Exhibit 99.1
[CARDINAL HEALTH LOGO]
7000 Cardinal Place
Dublin,OH 43017
www.cardinal.com
CONTACTS:
Sari Macrie - Media
(614) 757-3690
Steve Fischbach - Investor Relations
(614) 757-7067
CARDINAL HEALTH REPORTS RECORD FOURTH QUARTER
AND FISCAL YEAR 2003 FINANCIAL PERFORMANCE
Full year operating cash flow reaches record $1.4 billion
DUBLIN, OHIO, JULY 31, 2003 -- Cardinal Health, Inc. (NYSE: CAH), the leading
provider of products and services supporting the health care industry, today
reported record results for the fourth quarter and fiscal year ended June 30,
2003.
As reported in accordance with generally accepted accounting principles,
operating revenues rose 15 percent for the fourth quarter to $13.5 billion from
$11.8 billion a year ago. Earnings per diluted share from continuing operations
grew 28 percent to $0.82 for the fourth quarter, up from $0.64 a year ago.
Operating earnings rose 22 percent to a record $575 million for the quarter, up
from $471 million a year ago. Earnings from continuing operations were up 25
percent to $371 million for the quarter, up from $296 million a year ago.
For the full fiscal year 2003, operating revenues rose 14 percent to $50.5
billion from $44.4 billion a year ago. Earnings per diluted share from
continuing operations grew 27 percent to $3.12 for the year compared to $2.45 a
year ago. Operating earnings rose 22 percent to $2.2 billion for the year, up
from $1.8 billion in the prior year. Earnings from continuing operations, before
the cumulative effect of a change in accounting, were up 25 percent to $1.4
billion for the year, up from $1.1 billion a year ago.
"We've completed another fiscal year with impressive financial results -
results that demonstrate the benefits of a focus on the fast growing health care
industry, our market leading positions, and our broad and diverse offering to
our customers," said Robert D. Walter, chairman and chief executive officer,
Cardinal Health. "Acceleration in demand for our proprietary products and
services in our pharmaceutical technologies, automation and medical products
businesses drove the strong performance in the fourth quarter.
"Importantly, we continued to ensure future growth of our business, investing
approximately $1.5 billion in 2003 in strategic growth initiatives, research and
development, acquisitions, and capital expenditures," Walter said. "Record
revenues, strong gross margins and continued improvement in productivity yielded
record rates of return on sales, committed capital and
equity. Our balance sheet is the strongest it has ever been with $1.7 billion in
cash at year end, allowing us to maximize growth opportunities to build on our
leadership positions in the marketplace and giving us confidence that Cardinal
Health will continue to deliver exceptional performance into fiscal 2004 and
beyond."
FINANCIAL HIGHLIGHTS
Cardinal Health incurred special items during the quarter and year consisting of
merger-related costs and restructuring charges, partially offset by litigation
settlement income. These items totaled $49 million ($33 million after tax) in
the fourth quarter, compared to $70 million ($45 million after tax) in the same
period last year, and reduced earnings per diluted share in the current quarter
and comparable quarter by $0.07 and $0.10, respectively. For the year, special
items totaled $40 million ($33 million after tax) in 2003, compared to $139
million ($87 million after tax) in the prior year and reduced earnings per
diluted share in fiscal 2003 and 2002 by $0.07 and $0.19, respectively.
The following discussion adjusts certain amounts as reported to exclude special
items incurred during the quarter and the fiscal year. Please see the attached
financial table for a reconciliation of the reported amounts to the amounts
excluding these items and for related definitions and components.
FOURTH QUARTER
EARNINGS PER DILUTED SHARE from continuing operations rose 20 percent to $0.89
versus $0.74 last year. Earnings from continuing operations rose 19 percent to
an all-time record of $405 million from $341 million a year ago.
- OPERATING REVENUES rose 15 percent to an all-time high of $13.5 billion,
from $11.8 billion a year ago.
- OPERATING EARNINGS rose 15 percent to an all-time record of $625 million
from $541 million a year ago.
- INTEREST EXPENSE AND OTHER declined by 11 percent, driven by strong cash
flow and lower interest rates.
- RETURN ON SALES was 4.62 percent, up 2 basis points, and RETURN ON
EQUITY was 21.5 percent, both consistent with the strong performance a
year ago.
- OPERATING CASH FLOW of $882 million in the quarter was exceptional as a
result of effective working capital management, lower inventory
investments in the pharmaceutical distribution business and the cash
flow benefit from the sale of $156 million of automation leases. Total
company inventories grew by less than 4 percent from the prior year.
Accounts receivables days outstanding remained steady at 17 days.
- THE RATIO OF NET DEBT-TO-TOTAL CAPITAL declined to a record low of 11
percent, and the company ended the quarter with a record $1.7 billion
cash on hand.
-- more--
FISCAL YEAR 2003
EARNINGS PER DILUTED SHARE from continuing operations rose 21 percent to $3.19
from $2.64 last year. Earnings from continuing operations, before the cumulative
effect of a change in accounting in the prior year, rose 19 percent to an
all-time record $1.45 billion from $1.21 billion a year ago.
- OPERATING REVENUES rose 14 percent to an all-time high of $50.5 billion,
from $44.4 billion a year ago.
- OPERATING EARNINGS rose 16 percent to an all-time record of $2.28
billion from $1.97 billion a year ago.
- INTEREST EXPENSE AND OTHER declined by 13 percent, driven by strong cash
flow and lower interest rates.
- RETURN ON SALES rose 8 basis points to 4.52 percent and RETURN ON EQUITY
increased 60 basis points to an all-time record of 21.1 percent, driven
by strong operating earnings growth and focused asset management.
- EFFECTIVE TAX RATE declined to 33.3 percent from 34.1 percent in fiscal
2002, reflecting the impact of international operations, driven by
strong growth in proprietary self-manufactured medical and surgical
products and earnings from international pharmaceutical technologies
businesses.
- OPERATING CASH FLOW was $1.4 billion. The sale of leases related to the
automation business generated approximately $300 million of the
increase. Excluding the sale of leases, the company had operating cash
flow of approximately $1.1 billion, exceeding its cash flow target for
the year of $900 million to $1 billion. Additionally, the company
repurchased $1.2 billion of company common shares during the year.
- The integration of the leading nuclear pharmacy business in the United
States, SYNCOR INTERNATIONAL CORP., continued on schedule. The
acquisition, which was completed in January 2003, added approximately 1
percent to total revenue growth, but was neither dilutive nor accretive
to earnings per share for the year.
DISCUSSION OF STRATEGIC PROGRESS AND BUSINESS RESULTS
Cardinal Health's strong performance in the fourth quarter and fiscal year 2003
reflects its success in executing against its core strategy of investing
aggressively in health care to:
- Build scale and drive competitive advantage in the marketplace;
- Expand its breadth of product offerings to deepen customer
relationships, diversify earnings and deliver integrated solutions to
customers;
- Utilize technological innovation to create proprietary solutions;
- Increase operational excellence to improve productivity; and
- Invest in higher growth, higher margin proprietary products and services
to drive profitable growth.
During the year, the company made considerable strategic progress, including the
acquisition of Syncor International to build scale in the fast growing nuclear
pharmacy services business, information technology investments in
state-of-the-art pharmaceutical distribution centers, and additional proprietary
manufacturing capacity in its pharmaceutical technologies business.
-- more--
Innovative new products were introduced by all segments of the business,
including new patient safety products, infection-resistant surgical drapes and
gowns and pharmaceutical delivery technologies. Integrated selling results were
strong during the year in both the health care provider and pharmaceutical
manufacturing markets. The contribution from higher margin, high growth
businesses advanced during the year and operational productivity improved.
Strategic progress was achieved in each of the company's four reporting
segments. The following provides a summary review of results for each segment
for the fourth quarter and full fiscal year 2003.
FOURTH QUARTER - SEGMENT RESULTS
--------------------------------
CONTRIBUTION TO
OPERATING OPERATING EARNINGS
($ IN MILLIONS) REVENUE INCREASE EARNINGS INCREASE MIX
------- -------- --------- -------- ------------------
Pharmaceutical Distribution
and Provider Services $10,925 14% $320 11% 47%
Medical Products and Services $1,737 7% $158 10% 23%
Pharmaceutical Technologies and
Services $650 66% $116 51% 17%
Automation and Information Services $202 19% $86 21% 13%
FISCAL YEAR 2003 - SEGMENT RESULTS
----------------------------------
CONTRIBUTION TO
OPERATING OPERATING EARNINGS
($ IN MILLIONS) REVENUE INCREASE EARNINGS INCREASE MIX
------- -------- --------- -------- ------------------
Pharmaceutical Distribution
and Provider Services $41,195 14% $1,220 14% 50%
Medical Products and Services $6,616 6% $605 12% 24%
Pharmaceutical Technologies and
Services $2,049 44% $368 32% 15%
Automation and Information Services $667 19% $265 27% 11%
-- more--
PHARMACEUTICAL DISTRIBUTION AND PROVIDER SERVICES
Pharmaceutical Distribution and Provider Services produced solid results for the
fourth quarter, posting record revenues of $10.9 billion, an increase of 14
percent. Strong sales increases to all customer segments were partially offset
by a decline in wholesale-to-wholesale trading volume, which dampened overall
growth by 1 percent. New contract volume drove the strong sales performance in
the quarter, providing solid top line momentum moving into fiscal 2004.
Operating earnings rose 11 percent, up 14 percent after adjusting for a non-cash
LIFO (last-in, first out) inventory charge of $5.7 million in the quarter,
compared to a LIFO credit of $2.3 million a year ago. Gross margin was impacted
by customer mix and competitive pricing. In addition, gross margin was reduced
by lower vendor margins compared to very strong vendor margins in the prior
year, which was positively offset by the absence of an inventory obsolescence
charge taken in the prior year related to the closure of acquired distribution
facilities. Operating expense efficiencies substantially offset gross margin
declines of 38 basis points, resulting in a return on sales of 2.93 percent.
For the fiscal year, Pharmaceutical Distribution and Provider Services generated
record revenues of $41.2 billion, an increase of 14 percent. Operating earnings
grew to $1.2 billion, a 14 percent improvement. The strong revenue growth and
continued expense improvement drove a 560 basis point improvement in return on
committed capital to a record 36.8 percent, while generating strong cash flow.
MEDICAL PRODUCTS AND SERVICES
Medical Products and Services had a strong quarter, posting record revenues,
operating earnings and return on sales. Revenues reached more than $1.7 billion,
up 7 percent on the strength of acute care distribution sales. New distribution
contracts contributed to the volume gains during the quarter and represent
strong volume momentum moving into fiscal 2004. New products contributed nearly
a third of the growth in the quarter, highlighted by the introduction of a new
line of surgeon's gloves, the new Tiburon(TM) and Astound(TM) fabrics in the
Converters(R) line, and new innovations in the delivery of bone cement.
Gross margins rose 54 basis points to 22.23 percent, reflecting continued
productivity improvements from investments in manufacturing technology and
increased contributions from higher margin self-manufactured products. Strong
sales growth, gross margin improvement and a focus on continued expense
productivity produced a fourth quarter record $158 million in operating
earnings, 10 percent higher than the previous year. Return on sales rose 24
basis points to a fourth quarter record of 9.09 percent.
For the fiscal year, Medical Products and Services generated a record $6.6
billion in revenue, an increase of 6 percent. Strong productivity improvements
coupled with gains in gross margins in manufacturing and distribution operations
drove an operating earnings increase of 12 percent to $605 million, also a
record. As a result of the earnings performance and strong asset management,
return on committed capital rose to an all-time high 39.5 percent, while
generating strong cash flow.
PHARMACEUTICAL TECHNOLOGIES AND SERVICES
Pharmaceutical Technologies and Services produced exceptional results in the
fourth quarter. The segment generated record revenue of $650 million, a 66
percent increase. Revenue gains were particularly strong in oral and sterile
drug manufacturing, which experienced solid growth from Lilly's Zyprexa(R)
Zydis(R), and Mylan's Amnesteem(TM), Pfizer's Xalatan(R) as well as the nuclear
pharmacy
-- more--
services business. The increasing focus of nuclear pharmacy on therapeutic
products will continue to drive strong volume growth and further increase its
importance in the health care market. Demand for proprietary drug delivery
technologies, nuclear pharmacy services, packaging services and sterile products
represent strong sales momentum into fiscal 2004.
Operating earnings reached $116 million, an increase of 51 percent over the
prior year. Primarily as a result of the inclusion of nuclear pharmacy services
in the current year results, return on sales moderated to 17.88 percent compared
to 19.73 percent in the prior year.
Results for the segment included Syncor International as of January 2003.
Excluding Syncor, the segment experienced revenue growth in the high teens and
earnings growth in excess of 20 percent, with improved gross margins and a
higher return on sales, reflecting higher facility utilization and a favorable
product mix. The integration of Syncor International is proceeding as planned,
with the consolidation of 14 acquired nuclear pharmacy facilities during the
year, which will drive further efficiency gains in fiscal 2004 and beyond.
For the full year, Pharmaceutical Technologies and Services recorded revenue of
$2.0 billion, an all-time high and an increase of 44 percent. Operating earnings
grew at 32 percent to $368 million, also a record. Return on committed capital
rose 300 basis points to 31.4 percent, while generating record cash flow.
AUTOMATION AND INFORMATION SERVICES
Automation and Information Services recorded another robust quarter on sustained
demand for the company's automation solutions for health care providers. The
segment generated $202 million in revenue, a 19 percent improvement representing
an all-time quarterly record. Revenue gains were consistent across the business,
with sales of MedStation(R) , SupplyStation(R) and patient safety related
products all contributing to the strong performance. Pyxis PatientStation(R), a
new bedside patient safety and satisfaction product for patients and clinicians,
is gaining market acceptance and was a main driver in several large, recently
signed contracts. Contract momentum is expected to continue into fiscal 2004.
Continued demand for existing products and accelerating demand for new patient
safety and patient bedside technologies are expected to drive continued segment
revenue momentum.
Another indication of future revenue potential is the backlog of uninstalled
committed contracts, which grew by $31 million, the largest increase ever, to
end the year at $233 million.
As a result of the revenue momentum and productivity improvements, return on
sales improved 87 basis points to a record 42.68 percent. Operating earnings
were $86 million, a 21 percent increase and an all-time record. Return on
committed capital increased to a record 60.3 percent from 45.8 percent in the
prior year on the strong operating earnings growth, working capital
efficiencies, and lower investment in the lease portfolio.
For the full year, Automation and Information Services grew revenue a healthy 19
percent to $667 million, and operating earnings expanded by 27 percent to $265
million. Return on committed capital dramatically improved to 43.5 percent from
35.7 percent in the prior year.
FISCAL 2004 OUTLOOK
"We have built a diverse and balanced portfolio in health care, with each of our
businesses a leader in their respective markets," Walter said. "As we move into
fiscal year 2004, we expect strong overall revenue growth, with growth from each
of our business segments at a pace similar to fiscal 2003. We have long term
contracts in place, new products driving incremental volume, and an ability to
integrate our offerings for even higher potential growth.
-- more--
"In fiscal 2004, we believe that our investments in higher margin, high growth
proprietary products and services will enable our medical products,
pharmaceutical technologies and automation businesses to grow operating earnings
at a pace faster than our pharmaceutical distribution and provider services
business," Walter said. "Overall, we anticipate earnings per share growth in the
mid teens or better, with record returns on sales and capital. We also expect
that record cash flows and improving returns in 2004 will drive added
opportunity for deployment of capital, either in acquisitions or share
buybacks."
CONFERENCE CALL AND SEMI-ANNUAL INVESTOR CONFERENCE
Cardinal Health has scheduled a conference call for today at 11 a.m. Eastern
Daylight Time to discuss its fourth quarter and fiscal year financial
performance and outlook. To access this discussion via the internet, visit
www.cardinal.com and click the Investor Relations page. For those without
internet access, 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
midnight August 2, 2003 by dialing 706-645-9291, passcode 8636941. A replay of
the webcast will be available at the Investor Relations page on
www.cardinal.com.
Cardinal Health will host its semi-annual investor conference in New York on
August 12, 2003. Senior management presentations will be webcast live from 12:30
p.m. to 2:30 p.m. Eastern Daylight Time and can be accessed via www.cardinal.com
at the Investor Relations page. For those without Internet access, these
presentations can be listened to by calling 706-679-0766. An audio replay will
be available until midnight August 15, 2003 by dialing 706-645-9291, passcode
1713491. 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 companies
develop, manufacture, package and market products for patient care; develop
drug-delivery technologies; distribute pharmaceuticals, medical-surgical and
laboratory supplies; and offer consulting and other services that improve
quality and efficiency in health care. Headquartered in Dublin, Ohio, the
company 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.
--------------------------
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 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 in the terms of those relationships, changes
in the distribution outsourcing patterns for health-care products and/or
services, the costs and other effects of governmental regulation and legal and
administrative proceedings, and general economic conditions. Cardinal Health
undertakes no obligation to update or revise any forward-looking statements.
-- more--
CARDINAL HEALTH, INC.
CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
FOURTH QUARTER
---------------------------------------------------------------
June June
2003 2002 % Change
---------------------------------------------------------------
Operating revenue $ 13,506.4 $ 11,765.9 15 %
Operating cost of products sold 12,276.9 10,703.4 15 %
------------------- -------------------
Operating gross margin 1,229.5 1,062.5 16 %
Bulk deliveries to customer warehouses and other 1,682.2 1,262.3 33 %
Cost of products sold - bulk deliveries and other 1,682.2 1,262.3 33 %
------------------- -------------------
Bulk gross margin - - N.M.
Selling, general and administrative expenses 605.2 521.4 16 %
Special items - merger charges 25.1 63.7 N.M.
- other 23.9 6.7 N.M.
------------------- -------------------
Operating earnings 575.3 470.7 22 %
Interest expense and other 22.6 25.5 (11)%
------------------- -------------------
Earnings before income taxes and discontinued operations 552.7 445.2 24 %
Provision for income taxes 181.5 148.9 22 %
------------------- -------------------
Earnings from continuing operations 371.2 296.3 25 %
Loss from discontinued operations (net of tax of $1.4) (4.3) - N.M.
------------------- -------------------
Net earnings $ 366.9 $ 296.3 N.M.
=================== ===================
Basic earnings per Common Share:
Continuing operations $ 0.83 $ 0.66 26 %
Discontinued operations (0.01) - N.M.
------------------- -------------------
Net basic earnings per Common Share $ 0.82 $ 0.66 N.M.
=================== ===================
Diluted earnings per Common Share:
Continuing operations $ 0.82 $ 0.64 28 %
Discontinued operations (0.01) - N.M.
------------------- -------------------
Net diluted earnings per Common Share $ 0.81 $ 0.64 N.M.
=================== ===================
Weighted average number of shares outstanding:
Basic 446.8 451.2
Diluted 453.6 460.0
- ----------------------------------------------------------------------------------------------------------------------------------
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 $ (16.3) $ (0.03) $ (39.8) $ (0.09)
- other (17.0) (0.04) (4.7) (0.01)
----------------- ----------- ----------------- ------------
Impact of special items $ (33.3) $ (0.07) $ (44.5) $ (0.10)
================= =========== ================= ============
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CARDINAL HEALTH, INC.
CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
YEAR-TO-DATE
--------------------------------------------------------------
June June
2003 2002 % Change
--------------------------------------------------------------
Operating revenue $ 50,466.6 $ 44,394.3 14 %
Operating cost of products sold 45,956.6 40,348.1 14 %
------------------ ------------------
Operating gross margin 4,510.0 4,046.2 11 %
Bulk deliveries to customer warehouses and other 6,270.4 6,741.4 (7)%
Cost of products sold - bulk deliveries and other 6,270.4 6,741.4 (7)%
------------------ ------------------
Bulk gross margin - - N.M.
Selling, general and administrative expenses 2,228.2 2,073.8 7 %
Special items - merger charges 74.4 131.9 N.M.
- other (34.5) 6.7 N.M.
------------------ ------------------
Operating earnings 2,241.9 1,833.8 22 %
Interest expense and other 115.3 132.5 (13)%
------------------ ------------------
Earnings before income taxes, discontinued operations, and 2,126.6 1,701.3 25 %
cumulative effect of change in accounting
Provision for income taxes 714.7 575.0 24 %
------------------ ------------------
Earnings from continuing operations before
cumulative effect of change in accounting 1,411.9 1,126.3 25 %
Loss from discontinued operations (net of tax of $2.5) (6.1) - N.M.
Cumulative effect of change in accounting - (70.1) N.M.
------------------ ------------------
Net earnings $ 1,405.8 $ 1,056.2 N.M.
================== ==================
Basic earnings per Common Share:
Continuing operations $ 3.17 $ 2.50 27 %
Discontinued operations (0.02) - N.M.
Cumulative effect of change in accounting - (0.16) N.M.
------------------ ------------------
Net basic earnings per Common Share $ 3.15 $ 2.34 N.M.
================== ==================
Diluted earnings per Common Share:
Continuing operations $ 3.12 $ 2.45 27 %
Discontinued operations (0.02) - N.M.
Cumulative effect of change in accounting - (0.15) N.M.
------------------ ------------------
Net diluted earnings per Common Share $ 3.10 $ 2.30 N.M.
================== ==================
Weighted average number of shares outstanding:
Basic 446.0 450.1
Diluted 453.6 459.9
- ----------------------------------------------------------------------------------------------------------------------------------
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 $ (47.5) $ (0.10) $ (82.4) $ (0.18)
- other 14.3 0.03 (4.7) (0.01)
------------------ ----------- ----------------- ------------
Impact of special items $ (33.2) $ (0.07) $ (87.1) $ (0.19)
================== =========== ================= ============
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CARDINAL HEALTH, INC.
CONSOLIDATED BALANCE SHEETS
(IN MILLIONS)
(unaudited)
June 30, March 31, June 30,
2003 2003 2002
------------------------ ------------------------ -----------------------
ASSETS
- ------
CURRENT ASSETS
Cash and equivalents $ 1,724.0 $ 545.2 $ 1,382.0
Trade receivables 2,784.4 2,845.3 2,295.4
Current portion of investment in sales-type leases 171.8 185.7 218.3
Inventories 7,623.3 8,775.6 7,361.0
Prepaid expenses and other 776.0 710.5 649.9
Assets held for sale from discontinued operations 170.1 218.1 -
------------------------ ------------------------ -----------------------
Total current assets 13,249.6 13,280.4 11,906.6
------------------------ ------------------------ -----------------------
Property and equipment - net 2,089.5 2,005.1 1,894.4
Investment in sales-type leases 557.3 589.5 618.6
Other assets 2,625.0 2,605.5 2,018.4
------------------------ ------------------------ -----------------------
TOTAL ASSETS $ 18,521.4 $ 18,480.5 $ 16,438.0
======================== ======================== =======================
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES
Notes payable - banks and current portion of
long-term obligations $ 228.7 $ 26.5 $ 18.2
Accounts payable 5,288.4 6,465.2 5,504.5
Other accrued liabilities 1,733.0 1,465.0 1,287.7
Liabilities from discontinued operations 64.3 90.2 -
------------------------ ------------------------ -----------------------
Total current liabilities 7,314.4 8,046.9 6,810.4
------------------------ ------------------------ -----------------------
Long-term obligations, less current portion 2,471.9 2,328.2 2,207.0
Deferred taxes and other liabilities 977.0 860.8 1,027.6
Total shareholders' equity 7,758.1 7,244.6 6,393.0
------------------------ ------------------------ -----------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 18,521.4 $ 18,480.5 $ 16,438.0
======================== ======================== =======================
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CARDINAL HEALTH, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN MILLIONS)
THREE MONTHS ENDED FOR THE YEAR ENDED
--------------------------------- ----------------------------------
JUNE 30, JUNE 30,
--------------------------------- ----------------------------------
2003 2002 2003 2002
---------------- --------------- ----------------- ---------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Earnings from continuing operations before
cumulative effect of change in accounting $371.2 $296.3 $1,411.9 $1,126.3
Adjustments to reconcile earnings from
continuing operations before cumulative
effect of change in accounting to net
cash from operations:
Depreciation and amortization 70.6 62.0 265.8 243.5
Change in operating assets and liabilities,
net of effects from acquisitions:
(Increase)/decrease in trade receivables 60.9 315.5 (397.6) 188.0
(Increase)/decrease in inventories 1,152.3 538.1 (234.4) (1,071.1)
(Increase)/decrease in net investment in
sales-type leases 46.1 (62.7) 107.8 71.2
Increase/(decrease) in accounts payable (1,176.8) 233.9 (281.2) 179.2
Other operating items - net 357.9 43.6 525.7 246.8
--------------------------------- ----------------------------------
Net cash provided by operating activities 882.2 1,426.7 1,398.0 983.9
--------------------------------- ----------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of subsidiaries, net of cash acquired (23.6) (372.9) (26.8) (383.8)
Proceeds from sale of property, equipment, and
other assets 16.0 0.7 57.7 18.3
Additions to property and equipment (159.1) (99.3) (423.2) (285.4)
Proceeds from sale of discontinued operations 40.8 - 48.6 -
---------------- --------------- ----------------------------------
Net cash used in investing activities (125.9) (471.5) (343.7) (650.9)
--------------------------------- ----------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in commercial paper and short-term debt 1.8 (300.0) 8.5 (9.7)
Net change in long-term obligations 359.9 34.0 318.4 342.7
Proceeds from issuance of Common Shares 72.0 27.8 197.3 140.0
Purchase of Treasury Stock - (188.2) (1,191.7) (308.3)
Other (11.2) (16.0) (44.8) (49.8)
--------------------------------- ----------------------------------
Net cash provided by/(used in) financing
activities 422.5 (442.4) (712.3) 114.9
--------------------------------- ----------------------------------
NET INCREASE IN CASH AND EQUIVALENTS 1,178.8 512.8 342.0 447.9
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 545.2 869.2 1,382.0 934.1
--------------------------------- ----------------------------------
CASH AND EQUIVALENTS AT END OF PERIOD $ 1,724.0 $ 1,382.0 $ 1,724.0 $ 1,382.0
================================= ==================================
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CARDINAL HEALTH, INC. - FOURTH QUARTER FY 2003 BUSINESS ANALYSIS
($ MILLIONS)
PHARMACEUTICAL DISTRIBUTION AND PROVIDER SERVICES
-------------------------------------------------
2003 2002 COMMENT
---- ---- -------
. REVENUE
-------
- Amount $10,925 $9,610 RECORD
- Growth Rate 14% 17%
- Mix 81% 82%
. OPERATING EARNINGS
------------------
- Amount $320 $290 Q4 RECORD
- Growth Rate 11% 21% 14% excluding LIFO
- Mix 47% 50%
. RATIO TO REVENUE
----------------
- Gross Margin 4.47% 4.85% LIFO impact 8 bp
- Expenses 1.54% 1.84% RECORD LOW
- Operating Earnings 2.93% 3.01% LIFO impact 8 bp
. PRODUCTIVITY
------------
- Margin Per Expense Dollar $2.91 $2.64 10% improvement
. ASSET MANAGEMENT
----------------
- Average Committed Capital $3,518 $3,447 2% increase
- Return On Committed Capital 37.1% 33.4% Q4 RECORD
- Operating Cash Flow $255 $1,073 Timing - full year + 200M
- Capital Expenditures Investment $18 $29
MEDICAL PRODUCTS AND SERVICES
-----------------------------
2003 2002 COMMENT
---- ---- -------
. REVENUE
-------
- Amount $1,737 $1,631 RECORD
- Growth Rate 7% 5%
- Mix 13% 14%
. OPERATING EARNINGS
------------------
- Amount $158 $144 Q4 RECORD
- Growth Rate 10% 12%
- Mix 23% 25%
. RATIO TO REVENUE
----------------
- Gross Margin 22.23% 21.69% Self-manufactured mix
- Expenses 13.14% 12.84% Expense timing
- Operating Earnings 9.09% 8.85% Q4 RECORD
. PRODUCTIVITY
------------
- Margin Per Expense Dollar $1.69 $1.69
. ASSET MANAGEMENT
----------------
- Average Committed Capital $1,585 $1,466 Working capital productivity
- Return On Committed Capital 39.9% 39.3% Q4 RECORD
- Operating Cash Flow $343 $291 RECORD
- Capital Expenditures Investment $44 $36
PHARMACEUTICAL TECHNOLOGIES AND SERVICES
----------------------------------------
2003 2002 COMMENT
---- ---- -------
. REVENUE
-------
- Amount $650 $391 RECORD
- Growth Rate 66% 14% Syncor impact
- Mix 5% 3%
. OPERATING EARNINGS
------------------
- Amount $116 $77 RECORD
- Growth Rate 51% 16% Syncor impact
- Mix 17% 13%
. RATIO TO REVENUE
----------------
- Gross Margin 33.00% 33.72% Syncor impact, mix
- Expenses 15.12% 13.99% Syncor impact
- Operating Earnings 17.88% 19.73%
. PRODUCTIVITY
------------
- Margin Per Expense Dollar $2.18 $2.41 Syncor impact
. ASSET MANAGEMENT
----------------
- Average Committed Capital $1,249 $1,018 Syncor, investments
- Return On Committed Capital 37.2% 30.3% RECORD
- Operating Cash Flow $153 $94 RECORD
- Capital Expenditures Investment $61 $30
AUTOMATION AND INFORMATION SERVICES
-----------------------------------
2003 2002 COMMENT
---- ---- -------
. REVENUE
-------
- Amount $202 $170 RECORD
- Growth Rate 19% 13%
- Mix 1% 1%
. OPERATING EARNINGS
------------------
- Amount $86 $71 RECORD
- Growth Rate 21% 21%
- Mix 13% 12%
. RATIO TO REVENUE
----------------
- Gross Margin 67.69% 69.61% Mix impact
- Expenses 25.01% 27.80% Productivity
- Operating Earnings 42.68% 41.81% RECORD
. PRODUCTIVITY
------------
- Margin Per Expense Dollar $2.71 $2.51 8% improvement
. ASSET MANAGEMENT
----------------
- Average Committed Capital $572 $620 Q4 lease sale 165M
- Return On Committed Capital 60.3% 45.8% RECORD
- Operating Cash Flow $131 ($31) Q4 lease sale 165M
- Capital Expenditures Investment $2 $4
- Revenue and all ratios to revenue exclude bulk deliveries to customer
warehouses and other customer pass through charges
- Margin per Expense Dollar = Ratio of gross margin to expenses
-- more --
CARDINAL HEALTH, INC. - FOURTH QUARTER FY 2003 BUSINESS ANALYSIS
($ MILLIONS)
TOTAL
-----
2003 2002
---- ----
. REVENUE
-------
- Amount $13,506 $11,766 Excluding Special Items
-------------------------------------
- Growth Rate 15% 15%
2003 2002
---- ----
. OPERATING EARNINGS
------------------
- Amount $575 $471 $625 $541
- Growth Rate 22% 7% 15% 18%
. RATIO TO REVENUE
----------------
- Gross Margin 9.10% 9.03%
- Expenses 4.48% 4.43%
- Special Items 0.36% 0.60%
- Operating Earnings 4.26% 4.00% 4.62% 4.60%
. NET EARNINGS *
--------------
- Amount $371 $296 $405 $341
- Growth Rate 25% 12% 19% 24%
- Ratio to Revenue 2.75% 2.52% 3.00% 2.90%
. PRODUCTIVITY
------------
- Margin Per Expense Dollar $2.03 $2.04
. ASSET MANAGEMENT
----------------
- Average Committed Capital $6,560 $6,167
- Return On Committed Capital 35.4% 30.4% 38.4% 34.9%
- Operating Cash Flow $882 $1,427
- Capital Expenditures Investment $159 $99
- Revenue and all ratios to revenue exclude bulk deliveries to customer
warehouses and other customer pass through charges.
- Margin Per Expense Dollar = Ratio of gross margin to expenses
* The net earnings section is presented before discontinued operations.
-- more --
CARDINAL HEALTH, INC. - FISCAL YEAR 2003 BUSINESS ANALYSIS
($ MILLIONS)
PHARMACEUTICAL DISTRIBUTION AND PROVIDER SERVICES
-------------------------------------------------
2003 2002
---- ----
. REVENUE
-------
- Amount $41,195 $36,248
- Growth Rate 14% 17%
- Mix 82% 82%
. OPERATING EARNINGS
------------------
- Amount $1,220 $1,070
- Growth Rate 14% 23%
- Mix 50% 51%
. RATIO TO REVENUE
----------------
- Gross Margin 4.64% 5.01%
- Expenses 1.68% 2.06%
- Operating Earnings 2.96% 2.95%
. PRODUCTIVITY
------------
- Margin Per Expense Dollar $2.76 $2.43
. ASSET MANAGEMENT
----------------
- Average Committed Capital $3,333 $3,418
- Return On Committed Capital 36.8% 31.2%
- Operating Cash Flow $251 $59
- Capital Expenditures Investment $97 $78
MEDICAL PRODUCTS AND SERVICES
-----------------------------
2003 2002
---- ----
. REVENUE
-------
- Amount $6,616 $6,257
- Growth Rate 6% 6%
- Mix 13% 14%
. OPERATING EARNINGS
------------------
- Amount $605 $541
- Growth Rate 12% 14%
- Mix 24% 26%
. RATIO TO REVENUE
----------------
- Gross Margin 21.93% 21.90%
- Expenses 12.80% 13.27%
- Operating Earnings 9.13% 8.63%
. PRODUCTIVITY
------------
- Margin Per Expense Dollar $1.71 $1.65
. ASSET MANAGEMENT
----------------
- Average Committed Capital $1,529 $1,501
- Return On Committed Capital 39.5% 36.0%
- Operating Cash Flow $498 $599
- Capital Expenditures Investment $85 $88
PHARMACEUTICAL TECHNOLOGIES AND SERVICES
----------------------------------------
2003 2002
---- ----
. REVENUE
-------
- Amount $2,049 $1,418
- Growth Rate 44% 12%
- Mix 4% 3%
. OPERATING EARNINGS
------------------
- Amount $368 $279
- Growth Rate 32% 16%
- Mix 15% 13%
. RATIO TO REVENUE
----------------
- Gross Margin 33.08% 34.13%
- Expenses 15.11% 14.52%
- Operating Earnings 17.97% 19.61%
. PRODUCTIVITY
------------
- Margin Per Expense Dollar $2.19 $2.35
. ASSET MANAGEMENT
----------------
- Average Committed Capital $1,172 $980
- Return On Committed Capital 31.4% 28.4%
- Operating Cash Flow $332 $208
- Capital Expenditures Investment $183 $104
AUTOMATION AND INFORMATION SERVICES
-----------------------------------
2003 2002
---- ----
. REVENUE
-------
- Amount $667 $560
- Growth Rate 19% 19%
- Mix 1% 1%
. OPERATING EARNINGS
------------------
- Amount $265 $209
- Growth Rate 27% 23%
- Mix 11% 10%
. RATIO TO REVENUE
----------------
- Gross Margin 70.31% 68.52%
- Expenses 30.40% 31.17%
- Operating Earnings 39.91% 37.35%
. PRODUCTIVITY
------------
- Margin Per Expense Dollar $2.31 $2.20
. ASSET MANAGEMENT
----------------
- Average Committed Capital $612 $586
- Return On Committed Capital 43.5% 35.7%
- Operating Cash Flow $317 $118
- Capital Expenditures Investment $11 $15
- Revenue and all ratios to revenue exclude bulk deliveries to customer
warehouses and other customer pass through charges
- Margin per Expense Dollar = Ratio of gross margin to expenses
-- more --
CARDINAL HEALTH, INC. - FISCAL YEAR 2003 BUSINESS ANALYSIS
($ MILLIONS)
TOTAL
-----
2003 2002
---- ----
. REVENUE
-------
- Amount $50,467 $44,394 Excluding Special Items
---------------------------------------
- Growth Rate 14% 15%
2003 2002
---- ----
. OPERATING EARNINGS
------------------
- Amount $2,242 $1,834 $2,282 $1,973
- Growth Rate 22% 19% 16% 19%
. RATIO TO REVENUE
----------------
- Gross Margin 8.94% 9.11%
- Expenses 4.42% 4.67%
- Special Items 0.08% 0.31%
- Operating Earnings 4.44% 4.13% 4.52% 4.44%
. NET EARNINGS*
-------------
- Amount $1,412 $1,126 $1,445 $1,213
- Growth Rate 25% 25% 19% 23%
- Ratio to Revenue 2.80% 2.54% 2.86% 2.73%
. PRODUCTIVITY
------------
- Margin Per Expense Dollar $2.02 $1.95
. ASSET MANAGEMENT
----------------
- Average Committed Capital $6,226 $6,054
- Return On Committed Capital 36.1% 30.3% 36.7% 32.5%
- Operating Cash Flow $1,398 $984
- Capital Expenditures Investment $423 $285
- Revenue and all ratios to revenue exclude bulk deliveries to customer
warehouses and other customer pass through charges
- Margin Per Expense Dollar = Ratio of gross margin to expenses
* The net earnings section is presented before discontinued operations and
the cumulative effect of change in accounting.
-- more --
CARDINAL HEALTH, INC. - QUARTERLY FY 2003 BUSINESS ANALYSIS
($ MILLIONS)
PHARMACEUTICAL DISTRIBUTION AND PROVIDER SERVICES
-------------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
-- -- -- -- -----
. REVENUE
-------
- Amount $9,319 $10,505 $10,446 $10,925 $41,195
- Growth Rate 17% 14% 10% 14% 14%
- Mix 82% 83% 81% 81% 82%
. OPERATING EARNINGS
------------------
- Amount $262 $295 $343 $320 $1,220
- Growth Rate 20% 17% 11% 11% 14%
- Mix 50% 50% 52% 47% 50%
. RATIO TO REVENUE
----------------
- Gross Margin 4.82% 4.43% 4.88% 4.47% 4.64%
- Expenses 2.01% 1.62% 1.60% 1.54% 1.68%
- Operating Earnings 2.81% 2.81% 3.28% 2.93% 2.96%
. PRODUCTIVITY
------------
- Margin Per Expense Dollar $2.40 $2.73 $3.05 $2.91 $2.76
. ASSET MANAGEMENT
----------------
- Average Committed Capital $3,090 $3,332 $3,507 $3,518 $3,333
- Return On Committed Capital 33.9% 35.4% 39.1% 37.1% 36.8%
- Operating Cash Flow ($74) $81 ($11) $255 $251
- Capital Expenditures Investment $24 $38 $17 $18 $97
MEDICAL PRODUCTS AND SERVICES
-----------------------------
Q1 Q2 Q3 Q4 TOTAL
-- -- -- -- -----
. REVENUE
-------
- Amount $1,595 $1,639 $1,645 $1,737 $6,616
- Growth Rate 6% 5% 5% 7% 6%
- Mix 14% 13% 13% 13% 13%
. OPERATING EARNINGS
------------------
- Amount $139 $144 $164 $158 $605
- Growth Rate 10% 10% 18% 10% 12%
- Mix 27% 24% 24% 23% 24%
. RATIO TO REVENUE
----------------
- Gross Margin 20.91% 21.57% 22.96% 22.23% 21.93%
- Expenses 12.21% 12.81% 13.01% 13.14% 12.80%
- Operating Earnings 8.70% 8.76% 9.95% 9.09% 9.13%
. PRODUCTIVITY
------------
- Margin Per Expense Dollar $1.71 $1.68 $1.77 $1.69 $1.71
. ASSET MANAGEMENT
----------------
- Average Committed Capital $1,445 $1,534 $1,632 $1,585 $1,529
- Return On Committed Capital 38.4% 37.5% 40.1% 39.9% 39.5%
- Operating Cash Flow $60 $54 $41 $343 $498
- Capital Expenditures Investment $12 $14 $15 $44 $85
PHARMACEUTICAL TECHNOLOGIES AND SERVICES
----------------------------------------
Q1 Q2 Q3 Q4 TOTAL
-- -- -- -- -----
. REVENUE
-------
- Amount $387 $416 $596 $650 $2,049
- Growth Rate 19% 17% 73% 66% 44%
- Mix 3% 3% 5% 5% 4%
. OPERATING EARNINGS
------------------
- Amount $73 $85 $94 $116 $368
- Growth Rate 18% 16% 43% 51% 32%
- Mix 14% 14% 14% 17% 15%
. RATIO TO REVENUE
----------------
- Gross Margin 34.09% 34.18% 31.75% 33.00% 33.08%
- Expenses 15.33% 13.72% 15.92% 15.12% 15.11%
- Operating Earnings 18.76% 20.46% 15.83% 17.88% 17.97%
. PRODUCTIVITY
------------
- Margin Per Expense Dollar $2.22 $2.49 $1.99 $2.18 $2.19
. ASSET MANAGEMENT
----------------
- Average Committed Capital $1,070 $1,162 $1,265 $1,249 $1,172
- Return On Committed Capital 27.2% 29.3% 29.8% 37.2% 31.4%
- Operating Cash Flow $4 $43 $132 $153 $332
- Capital Expenditures Investment $33 $46 $43 $61 $183
AUTOMATION AND INFORMATION SERVICES
-----------------------------------
Q1 Q2 Q3 Q4 TOTAL
-- -- -- -- -----
. REVENUE
-------
- Amount $134 $165 $166 $202 $667
- Growth Rate 24% 18% 17% 19% 19%
- Mix 1% 1% 1% 1% 1%
. OPERATING EARNINGS
------------------
- Amount $46 $69 $64 $86 $265
- Growth Rate 55% 26% 21% 21% 27%
- Mix 9% 12% 10% 13% 11%
. RATIO TO REVENUE
----------------
- Gross Margin 70.86% 73.51% 69.89% 67.69% 70.31%
- Expenses 36.35% 31.42% 31.17% 25.01% 30.40%
- Operating Earnings 34.51% 42.09% 38.72% 42.68% 39.91%
. PRODUCTIVITY
------------
- Margin Per Expense Dollar $1.95 $2.34 $2.24 $2.71 $2.31
. ASSET MANAGEMENT
----------------
- Average Committed Capital $682 $626 $578 $572 $612
- Return On Committed Capital 27.1% 44.3% 44.5% 60.3% 43.5%
- Operating Cash Flow ($4) $195 ($5) $131 $317
- Capital Expenditures Investment $2 $4 $3 $2 $11
- Revenue and all ratios to revenue exclude bulk deliveries to customer
warehouses and other customer pass through charges.
- Margin Per Expense Dollar = Ratio of gross margin to expenses
-- more --
CARDINAL HEALTH, INC. - QUARTERLY FY 2003 BUSINESS ANALYSIS
($ MILLIONS)
TOTAL (EXCLUDING SPECIAL ITEMS)
-------------------------------
Q1 Q2 Q3 Q4 TOTAL
-- -- -- -- -----
. REVENUE
-------
- Amount $11,417 $12,706 $12,837 $13,506 $50,467
- Growth Rate 16% 13% 11% 15% 14%
. OPERATING EARNINGS
------------------
- Amount $486 $553 $618 $625 $2,282
- Growth Rate 18% 14% 16% 15% 16%
. RATIO TO REVENUE
----------------
- Gross Margin 8.82% 8.50% 9.30% 9.10% 8.94%
- Expenses 4.56% 4.14% 4.49% 4.48% 4.42%
- Operating Earnings 4.26% 4.36% 4.81% 4.62% 4.52%
. NET EARNINGS*
-------------
- Amount $304 $345 $391 $405 $1,445
- Growth Rate 20% 18% 20% 19% 19%
- Ratio to Revenue 2.66% 2.72% 3.05% 3.00% 2.86%
. PRODUCTIVITY
------------
- Margin Per Expense Dollar $1.93 $2.05 $2.07 $2.03 $2.02
. ASSET MANAGEMENT
----------------
- Average Committed Capital $5,894 $6,158 $6,479 $6,560 $6,226
- Return On Committed Capital 33.0% 35.9% 38.2% 38.4% 36.7%
- Operating Cash Flow ($14) $373 $157 $882 $1,398
- Capital Expenditures Investment $71 $102 $91 $159 $423
- Revenue and all ratios to revenue exclude bulk deliveries to customer
warehouses and other customer pass through charges.
- Margin Per Expense Dollar = Ratio of gross margin to expenses
- The sum of the quarters may not equal year-to-date due to rounding.
* The net earnings section is presented before discontinued operations.
-- more --
CARDINAL HEALTH, INC. - FISCAL 2003 AND 2002 ASSET MANAGEMENT ANALYSIS
($ MILLIONS)
2003
----
Q1 Q2 Q3 Q4 YTD COMMENT
-- -- -- -- --- -------
. RECEIVABLE DAYS 19 17 18 17 TIES RECORD LOW
. INVENTORY TURNS 6.8 7.0 6.2 6.6
. CASH $946 $999 $545 $1,724
. DEBT $2,255 $2,260 $2,355 $2,701 $500M issued Q4
. EQUITY $6,354 $6,532 $7,245 $7,758
. NET DEBT/TOTAL CAPITAL 17% 16% 20% 11% RECORD LOW
. TANGIBLE NET WORTH $4,786 $4,960 $4,927 $5,406
. RETURN ON EQUITY 18.1% 22.8% 22.4% 19.8% 20.6%
EXCLUDING SPECIAL ITEMS 19.0% 21.5% 22.7% 21.5% 21.1% RECORD
. TAX RATE 34.0% 34.3% 33.4% 32.8% 33.6%
EXCLUDING SPECIAL ITEMS 33.3% 33.8% 33.4% 32.8% 33.3% Business/ Int'l
mix
2002
----
Q1 Q2 Q3 Q4 YTD
-- -- -- -- ---
. RECEIVABLE DAYS 20 19 18 17
. INVENTORY TURNS 6.0 5.6 5.5 6.7
. CASH $872 $399 $869 $1,382
. DEBT $2,315 $2,480 $2,481 $2,225
. EQUITY $5,670 $5,863 $6,209 $6,393
. NET DEBT/TOTAL CAPITAL 20% 26% 21% 12%
. TANGIBLE NET WORTH $4,503 $4,697 $5,031 $4,849
. RETURN ON EQUITY 17.8% 19.7% 19.9% 18.8% 19.0%
EXCLUDING SPECIAL ITEMS 18.3% 20.3% 21.5% 21.5% 20.5%
. TAX RATE 33.7% 34.3% 33.8% 33.4% 33.8%
EXCLUDING SPECIAL ITEMS 33.8% 34.4% 34.1% 33.9% 34.1%
-- more --
CARDINAL HEALTH, INC. - GAAP/NON-GAAP RECONCILIATION
($ MILLIONS)
FOURTH QUARTER FISCAL 2003
--------------------------
GAAP* EXCLUDING
BASIS SPECIAL ITEMS SPECIAL ITEMS
----- ------------- -------------
. SPECIAL ITEMS
-------------
- Merger Related Costs $25 $25 -
- Restructuring and Other $26 $26 -
- Litigation Settlements ($2) ($2) -
. OPERATING EARNINGS
------------------
- Amount $576 $49 $625
- Growth Rate 22% 15%
- Ratio to Revenue (Return on Sales) 4.26% 4.62%
. NET EARNINGS**
--------------
- Amount $371 $34 $405
- Growth Rate 25% 19%
- Ratio to Revenue 2.75% 3.00%
- Diluted EPS $0.82 $0.07 $0.89
. INCOME TAX PROVISION
--------------------
-Income Tax Provision ($182) ($15) ($197)
PHARMARCEUTICAL DISTRIBUTION AND PROVIDER SERVICES
--------------------------------------------------
GAAP* LIFO EXCLUDING
BASIS CHARGE LIFO
----- -------- -------------
. OPERATING EARNINGS
------------------
- Amount $320.5 $5.7 $326.2
- Growth Rate 11% 14%
FISCAL 2003
-----------
GAAP* EXCLUDING
BASIS SPECIAL ITEMS SPECIAL ITEMS
----- ------------- -------------
. SPECIAL ITEMS
-------------
- Merger Related Costs $74 $74 -
- Restructuring Items $67 $67 -
- Litigation Settlement ($101) ($101) -
. OPERATING EARNINGS
------------------
- Amount $2,242 $40 $2,282
- Growth Rate 22% 16%
- Ratio to Revenue (Return on Sales) 4.44% 4.52%
. NET EARNINGS**
--------------
- Amount $1,412 $33 $1,445
- Growth Rate 25% 19%
- Ratio to Revenue 2.80% 2.86%
- Diluted EPS $3.12 $0.07 $3.19
. INCOME TAX PROVISION
--------------------
- Income Tax Provision ($715) ($7) ($722)
PHARMACEUTICAL DISTRIBUTION AND PROVIDER SERVICES
-------------------------------------------------
GAAP* LIFO EXCLUDING
BASIS CHARGE LIFO
----- ------ ----
. OPERATING EARNINGS
------------------
- Amount $1,220.1 $5.7 $1,225.8
- Growth Rate 14% 15%
FOURTH QUARTER FISCAL 2002
--------------------------
GAAP* EXCLUDING
BASIS SPECIAL ITEMS SPECIAL ITEMS
----- ------------- -------------
. SPECIAL ITEMS
-------------
- Merger Related Costs $63 $63 -
- Restructuring and Other $7 $7 -
. OPERATING EARNINGS
------------------
- Amount $471 $70 $541
- Growth Rate 7% 18%
- Ratio to Revenue (Return on Sales) 4.00% 4.60%
. NET EARNINGS**
--------------
- Amount $296 $45 $341
- Growth Rate 12% 24%
- Ratio to Revenue 2.52% 2.90%
- Diluted EPS $0.64 $0.10 $0.74
. INCOME TAX PROVISION
--------------------
-Income Tax Provision ($149) ($25) ($174)
PHARMARCEUTICAL DISTRIBUTION AND PROVIDER SERVICES
--------------------------------------------------
GAAP* LIFO EXCLUDING
BASIS CREDIT LIFO
----- -------- -------------
. OPERATING EARNINGS
------------------
- Amount $289.6 ($2.3) $287.3
FISCAL 2002
- -----------
GAAP* EXCLUDING
BASIS SPECIAL ITEMS SPECIAL ITEMS
----- ------------- -------------
. SPECIAL ITEMS
-------------
- Merger Related Costs $132 $132 -
- Restructuring and Other $7 $7 -
. OPERATING EARNINGS
------------------
- Amount $1,834 $139 $1,973
- Growth Rate 19% 19%
- Ratio to Revenue (Return on Sales) 4.13% 4.44%
. NET EARNINGS***
---------------
- Amount $1,126 $87 $1,213
- Growth Rate 25% 23%
- Ratio to Revenue 2.54% 2.73%
- Diluted EPS $2.45 $0.19 $2.64
. INCOME TAX PROVISION
--------------------
- Income Tax Provision ($575) ($52) ($627)
PHARMACEUTICAL DISTRIBUTION AND PROVIDER SERVICES
-------------------------------------------------
GAAP* LIFO EXCLUDING
BASIS CREDIT LIFO
----- ------ ----
. OPERATING EARNINGS
------------------
- Amount $1,069.4 ($2.3) $1,067.1
* GAAP - Amounts that conform with generally accepted accounting principles.
** The net earnings section is presented before discontinued operations.
*** The net earnings section is presented before discontinued operations and
cumulative effect of change in accounting.
DEFINITIONS:
RETURN ON COMMITTED CAPITAL (EXCLUDING SPECIAL ITEMS) = Operating Earnings
Excluding Special Items (Annualized) / Average Committed Capital
RETURN ON EQUITY (EXCLUDING SPECIAL ITEMS) = Net Earnings Excluding Special
Items (Annualized) / (Average Shareholders Equity + Average Special Items After
Tax)
EFFECTIVE TAX RATE (EXCLUDING SPECIAL ITEMS) = (Income Tax Provision + Tax
Effect of Special Items) / (Earnings Before Income Taxes + Special Items)
NET DEBT / TOTAL CAPITAL = (Long-term Obligations + Notes Payable Banks and
Current Portion of Long-term Obligations - Cash and Equivalents)/ (Shareholders
Equity + Net Debt)
###