Cardinal Health's business."
FINANCIAL HIGHLIGHTS
Cardinal Health incurred special items during the quarter consisting of
merger-related costs and restructuring charges, partially offset by cash
received from a litigation settlement. These items totaled $13.2 million ($8.7
million after tax) in the first quarter, compared to $18.7 million ($15.6
million after tax) in the same period last year, and decreased earnings per
diluted share in the current quarter and comparable quarter by $0.02 and $0.03,
respectively.
The following discussion adjusts certain amounts to exclude special items
incurred during the quarter. Please see the attached financial table for a
reconciliation of the reported amounts to the amounts excluding these items.
o EARNINGS PER DILUTED SHARE from continuing operations rose 13 percent to
$0.76 versus $0.67 last year. Net earnings from continuing operations
rose 12 percent to $339 million from $304 million a year ago.
o OPERATING REVENUES rose 16 percent to a first quarter record $13.3
billion, from $11.4 billion a year ago.
o OPERATING EARNINGS rose 10 percent to $536 million from $486 million a
year ago.
o INTEREST EXPENSE AND OTHER declined by 8 percent, driven by strong cash
flow and lower interest rates.
o RETURN ON EQUITY was 18.2 percent compared to 19.0 percent last year and
RETURN ON INVESTED CAPITAL improved to 7.21 percent versus 7.08 percent a
year ago.
o OPERATING CASH FLOW of $294 million in the quarter was strong as a result
of effective working capital management and lower inventory investments
in the pharmaceutical distribution business. Owned inventories declined
by more than $200 million in the quarter. Accounts receivable days
improved to 18 days versus 19 days a year ago.
o THE RATIO OF NET DEBT-TO-TOTAL CAPITAL was 20 percent, and the company
ended the quarter with $992 million cash on hand.
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CARDINAL HEALTH FIRST QUARTER REVENUE UP 16 PERCENT
PAGE 3
SIGNIFICANT EVENTS FOR THE QUARTER AND BUSINESS RESULTS
During the quarter Cardinal Health made significant progress executing against
key strategies to build scale and drive competitive advantage; to expand product
and service offerings that deepen customer relationships; and to innovate and
invest in technology and services to provide integrated solutions and new levels
of customer value.
Highlights include:
o The acquisition of Gala Biotech as part of an ongoing strategy to enhance
Cardinal Health's range of innovative drug development services that help
customers bring biopharmaceuticals to market at lower costs.
o Rapid customer acceptance of Pyxis PatientStation(R), with signed
agreements representing more than 5,000 units. These systems deliver
significant value to hospitals by bringing medication and supply storage,
entertainment and clinical information to the patient's bedside.
o The announcement of a contract to produce Roche's Klonopin(R), a leading
medication for panic disorder, in Cardinal Health's patented Zydis(R)
quick dissolve form.
o Strong market acceptance of new self-manufactured medical products. New
product momentum continued with last week's clearance by the Food and
Drug Administration (FDA) to market Esteem(R) surgical gloves with a
proprietary emollient designed to help protect surgeons' hands.
o Healthcare provider demand for integrated solutions continues strong, now
representing more than $5 billion in annual sales and growing 19 percent
year-on-year, an indicator of the increased value Cardinal Health is
bringing its customers through integrated offerings.
Specific segment results included:
FIRST QUARTER - SEGMENT RESULTS
CONTRIBUTION
OPERATING TO OPERATING
($ IN MILLIONS) REVENUE INCREASE EARNINGS INCREASE EARNINGS MIX
------- -------- --------- -------- ------------
Pharmaceutical
Distribution
and Provider
Services $10,824 16% $266 2% 46%
Medical Products
and Services $ 1,733 9% $150 8% 26%
Pharmaceutical
Technologies
and Services $ 606 57% $107 47% 19%
Automation and
Information Services $ 143 7% $ 53 15% 9%
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CARDINAL HEALTH FIRST QUARTER REVENUE UP 16 PERCENT
PAGE 4
PHARMACEUTICAL DISTRIBUTION AND PROVIDER SERVICES delivered 16 percent revenue
growth, increasing to $10.8 billion, compared to $9.3 billion during the first
quarter of fiscal year 2003. Results from the company's provider services
businesses continued strong across the board. Robust sales from all
pharmaceutical distribution customer segments were partially offset by a
significant decline in wholesale-to-wholesale trading company revenues. The
company experienced lower vendor margins because of limited product
availability. These lower vendor margins as well as continued selling margin
pressure were partially offset by expense control, driving operating earnings of
$266 million. Return on sales was 2.45 percent, down 36 basis points, while
return on invested capital continued strong primarily reflecting lower inventory
levels.
For the full year, the company expects to see continued improvements in
productivity and returns on capital for this segment. Near term pressure on
vendor margins and selling margins for pharmaceutical distribution is expected
to improve in the second half of the year.
MEDICAL PRODUCTS AND SERVICES revenue increased 9 percent to $1.7 billion with
operating earnings of $150 million led by momentum in distribution activities.
Earnings growth was driven by increased sales of self-manufactured offerings,
such as Esteem(R) surgical gloves, and new respiratory and thermal products.
Revenue generated from new products tripled during the quarter. Key customer
growth segments included ambulatory care and surgery centers, which increased 20
percent in the quarter.
The company continues to expect revenue growth substantially above industry
levels, with rising returns on sales reflecting new distribution contracts,
increased sales of higher margin self-manufactured products and continued
success of new products.
PHARMACEUTICAL TECHNOLOGIES AND SERVICES showed continued strength with a
year-over-year revenue increase of 57 percent to $606 million. Solid growth from
drug delivery and manufacturing drove high-teens organic earnings growth, and
the addition of Syncor nuclear pharmacy results contributed to segment earnings
growth of 47 percent. Revenue gains were particularly strong in oral drug
manufacturing, which experienced gains from Lilly's Zyprexa(R) Zydis(R) for
schizophrenia, and Mylan's Amnesteem(R), a dermatology product. Packaging
services also experienced strong gains driven by the launch of Astra Zeneca's
Crestor(R), a cholesterol medication. Increased capacity utilization,
integration efficiencies from nuclear pharmacy operations and tight expense
control contributed to the 47 percent improvement in operating earnings.
Cardinal Health continues to expect Pharmaceutical Technologies and Services to
represent its fastest growing segment, with results substantially above industry
growth rates. Expected approval of new products, coupled with the launch of
sterile manufacturing capacity awaiting FDA approval is expected to drive
momentum in revenue and operating earnings growth throughout the remainder of
the fiscal year.
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CARDINAL HEALTH FIRST QUARTER REVENUE UP 16 PERCENT
PAGE 5
AUTOMATION AND INFORMATION SERVICES revenues increased 7 percent to $143
million. Manufacturing efficiencies and expense control yielded an increase in
return on sales of 266 basis points and drove an operating earnings increase of
15 percent. Installations and associated revenues were dampened by business
disruptions experienced by healthcare providers during the quarter. The backlog
of committed contracts ended the quarter at $208 million.
Based on strong demand, the company expects significant revenue growth for the
remainder of the year as delayed installations are booked and new contracts are
signed and installed. Ongoing expense control and the benefit of just-in-time
manufacturing are expected to continue to drive productivity improvement. The
company expects this segment to grow at historically strong levels, led by
growing customer demand for Pyxis PatientStation.
CONFERENCE CALL
Cardinal Health has scheduled a conference call for today at 11 a.m. Eastern
Daylight Time to discuss its first quarter financial performance. To access this
discussion via the internet, go to the Investor Relations page at
www.cardinal.com. The company has also established a telephone call-in line at
706-679-0766. An audio replay of the conference call will be available until
Oct. 25, 2003 by dialing 706-645-9291, passcode 2633455. A replay of the Webcast
will be available at the Investor Relations page on www.cardinal.com.
ABOUT CARDINAL HEALTH
CARDINAL HEALTH, INC. (www.cardinal.com) is the leading provider of products and
services supporting the health care industry. Cardinal Health develops,
manufactures, packages and markets products for patient care; develops
drug-delivery technologies; distributes pharmaceuticals, medical- surgical and
laboratory supplies; and offers consulting and other services that improve
quality and efficiency in health care. Headquartered in Dublin, Ohio, Cardinal
Health employs more than 50,000 people on five continents and produces annual
revenues of more than $50 billion. Cardinal Health is ranked #19 on the current
Fortune 500 list and was named one of "The World's Best" companies by Forbes
magazine in 2002.
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Except for historical information, all other information in this news release
consists of forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements 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 8-K and
Form 10-Q reports (including all amendments to those reports) and exhibits to
those reports, and include (but are not limited to) the costs, difficulties, and
uncertainties related to the integration of acquired businesses, the loss of one
or more key customer or supplier relationships or changes to the terms of those
relationships, changes in the distribution patterns or reimbursement rates for
health-care products and/or services, the costs and other effects of
governmental regulation and legal and administrative proceedings, and general
economic and market conditions. Cardinal Health undertakes no obligation to
update or revise any forward-looking statement.
CARDINAL HEALTH, INC.
CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
(IN MILLIONS, EXCEPT PER COMMON SHARE AMOUNTS)
FIRST QUARTER
----------------------------------------------
September September
2003 2002 % Change
----------------------------------------------
Operating revenue $ 13,288.3 $ 11,416.6 16 %
Operating cost of products sold 12,205.1 10,409.7 17 %
---------- ----------
Operating gross margin 1,083.2 1,006.9 8 %
Bulk deliveries to customer warehouses and other 2,100.4 1,669.5 26 %
Cost of products sold - bulk deliveries and other 2,100.4 1,669.5 26 %
---------- ----------
Bulk gross margin -- -- N.M.
Selling, general and administrative expenses 547.6 520.7 5 %
Special items - merger charges 8.6 11.4 N.M.
- other 4.6 7.3 N.M.
---------- ----------
Operating earnings 522.4 467.5 12 %
Interest expense and other 28.0 30.6 (8)%
---------- ----------
Earnings before income taxes and discontinued operations 494.4 436.9 13 %
Provision for income taxes 164.0 148.6 10 %
---------- ----------
Earnings from continuing operations 330.4 288.3 15 %
Loss from discontinued operations (net of tax of $1.1) (1.8) -- N.M.
---------- ----------
Net earnings $ 328.6 $ 288.3 N.M.
========== ==========
Basic earnings per Common Share:
Continuing operations $ 0.75 $ 0.65 15 %
Discontinued operations -- -- N.M.
---------- ----------
Net basic earnings per Common Share $ 0.75 $ 0.65 N.M.
========== ==========
Diluted earnings per Common Share:
Continuing operations $ 0.74 $ 0.64 16 %
Discontinued operations -- -- N.M.
---------- ----------
Net diluted earnings per Common Share $ 0.74 $ 0.64 N.M.
========== ==========
Weighted average number of Common Shares outstanding:
Basic 440.5 446.2
Diluted 446.7 454.2
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The following table summarizes the impact of special items on net earnings and
diluted earnings per Common Share in the quarters in which they were recorded:
Current Year Prior Year
------------------------ ------------------------
Net Diluted Net Diluted
Earnings EPS Earnings EPS
------------------------ -----------------------
Impact of special items - merger charges $ (5.4) $ (0.01) $ (7.2) $ (0.01)
- other (3.3) (0.01) (8.4) (0.02)
------ -------- ------- --------
Impact of special items $ (8.7) $ (0.02) $ (15.6) $ (0.03)
====== ======== ======= ========
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CARDINAL HEALTH, INC.
CONSOLIDATED BALANCE SHEETS
(IN MILLIONS)
(unaudited)
SEPTEMBER 30, June 30, September 30,
2003 2003 2002
-------------- ----------- -------------
ASSETS
CURRENT ASSETS
Cash and equivalents $ 992.0 $ 1,724.0 $ 945.6
Trade receivables 2,996.1 2,784.4 2,554.8
Current portion of investment in sales-type leases 196.0 171.8 190.6
Inventories 8,253.7 7,623.3 7,250.2
Prepaid expenses and other 732.2 776.0 670.3
Assets held for sale from discontinued operations 163.0 170.1 --
----------- ----------- -----------
Total current assets 13,333.0 13,249.6 11,611.5
----------- ----------- -----------
Property and equipment - net 2,079.9 2,089.5 1,887.3
Investment in sales-type leases 594.0 557.3 644.8
Other assets 2,642.4 2,625.0 2,091.6
----------- ----------- -----------
TOTAL ASSETS $ 18,649.3 $ 18,521.4 $ 16,235.2
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable - banks and current portion of
long-term obligations $ 217.1 $ 228.7 $ 17.4
Accounts payable 6,156.6 5,288.4 5,299.8
Other accrued liabilities 1,620.4 1,733.0 1,320.9
Liabilities from discontinued operations 62.2 64.3 --
----------- ----------- -----------
Total current liabilities 8,056.3 7,314.4 6,638.1
----------- ----------- -----------
Long-term obligations, less current portion 2,506.9 2,471.9 2,237.8
Deferred taxes and other liabilities 963.5 977.0 1,005.6
Total shareholders' equity 7,122.6 7,758.1 6,353.7
----------- ----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 18,649.3 $ 18,521.4 $ 16,235.2
=========== =========== ===========
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CARDINAL HEALTH, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN MILLIONS)
THREE MONTHS ENDED
--------------------------
SEPTEMBER 30,
--------------------------
2003 2002
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Earnings from continuing operations $ 330.4 $ 288.3
Adjustments to reconcile earnings from continuing operations
to net cash from operations:
Depreciation and amortization 68.7 62.2
Change in operating assets and liabilities, net of
effects from acquisitions:
Increase in trade receivables (210.5) (259.3)
(Increase)/decrease in inventories (630.3) 110.8
(Increase)/decrease in net investment in sales-type leases (60.9) 1.5
Increase/(decrease) in accounts payable 866.9 (204.7)
Other operating items - net (70.2) (12.9)
---------------------------------
Net cash provided by/(used in) operating activities 294.1 (14.1)
---------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of subsidiaries, net of cash acquired (15.0) (5.4)
Proceeds from sale of property, equipment, and other assets 2.5 16.3
Additions to property and equipment (77.8) (70.5)
---------------------------------
Net cash used in investing activities (90.3) (59.6)
---------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in commercial paper and short-term debt (0.1) (0.7)
Net change in long-term obligations 32.4 (0.8)
Proceeds from issuance of Common Shares 45.3 42.7
Purchase of Treasury Stock (1,000.0) (392.7)
Other (13.4) (11.2)
---------------------------------
Net cash used in financing activities (935.8) (362.7)
---------------------------------
NET DECREASE IN CASH AND EQUIVALENTS (732.0) (436.4)
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 1,724.0 1,382.0
---------------------------------
CASH AND EQUIVALENTS AT END OF PERIOD $ 992.0 $ 945.6
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CARDINAL HEALTH, INC. - FIRST QUARTER FY 2004 BUSINESS ANALYSIS
($ MILLIONS)
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PHARMACEUTICAL DISTRIBUTION AND PROVIDER SERVICES
2004 2003 COMMENT
---- ---- -------
. REVENUE
- Amount $10,824 $ 9,319 Q1 RECORD
- Growth Rate 16% 17%
- Mix 81% 82%
. OPERATING EARNINGS
- Amount $ 266 $ 262 Q1 RECORD
- Growth Rate 2% 20%
- Mix 46% 50%
- Ratio to Revenue 2.45% 2.81% Vendor, sell margins
. PRODUCTIVITY
- Margin Per Expense Dollar $ 2.56 $ 2.40 7% improvement
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MEDICAL PRODUCTS AND SERVICES
2004 2003 COMMENT
---- ---- -------
. REVENUE
- Amount $ 1,733 $ 1,595 Q1 RECORD
- Growth Rate 9% 6%
- Mix 13% 14%
. OPERATING EARNINGS
- Amount $ 150 $ 139 Q1 RECORD
- Growth Rate 8% 10%
- Mix 26% 27%
- Ratio to Revenue 8.67% 8.70%
. PRODUCTIVITY
- Margin Per Expense Dollar $ 1.70 $ 1.71
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PHARMACEUTICAL TECHNOLOGIES AND SERVICES
2004 2003 COMMENT
---- ---- -------
. REVENUE
- Amount $ 606 $ 387 Q1 RECORD
- Growth Rate 57% 19% Syncor impact
- Mix 5% 3%
. OPERATING EARNINGS
- Amount $ 107 $ 73 Q1 RECORD
- Growth Rate 47% 18% Syncor impact
- Mix 19% 14%
- Ratio to Revenue 17.63% 18.76% Mix, Syncor impact
. PRODUCTIVITY
- Margin Per Expense Dollar $ 2.29 $ 2.22
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AUTOMATION AND INFORMATION SERVICES
2004 2003 COMMENT
---- ---- -------
. REVENUE
- Amount $ 143 $ 134 Q1 RECORD
- Growth Rate 7% 24%
- Mix 1% 1%
. OPERATING EARNINGS
- Amount $ 53 $ 46 Q1 RECORD
- Growth Rate 15% 55%
- Mix 9% 9%
- Ratio to Revenue 37.17% 34.51% Expense control
. PRODUCTIVITY
- Margin Per Expense Dollar $ 2.24 $ 1.95 15% improvement
- -------------------------------------------------------------------------------
- - REVENUE AND ALL RATIOS TO REVENUE EXCLUDE BULK DELIVERIES TO CUSTOMER
WAREHOUSES AND OTHER CUSTOMER PASS THROUGH CHARGES
- - MARGIN PER EXPENSE DOLLAR = RATIO OF GROSS MARGIN TO EXPENSES
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CARDINAL HEALTH, INC. - FIRST QUARTER FY 2004 BUSINESS ANALYSIS
($ MILLIONS)
- ------------------------------------------------------------------------------
TOTAL
-----
2004 2003
---- ----
. REVENUE
- Amount $13,288 $11,417 Excluding Special Items
- Growth Rate 16% 16% ---------------------------
2004 2003
---- ----
. OPERATING EARNINGS
- Amount $ 522 $ 468 $ 536 $ 486
- Growth Rate 12% 17% 10% 18%
. RATIO TO REVENUE
- Gross Margin 8.15% 8.82%
- Expenses 4.12% 4.56%
- Special Items 0.10% 0.16%
- Operating Earnings 3.93% 4.10% 4.03% 4.26%
. NET EARNINGS *
- Amount $ 330 $ 288 $ 339 $ 304
- Growth Rate 15% 17% 12% 20%
- Ratio to Revenue 2.49% 2.53% 2.55% 2.66%
. PRODUCTIVITY
- Margin per Expense Dollar $ 1.98 $ 1.93
. ASSET MANAGEMENT
- Operating Cash Flow $ 294 $ (14)
- Free Cash Flow $ 205 $ (80)
- Return on Invested Capital 7.03% 6.74% 7.21% 7.08%
-------------------------------
- -------------------------------------------------------------------------------
- - REVENUE AND ALL RATIOS TO REVENUE EXCLUDE BULK DELIVERIES TO CUSTOMER
WAREHOUSES AND OTHER CUSTOMER PASS THROUGH CHARGES.
- - MARGIN PER EXPENSE DOLLAR = RATIO OF GROSS MARGIN TO EXPENSES
* THE NET EARNINGS SECTION IS PRESENTED BEFORE DISCONTINUED OPERATIONS.
SEE THE GAAP/NON-GAAP RECONCILIATION FOR THE CALCULATIONS AND DEFINITIONS
SUPPORTING THE BALANCES EXCLUDING SPECIAL ITEMS.
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CARDINAL HEALTH, INC. - FIRST QUARTER FISCAL 2004 AND 2003
ASSET MANAGEMENT ANALYSIS
($ MILLIONS)
- -------------------------------------------------------------------------------
2004 2003 COMMENT
---- ---- -------
. RECEIVABLE DAYS 18 19 Q1 RECORD
. INVENTORY TURNS 6.5 6.8
. CASH $ 992 $ 946
. DEBT $2,724 $2,255
. EQUITY $7,123 $6,354 $1B stock repurchase
. NET DEBT/TOTAL CAPITAL 20% 17%
. TANGIBLE NET WORTH $4,782 $4,786
. RETURN ON EQUITY 17.8% 18.1%
EXCLUDING SPECIAL CHARGES 18.2% 19.0%
. TAX RATE 33.2% 34.0%
EXCLUDING SPECIAL CHARGES 33.2% 33.3% Business/International mix
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CARDINAL HEALTH, INC. - BUSINESS ANALYSIS RECONCILIATION
($ MILLIONS)
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FIRST QUARTER FISCAL 2004
GAAP* EXCLUDING
BASIS SPECIAL ITEMS SPECIAL ITEMS
----- ------------- -------------
. SPECIAL ITEMS
- Merger Related Costs $ 9 $ 9 -
- Other $ 5 $ 5 -
. OPERATING EARNINGS
- Amount $ 522 $ 14 $ 536
- Growth Rate 12% 10%
- Ratio to Revenue (Return on Sales) 3.93% 4.03%
. NET EARNINGS**
- Amount $ 330 $ 9 $ 339
- Growth Rate 15% 12%
- Ratio to Revenue 2.49% 2.55%
- Diluted EPS $0.74 $0.02 $0.76
. INCOME TAX PROVISION
- Income Tax Provision $(164) $ (5) $(169)
- -------------------------------------------------------------------------------
FIRST QUARTER FISCAL 2003
GAAP* EXCLUDING
BASIS SPECIAL ITEMS SPECIAL ITEMS
----- ------------- -------------
. SPECIAL ITEMS
- Merger Related Costs $ 11 $ 11 -
- Other $ 7 $ 7 -
. OPERATING EARNINGS
- Amount $ 468 $ 18 $ 486
- Growth Rate 17% 18%
- Ratio to Revenue (Return on Sales) 4.10% 4.26%
. NET EARNINGS**
- Amount $ 288 $ 16 $ 304
- Growth Rate 17% 20%
- Ratio to Revenue 2.53% 2.66%
- Diluted EPS $0.64 $0.03 $0.67
. INCOME TAX PROVISION
- Income Tax Provision $(149) $ (2) $(151)
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* GAAP - AMOUNTS THAT CONFORM WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.
** THE NET EARNINGS SECTION IS PRESENTED BEFORE DISCONTINUED OPERATIONS.
DEFINITIONS:
RETURN ON EQUITY (EXCLUDING SPECIAL ITEMS) = Earnings from continuing operations
+ special items after tax / [average shareholders' equity + (special items after
tax) / 2]
Note: Average shareholders' equity used in the return on equity calculation was
$7.4 billion and $6.4 billion in the first quarter of fiscal 2004 and 2003,
respectively.
EFFECTIVE TAX RATE (EXCLUDING SPECIAL ITEMS) = (Income tax provision + tax
effect of special items) / (earnings before income taxes + special items)
GROWTH RATE (EXCLUDING SPECIAL ITEMS) = (Current quarter earnings excluding
special items - prior year quarter earnings excluding special items)/ prior year
quarter earnings excluding special items
RATIO TO REVENUE (EXCLUDING SPECIAL ITEMS) = Current quarter earnings excluding
special items / operating revenue
FREE CASH FLOW = Operating cash flow - net property activity - dividends
RETURN ON INVESTED CAPITAL (EXCLUDING SPECIAL ITEMS) = [Operating earnings
excluding special items annualized x (1 - effective tax rate, excluding special
items)] / average (equity + debt + unrecorded goodwill)
Note: Average unrecorded goodwill used in return on invested capital calculation
was $9.7 billion in fiscal 2004 and fiscal 2003.
OWNED INVENTORY = Change in inventories for the quarter - change in accounts
payable for the quarter
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