DUBLIN, Ohio, Feb. 1, 2016 /PRNewswire/ -- Cardinal Health
today reported fiscal year 2016 second-quarter results, with
revenue of $31.4 billion, an increase
of 23 percent, and non-GAAP operating earnings of $726 million, an increase of 14 percent. Non-GAAP
diluted earnings per share (EPS) increased 8 percent to
$1.30. On a GAAP basis, operating
earnings increased 3 percent to $563
million, and diluted EPS increased 14 percent to
$0.98.
"Our performance in the second quarter of our fiscal 2016
reflects our deep commitment to serving a health system
experiencing powerful changes," said George
Barrett, chairman and chief executive officer of Cardinal
Health. "We achieved strong revenue and operating growth. Both of
our reporting segments continue to demonstrate very solid
fundamentals and growth in our base of customers. Our organization
continues to demonstrate discipline in executing on our priorities
while strategically positioning us for the future."
Barrett noted that the company was reaffirming its fiscal 2016
non-GAAP diluted earnings per share guidance of $5.15 to $5.35, representing an 18 to 22 percent
growth rate compared to fiscal 2015.
Q2 FY16 SUMMARY
|
Q2
FY16
|
Q2
FY15
|
Y/Y
|
Revenue
|
$31.4
billion
|
$25.5
billion
|
23%
|
|
|
|
|
Operating
Earnings
|
$563
million
|
$546
million
|
3%
|
Non-GAAP Operating
Earnings
|
$726
million
|
$639
million
|
14%
|
|
|
|
|
Net Earnings
attributable to Cardinal Health, Inc.
|
$326
million
|
$289
million
|
13%
|
Non-GAAP Net Earnings
attributable to Cardinal Health, Inc.
|
$430
million
|
$400
million
|
7%
|
|
|
|
|
Diluted EPS
attributable to Cardinal Health, Inc.
|
$0.98
|
$0.86
|
14%
|
Non-GAAP Diluted EPS
attributable to Cardinal Health, Inc.
|
$1.30
|
$1.20
|
8%
|
SEGMENT RESULTS
Pharmaceutical segment
Second-quarter revenue for the Pharmaceutical segment increased
25 percent to $28.3 billion.
Segment profit for the quarter increased 16 percent to
$627 million. The drivers for both
segment revenue and profit were growth from existing and new
customers as well as acquisitions.
|
Q2
FY16
|
Q2
FY15
|
Y/Y
|
Revenue
|
$28.3
billion
|
$22.6
billion
|
25%
|
Segment
Profit
|
$627
million
|
$542
million
|
16%
|
Medical segment
Second-quarter revenue for the Medical segment increased 9
percent to $3.2 billion. This growth
was primarily due to the net contribution from acquisitions and
growth in the Cardinal Health at Home platform.
Segment profit declined 8 percent to $106
million. This includes the impact of the Cordis-related
inventory fair value step-up. Excluding the step-up of $21 million, year-over-year Medical segment
profit growth was 10 percent.
|
Q2
FY16
|
Q2
FY15
|
Y/Y
|
Revenue
|
$3.2
billion
|
$2.9
billion
|
9%
|
Segment
Profit
|
$106
million
|
$115
million
|
(8)%
|
ADDITIONAL SECOND-QUARTER AND RECENT HIGHLIGHTS
- Completed acquisition of Cordis and launched combined
Interventional Solutions portfolio at
27th annual Transcatheter Cardiovascular Therapeutics
conference
- Supported expansion of naviHealth presence in post-acute care
with acquisition of RightCare Solutions Inc.
- Opened the Generation Rx Medication Disposal Grant Program
application period to non-profit organizations throughout the U.S.
and Puerto Rico to help support education and awareness
of community drug disposal programs
- Named among 2016 Best Companies for Leaders by Chief
Executive magazine
- Ranked among the Most LGBT-Inclusive Places to Work in 2016 and
earned a perfect score on the 2016 Corporate Equality Index for the
eighth consecutive year
CONFERENCE CALL
Cardinal Health will host a webcast and conference call today at
8:30 a.m. Eastern to discuss
second-quarter results. To access the call and corresponding slide
presentation, go to ir.cardinalhealth.com. Alternatively,
participants can call 913.905.3226 and use passcode 852145.
There is no pre-registration for the call. Participants are
advised to dial into the call at least 10 minutes prior to the
start time.
Presentation slides and an audio replay will be archived on the
Cardinal Health website after the conclusion of the meeting. The
audio replay will also be available until Feb. 8 by dialing 719.457.0820, passcode
852145.
UPCOMING WEBCASTED INVESTOR EVENTS
- Leerink Partners Fifth Annual Global Healthcare Conference on
Feb. 10 at 8:50 a.m. Eastern in New York
At the event, Cardinal Health executives will discuss the
company's diverse products and services, company performance and
strategies for continued growth. To access more details and a live
webcast of this event, go to ir.cardinalhealth.com.
About Cardinal Health
Headquartered in Dublin, Ohio, Cardinal Health, Inc. (NYSE:
CAH) is a $103 billion health care
services company that improves the cost-effectiveness of health
care. Cardinal Health helps pharmacies, hospitals, ambulatory
surgery centers, clinical laboratories and physician offices focus
on patient care while reducing costs, enhancing efficiency and
improving quality. Cardinal Health is an essential link in the
health care supply chain, providing pharmaceuticals and medical
products and services to more than 100,000 locations each day and
is also the industry-leading direct-to-home medical supplies
distributor. The company is a leading manufacturer of medical and
surgical products, including gloves, surgical apparel and fluid
management products. In addition, the company operates the nation's
largest network of radiopharmacies that dispense products to aid in
the early diagnosis and treatment of disease. Ranked #26 on the
Fortune 500, Cardinal Health employs more than 36,000 people
worldwide. More information about the company may be found at
www.cardinalhealth.com and @CardinalHealth on Twitter.
1 See
the attached tables for definitions of the non-GAAP financial
measures presented in this news release and reconciliations of the
differences between the non-GAAP financial measures and their most
directly comparable GAAP financial measures.
Cardinal Health uses its website as a channel of distribution
for material company information. Important information, including
news releases, financial information, earnings and analyst
presentations, and information about upcoming presentations and
events is routinely posted and accessible at ir.cardinalhealth.com.
In addition, the website allows investors and other interested
persons to sign up automatically to receive e-mail alerts when the
company posts news releases, SEC filings and certain other
information on its website.
Cautions Concerning Forward-Looking Statements
This news release contains forward-looking statements addressing
expectations, prospects, estimates and other matters that are
dependent upon future events or developments. These statements may
be identified by words such as "expect," "anticipate," "intend,"
"plan," "believe," "will," "should," "could," "would," "project,"
"continue," "likely," and similar expressions, and include
statements reflecting future results or guidance, statements of
outlook and expense accruals. These matters are subject to risks
and uncertainties that could cause actual results to differ
materially from those projected, anticipated or implied. These
risks and uncertainties include competitive pressures in Cardinal
Health's various lines of business; the frequency or rate of
pharmaceutical price appreciation or deflation and the timing of
generic and branded pharmaceutical introductions; the ability to
continue to achieve and maintain the benefits from the generic
sourcing venture with CVS Health and from the acquisitions of
Cordis and The Harvard Drug Group; the risk of non-renewal or a
default under one or more key customer or supplier arrangements or
changes to the terms of or level of purchases under those
arrangements; uncertainties due to government health care reform,
including federal health care reform legislation; changes in the
distribution patterns or reimbursement rates for health care
products and services; the effects of any investigation or action
by any regulatory authority; and changes in foreign currency rates
and the cost of commodities such as oil-based resins, cotton, latex
and diesel fuel. Cardinal Health is subject to additional risks and
uncertainties described in Cardinal Health's Form 10-K, Form 10-Q
and Form 8-K reports and exhibits to those reports. This news
release reflects management's views as of Feb. 1, 2016. Except to the extent required by
applicable law, Cardinal Health undertakes no obligation to update
or revise any forward-looking statement.
Schedule
1
|
|
|
|
|
Cardinal Health,
Inc. and Subsidiaries
|
Condensed
Consolidated Statements of Earnings (Unaudited)
|
|
|
|
|
|
Second
Quarter
|
|
|
(in millions, except
per common share amounts)
|
2016
|
|
2015
|
|
%
Change
|
Revenue
|
$
|
31,445
|
|
|
$
|
25,537
|
|
|
23
|
%
|
Cost of products
sold
|
29,836
|
|
|
24,083
|
|
|
24
|
%
|
Gross
margin
|
1,609
|
|
|
1,454
|
|
|
11
|
%
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
Distribution,
selling, general, and administrative expenses
|
922
|
|
|
815
|
|
|
13
|
%
|
Restructuring and
employee severance
|
2
|
|
|
7
|
|
|
N.M.
|
|
Amortization and
other acquisition-related costs
|
114
|
|
|
60
|
|
|
N.M.
|
|
Impairments and
(gain)/loss on disposal of assets
|
17
|
|
|
(18)
|
|
|
N.M.
|
|
Litigation
(recoveries)/charges, net
|
(9)
|
|
|
44
|
|
|
N.M.
|
|
Operating
earnings
|
563
|
|
|
546
|
|
|
3
|
%
|
|
|
|
|
|
|
Other income,
net
|
(2)
|
|
|
(1)
|
|
|
N.M.
|
|
Interest expense,
net
|
45
|
|
|
36
|
|
|
24
|
%
|
Loss on
extinguishment of debt
|
—
|
|
|
60
|
|
|
N.M.
|
|
Earnings before
income taxes
|
520
|
|
|
451
|
|
|
15
|
%
|
|
|
|
|
|
|
Provision for income
taxes
|
194
|
|
|
162
|
|
|
20
|
%
|
Net
earnings
|
326
|
|
|
289
|
|
|
12
|
%
|
|
|
|
|
|
|
Less: Net earnings
attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
N.M.
|
|
Net earnings
attributable to Cardinal Health, Inc.
|
$
|
326
|
|
|
$
|
289
|
|
|
13
|
%
|
|
|
|
|
|
|
Earnings per
common share attributable to Cardinal Health, Inc.:
|
|
|
|
|
|
Basic
|
$
|
0.99
|
|
|
$
|
0.87
|
|
|
14
|
%
|
Diluted
|
0.98
|
|
|
0.86
|
|
|
14
|
%
|
|
|
|
|
|
|
Weighted-average
number of common shares outstanding:
|
|
|
|
|
|
Basic
|
329
|
|
|
331
|
|
|
|
Diluted
|
332
|
|
|
334
|
|
|
|
Schedule
2
|
|
|
|
|
Cardinal Health,
Inc. and Subsidiaries
|
Condensed
Consolidated Statements of Earnings (Unaudited)
|
|
|
|
|
|
Year-to-Date
|
|
|
(in millions, except
per common share amounts)
|
2016
|
|
2015
|
|
%
Change
|
Revenue
|
$
|
59,499
|
|
|
$
|
49,607
|
|
|
20
|
%
|
Cost of products
sold
|
56,311
|
|
|
46,813
|
|
|
20
|
%
|
Gross
margin
|
3,188
|
|
|
2,794
|
|
|
14
|
%
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
Distribution,
selling, general, and administrative expenses
|
1,764
|
|
|
1,590
|
|
|
11
|
%
|
Restructuring and
employee severance
|
14
|
|
|
26
|
|
|
N.M.
|
|
Amortization and
other acquisition-related costs
|
219
|
|
|
112
|
|
|
N.M.
|
|
Impairments and
(gain)/loss on disposal of assets
|
17
|
|
|
(18)
|
|
|
N.M.
|
|
Litigation
(recoveries)/charges, net
|
(9)
|
|
|
72
|
|
|
N.M.
|
|
Operating
earnings
|
1,183
|
|
|
1,012
|
|
|
17
|
%
|
|
|
|
|
|
|
Other
(income)/expense, net
|
6
|
|
|
(4)
|
|
|
N.M.
|
|
Interest expense,
net
|
90
|
|
|
70
|
|
|
28
|
%
|
Loss on
extinguishment of debt
|
—
|
|
|
60
|
|
|
N.M.
|
|
Earnings before
income taxes
|
1,087
|
|
|
886
|
|
|
23
|
%
|
|
|
|
|
|
|
Provision for income
taxes
|
377
|
|
|
331
|
|
|
14
|
%
|
Net
earnings
|
710
|
|
|
555
|
|
|
28
|
%
|
|
|
|
|
|
|
Less: Net earnings
attributable to noncontrolling interests
|
(1)
|
|
|
—
|
|
|
N.M.
|
|
Net earnings
attributable to Cardinal Health, Inc.
|
$
|
709
|
|
|
$
|
555
|
|
|
28
|
%
|
|
|
|
|
|
|
Earnings per
common share attributable to Cardinal Health, Inc.:
|
|
|
|
|
|
Basic
|
$
|
2.16
|
|
|
$
|
1.66
|
|
|
30
|
%
|
Diluted
|
2.14
|
|
|
1.65
|
|
|
30
|
%
|
|
|
|
|
|
|
Weighted-average
number of common shares outstanding:
|
|
|
|
|
|
Basic
|
329
|
|
|
333
|
|
|
|
Diluted
|
332
|
|
|
337
|
|
|
|
Schedule
3
|
|
|
|
|
Cardinal Health,
Inc. and Subsidiaries
|
Condensed
Consolidated Balance Sheets
|
|
|
|
|
(in
millions)
|
December 31,
2015
|
|
June 30,
2015
|
|
(Unaudited)
|
|
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and
equivalents
|
$
|
2,324
|
|
|
$
|
4,616
|
|
Trade receivables,
net
|
6,980
|
|
|
6,523
|
|
Inventories,
net
|
11,007
|
|
|
9,211
|
|
Prepaid expenses and
other
|
1,518
|
|
|
1,402
|
|
Total current
assets
|
21,829
|
|
|
21,752
|
|
|
|
|
|
Property and
equipment, net
|
1,651
|
|
|
1,506
|
|
Goodwill and other
intangibles, net
|
9,113
|
|
|
6,018
|
|
Other
assets
|
914
|
|
|
866
|
|
Total
assets
|
$
|
33,507
|
|
|
$
|
30,142
|
|
|
|
|
|
Liabilities,
Redeemable Noncontrolling Interests, and Shareholders'
Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
16,919
|
|
|
$
|
14,368
|
|
Current portion of
long-term obligations and other short-term borrowings
|
354
|
|
|
281
|
|
Other accrued
liabilities
|
1,606
|
|
|
2,594
|
|
Total current
liabilities
|
18,879
|
|
|
17,243
|
|
|
|
|
|
Long-term
obligations, less current portion
|
5,171
|
|
|
5,211
|
|
Deferred income taxes
and other liabilities
|
2,609
|
|
|
1,432
|
|
|
|
|
|
Redeemable
noncontrolling interests
|
120
|
|
|
—
|
|
|
|
|
|
Total Cardinal
Health, Inc. shareholders' equity
|
6,711
|
|
|
6,256
|
|
Noncontrolling
interests
|
17
|
|
|
—
|
|
Total shareholders'
equity
|
6,728
|
|
|
6,256
|
|
Total liabilities,
redeemable noncontrolling interests, and shareholders'
equity
|
$
|
33,507
|
|
|
$
|
30,142
|
|
Schedule
4
|
|
|
|
|
Cardinal Health,
Inc. and Subsidiaries
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
|
|
|
|
|
Second
Quarter
|
|
Year-to-Date
|
(in
millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net
earnings
|
$
|
326
|
|
|
$
|
289
|
|
|
$
|
710
|
|
|
$
|
555
|
|
|
|
|
|
|
|
|
|
Adjustments to
reconcile net earnings to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
169
|
|
|
112
|
|
|
306
|
|
|
220
|
|
Loss on
extinguishment of debt
|
—
|
|
|
60
|
|
|
—
|
|
|
60
|
|
Gain on sale of other
investments
|
—
|
|
|
—
|
|
|
—
|
|
|
(5)
|
|
Impairments and
(gain)/loss on disposal of assets, net
|
17
|
|
|
(18)
|
|
|
17
|
|
|
(18)
|
|
Share-based
compensation
|
26
|
|
|
28
|
|
|
56
|
|
|
53
|
|
Provision for bad
debts
|
18
|
|
|
14
|
|
|
35
|
|
|
26
|
|
Change in fair value
of contingent consideration obligation
|
(13)
|
|
|
—
|
|
|
(14)
|
|
|
—
|
|
Change in operating
assets and liabilities, net of effects from
acquisitions:
|
|
|
|
|
|
|
|
Increase in trade
receivables
|
(45)
|
|
|
—
|
|
|
(393)
|
|
|
(291)
|
|
Increase in
inventories
|
(1,070)
|
|
|
(1,336)
|
|
|
(1,565)
|
|
|
(1,137)
|
|
Increase in accounts
payable
|
2,006
|
|
|
1,595
|
|
|
2,431
|
|
|
1,438
|
|
Other accrued
liabilities and operating items, net
|
29
|
|
|
209
|
|
|
(172)
|
|
|
113
|
|
Net cash provided by
operating activities
|
1,463
|
|
|
953
|
|
|
1,411
|
|
|
1,014
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Acquisition of
subsidiaries, net of cash acquired
|
(1,885)
|
|
|
(25)
|
|
|
(3,284)
|
|
|
(86)
|
|
Additions to property
and equipment
|
(92)
|
|
|
(47)
|
|
|
(175)
|
|
|
(83)
|
|
Purchase of
available-for-sale securities and other investments
|
(62)
|
|
|
(32)
|
|
|
(88)
|
|
|
(107)
|
|
Proceeds from sale of
available-for-sale securities and other investments
|
32
|
|
|
16
|
|
|
57
|
|
|
107
|
|
Proceeds from
maturities of available-for-sale securities
|
14
|
|
|
16
|
|
|
19
|
|
|
16
|
|
Proceeds from
divestitures and disposal of held for sale assets
|
—
|
|
|
53
|
|
|
—
|
|
|
53
|
|
Net cash used in
investing activities
|
(1,993)
|
|
|
(19)
|
|
|
(3,471)
|
|
|
(100)
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Payment of contingent
consideration obligation
|
—
|
|
|
—
|
|
|
(23)
|
|
|
—
|
|
Net change in
short-term borrowings
|
3
|
|
|
(58)
|
|
|
39
|
|
|
(18)
|
|
Reduction of
long-term obligations
|
—
|
|
|
(1,220)
|
|
|
(4)
|
|
|
(1,220)
|
|
Proceeds from
long-term obligations, net of issuance costs
|
—
|
|
|
1,182
|
|
|
—
|
|
|
1,182
|
|
Net proceeds/(tax
withholdings) from share-based compensation
|
14
|
|
|
10
|
|
|
(7)
|
|
|
35
|
|
Tax proceeds from
share-based compensation
|
1
|
|
|
4
|
|
|
32
|
|
|
42
|
|
Dividends on common
shares
|
(128)
|
|
|
(114)
|
|
|
(259)
|
|
|
(233)
|
|
Purchase of treasury
shares
|
—
|
|
|
(326)
|
|
|
—
|
|
|
(686)
|
|
Net cash used in
financing activities
|
(110)
|
|
|
(522)
|
|
|
(222)
|
|
|
(898)
|
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash and equivalents
|
(10)
|
|
|
—
|
|
|
(10)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
Net
increase/(decrease) in cash and equivalents
|
(650)
|
|
|
412
|
|
|
(2,292)
|
|
|
16
|
|
Cash and equivalents
at beginning of period
|
2,974
|
|
|
2,469
|
|
|
4,616
|
|
|
2,865
|
|
Cash and
equivalents at end of period
|
$
|
2,324
|
|
|
$
|
2,881
|
|
|
$
|
2,324
|
|
|
$
|
2,881
|
|
Schedule
5
|
|
|
|
|
Cardinal Health,
Inc. and Subsidiaries
|
Total Company
Business Analysis
|
|
|
|
|
|
|
|
Non-GAAP
|
|
Second
Quarter
|
|
Second
Quarter
|
(in
millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Revenue
|
|
|
|
|
|
|
|
Amount
|
$
|
31,445
|
|
|
$
|
25,537
|
|
|
|
|
|
Growth
rate
|
23
|
%
|
|
15
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Margin
|
|
|
|
|
|
|
|
Amount1
|
$
|
1,609
|
|
|
$
|
1,454
|
|
|
$
|
1,648
|
|
|
$
|
1,454
|
|
Growth
rate
|
11
|
%
|
|
8
|
%
|
|
13
|
%
|
|
8
|
%
|
|
|
|
|
|
|
|
|
Operating
earnings
|
|
|
|
|
|
|
|
Amount
|
$
|
563
|
|
|
$
|
546
|
|
|
$
|
726
|
|
|
$
|
639
|
|
Growth
rate
|
3
|
%
|
|
5
|
%
|
|
14
|
%
|
|
10
|
%
|
|
|
|
|
|
|
|
|
Net earnings
attributable to Cardinal Health, Inc.
|
|
|
|
|
|
|
|
Amount
|
$
|
326
|
|
|
$
|
289
|
|
|
$
|
430
|
|
|
$
|
400
|
|
Growth
rate
|
13
|
%
|
|
5
|
%
|
|
7
|
%
|
|
28
|
%
|
|
|
|
|
|
|
|
|
Return on
equity
|
19.7
|
%
|
|
18.7
|
%
|
|
26.0
|
%
|
|
25.9
|
%
|
|
|
|
|
|
|
|
|
Effective tax
rate
|
37.3
|
%
|
|
36.0
|
%
|
|
37.1
|
%
|
|
33.8
|
%
|
|
|
|
|
|
|
|
|
Debt to total
capital
|
45
|
%
|
|
39
|
%
|
|
|
|
|
Net debt to
capital
|
|
|
|
|
32
|
%
|
|
15
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
|
|
Year-to-Date
|
|
Year-to-Date
|
(in
millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Revenue
|
|
|
|
|
|
|
|
Amount
|
$
|
59,499
|
|
|
$
|
49,607
|
|
|
|
|
|
Growth
rate
|
20
|
%
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Margin
|
|
|
|
|
|
|
|
Amount1
|
$
|
3,188
|
|
|
$
|
2,794
|
|
|
$
|
3,227
|
|
|
$
|
2,794
|
|
Growth
rate
|
14
|
%
|
|
7
|
%
|
|
15
|
%
|
|
7
|
%
|
|
|
|
|
|
|
|
|
Operating
earnings
|
|
|
|
|
|
|
|
Amount
|
$
|
1,183
|
|
|
$
|
1,012
|
|
|
$
|
1,463
|
|
|
$
|
1,204
|
|
Growth
rate
|
17
|
%
|
|
2
|
%
|
|
22
|
%
|
|
8
|
%
|
|
|
|
|
|
|
|
|
Net earnings
attributable to Cardinal Health, Inc.
|
|
|
|
|
|
|
|
Amount
|
$
|
709
|
|
|
$
|
555
|
|
|
$
|
889
|
|
|
$
|
740
|
|
Growth
rate
|
28
|
%
|
|
(10)
|
%
|
|
20
|
%
|
|
7
|
%
|
|
|
|
|
|
|
|
|
Return on
equity
|
21.8
|
%
|
|
17.8
|
%
|
|
27.4
|
%
|
|
23.7
|
%
|
|
|
|
|
|
|
|
|
Effective tax
rate
|
34.7
|
%
|
|
37.4
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
|
|
1
|
Gross margin includes
the negative impact of a $39 million LIFO charge in the second
quarter.
|
|
|
Refer to the
GAAP/Non-GAAP reconciliation for definitions and calculations
supporting the Non-GAAP balances.
|
|
|
|
|
Schedule
6
|
|
|
|
|
|
Cardinal Health,
Inc. and Subsidiaries
|
Segment Business
Analysis
|
|
|
|
|
|
|
Second
Quarter
|
|
|
Second
Quarter
|
(in
millions)
|
2016
|
|
2015
|
|
(in
millions)
|
2016
|
|
2015
|
Pharmaceutical
|
|
|
|
|
Medical
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
Revenue
|
|
|
|
Amount
|
$
|
28,287
|
|
|
$
|
22,627
|
|
|
Amount
|
$
|
3,162
|
|
|
$
|
2,914
|
|
Growth
rate
|
25
|
%
|
|
16
|
%
|
|
Growth
rate
|
9
|
%
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
Segment
profit
|
|
|
|
|
Segment
profit
|
|
|
|
Amount
|
$
|
627
|
|
|
$
|
542
|
|
|
Amount
|
$
|
106
|
|
|
$
|
115
|
|
Growth
rate
|
16
|
%
|
|
12
|
%
|
|
Growth
rate1
|
(8)
|
%
|
|
(12)
|
%
|
Segment profit
margin
|
2.22
|
%
|
|
2.39
|
%
|
|
Segment profit
margin
|
3.36
|
%
|
|
3.96
|
%
|
|
|
1
|
Segment profit
includes a $21 million impact from the roll-out of the inventory
fair value step up related to the Cordis acquisition for the three
months ended December 31, 2015. Excluding the impact of the
inventory fair value step up, Medical segment profit would have
increased 10% for the three months ended December 31,
2015.
|
|
|
Refer to definitions
for an explanation of calculations.
|
|
Total consolidated
revenue for the three months ended December 31, 2015 was
$31,445 million, which included total segment revenue of $31,449
million and Corporate revenue of $(4) million. Total consolidated
revenue for the three months ended December 31, 2014 was
$25,537 million, which included total segment revenue of $25,541
million and Corporate revenue of $(4) million. Corporate revenue
consists primarily of elimination of inter-segment revenue and
other revenue not allocated to the segments.
|
|
Total consolidated
operating earnings for the three months ended December 31,
2015 were $563 million, which included total segment profit of $733
million and Corporate costs of $(170) million. Total consolidated
operating earnings for the three months ended December 31,
2014 were $546 million, which included total segment profit of $657
million and Corporate costs of $(111) million. Corporate includes,
among other things, LIFO (charges)/credits, restructuring and
employee severance, amortization and other acquisition-related
costs, impairments and (gain)/loss on disposal of assets,
litigation (recoveries)/charges, net, and certain investment
spending that are not allocated to the segments.
|
|
|
|
|
Schedule
7
|
|
|
|
|
|
Cardinal Health,
Inc. and Subsidiaries
|
Segment Business
Analysis
|
|
|
|
|
|
|
Year-to-Date
|
|
|
Year-to-Date
|
(in
millions)
|
2016
|
|
2015
|
|
(in
millions)
|
2016
|
|
2015
|
Pharmaceutical
|
|
|
|
|
Medical
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
Revenue
|
|
|
|
Amount
|
$
|
53,427
|
|
|
$
|
43,836
|
|
|
Amount
|
$
|
6,081
|
|
|
$
|
5,766
|
|
Growth
rate
|
22
|
%
|
|
6
|
%
|
|
Growth
rate
|
5
|
%
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
Segment
profit
|
|
|
|
|
Segment
profit
|
|
|
|
Amount
|
$
|
1,285
|
|
|
$
|
992
|
|
|
Amount
|
$
|
207
|
|
|
$
|
229
|
|
Growth
rate
|
29
|
%
|
|
8
|
%
|
|
Growth
rate1
|
(10)
|
%
|
|
(4)
|
%
|
Segment profit
margin
|
2.41
|
%
|
|
2.26
|
%
|
|
Segment profit
margin
|
3.40
|
%
|
|
3.96
|
%
|
|
|
1
|
Segment profit
includes a $21 million impact from the roll-out of the inventory
fair value step up related to the Cordis acquisition for the six
months ended December 31, 2015. Excluding the impact of the
inventory fair value step up, Medical segment profit growth would
have been flat for the six months ended December 31,
2015.
|
|
|
Refer to
definitions for an explanation of calculations.
|
|
|
Total consolidated
revenue for the six months ended December 31, 2015 was $59,499
million, which included total segment revenue of $59,508 million
and Corporate revenue of $(9) million. Total consolidated revenue
for the six months ended December 31, 2014 was $49,607
million, which included total segment revenue of $49,602 million
and Corporate revenue of $5 million. Corporate revenue
consists primarily of elimination of inter-segment revenue and
other revenue not allocated to the segments.
|
|
|
Total consolidated
operating earnings for the six months ended December 31, 2015
were $1,183 million, which included total segment profit of $1,492
million and Corporate costs of $(309) million. Total consolidated
operating earnings for the six months ended December 31, 2014
were $1,012 million, which included total segment profit of $1,221
million and Corporate costs of $(209) million. Corporate includes,
among other things, LIFO charges/(credits), restructuring and
employee severance, amortization and other acquisition-related
costs, impairments and (gain)/loss on disposal of assets,
litigation (recoveries)/charges, net and certain investment
spending that are not allocated to the segments.
|
Schedule
8
|
|
Cardinal Health,
Inc. and Subsidiaries
|
GAAP / Non-GAAP
Reconciliation
|
|
|
|
|
|
|
|
|
|
Net
Earnings
|
Diluted
|
Diluted
EPS
|
|
|
Gross
|
|
Operating
|
Earnings
|
Provision
|
Net
Earnings
|
attributable
|
EPS
|
attributable
|
|
|
Margin
|
|
Earnings
|
Before
|
for
|
attributable
|
to
Cardinal
|
attributable
|
to
Cardinal
|
|
Gross
|
Growth
|
Operating
|
Growth
|
Income
|
Income
|
to
Cardinal
|
Health,
Inc.
|
to
Cardinal
|
Health,
Inc.
|
|
Margin
|
Rate
|
Earnings
|
Rate
|
Taxes
|
Taxes
|
Health,
Inc.
|
Growth
Rate
|
Health,
Inc.
|
Growth
Rate1
|
(in millions, except
per common share amounts)
|
Second Quarter
2016
|
GAAP
|
$
|
1,609
|
|
11
|
%
|
$
|
563
|
|
3
|
%
|
$
|
520
|
|
$
|
194
|
|
$
|
326
|
|
13
|
%
|
$
|
0.98
|
|
14
|
%
|
LIFO
charges/(credits)
|
39
|
|
|
39
|
|
|
39
|
|
15
|
|
24
|
|
|
0.07
|
|
|
Restructuring and
employee severance
|
—
|
|
|
2
|
|
|
2
|
|
1
|
|
1
|
|
|
—
|
|
|
Amortization and
other acquisition-related costs
|
—
|
|
|
114
|
|
|
114
|
|
41
|
|
73
|
|
|
0.22
|
|
|
Impairments and
(gain)/loss on disposal of assets
|
—
|
|
|
17
|
|
|
17
|
|
7
|
|
10
|
|
|
0.03
|
|
|
Litigation
(recoveries)/charges, net
|
—
|
|
|
(9)
|
|
|
(9)
|
|
(5)
|
|
(4)
|
|
|
(0.01)
|
|
|
Non-GAAP
|
$
|
1,648
|
|
13
|
%
|
$
|
726
|
|
14
|
%
|
$
|
683
|
|
$
|
253
|
|
$
|
430
|
|
7
|
%
|
$
|
1.30
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter
2015
|
GAAP
|
$
|
1,454
|
|
8
|
%
|
$
|
546
|
|
5
|
%
|
$
|
451
|
|
$
|
162
|
|
$
|
289
|
|
5
|
%
|
$
|
0.86
|
|
9
|
%
|
Restructuring and
employee severance
|
—
|
|
|
7
|
|
|
7
|
|
3
|
|
4
|
|
|
0.01
|
|
|
Amortization and
other acquisition-related costs
|
—
|
|
|
60
|
|
|
60
|
|
22
|
|
38
|
|
|
0.11
|
|
|
Impairments and
(gain)/loss on disposal of assets
|
—
|
|
|
(18)
|
|
|
(18)
|
|
(10)
|
|
(8)
|
|
|
(0.03)
|
|
|
Litigation
(recoveries)/charges, net
|
—
|
|
|
44
|
|
|
44
|
|
4
|
|
40
|
|
|
0.12
|
|
|
Loss on
extinguishment of debt
|
—
|
|
|
—
|
|
|
60
|
|
23
|
|
37
|
|
|
0.11
|
|
|
Non-GAAP
|
$
|
1,454
|
|
8
|
%
|
$
|
639
|
|
10
|
%
|
$
|
604
|
|
$
|
204
|
|
$
|
400
|
|
28
|
%
|
$
|
1.20
|
|
33
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Earnings
|
Diluted
|
Diluted
EPS
|
|
|
Gross
|
|
Operating
|
Earnings
|
Provision
|
Net
Earnings
|
attributable
|
EPS
|
attributable
|
|
|
Margin
|
|
Earnings
|
Before
|
for
|
attributable
|
to
Cardinal
|
attributable
|
to
Cardinal
|
|
Gross
|
Growth
|
Operating
|
Growth
|
Income
|
Income
|
to
Cardinal
|
Health,
Inc.
|
to
Cardinal
|
Health,
Inc.
|
|
Margin
|
Rate
|
Earnings
|
Rate
|
Taxes
|
Taxes
|
Health,
Inc.
|
Growth
Rate
|
Health,
Inc.
|
Growth
Rate
|
(in millions, except
per common share amounts)
|
Year-to-Date
2016
|
GAAP
|
$
|
3,188
|
|
14
|
%
|
$
|
1,183
|
|
17
|
%
|
$
|
1,087
|
|
$
|
377
|
|
$
|
709
|
|
28
|
%
|
$
|
2.14
|
|
30
|
%
|
LIFO
charges/(credits)
|
39
|
|
|
39
|
|
|
39
|
|
15
|
|
24
|
|
|
0.07
|
|
|
Restructuring and
employee severance
|
—
|
|
|
14
|
|
|
14
|
|
5
|
|
9
|
|
|
0.02
|
|
|
Amortization and
other acquisition-related costs
|
—
|
|
|
219
|
|
|
219
|
|
78
|
|
141
|
|
|
0.42
|
|
|
Impairments and
(gain)/loss on disposal of assets
|
—
|
|
|
17
|
|
|
17
|
|
7
|
|
10
|
|
|
0.03
|
|
|
Litigation
(recoveries)/charges, net
|
—
|
|
|
(9)
|
|
|
(9)
|
|
(5)
|
|
(4)
|
|
|
(0.01)
|
|
|
Non-GAAP
|
$
|
3,227
|
|
15
|
%
|
$
|
1,463
|
|
22
|
%
|
$
|
1,368
|
|
$
|
479
|
|
$
|
889
|
|
20
|
%
|
$
|
2.68
|
|
22
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-to-Date
2015
|
GAAP
|
$
|
2,794
|
|
7
|
%
|
$
|
1,012
|
|
2
|
%
|
$
|
886
|
|
$
|
331
|
|
$
|
555
|
|
(10)
|
%
|
$
|
1.65
|
|
(7)
|
%
|
Restructuring and
employee severance
|
—
|
|
|
26
|
|
|
26
|
|
9
|
|
17
|
|
|
0.05
|
|
|
Amortization and
other acquisition-related costs
|
—
|
|
|
112
|
|
|
112
|
|
41
|
|
71
|
|
|
0.21
|
|
|
Impairments and
(gain)/loss on disposal of assets
|
—
|
|
|
(18)
|
|
|
(18)
|
|
(10)
|
|
(8)
|
|
|
(0.02)
|
|
|
Litigation
(recoveries)/charges, net
|
—
|
|
|
72
|
|
|
72
|
|
4
|
|
68
|
|
|
0.20
|
|
|
Loss on
extinguishment of debt
|
—
|
|
|
—
|
|
|
60
|
|
23
|
|
37
|
|
|
0.11
|
|
|
Non-GAAP
|
$
|
2,794
|
|
7
|
%
|
$
|
1,204
|
|
8
|
%
|
$
|
1,138
|
|
$
|
399
|
|
$
|
740
|
|
7
|
%
|
$
|
2.19
|
|
10
|
%
|
|
1 The $56 million remeasurement of unrecognized tax
benefits reduced, for fiscal 2014 second quarter, both diluted EPS
from continuing operations and non-GAAP diluted EPS from continuing
operations by $0.16. The fiscal 2015 second quarter growth rates
for diluted EPS from continuing operations and non-GAAP diluted EPS
from continuing operations, excluding the impact of the tax
remeasurement, would have been (10) percent and 13 percent,
respectively.
|
|
The sum of the
components may not equal the total due to rounding.
|
|
We apply varying tax
rates depending on the item's nature and tax jurisdiction where it
is incurred.
|
|
|
|
Schedule
9
|
|
|
|
|
Cardinal Health,
Inc. and Subsidiaries
|
GAAP / Non-GAAP
Reconciliation
|
|
|
|
|
|
Second
Quarter
|
|
|
(in
millions)
|
2016
|
|
|
|
2015
|
|
|
GAAP return on
equity
|
19.7
|
%
|
|
|
|
18.7
|
%
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP return on
equity
|
|
|
|
|
|
|
|
Net earnings
attributable to Cardinal Health, Inc.
|
$
|
326
|
|
|
|
|
$
|
289
|
|
|
|
LIFO
charges/(credits), net of tax
|
24
|
|
|
|
|
—
|
|
|
|
Restructuring and
employee severance, net of tax
|
1
|
|
|
|
|
4
|
|
|
|
Amortization and
other acquisition-related costs, net of tax
|
73
|
|
|
|
|
38
|
|
|
|
Impairments and
(gain)/loss on disposal of assets, net of tax
|
10
|
|
|
|
|
(8)
|
|
|
|
Litigation
(recoveries)/charges, net, net of tax
|
(4)
|
|
|
|
|
40
|
|
|
|
Loss on
extinguishment of debt, net of tax
|
—
|
|
|
|
|
37
|
|
|
|
Adjusted net earnings
attributable to Cardinal Health, Inc.
|
$
|
430
|
|
|
|
|
$
|
400
|
|
|
|
Annualized
|
$
|
1,720
|
|
|
|
|
$
|
1,600
|
|
|
|
|
|
|
|
|
|
|
|
|
Second
|
|
First
|
|
Second
|
|
First
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
2016
|
|
2016
|
|
2015
|
|
2015
|
Total Cardinal
Health, Inc. shareholders' equity
|
$
|
6,711
|
|
|
$
|
6,505
|
|
|
$
|
6,100
|
|
|
$
|
6,256
|
|
Divided by average
Cardinal Health, Inc. shareholders' equity
|
$
|
6,608
|
|
|
|
|
$
|
6,178
|
|
|
|
Non-GAAP return on
equity
|
26.0
|
%
|
|
|
|
25.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We apply varying tax
rates depending on the item's nature and tax jurisdiction where it
is incurred.
|
Schedule
10
|
|
|
|
|
|
|
Cardinal Health,
Inc. and Subsidiaries
|
GAAP / Non-GAAP
Reconciliation
|
|
|
|
|
|
|
|
Year-to-Date
|
|
|
|
|
(in
millions)
|
2016
|
|
|
|
|
|
2015
|
|
|
|
|
GAAP return on
equity
|
21.8
|
%
|
|
|
|
|
|
17.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP return on
equity
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to Cardinal Health, Inc.
|
$
|
709
|
|
|
|
|
|
|
$
|
555
|
|
|
|
|
|
LIFO
charges/(credits), net of tax
|
24
|
|
|
|
|
|
|
—
|
|
|
|
|
|
Restructuring and
employee severance, net of tax
|
9
|
|
|
|
|
|
|
17
|
|
|
|
|
|
Amortization and
other acquisition-related costs, net of tax
|
141
|
|
|
|
|
|
|
71
|
|
|
|
|
|
Impairments and
(gain)/loss on disposal of assets, net of tax
|
10
|
|
|
|
|
|
|
(8)
|
|
|
|
|
|
Litigation
(recoveries)/charges, net, net of tax
|
(4)
|
|
|
|
|
|
|
68
|
|
|
|
|
|
Loss on
extinguishment of debt, net of tax
|
—
|
|
|
|
|
|
|
37
|
|
|
|
|
|
Adjusted net earnings
attributable to Cardinal Health, Inc.
|
$
|
889
|
|
|
|
|
|
|
$
|
740
|
|
|
|
|
|
Annualized
|
$
|
1,778
|
|
|
|
|
|
|
$
|
1,480
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second
|
|
First
|
|
Fourth
|
|
Second
|
|
First
|
|
Fourth
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
2016
|
|
2016
|
|
2015
|
|
2015
|
|
2015
|
|
2014
|
Total Cardinal
Health, Inc. shareholders' equity
|
$
|
6,711
|
|
|
$
|
6,505
|
|
|
$
|
6,256
|
|
|
$
|
6,100
|
|
|
$
|
6,256
|
|
|
$
|
6,401
|
|
Divided by average
Cardinal Health, Inc. shareholders' equity
|
$
|
6,491
|
|
|
|
|
|
|
$
|
6,252
|
|
|
|
|
|
Non-GAAP return on
equity
|
27.4
|
%
|
|
|
|
|
|
23.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We apply varying tax
rates depending on the item's nature and tax jurisdiction where it
is incurred.
|
Schedule
11
|
|
|
|
|
Cardinal Health,
Inc. and Subsidiaries
|
GAAP / Non-GAAP
Reconciliation
|
|
|
|
|
|
Second
Quarter
|
|
Year-to-Date
|
(in
millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
GAAP effective tax
rate
|
37.3
|
%
|
|
36.0
|
%
|
|
34.7
|
%
|
|
37.4
|
%
|
|
|
|
|
|
|
|
|
Non-GAAP effective
tax rate
|
|
|
|
|
|
|
|
Earnings before
income taxes
|
$
|
520
|
|
|
$
|
451
|
|
|
$
|
1,087
|
|
|
$
|
886
|
|
LIFO
charges/(credits)
|
39
|
|
|
—
|
|
|
39
|
|
|
—
|
|
Restructuring and
employee severance
|
2
|
|
|
7
|
|
|
14
|
|
|
26
|
|
Amortization and
other acquisition-related costs
|
114
|
|
|
60
|
|
|
219
|
|
|
112
|
|
Impairments and
(gain)/loss on disposal of assets
|
17
|
|
|
(18)
|
|
|
17
|
|
|
(18)
|
|
Litigation
(recoveries)/charges, net
|
(9)
|
|
|
44
|
|
|
(9)
|
|
|
72
|
|
Loss on
extinguishment of debt
|
—
|
|
|
60
|
|
|
—
|
|
|
60
|
|
Adjusted earnings
before income taxes
|
$
|
683
|
|
|
$
|
604
|
|
|
$
|
1,368
|
|
|
$
|
1,138
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
$
|
194
|
|
|
$
|
162
|
|
|
$
|
377
|
|
|
$
|
331
|
|
LIFO
charges/(credits) tax benefit
|
15
|
|
|
—
|
|
|
15
|
|
|
—
|
|
Restructuring and
employee severance tax benefit
|
1
|
|
|
3
|
|
|
5
|
|
|
9
|
|
Amortization and
other acquisition-related costs tax benefit
|
41
|
|
|
22
|
|
|
78
|
|
|
41
|
|
Impairments and
(gain)/loss on disposal of assets tax benefit/(expense)
|
7
|
|
|
(10)
|
|
|
7
|
|
|
(10)
|
|
Litigation
(recoveries)/charges, net tax benefit/(expense)
|
(5)
|
|
|
4
|
|
|
(5)
|
|
|
4
|
|
Loss on
extinguishment of debt tax benefit
|
—
|
|
|
23
|
|
|
—
|
|
|
23
|
|
Adjusted provision
for income taxes
|
$
|
253
|
|
|
$
|
204
|
|
|
$
|
479
|
|
|
$
|
399
|
|
|
|
|
|
|
|
|
|
Non-GAAP effective
tax rate
|
37.1
|
%
|
|
33.8
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
|
|
|
|
|
|
|
|
|
Second
Quarter
|
|
|
|
|
|
2016
|
|
2015
|
|
|
|
|
Debt to total
capital
|
45
|
%
|
|
39
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net debt to
capital
|
|
|
|
|
|
|
|
Current portion of
long-term obligations and other short-term borrowings
|
$
|
354
|
|
|
$
|
270
|
|
|
|
|
|
Long-term
obligations, less current portion
|
5,171
|
|
|
3,706
|
|
|
|
|
|
Debt
|
$
|
5,525
|
|
|
$
|
3,976
|
|
|
|
|
|
Cash and
equivalents
|
(2,324)
|
|
|
(2,881)
|
|
|
|
|
|
Net debt
|
$
|
3,201
|
|
|
$
|
1,095
|
|
|
|
|
|
Total Cardinal
Health, Inc. shareholders' equity
|
6,711
|
|
|
6,100
|
|
|
|
|
|
Capital
|
$
|
9,912
|
|
|
$
|
7,195
|
|
|
|
|
|
Net debt to
capital
|
32
|
%
|
|
15
|
%
|
|
|
|
|
|
The sum of the
components may not equal the total due to rounding.
|
|
We apply varying tax
rates depending on the item's nature and tax jurisdiction where it
is incurred.
|
Forward-Looking Non-GAAP Financial Measures
We present non-GAAP net earnings attributable to Cardinal
Health, Inc. and non-GAAP effective tax rate (and presentations
derived from these financial measures, including per share
calculations) on a forward-looking basis. The most directly
comparable forward-looking GAAP measures are net earnings
attributable to Cardinal Health, Inc. and effective tax rate. We
are unable to provide a quantitative reconciliation of these
forward-looking non-GAAP measures to the most directly comparable
forward-looking GAAP measures because we cannot reliably forecast
LIFO charges/(credits), restructuring and employee severance,
amortization and other acquisition-related costs, impairments and
(gain)/loss on disposal of assets, litigation (recoveries)/charges,
net, and loss on extinguishment of debt, which are difficult to
predict and estimate and are primarily dependent on future events.
Please note that the unavailable reconciling items could
significantly impact our future financial results.
Cardinal Health, Inc. and Subsidiaries
Use of Non-GAAP Measures
This earnings release contains financial measures that are not
calculated in accordance with U.S. generally accepted accounting
principles ("GAAP"). In general, the measures exclude items
and charges that (i) management does not believe reflect Cardinal
Health, Inc.'s (the "Company") core business and relate more to
strategic, multi-year corporate activities; or (ii) relate to
activities or actions that may have occurred over multiple or in
prior periods without predictable trends. Management uses these
non-GAAP financial measures internally to evaluate the Company's
performance, evaluate the balance sheet, engage in financial and
operational planning and determine incentive compensation.
Management provides these non-GAAP financial measures to
investors as supplemental metrics to assist readers in assessing
the effects of items and events on its financial and operating
results and in comparing the Company's performance to that of its
competitors. However, the non-GAAP financial measures used by
the Company may be calculated differently from, and therefore may
not be comparable to, similarly titled measures used by other
companies.
The non-GAAP financial measures disclosed by the Company should
not be considered a substitute for, or superior to, financial
measures calculated in accordance with GAAP, and the financial
results calculated in accordance with GAAP and reconciliations to
those financial statements set forth above should be carefully
evaluated.
Definitions
Debt: long-term obligations plus short-term
borrowings.
Debt to Total Capital: debt divided by (debt plus total
Cardinal Health, Inc. shareholders' equity).
Net Debt: a Non-GAAP measure defined as debt minus (cash
and equivalents).
Net Debt to Capital: a Non-GAAP measure defined as net
debt divided by (net debt plus total Cardinal Health, Inc.
shareholders' equity).
Non-GAAP Diluted EPS attributable to Cardinal Health, Inc. or
"Non-GAAP Diluted EPS" or "Non-GAAP Diluted Earnings Per
Share": non-GAAP net earnings attributable to Cardinal Health,
Inc. divided by diluted weighted-average shares outstanding.
Non-GAAP Diluted EPS from continuing operations: non-GAAP
earnings from continuing operations divided by diluted
weighted-average shares outstanding.
Non-GAAP Effective Tax Rate: (provision for income taxes
adjusted for (1) LIFO charges/(credits)1, (2)
restructuring and employee severance2, (3) amortization
and other acquisition-related costs3, (4) impairments
and (gain)/loss on disposal of assets4, (5) litigation
(recoveries)/charges, net5, and (6) loss on
extinguishment of debt6) divided by (earnings before
income taxes adjusted for the same six items).
Non-GAAP Gross Margin: Gross margin excluding LIFO
charges/(credits).
Non-GAAP Net Earnings attributable to Cardinal Health, Inc.
or "Non-GAAP Net Earnings": net earnings attributable to
Cardinal Health, Inc. excluding (1) LIFO charges/(credits), (2)
restructuring and employee severance, (3) amortization and other
acquisition-related costs, (4) impairments and (gain)/loss on
disposal of assets, (5) litigation (recoveries)/charges, net, and
(6) loss on extinguishment of debt, each net of tax.
Non-GAAP Earnings from Continuing Operations: earnings
from continuing operations excluding (1) LIFO charges/(credits),
(2) restructuring and employee severance, (3) amortization and
other acquisition-related costs, (4) impairments and (gain)/loss on
disposal of assets, (5) litigation (recoveries)/charges, net, and
(6) loss on extinguishment of debt, each net of tax.
Non-GAAP Operating Earnings: operating earnings excluding
(1) LIFO charges/(credits), (2) restructuring and employee
severance, (3) amortization and other acquisition-related costs,
(4) impairments and (gain)/loss on disposal of assets, and (5)
litigation (recoveries)/charges, net.
Non-GAAP Return on Equity: (annualized current period net
earnings attributable to Cardinal Health, Inc. excluding (1) LIFO
charges/(credits), (2) restructuring and employee severance, (3)
amortization and other acquisition-related costs, (4) impairments
and (gain)/loss on disposal of assets, (5) litigation
(recoveries)/charges, net, and (6) loss on extinguishment of debt,
each net of tax) divided by average Cardinal Health, Inc.
shareholders' equity.
Return on Equity: annualized current period net earnings
attributable to Cardinal Health, Inc. divided by average Cardinal
Health, Inc. shareholders' equity.
Segment Profit: segment revenue minus (segment cost of
products sold and segment distribution, selling, general, and
administrative expenses).
Segment Profit Margin: segment profit divided by segment
revenue.
1
|
The inventories of
the Company's core pharmaceutical distribution facilities in the
Pharmaceutical segment are valued at the lower of cost, using the
LIFO method, or market. These charges or credits are included
in cost of products sold, and represent changes in the Company's
LIFO inventory reserve.
|
|
|
2
|
Programs by which the
Company fundamentally changes its operations such as closing and
consolidating facilities, moving manufacturing of a product to
another location, production or business process sourcing, employee
severance (including rationalizing headcount or other significant
changes in personnel), and realigning operations (including
realignment of the management structure of a business unit in
response to changing market conditions).
|
|
|
3
|
Costs that consist
primarily of amortization of acquisition-related intangibles
assets, transaction costs, integration costs, and changes in the
fair value of contingent consideration obligations.
|
|
|
4
|
Asset impairments and
(gains)/losses from the disposal of assets not eligible to be
classified as discontinued operations are classified within
impairments and (gain)/loss on disposal of assets within the
condensed consolidated statements of earnings.
|
|
|
5
|
Loss contingencies
related to litigation and regulatory matters and income from
favorable resolution of legal matters.
|
|
|
6
|
Charges related to
the make-whole premium on the redemption of notes.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/cardinal-health-reports-second-quarter-results-for-fiscal-2016-300212712.html
SOURCE Cardinal Health