McKesson 2012 Annual Report Download - page 123

Download and view the complete annual report

Please find page 123 of the 2012 McKesson annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 128

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128

Appendix A
2012 2011 2010 2009 2008
Diluted earnings per share from continuing
operations (GAAP) 5.59$ 4.29$ 4.62$ 2.95$ 3.32$
Adjustments, net of tax:
Amortization of acquisition-related intangibles 0.47 0.31 0.26 0.28 0.22
Acquisition-related expenses 0.08 0.14 — — 0.01
Litigation reserve adjustments 0.24 0.57 (0.04) 1.11 (0.01)
Adjusted earnings per share (Non-GAAP
)
1 6.38$ 5.31$ 4.85$ 4.35$ 3.53$
(1) May not add due to rounding.
Distribution
Solutions
Technology
Solutions Corporate Total
Income from continuing operations befor
e
interest expense and income taxes (GAAP) 2,219$ 364$ (413)$ 2,170$
Adjustments:
Amortization of acquisition-related intangibles 121 70 — 191
Acquisition-related expenses 24 6 1 31
Litigation reserve adjustments 149 — — 149
Adjusted income from continuing operations before
interest expense and income taxes (Non-GAAP) 2,513$ 440$ (412)$ 2,541$
Distribution
Solutions
Technology
Solutions Corporate Total
Income from continuing operations befor
e
interest expense and income taxes (GAAP) 1,897$ 301$ (341)$ 1,857$
Adjustments:
Aiif iii ldi ibl
70
62
132
(In millions)
RECONCILIATION OF GAAP EARNINGS PER SHARE TO ADJUSTED EARNINGS PER SHARE (NON-GAAP)
Years Ended March 31,
RECONCILIATION OF GAAP SEGMENT OPERATING PROFIT TO ADJUSTED OPERATING PROFIT (NON-GAAP)
Year Ended March 31, 2012
Year Ended March 31, 2011
Amortization of acquisition-related intangible
s
70 62
—
132
Acquisition-related expenses 41 — (14) 27
Litigation reserve adjustments 213 — — 213
Adjusted income from continuing operations before
interest expense and income taxes (Non-GAAP) 2,221$ 363$ (355)$ 2,229$
Year-over-Year Change - GAAP 17% 21% 21% 17%
Year over Year Change - Non-GAAP 13% 21% 16% 14%
Adjusted Earnings (Non-GAAP) Financial Information
Income taxes on Adjusted Earnings are calculated in accordance with Accounting Standards Codification 740, “Income Taxes,” which is the same accounting
principles used by the Company when presenting its GAAP financial results.
The Company believes the presentation of non-GAAP measures such as Adjusted Earnings provides useful supplemental information to investors with regard to its
core operating performance, as well as assists with the comparison of its past financial performance to the Company’s future financial results. Moreover, the Company
believes that the presentation of Adjusted Earnings assists investors’ ability to compare its financial results to those of other companies in the same industry. However,
the Company's Adjusted Earnings measure may be defined and calculated differently by other companies in the same industry.
The Company internally uses non-GAAP financial measures such as Adjusted Earnings in connection with its own financial planning and reporting processes.
Specifically, Adjusted Earnings serves as one of the measures management utilizes when allocating resources, deploying capital and assessing business performance
and employee incentive compensation. Nonetheless, non-GAAP financial results and related measures disclosed by the Company should not be considered a substitute
for, nor superior to, financial results and measures as determined or calculated in accordance with GAAP.
Adjusted Earnings represents income from continuing operations, excluding the effects of the following items from the Company’s U.S. generally accepted accounting
principles (“GAAP”) financial results, including the related income tax effects:
Amortization of acquisition-related intangibles - Amortization expense of acquired intangible assets purchased in connection with acquisitions by the Company.
Acquisition-related expenses - Transaction and integration expenses that are directly related to acquisitions by the Company. Examples include transaction closing
costs, professional service fees, restructuring or severance charges, retention payments, employee relocation expenses, facility or other exit-related expenses,
recoveries of acquisition-related expenses or post-closing expenses, or bridge loan fees.
Litigation reserve adjustments - Adjustments to the Company’s reserves, including accrued interest, for estimated probable losses for its Average Wholesale Price
and Securities Litigation matters, as such terms were defined in the Company’s Annual Reports on Form 10-K for the fiscal years ended March 31, 2012 and 2009.