Express Scripts 2014 Annual Report Download - page 46

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Express Scripts 2014 Annual Report
44
• Theredemptionof$300.0millionaggregateprincipalamountof6.125%seniornotesdue2013duringthe
yearended2013.
• Acontractualinterestpaymentof$35.4millionreceivedfromaclientintheyearended2013.Interest
associatedwiththisclienthasbeenreceivedthroughout2014.
Netotherexpensedecreased$72.1million,or12.1%,in2013ascomparedto2012.Thisdecreaseisprimarilydue
toreducedinterestfortheyearendedDecember31,2013duetotheearlyredemptionofESI’s$1,000.0millionaggregate
principalamountof6.250%seniornotesdue2014,anda$35.4millioncontractualinterestpaymentreceivedfromaclient.In
addition,thisdecreasewaspartiallyduetogreaterequityincomefromourjointventureof$32.8millionfortheyearended
2013comparedto$14.9millionfortheyearended2012,whichwebeganrecordingundertheequitymethodduetoour
increasedconsolidatedownershipfollowingtheMergerasdescribedinNote3-Changesinbusiness.Thesenetdecreasesare
partiallyoffsetbytheacquisitionofMedcoandinclusionofitsinterestexpenseforthethreemonthsendedMarch31,2013
relatedtotheseniornotesacquiredintheMerger,aswellas$68.5millionofredemptioncostsandwrite-offofdeferred
financingfeesincurredforearlyredemptionofdebtasdescribedbelowfortheyearendedDecember31,2013.
Forthedefinitionsoftheagreementsandseniornotesreferencedabove,see“PartII—Item7—Management’s
DiscussionandAnalysisofFinancialConditionandResultsofOperations—LiquidityandCapitalResources.”
PROVISION FOR INCOME TAXES
OureffectivetaxratefromcontinuingoperationsattributabletoExpressScriptswas33.6%fortheyearended
December31,2014,comparedto36.4%and38.1%for2013and2012,respectively.
During2014,werecognizedanetdiscretebenefitof$113.9millionprimarilyattributabletoachangeinestimate
resultingintherecognitionoftaxbenefitsforapermanentdeductionrelatedtoourdomesticproductionactivities,offsetby
chargesrelatedtointerestonandchangesinourunrecognizedtaxbenefits.In2013,werecognizedanetdiscretebenefitof
$51.2millionprimarilyattributabletoinvestmentsincertainforeignsubsidiariesforwhichwerecognizedasaresultofvarious
divestitures,deferredtaximplicationsofnewlyenactedstatelawsandincomenotrecognizedfortaxpurposes.
TheCompanyiscurrentlypursuinganapproximate$531.0millionpotentialtaxbenefitrelatedtothedispositionof
PolyMedicaCorporation(“Liberty”).Nonetbenefithasbeenrecognized.Anetbenefitmaybecomerealizableinthefuture;
howeverwecannotpredictwithanycertaintytheexactamount.
Webelieveitisreasonablypossibleourunrecognizedtaxbenefitscoulddecreasebyupto$100millionwithinthe
nexttwelvemonthsduetotheconclusionofvariousexaminationsaswellaslapsesinvariousstatutesoflimitations.
NET LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX
During2014,ourEuropeanoperationsweresubstantiallyshutdown.During2013,wesoldvariousportionsofour
UBClineofbusinessandouracuteinfusiontherapieslineofbusiness.During2012,wesoldourEAVlineofbusiness.These
linesofbusinessareclassifiedasdiscontinuedoperations.Theresultsofoperationsforthesebusinesseswerereportedas
discontinuedoperationsforallperiodspresentedintheaccompanyinginformation.
Therewerenodiscontinuedoperationsfortheyearended2014.Thenetlossfromdiscontinuedoperations,netof
tax,increased$21.3million,or65.9%,in2013ascomparedto2012.Thisincreaseisduetoatotalgainof$52.3million
recognizedinconnectionwiththesaleofthediscontinuedoperationsportionsofourUBCbusinessandouracuteinfusion
therapieslineofbusiness,aswellasimpairmentchargesassociatedwithourEAVlineofbusinessof$11.5millionduringthe
yearendedDecember31,2012,whichwassoldin2012.Theseincreasesarepartiallyoffsetbya$32.9millionimpairment
chargeonouracuteinfusiontherapieslineofbusinessandchargesrecognizedof$16.0millionfortheyearendedDecember
31,2013.
SeeNote6-GoodwillandotherintangiblesandNote4-Dispositionsforfurtherinformationregardingthe
businessesdescribedabove.
NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTEREST
Netincomeattributabletonon-controllinginterestrepresentstheshareofnetincomeallocatedtomembersinour
consolidatedaffiliates.Changesintheseamountsaredirectlyimpactedbyprofitabilityofourconsolidatedaffiliates.
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