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
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