Express Scripts 2012 Annual Report Download - page 74

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Express Scripts 2012 Annual Report72
Prior to being classified as a discontinued operation, PMG was included in the Other Business Operations
segment. PMG was headquartered in Lincoln Park, New Jersey and provided outsourced distribution and
verification services to pharmaceutical manufacturers.
The results of operations for PMG are reported as discontinued operations for all periods presented in the
accompanying consolidated statement of operations in accordance with applicable accounting guidance.
Additionally, for all periods presented, cash flows of our discontinued operations are segregated in our
accompanying consolidated statement of cash flows.
Select statement of operations information. Certain information with respect to discontinued operations of
EAV, UBC, Europe and PMG for the years ended December 31, 2012, 2011 and 2010 is summarized as follows:
(in millions)
2012
2011
2010
Revenues
$ 558.6
$ -
$ 16.5
Operating loss
(13.3)
-
(36.4)
Income tax benefit (expense) from discontinued operations
(12.2)
-
12.9
Net loss from discontinued operations, net of tax
(27.6)
-
(23.4)
5. Property and equipment
Property and equipment of our continuing operations consists of the following:
December 31,
(in millions)
2012
2011
Land and buildings
$ 216.4
$ 11.3
Furniture
66.9
36.7
Equipment
543.8
345.4
Computer software
1,321.3
398.0
Leasehold improvements
180.4
107.7
Total property and equipment
2,328.8
899.1
Less accumulated depreciation
(694.5)
(482.9)
Property and equipment, net
$ 1,634.3
$ 416.2
Depreciation expense for our continuing operations in 2012, 2011 and 2010 was $284.2 million, $98.6
million and $91.9 million, respectively. Internally developed software, net of accumulated depreciation, for our
continuing operations was $743.5 million and $71.4 million at December 31, 2012 and 2011, respectively. We
capitalized $95.7 million of internally developed software during 2012.
In November 2012, we entered into a four-year capital lease for equipment to be used in our Fair Lawn,
New Jersey facility. Prior to January 1, 2013, the Company did not have the right to use the asset, and did not
receive any services that would result in an obligation. Additionally, the equipment has not been placed into service
at December 31, 2012. As such, no asset or liability has been recorded at December 31, 2012 (see Note 12 –
Commitments and contingencies).
Under certain of our operating leases for facilities in which we operate home delivery and specialty
pharmacies, we are required to remove improvements and equipment upon surrender of the property to the landlord
and convert the facilities back to office space. Our asset retirement obligation for our continuing operations was $4.9
million at both December 31, 2012 and 2011.
In the first quarter of 2011, ESI ceased fulfilling prescriptions from our home delivery dispensing
pharmacy in Bensalem, Pennsylvania. ESI currently maintains the location and all necessary permits and licenses to
be able to utilize the facility for business continuity planning purposes. ESI also maintains a non-dispensing order
processing facility in the Bensalem, Pennsylvania area, which will remain operational. Based on our assessments of
potential use and our intent for this location, we consider the Bensalem dispensing pharmacy facility to be
temporarily idle, and have not modified the method or useful life used to depreciate the related assets.