FRANKLIN LAKES, N.J.,
July 21, 2011 /PRNewswire/ --
Second-Quarter 2011 Highlights:
- GAAP diluted earnings per share (EPS) increased 10.4 percent to
$0.85 from $0.77 in second-quarter 2010
- Diluted EPS, excluding all intangible amortization, increased
10.3 percent to $0.96 from
$0.87 in second-quarter 2010
- Total net revenues increased 4.1 percent to a record of
$17.1 billion
- Gross margin increased 4.1 percent to over $1.1 billion, representing a gross margin
percentage of 6.5 percent, consistent with second-quarter 2010
- EBITDA increased 0.8 percent to $736.1
million, and EBITDA per adjusted prescription increased
slightly to $3.07
- Mail-order prescriptions increased 0.7 percent to 27.7 million,
including generic mail-order prescriptions, which increased 6.0
percent to a record 17.8 million
- Overall generic dispensing rate increased 2.8 percentage points
to a record 73.4 percent; mail-order generic dispensing rate
increased 3.1 percentage points to a record 64.3 percent
- Specialty pharmacy revenues increased 13.2 percent to a record
$3.2 billion; specialty operating
income increased 20.8 percent to a record $132.8 million
2011 Guidance Reaffirmed:
- Full-year 2011 GAAP diluted EPS expected in the range of
$3.59 to $3.69, representing growth
of 14 to 17 percent over 2010
- Full-year 2011 guidance for diluted EPS, excluding all
intangible amortization, expected in the range of $4.02 to $4.12, representing growth of 13 to 16
percent over the 2010 full-year equivalent of $3.55 (please see Table 9)
Medco Health Solutions, Inc. (NYSE: MHS) today reported
second-quarter 2011 GAAP diluted EPS of $0.85, up 10.4 percent compared to $0.77 for the second quarter of 2010. Adjusting
for all amortization of intangible assets, second-quarter 2011
diluted earnings per share increased 10.3 percent to $0.96, up from $0.87 in the second quarter of 2010. When
excluding the second-quarter 2010 benefit from a settlement award
in a class action antitrust lawsuit brought by direct purchasers of
a brand-name medication, second-quarter 2011 diluted EPS, excluding
all intangible amortization, increased 14.3 percent from
second-quarter 2010.
(LOGO:
http://photos.prnewswire.com/prnh/20100609/MEDCOLOGO )
“Medco’s second-quarter results are characterized by strong
performance across the enterprise. We generated record revenues
that include a 43.3 percent increase in service revenues driven
primarily by UnitedBioSource Corp (UBC) and growth across our
portfolio of service offerings. Record specialty operating income,
continued strong performance in Medicare, and record generic
mail-order volume and generic dispensing rates also contributed to
our earnings per share growth this quarter. Importantly, our margin
percentage profile is stable and expected to grow in the future,”
said David B. Snow Jr., chairman and
chief executive officer of Medco.
For 2011, annualized new-named sales total nearly $3.0 billion, up from our previously reported
$1.7 billion and net-new sales for
2011 are $2.1 billion, up from our
previously reported $1.5 billion.
Our 2011 client retention rate remains at over 99
percent.
“With the 2012 selling season still in progress, our annualized
new-named sales for 2012 stand at more than $800 million. Net-new sales are currently
negative for 2012 due to the previously announced transitions of
the Federal Employee Health Benefits Program and CalPERS, and
Universal American/Member Health and Bravo Health due to the
previously announced acquisitions of these businesses. Due to
trends in the industry from the expected growth in generics,
specialty pharmacy, and personalized medicine, combined with UBC
and our unique clinical model that reduces the total cost of
healthcare for our clients, we are confident that we can drive
meaningful long-term earnings growth,” concluded Snow.
Second-Quarter Financial and Operational Results
Medco reported record second-quarter 2011 net revenues of
$17.1 billion, representing a 4.1
percent increase over second-quarter 2010 -- primarily the result
of contributions from new client wins and higher prices charged by
brand-name pharmaceutical manufacturers, partially offset by higher
volumes of lower-priced generic drugs. This performance includes
service revenue growth of 43.3 percent, reflecting the UBC
acquisition and growth in Medco’s client service offerings across
the company.
Medco’s generic dispensing rate increased 2.8 percentage points
from second-quarter 2010 to a record 73.4 percent. The mail-order
generic dispensing rate increased 3.1 percentage points to a record
64.3 percent, while the retail generic dispensing rate increased
2.7 percentage points to a record 75.0 percent. The year-over-year
improvement in the overall generic dispensing rate drove
incremental savings of approximately $900
million for Medco’s clients and members in the quarter.
Total prescription volume, adjusting for the difference in days
supply between mail-order and retail amounted to 239.7 million, an
increase of 0.5 percent over second-quarter 2010. Mail-order
prescription volume increased 0.7 percent to 27.7 million.
Importantly, generic mail-order prescription volumes increased 6.0
percent to a record 17.8 million, while brand-name mail-order
prescription volumes decreased 7.5 percent to 9.9 million in the
second quarter of 2011.
Retail prescription volumes increased 0.4 percent over
second-quarter 2010, reaching 157.4 million. The second-quarter
2011 adjusted mail-order penetration rate of 34.3 percent was
consistent with the second quarter of 2010.
Total gross margin for second-quarter 2011 exceeded $1.1 billion, representing a 4.1 percent increase
over second-quarter 2010. The total gross margin percentage of 6.5
percent was consistent with second-quarter 2010. When excluding the
benefit from the settlement award in the second quarter of 2010,
the gross margin percentage for second-quarter 2011 reflects an
increase of approximately 20 basis points, primarily reflecting the
strong second-quarter 2011 generic mail-order prescription volume
and growth in service margin.
Total selling, general and administrative (SG&A) expenses of
$420.3 million increased 11.7
percent, or $43.9 million, from
second-quarter 2010, largely reflecting increased expenses
associated with the recently-acquired UBC business, as well as
higher professional fees and technology-related expenses associated
with strategic initiatives. When excluding the effect of the
September 2010 UBC acquisition,
SG&A expenses increased less than 6 percent over second-quarter
2010.
Earnings Before Interest and Other Income/Expense, Taxes,
Depreciation and Amortization (EBITDA) for the quarter reached
$736.1 million, an increase of 0.8
percent, or $5.9 million, over the
same period last year. EBITDA per adjusted prescription for
second-quarter 2011 reached $3.07, up
0.3 percent from $3.06 in the second
quarter of 2010 (please see Table 6). When excluding the
second-quarter 2010 settlement award, EBITDA increased 4.7 percent
and EBITDA per adjusted prescription increased 4.1 percent from
second-quarter 2010.
Total interest and other (income) expense, net, of $54.2 million in second-quarter 2011 increased
$21.7 million compared to the same
period in 2010, reflecting higher debt levels from the $1.0 billion senior notes issuance in
September 2010 associated with the
acquisition of UBC.
Income before the provision for income taxes for the second
quarter decreased 4.2 percent to $557.6
million, compared to $582.1
million for the second quarter of 2010. When excluding the
second-quarter 2010 settlement award, income before the provision
for income taxes for second-quarter 2011 increased 0.5 percent from
second-quarter 2010.
The second-quarter 2011 effective tax rate was 38.5 percent
compared to 38.7 percent in second-quarter 2010.
Net income decreased 4.0 percent over the same quarter last year
to $342.8 million. When excluding the
previously mentioned second-quarter 2010 settlement award, net
income for second-quarter 2011 increased 0.7 percent from
second-quarter 2010.
Specialty Pharmacy
For second-quarter 2011, revenues for Accredo Health Group grew
13.2 percent to a record $3.2
billion. This strong performance primarily reflects growth
in prescription volumes, increases in manufacturer brand pricing,
broader utilization of specialty products, and the impact of
recently introduced drugs.
The Accredo second-quarter 2011 gross margin percentage of 6.7
percent compares to 7.0 percent for second-quarter 2010, reflecting
changes in product and channel mix. Accredo’s operating income for
second-quarter 2011 grew 20.8 percent to a record $132.8 million.
Share Repurchase Programs
During the second quarter of 2011, Medco repurchased 9.6 million
shares at a cost of $600 million,
representing an average per-share cost of $62.44 through a pre-authorized trading plan. For
the month of July 2011 to-date, Medco
repurchased 6.3 million shares at a cost of $350 million, representing an average per-share
cost of $55.89. For July 2011 year-to-date, Medco repurchased 29.3
million shares at a cost of $1,786.6
million, representing an average per-share cost of
$60.93.
2011 Guidance Reaffirmed
Medco continues to expect to achieve full-year 2011 GAAP diluted
EPS in the range of $3.59 to $3.69,
representing growth of 14 to 17 percent over 2010. Diluted EPS,
excluding all intangible amortization, is expected in the range of
$4.02 to $4.12, representing growth
of 13 to 16 percent over the 2010 full-year equivalent of
$3.55 (please see Table 9).
Richard Rubino, chief financial
officer noted, “We are pleased to deliver strong EPS that are even
more impressive when the second-quarter 2010 benefit from the
settlement award is excluded, resulting in a second-quarter 2011
diluted EPS increase of 14.3 percent over second-quarter 2010,
excluding all intangible amortization. We have entered the second
half of the year in a strong financial position with a healthy
balance sheet, including record low inventory levels of
$833 million - - the lowest level
since 2001, and a continued strong return on invested capital of
over 30 percent. We remain confident in our expected GAAP
diluted earnings per share growth of 14 to 17 percent for the full
year.”
Use of Non-GAAP Measures
Medco calculates and uses EBITDA and EBITDA per adjusted
prescription as indicators of its ability to generate cash from its
reported operating results. These measurements are used in
concert with net income and cash flows from operations, which
measure actual cash generated in the period. In addition,
Medco believes that EBITDA and EBITDA per adjusted prescription are
supplemental measurement tools used by analysts and investors to
help evaluate overall operating performance and the ability to
incur and service debt and make capital expenditures. EBITDA
does not represent funds available for Medco’s discretionary use
and is not intended to represent or to be used as a substitute for
net income or cash flows from operations data, as measured under
U.S. generally accepted accounting principles (GAAP). The
items excluded from EBITDA, but included in the calculation of
reported net income, are significant components of the consolidated
statements of income and must be considered in performing a
comprehensive assessment of overall financial performance.
EBITDA, and the associated year-to-year trends, should not be
considered in isolation. Medco’s calculation of EBITDA may not be
consistent with calculations of EBITDA used by other companies.
EBITDA per adjusted prescription is calculated by dividing
EBITDA by the adjusted prescription volume for the period.
This measure is used as an indicator of EBITDA performance on
a per-unit basis, providing insight into the cash-generating
ability of each prescription. EBITDA, and as a result, EBITDA
per adjusted prescription, are affected by the changes in
prescription volumes between retail and mail order, the relative
representation of brand-name, generic and specialty pharmacy drugs,
as well as the level of efficiency in the business. Adjusted
prescription volume equals substantially all mail-order
prescriptions multiplied by three, plus retail prescriptions.
These mail-order prescriptions are multiplied by three to
adjust for the fact that they include approximately three times the
amount of product days supplied compared with retail
prescriptions.
Medco uses diluted earnings per share, excluding all intangible
amortization, as a supplemental measure of operating performance.
Medco believes that diluted earnings per share, excluding all
intangible amortization, is a valuable supplemental measurement
tool used by analysts and investors to compare our overall
operating performance with our industry peers.
About Medco
Medco Health Solutions, Inc. (NYSE: MHS) is pioneering the
world’s most advanced pharmacy® and its clinical
research and innovations are part of Medco making medicine
smarter™ for more than 65 million members.
With more than 20,000 employees dedicated to improving patient
health and reducing costs for a wide range of public and private
sector clients, and 2010 revenues of $66
billion, Medco ranks 34th on the 2011
Fortune 500 list and is named among the world’s most
innovative, most admired and most trustworthy companies.
For more information, go to http://www.medcohealth.com.
This press release contains "forward-looking statements" as that
term is defined in the Private Securities Litigation Reform Act of
1995. These statements involve risks and uncertainties that may
cause results to differ materially from those set forth in the
statements. No forward-looking statement can be guaranteed, and
actual results may differ materially from those projected. We
undertake no obligation to publicly update any forward-looking
statement, whether as a result of new information, future events or
otherwise. Forward-looking statements are not historical facts, but
rather are based on current expectations, estimates, assumptions
and projections about the business and future financial results of
the pharmacy benefit management ("PBM") and specialty pharmacy
industries, and other legal, regulatory and economic developments.
We use words such as "anticipates," "believes," "plans," "expects,"
"projects," "future," "intends," "may," "will," "should," "could,"
"estimates," "predicts," "potential," "continue," "guidance" and
similar expressions to identify these forward-looking statements.
Medco’s actual results could differ materially from the results
contemplated by these forward-looking statements due to a number of
factors, including those set forth below.
- Competition in the PBM, specialty pharmacy and broader
healthcare industry is intense and could impair our ability to
attract and retain clients;
- Failure to retain key clients and their members, either as a
result of economic conditions, increased competition or other
factors, could result in significantly decreased revenues, harm to
our reputation and decreased profitability;
- Government efforts to reduce healthcare costs and alter
healthcare financing practices could lead to a decreased demand for
our services or to reduced profitability;
- Failure in continued execution of our retiree strategy,
including the potential loss of Medicare Part D-eligible members,
could adversely impact our business and financial results;
- If we or our suppliers fail to comply with complex and
evolving laws and regulations domestically and internationally, we
could suffer penalties, be required to pay substantial damages
and/or make significant changes to our operations;
- If we do not continue to earn and retain purchase discounts,
rebates and service fees from manufacturers at current levels, our
gross margins may decline;
- From time to time we engage in transactions to acquire other
companies or businesses and if we are unable to effectively
integrate acquired businesses into ours, our operating results may
be adversely affected. Even if we are successful, the integration
of these businesses has required, and will likely continue to
require, significant resources and management attention;
- New legislative or regulatory initiatives that restrict or
prohibit the PBM industry’s ability to use patient identifiable
information could limit our ability to use information critical to
the operation of our business;
- Our Specialty Pharmacy business is dependent on our
relationships with a limited number of suppliers and our clinical
research services are dependent on our relationships with a limited
number of clients. As such, the loss of one or more of these
relationships, or limitations on our ability to provide services to
these suppliers or clients, could significantly impact our ability
to sustain and/or improve our financial performance;
- Our ability to grow our Specialty Pharmacy business could be
limited if we do not expand our existing base of drugs or if we
lose patients;
- Our Specialty Pharmacy business, certain revenues from
diabetes testing supplies and our Medicare Part D offerings
expose us to increased billing, cash application and credit risks.
Additionally, current economic conditions may expose us to
increased credit risk;
- Changes in reimbursement, including reimbursement for
durable medical equipment, could negatively affect our revenues and
profits;
- Prescription volumes may decline, and our net revenues and
profitability may be negatively impacted, if the safety risk
profiles of drugs increase or if drugs are withdrawn from the
market, including as a result of manufacturing issues, or if
prescription drugs transition to over-the-counter
products;
- Demand for our clinical research services depends on the
willingness of companies in the pharmaceutical and biotechnology
industries to continue to outsource clinical development and on our
reputation for independent, high-quality scientific research and
evidence development;
- PBMs could be subject to claims under ERISA if they are
found to be a fiduciary of a health benefit plan governed by
ERISA;
- Pending litigation could adversely impact our business
practices and have a material adverse effect on our business,
financial condition, liquidity and operating results;
- Changes in industry pricing benchmarks could adversely
affect our financial performance;
- We are subject to a corporate integrity agreement and
noncompliance may impede our ability to conduct business with the
federal government;
- The terms and covenants relating to our existing
indebtedness could adversely impact our financial performance and
liquidity;
- We may be subject to liability claims for damages and other
expenses not covered by insurance;
- The success of our business depends on maintaining a
well-secured pharmacy operation and technology infrastructure.
Additionally, significant disruptions to our infrastructure or any
of our facilities due to failure to execute security measures or
failure to execute business continuity plans in the event of an
epidemic or pandemic or some other catastrophic event could
adversely impact our business;
- Business process and technology infrastructure improvements
associated with our agile enterprise initiative may not be
successfully or timely implemented or may fail to operate as
designed and intended, causing the Company’s performance to
suffer;
- We may be required to record a material non-cash charge to
income if our recorded intangible assets or goodwill are impaired,
or if we shorten intangible asset useful lives;
- We are subject to certain risks associated with our
international operations; and
- Anti-takeover provisions of the Delaware General Corporation
Law, our certificate of incorporation and our bylaws could delay or
deter a change in control and make it more difficult to remove
incumbent officers and directors.
The foregoing list of factors is not exhaustive. You should
carefully consider the foregoing factors and the other risks and
uncertainties that affect our business described in our Annual
Report on Form 10-K, Quarterly Reports on Form 10-Q and other
documents filed from time to time with the Securities and Exchange
Commission.
Medco Health
Solutions, Inc.
|
|
Condensed
Consolidated Statements of Income
|
|
(Unaudited)
|
|
(In
millions, except for per share data)
|
|
Table 1.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters
Ended
|
|
Six Months
Ended
|
|
|
|
|
|
|
June
25,
2011
|
|
June
26,
2010
|
|
June
25,
2011
|
|
June
26,
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product net revenues (Includes
retail
co-payments of $2,255 and
$2,279 in
the second quarters of
2011 and 2010,
and $4,768 and $4,750 in
the six months
of 2011 and
2010)
|
|
$ 16,724.1
|
|
$ 16,163.3
|
|
$ 33,385.8
|
|
$ 32,247.0
|
|
|
Service revenues
|
|
349.9
|
|
244.2
|
|
707.7
|
|
471.4
|
|
|
|
Total net revenues
|
|
17,074.0
|
|
16,407.5
|
|
34,093.5
|
|
32,718.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of operations:
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product net revenues
(Includes retail
|
|
|
|
|
|
|
|
|
|
|
|
copayments of $2,255 and $2,279
in the second
|
|
|
|
|
|
|
|
|
|
|
|
quarters of 2011 and 2010, and
$4,768 and $4,750
|
|
|
|
|
|
|
|
|
|
|
|
in the six months of 2011 and
2010)
|
|
15,846.0
|
|
15,284.5
|
|
31,674.8
|
|
30,538.1
|
|
|
|
Cost of service
revenues
|
|
122.6
|
|
61.3
|
|
243.0
|
|
125.8
|
|
|
|
|
Total cost of
revenues
|
|
15,968.6
|
|
15,345.8
|
|
31,917.8
|
|
30,663.9
|
|
|
|
Selling, general and
administrative expenses
|
|
420.3
|
|
376.4
|
|
807.4
|
|
727.0
|
|
|
|
Amortization of
intangibles
|
|
73.3
|
|
70.7
|
|
146.4
|
|
141.2
|
|
|
|
Interest expense
|
|
52.3
|
|
38.8
|
|
104.2
|
|
79.5
|
|
|
|
Interest (income) and other
(income) expense, net
|
|
1.9
|
|
(6.3)
|
|
4.3
|
|
(7.7)
|
|
|
|
|
Total costs and
expenses
|
|
16,516.4
|
|
15,825.4
|
|
32,980.1
|
|
31,603.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before provision for
income taxes
|
|
557.6
|
|
582.1
|
|
1,113.4
|
|
1,114.5
|
|
|
Provision for income
taxes
|
|
214.8
|
|
225.2
|
|
437.5
|
|
437.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
342.8
|
|
$
356.9
|
|
$
675.9
|
|
$
677.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares
outstanding
|
|
397.6
|
|
453.0
|
|
401.6
|
|
460.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
|
$
0.86
|
|
$
0.79
|
|
$
1.68
|
|
$
1.47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares
outstanding
|
|
405.1
|
|
462.0
|
|
409.6
|
|
470.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
|
$
0.85
|
|
$
0.77
|
|
$
1.65
|
|
$
1.44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medco Health
Solutions, Inc.
|
|
Condensed
Consolidated Balance Sheets
|
|
(Unaudited)
|
|
(In
millions)
|
|
Table 2.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
25,
2011
|
|
December
25,
2010
|
|
|
ASSETS
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
92.4
|
|
$
853.4
|
|
|
|
Short-term
investments
|
|
8.2
|
|
56.7
|
|
|
|
Manufacturer accounts
receivable, net
|
|
1,911.9
|
|
1,895.1
|
|
|
|
Client accounts receivable,
net
|
|
2,483.5
|
|
2,553.1
|
|
|
|
Inventories, net
|
|
833.0
|
|
1,013.2
|
|
|
|
Prepaid expenses and other
current assets
|
|
83.6
|
|
75.8
|
|
|
|
Deferred tax assets
|
|
248.3
|
|
238.4
|
|
|
|
|
Total current assets
|
|
5,660.9
|
|
6,685.7
|
|
|
Property and equipment,
net
|
|
1,001.9
|
|
993.6
|
|
|
Goodwill
|
|
6,956.6
|
|
6,939.5
|
|
|
Intangible assets,
net
|
|
2,285.6
|
|
2,409.8
|
|
|
Other noncurrent
assets
|
|
85.8
|
|
68.7
|
|
|
|
|
Total assets
|
|
$ 15,990.8
|
|
$
17,097.3
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Claims and other accounts
payable
|
|
$ 3,384.8
|
|
$
3,495.4
|
|
|
|
Client rebates and guarantees
payable
|
|
2,260.3
|
|
2,453.2
|
|
|
|
Accrued expenses and other
current liabilities
|
|
683.6
|
|
910.2
|
|
|
|
Short-term debt
|
|
31.9
|
|
23.6
|
|
|
|
Current portion of long-term
debt
|
|
2,000.0
|
|
-
|
|
|
|
|
Total current
liabilities
|
|
8,360.6
|
|
6,882.4
|
|
|
Long-term debt, net
|
|
3,004.2
|
|
5,003.6
|
|
|
Deferred tax
liabilities
|
|
980.6
|
|
985.1
|
|
|
Other noncurrent
liabilities
|
|
201.2
|
|
239.4
|
|
|
|
|
Total liabilities
|
|
12,546.6
|
|
13,110.5
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
3,444.2
|
|
3,986.8
|
|
|
Total liabilities and
stockholders' equity
|
|
$ 15,990.8
|
|
$
17,097.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
25,
2011
|
|
December
25,
2010
|
|
|
Balance Sheet
Debt
|
|
|
|
|
|
|
Accounts receivable financing
facility
|
|
$
-
|
|
$
-
|
|
|
Other short-term debt
|
|
31.9
|
|
23.6
|
|
|
Senior unsecured revolving
credit facility
|
|
1,000.0
|
|
1,000.0
|
|
|
Senior unsecured term
loan
|
|
1,000.0
|
|
1,000.0
|
|
|
7.25% senior notes due 2013, net
of unamortized discount
|
|
498.9
|
|
498.7
|
|
|
6.125% senior notes due 2013,
net of unamortized discount
|
|
299.3
|
|
299.2
|
|
|
2.75% senior notes due 2015, net
of unamortized discount
|
|
499.9
|
|
499.8
|
|
|
7.125% senior notes due 2018,
net of unamortized discount
|
|
1,190.6
|
|
1,190.1
|
|
|
4.125% senior notes due 2020,
net of unamortized discount
|
|
499.0
|
|
498.9
|
|
|
Fair value of interest rate swap
agreements
|
|
16.5
|
|
16.9
|
|
|
Total debt
|
|
$ 5,036.1
|
|
$
5,027.2
|
|
|
|
|
|
|
|
|
|
Medco Health
Solutions, Inc.
|
|
Condensed
Consolidated Statements of Cash Flows
|
|
(Unaudited)
|
|
(In
millions)
|
|
Table 3.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
|
|
June
25,
2011
|
|
June
26,
2010
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating
activities:
|
|
|
|
|
|
|
|
Net income
|
|
$ 675.9
|
|
$ 677.4
|
|
|
|
Adjustments to reconcile net
income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
102.0
|
|
89.2
|
|
|
|
|
Amortization of
intangibles
|
|
146.4
|
|
141.2
|
|
|
|
|
Deferred income taxes
|
|
(66.8)
|
|
(91.0)
|
|
|
|
|
Stock-based compensation on
employee stock plans
|
|
83.8
|
|
77.8
|
|
|
|
|
Tax benefit on employee stock
plans
|
|
62.5
|
|
63.4
|
|
|
|
|
Excess tax benefits from
stock-based compensation arrangements
|
|
(27.9)
|
|
(34.1)
|
|
|
|
|
Other
|
|
40.3
|
|
49.1
|
|
|
|
Net changes in assets and
liabilities (net of acquisition effects):
|
|
|
|
|
|
|
|
|
Manufacturer accounts
receivable, net
|
|
(14.2)
|
|
(30.9)
|
|
|
|
|
Client accounts receivable,
net
|
|
5.7
|
|
(80.3)
|
|
|
|
|
Income taxes
receivable
|
|
(2.0)
|
|
174.6
|
|
|
|
|
Inventories, net
|
|
181.1
|
|
121.8
|
|
|
|
|
Prepaid expenses and other
current assets
|
|
(6.1)
|
|
(9.9)
|
|
|
|
|
Other noncurrent
assets
|
|
(16.0)
|
|
(11.2)
|
|
|
|
|
Claims and other accounts
payable
|
|
(110.6)
|
|
(345.3)
|
|
|
|
|
Client rebates and guarantees
payable
|
|
(192.9)
|
|
348.0
|
|
|
|
|
Accrued expenses and other
current and noncurrent liabilities
|
|
(220.8)
|
|
(149.0)
|
|
|
Net cash provided by operating
activities
|
|
640.4
|
|
990.8
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing
activities:
|
|
|
|
|
|
|
|
Capital expenditures
|
|
(111.1)
|
|
(100.4)
|
|
|
|
Purchases of securities and
other assets
|
|
(14.1)
|
|
(23.2)
|
|
|
|
Acquisitions of businesses, net
of cash acquired
|
|
(3.4)
|
|
(33.8)
|
|
|
|
Proceeds from sale of securities
and other investments
|
|
48.5
|
|
18.5
|
|
|
Net cash used by investing
activities
|
|
(80.1)
|
|
(138.9)
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing
activities:
|
|
|
|
|
|
|
|
Proceeds from revolving credit
facility
|
|
7,242.2
|
|
200.0
|
|
|
|
Repayments on revolving credit
facility
|
|
(7,242.2)
|
|
(200.0)
|
|
|
|
Proceeds from accounts
receivable financing facility and other
|
|
546.3
|
|
3.3
|
|
|
|
Repayments under accounts
receivable financing facility
|
|
(538.0)
|
|
-
|
|
|
|
Purchases of treasury
stock
|
|
(1,436.6)
|
|
(2,257.9)
|
|
|
|
Excess tax benefits from
stock-based compensation arrangements
|
|
27.9
|
|
34.1
|
|
|
|
Net proceeds from employee stock
plans
|
|
79.1
|
|
24.1
|
|
|
Net cash used by financing
activities
|
|
(1,321.3)
|
|
(2,196.4)
|
|
|
Net decrease in cash and cash
equivalents
|
|
(761.0)
|
|
(1,344.5)
|
|
|
Cash and cash equivalents at
beginning of period
|
|
853.4
|
|
2,528.2
|
|
|
Cash and cash equivalents at end
of period
|
|
$ 92.4
|
|
$ 1,183.7
|
|
|
|
|
|
|
|
|
|
Medco Health
Solutions, Inc.
|
|
Consolidated
Income Statement Results
|
|
(Unaudited)
|
|
(In
millions, except for per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 4.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
Quarter
Ended
|
|
Six
Months
Ended
|
|
Six
Months
Ended
|
|
|
|
|
|
|
June
25,
2011 (1)
|
|
Variance
|
|
June
26,
2010
|
|
June
25,
2011 (1)
|
|
Variance
|
|
June
26,
2010
|
|
|
Consolidated income statement
results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail product revenues
(2)
|
|
$
10,250.8
|
|
$ 235.6
|
|
2.4%
|
|
$
10,015.2
|
|
$
20,548.5
|
|
$ 497.7
|
|
2.5%
|
|
$
20,050.8
|
|
|
Mail-order product
revenues
|
|
6,473.3
|
|
325.2
|
|
5.3%
|
|
6,148.1
|
|
12,837.3
|
|
641.1
|
|
5.3%
|
|
12,196.2
|
|
|
|
Total product net
revenues (2)
|
|
16,724.1
|
|
560.8
|
|
3.5%
|
|
16,163.3
|
|
33,385.8
|
|
1,138.8
|
|
3.5%
|
|
32,247.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Client and other service
revenues
|
|
221.1
|
|
18.2
|
|
9.0%
|
|
202.9
|
|
455.4
|
|
63.7
|
|
16.3%
|
|
391.7
|
|
|
Manufacturer service
revenues
|
|
128.8
|
|
87.5
|
|
N/M*
|
|
41.3
|
|
252.3
|
|
172.6
|
|
N/M*
|
|
79.7
|
|
|
|
Total service
revenues
|
|
349.9
|
|
105.7
|
|
43.3%
|
|
244.2
|
|
707.7
|
|
236.3
|
|
50.1%
|
|
471.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net revenues
(2)
|
|
17,074.0
|
|
666.5
|
|
4.1%
|
|
16,407.5
|
|
34,093.5
|
|
1,375.1
|
|
4.2%
|
|
32,718.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product net
revenues (2)
|
|
15,846.0
|
|
561.5
|
|
3.7%
|
|
15,284.5
|
|
31,674.8
|
|
1,136.7
|
|
3.7%
|
|
30,538.1
|
|
|
Cost of service
revenues
|
|
122.6
|
|
61.3
|
|
100.0%
|
|
61.3
|
|
243.0
|
|
117.2
|
|
93.2%
|
|
125.8
|
|
|
|
|
Total cost of revenues
(2)
|
|
15,968.6
|
|
622.8
|
|
4.1%
|
|
15,345.8
|
|
31,917.8
|
|
1,253.9
|
|
4.1%
|
|
30,663.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
420.3
|
|
43.9
|
|
11.7%
|
|
376.4
|
|
807.4
|
|
80.4
|
|
11.1%
|
|
727.0
|
|
|
Amortization of
intangibles
|
|
73.3
|
|
2.6
|
|
3.7%
|
|
70.7
|
|
146.4
|
|
5.2
|
|
3.7%
|
|
141.2
|
|
|
Interest expense
|
|
52.3
|
|
13.5
|
|
34.8%
|
|
38.8
|
|
104.2
|
|
24.7
|
|
31.1%
|
|
79.5
|
|
|
Interest (income) and other
(income) expense, net
|
|
1.9
|
|
8.2
|
|
N/M*
|
|
(6.3)
|
|
4.3
|
|
12.0
|
|
N/M*
|
|
(7.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before provision for
income taxes
|
|
557.6
|
|
(24.5)
|
|
-4.2%
|
|
582.1
|
|
1,113.4
|
|
(1.1)
|
|
-0.1%
|
|
1,114.5
|
|
|
Provision for income
taxes
|
|
214.8
|
|
(10.4)
|
|
-4.6%
|
|
225.2
|
|
437.5
|
|
0.4
|
|
0.1%
|
|
437.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
$
342.8
|
|
$ (14.1)
|
|
-4.0%
|
|
$
356.9
|
|
$
675.9
|
|
$
(1.5)
|
|
-0.2%
|
|
$
677.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding
|
|
405.1
|
|
(56.9)
|
|
-12.3%
|
|
462.0
|
|
409.6
|
|
(60.5)
|
|
-12.9%
|
|
470.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
$
0.85
|
|
$ 0.08
|
|
10.4%
|
|
$
0.77
|
|
$
1.65
|
|
$
0.21
|
|
14.6%
|
|
$
1.44
|
|
|
Earnings per share,
excluding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
all intangible
amortization (3)
|
|
$
0.96
|
|
$ 0.09
|
|
10.3%
|
|
$
0.87
|
|
$
1.86
|
|
$
0.24
|
|
14.8%
|
|
$
1.62
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product
|
|
|
$
878.1
|
|
$ (0.7)
|
|
-0.1%
|
|
$
878.8
|
|
$
1,711.0
|
|
$
2.1
|
|
0.1%
|
|
$
1,708.9
|
|
|
|
Product gross margin
percentage
|
|
5.3%
|
|
-0.1%
|
|
|
|
5.4%
|
|
5.1%
|
|
-0.2%
|
|
|
|
5.3%
|
|
|
Service
|
|
|
$
227.3
|
|
$ 44.4
|
|
24.3%
|
|
$
182.9
|
|
$
464.7
|
|
$ 119.1
|
|
34.5%
|
|
$
345.6
|
|
|
|
Service gross margin
percentage
|
|
65.0%
|
|
-9.9%
|
|
|
|
74.9%
|
|
65.7%
|
|
-7.6%
|
|
|
|
73.3%
|
|
|
Total
|
|
|
$
1,105.4
|
|
$ 43.7
|
|
4.1%
|
|
$
1,061.7
|
|
$
2,175.7
|
|
$ 121.2
|
|
5.9%
|
|
$
2,054.5
|
|
|
|
Total gross margin
percentage
|
|
6.5%
|
|
0.0%
|
|
|
|
6.5%
|
|
6.4%
|
|
0.1%
|
|
|
|
6.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes UBC's
operating results commencing on the September 16, 2010 acquisition
date.
|
|
(2) Includes retail
co-payments of $2,255 million and $2,279 million for the second
quarters of 2011 and 2010, and $4,768 million and $4,750 million
for the six months of 2011 and 2010.
|
|
(3) Please refer to Table
8 for reconciliation of the earnings per share excluding all
intangible amortization.
|
|
(4) Represents total net
revenues minus total cost of revenues.
|
|
|
|
*Not meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medco Health
Solutions, Inc.
|
|
Consolidated
Selected Information
|
|
(Unaudited)
|
|
(In
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 5.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
Quarter
Ended
|
|
Six Months
Ended
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
|
June
25,
2011 (1)
|
|
Variance
|
|
June
26,
2010
|
|
June
25,
2011 (1)
|
|
Variance
|
|
June
26,
2010
|
|
|
Volume
Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Generic mail-order
prescriptions
|
|
17.8
|
|
1.0
|
|
6.0%
|
|
16.8
|
|
35.4
|
|
2.4
|
|
7.3%
|
|
33.0
|
|
|
Brand mail-order
prescriptions
|
|
9.9
|
|
(0.8)
|
|
-7.5%
|
|
10.7
|
|
19.9
|
|
(1.8)
|
|
-8.3%
|
|
21.7
|
|
|
|
Total mail-order
prescriptions
|
|
27.7
|
|
0.2
|
|
0.7%
|
|
27.5
|
|
55.3
|
|
0.6
|
|
1.1%
|
|
54.7
|
|
|
Retail prescriptions
|
|
157.4
|
|
0.7
|
|
0.4%
|
|
156.7
|
|
319.4
|
|
4.6
|
|
1.5%
|
|
314.8
|
|
|
|
Total prescriptions
|
|
185.1
|
|
0.9
|
|
0.5%
|
|
184.2
|
|
374.7
|
|
5.2
|
|
1.4%
|
|
369.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted prescriptions
(2)
|
|
239.7
|
|
1.3
|
|
0.5%
|
|
238.4
|
|
484.0
|
|
6.4
|
|
1.3%
|
|
477.6
|
|
|
Adjusted mail-order
penetration (3)
|
|
34.3%
|
|
0.0%
|
|
|
|
34.3%
|
|
34.0%
|
|
-0.1%
|
|
|
|
34.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Generic Dispensing Rate
Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail generic dispensing
rate
|
|
75.0%
|
|
2.7%
|
|
|
|
72.3%
|
|
74.8%
|
|
3.0%
|
|
|
|
71.8%
|
|
|
Mail-order generic dispensing
rate
|
|
64.3%
|
|
3.1%
|
|
|
|
61.2%
|
|
64.1%
|
|
3.8%
|
|
|
|
60.3%
|
|
|
Overall generic dispensing
rate
|
|
73.4%
|
|
2.8%
|
|
|
|
70.6%
|
|
73.2%
|
|
3.1%
|
|
|
|
70.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Manufacturer Rebate
Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rebates earned
|
|
$
1,484
|
|
$ 55
|
|
3.8%
|
|
$
1,429
|
|
$
2,986
|
|
$ 105
|
|
3.6%
|
|
$
2,881
|
|
|
Percent of rebates
retained
|
|
12.2%
|
|
0.3%
|
|
|
|
11.9%
|
|
11.9%
|
|
-0.1%
|
|
|
|
12.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
depreciation
|
|
$
15.2
|
|
$ 3.0
|
|
24.6%
|
|
$
12.2
|
|
$
31.9
|
|
$ 7.3
|
|
29.7%
|
|
$
24.6
|
|
|
SG&A expenses
depreciation
|
|
35.8
|
|
3.1
|
|
9.5%
|
|
32.7
|
|
70.1
|
|
5.5
|
|
8.5%
|
|
64.6
|
|
|
Total depreciation
|
|
$
51.0
|
|
$ 6.1
|
|
13.6%
|
|
$
44.9
|
|
$
102.0
|
|
$ 12.8
|
|
14.3%
|
|
$
89.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes UBC's
operating results commencing on the September 16, 2010 acquisition
date.
|
|
(2) Adjusted prescription
volume equals substantially all mail-order prescriptions multiplied
by three, plus retail prescriptions. These mail-order prescriptions
are multiplied
|
|
by three to adjust for the
fact that they include approximately three times the amount of
product days supplied compared with retail prescriptions.
|
|
(3) Represents the
percentage of adjusted mail-order prescriptions to total adjusted
prescriptions.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medco Health
Solutions, Inc.
|
|
Consolidated
EBITDA
|
|
(Unaudited)
|
|
(In
millions, except for EBITDA per adjusted prescription
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 6.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters
Ended
|
|
Six Months
Ended
|
|
|
|
|
|
June
25,
2011
|
|
June
26,
2010
|
|
June
25,
2011
|
|
June
26,
2010
|
|
|
EBITDA
Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$ 342.8
|
|
$ 356.9
|
|
$ 675.9
|
|
$ 677.4
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
52.3
|
|
38.8
|
|
104.2
|
|
79.5
|
|
|
|
Interest (income) and other
(income) expense, net
|
|
1.9
|
|
(6.3)
|
|
4.3
|
|
(7.7)
|
|
|
|
Provision for income
taxes
|
|
214.8
|
|
225.2
|
|
437.5
|
|
437.1
|
|
|
|
Depreciation expense
|
|
51.0
|
|
44.9
|
|
102.0
|
|
89.2
|
|
|
|
Amortization expense
|
|
73.3
|
|
70.7
|
|
146.4
|
|
141.2
|
|
|
EBITDA
|
|
$ 736.1
|
|
$ 730.2
|
|
$ 1,470.3
|
|
$ 1,416.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted prescriptions
(1)
|
|
239.7
|
|
238.4
|
|
484.0
|
|
477.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA per adjusted
prescription
|
|
$ 3.07
|
|
$ 3.06
|
|
$
3.04
|
|
$
2.97
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Adjusted prescription
volume equals substantially all mail-order prescriptions multiplied
by three, plus retail prescriptions. These mail-order
|
|
|
prescriptions are
multiplied by three to adjust for the fact that they include
approximately three times the amount of product days supplied
|
|
|
compared with retail
prescriptions.
|
|
|
|
|
|
|
|
|
|
|
|
|
Medco Health
Solutions, Inc.
|
|
Accredo
Health Group (Specialty Pharmacy) Segment Results
|
|
(Unaudited)
|
|
(In
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 7.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
Quarter
Ended
|
|
Six Months
Ended
|
|
Six Months
Ended
|
|
|
|
|
|
June
25,
2011
|
|
Variance
|
|
June
26,
2010
|
|
June
25,
2011
|
|
Variance
|
|
June
26,
2010
|
|
|
Specialty
Pharmacy:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product net revenues
|
|
$
3,164.8
|
|
$ 376.3
|
|
13.5%
|
|
$
2,788.5
|
|
$ 6,221.5
|
|
$ 779.7
|
|
14.3%
|
|
$ 5,441.8
|
|
|
Service revenues
|
|
20.7
|
|
(5.7)
|
|
-21.6%
|
|
26.4
|
|
38.5
|
|
(10.9)
|
|
-22.1%
|
|
49.4
|
|
|
|
Total net revenues
|
|
3,185.5
|
|
370.6
|
|
13.2%
|
|
2,814.9
|
|
6,260.0
|
|
768.8
|
|
14.0%
|
|
5,491.2
|
|
|
Total cost of
revenues
|
|
2,973.5
|
|
356.6
|
|
13.6%
|
|
2,616.9
|
|
5,846.5
|
|
742.4
|
|
14.5%
|
|
5,104.1
|
|
|
Selling, general and
administrative expenses
|
|
68.7
|
|
(8.7)
|
|
-11.2%
|
|
77.4
|
|
139.1
|
|
(10.1)
|
|
-6.8%
|
|
149.2
|
|
|
Amortization of
intangibles
|
|
10.5
|
|
(0.2)
|
|
-1.9%
|
|
10.7
|
|
21.0
|
|
(0.4)
|
|
-1.9%
|
|
21.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
$
132.8
|
|
$ 22.9
|
|
20.8%
|
|
$
109.9
|
|
$
253.4
|
|
$ 36.9
|
|
17.0%
|
|
$
216.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Margin
(1)
|
|
$
212.0
|
|
$ 14.0
|
|
7.1%
|
|
$
198.0
|
|
$
413.5
|
|
$ 26.4
|
|
6.8%
|
|
$
387.1
|
|
|
|
Gross margin
percentage
|
|
6.7%
|
|
-0.3%
|
|
|
|
7.0%
|
|
6.6%
|
|
-0.4%
|
|
|
|
7.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Represents total net
revenues minus total cost of revenues.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medco Health
Solutions, Inc.
|
|
Earnings Per
Share Reconciliation
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 8.
|
|
|
|
|
|
|
|
|
|
Quarters
Ended
|
|
Six Months
Ended
|
|
|
|
|
|
June
25,
2011
|
|
June
26,
2010
|
|
June
25,
2011
|
|
June
26,
2010
|
|
|
Earnings Per Share
Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted earnings per
share
|
|
$ 0.85
|
|
$ 0.77
|
|
$ 1.65
|
|
$ 1.44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustment for the amortization
of intangible assets (1)
|
|
0.11
|
|
0.10
|
|
0.21
|
|
0.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share,
excluding all intangible amortization
|
|
$ 0.96
|
|
$ 0.87
|
|
$ 1.86
|
|
$ 1.62
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustment for the
second-quarter 2010 settlement benefit (2)
|
|
-
|
|
(0.03)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share,
excluding all intangible amortization and
|
|
$ 0.96
|
|
$ 0.84
|
|
|
|
|
|
|
|
the 2010 settlement
benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
growth over prior year, excluding all
|
|
|
|
14.3%
|
|
|
|
|
|
|
|
intangible amortization and the
2010 settlement benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) This adjustment
represents the per-share effect of all intangible amortization.
|
|
|
(2) This adjustment
represents the per-share effect of the second-quarter 2010 benefit
from a settlement award in a
|
|
|
class action antitrust
lawsuit brought by direct purchasers of a brand-name medication.
|
|
|
|
|
|
|
|
|
|
|
|
|
Medco Health
Solutions, Inc.
|
|
Guidance
Information
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 9.
|
|
|
|
|
|
|
|
|
|
|
|
Full Year
Ended
|
|
Full Year
Ended
|
|
|
|
|
|
December
25,
2010
|
|
December
31,
2011
|
|
|
|
|
|
Actual
|
|
Low
End
|
|
High
End
|
|
|
Earnings Per Share Guidance
Reconciliation:
|
|
|
|
|
|
|
|
|
GAAP diluted earnings per
share
|
|
$
3.16
|
|
$ 3.59
|
|
$ 3.69
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustment for the amortization
of intangible assets (1)
|
|
0.39
|
|
0.43
|
|
0.43
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share,
excluding all intangible amortization
|
|
$
3.55
|
|
$ 4.02
|
|
$ 4.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
growth over prior year
|
|
|
|
14%
|
|
17%
|
|
|
Diluted earnings per share
growth over prior year, excluding all intangible
amortization
|
|
|
13%
|
|
16%
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) This
adjustment represents the per-share effect of all intangible
amortization.
|
|
|
|
|
|
|
|
|
|
|
SOURCE Medco Health Solutions, Inc.