Walgreens Boots Alliance Reports Fiscal Year 2022 Earnings
Walgreens Boots Alliance (WBA) reported its fourth quarter and fiscal year results for 2022, highlighting a loss per share of $0.48, a decline from earnings of $0.41 in the prior year. Adjusted EPS fell by 31.8% to $0.80. Sales for the fourth quarter totaled $32.4 billion, down 5.3% year-over-year. Despite challenges, WBA raised its long-term U.S. Healthcare sales target to $11-$12 billion by fiscal year 2025, predicting low-teens adjusted EPS growth. The company's management expressed confidence in its strategic transformation towards becoming a consumer-centric healthcare leader.
- Fiscal 2022 EPS increased 117.6% to $5.01.
- Raised U.S. Healthcare fiscal 2025 sales target to $11-$12 billion.
- Projected low-teens adjusted EPS growth in fiscal year 2025.
- Fourth quarter sales from continuing operations dropped 5.3% year-over-year.
- Fourth quarter operating loss was $822 million, largely due to a $783 million impairment charge.
- Free cash flow decreased by $1.3 billion compared to the prior year.
Fourth Quarter Results Ahead of Expectations;
Raising Long-Term Targets for
Fourth quarter and fiscal year financial highlights
-
Fourth quarter loss per share* from continuing operations was
$0.48 $0.89 $0.80 -
Fiscal 2022 EPS from continuing operations was
$5.01 $2.30 $5.04 -
Fourth quarter sales from continuing operations decreased 5.3 percent year-over-year, to
$32.4 billion Walgreens -
Fiscal 2022 sales from continuing operations increased 0.1 percent to
$132.7 billion Walgreens
Fiscal 2023 guidance and long-term growth outlook
-
Expecting fiscal year 2023 adjusted EPS of
$4.45 $4.65 -
Raising
U.S. Healthcare fiscal 2025 sales target to$11 billion $12 billion - Increased visibility to the company's long-term growth algorithm, building to low-teens adjusted EPS growth in fiscal year 2025 and beyond
Chief Executive Officer
"WBA has delivered ahead of expectations in the first year of our transformation to a consumer-centric healthcare company. Our resilient business achieved growth while navigating macroeconomic headwinds. Fiscal 2023 will be a year of accelerating core growth and rapidly scaling our
Overview of Fourth Quarter Results
WBA fourth quarter sales from continuing operations decreased 5.3 percent from the year-ago quarter to
Fourth quarter operating loss from continuing operations was
Net loss from continuing operations in the fourth quarter was
Loss per share from continuing operations was
Net cash provided by operating activities was
Overview of Fiscal Year Results
Sales from continuing operations in fiscal 2022 increased 0.1 percent from the year-ago period to
Operating income from continuing operations in fiscal 2022 decreased 40.8 percent to
Net earnings from continuing operations were
EPS from continuing operations for fiscal 2022 increased to
Net cash provided by operating activities was
Business Highlights
WBA continued to achieve strong results across its business, including:
Transform and align the core
-
Continuing to play a leading role in COVID-19 vaccinations and testing
–Walgreens administered 2.9 million vaccinations and 3.4 million PCR tests in 4Q
– Over 24.9 million boosters administered for the program to date -
Drove
U.S. digital sales growth of 14 percent in 4Q, on top of 82 percent in the year-ago period - Grew myWalgreens membership to 102 million members at the end of 4Q
- Operated eight automated microfulfillment centers at quarter-end, supporting ~1,800 stores
- Investing in labor to return impacted stores to normal operating hours
Build our next growth engine with consumer-centric healthcare solutions
- Accelerated full acquisition of Shields
-
Completed majority share acquisition of
CareCentrix and accelerated full acquisition -
Continued the rollout of
VillageMD with 342 total clinics and 152 co-located clinics now open, on track toward 200 co-located clinics by end of CY22 -
Established 70
Walgreens Health Corners to date, on track toward 100 by end of CY22
Focus the portfolio; optimize capital allocation
-
Sold 11 million shares of Option Care Health, with
$360 million -
$150 million Guangzhou Pharmaceuticals stake - Increased the quarterly dividend for the 47th consecutive year
Build a high-performance culture and a winning team
-
Announced
CareCentrix CEOJohn Driscoll as executive vice president and president,U.S. Healthcare at WBA; CareCentrix CFO,Steve Horowitz , will assume the role ofCareCentrix CEO -
Announced a new structure for the
U.S. Retail Pharmacy segment, organized under two leaders:Lee Cooper , executive vice president and president, Pharmacy; andTracey Brown , president,Walgreens Retail and chief customer officer -
Elevated
Walgreens chief medical officerKevin Ban to the newly created enterprise-level role of executive vice president and chief medical officer, joining the WBA Executive Committee -
Appointed
Inderpal Bhandari to the Board of Directors and namedHsiao Wang senior vice president and chief information officer, bringing deep tech expertise in healthcare and retail -
Reconstituted the
Finance Committee of the Board of Directors as theFinance and Technology Committee , reflecting the significance of technology to achieving the Company's goals -
Named
Alethia Jackson senior vice president, ESG and chief DEI officer
Business Segments
The Company has changed the names of two reportable segments to better align with the Company’s business activities, structure, and strategy. The “United States” segment has been renamed to “U.S. Retail Pharmacy” and the “Walgreens Health” segment was renamed to “U.S. Healthcare”. The segment name changes did not result in any change to the composition of the segments.
Pharmacy sales decreased 8.8 percent compared to the year-ago quarter, negatively impacted by a 10 percentage point headwind from AllianceRx
Retail sales decreased 2.4 percent and comparable retail sales decreased 1.9 percent compared with the year-ago quarter. Excluding tobacco, comparable retail sales decreased 1.1 percent. Comparable retail sales lapped strong results in the year ago quarter where comparable retail sales increased 6.2 percent, aided by broad based growth across all categories including strong sales of COVID-19 related items. Over a three-year period, comparable retail sales excluding tobacco increased 13.0 percent.
Gross profit decreased 15.3 percent to
Selling, general and administrative expenses (SG&A) decreased 3.2 percent to
Operating income in the fourth quarter decreased 75.2 percent to
International
The International segment had fourth quarter sales of
Boots
Gross profit decreased 7.3 percent compared to the year-ago quarter, including an adverse currency impact of 12.7 percent. Adjusted gross profit increased 5.4 percent on a constant currency basis, reflecting strong sales growth across all International markets, partially offset by lower demand for COVID-19 related services in the
SG&A in the quarter increased 54.7 percent from the year-ago quarter to
Operating loss in the fourth quarter was
Gross profit was a loss of
Fourth quarter SG&A was
Operating loss was
Fiscal 2023 Outlook and Long-Term Growth Outlook
For the full fiscal year 2023,
Additionally, the Company is raising the
Management will provide additional details during the earnings call presentation.
Conference Call
WBA will hold an extended conference call to discuss fourth quarter and fiscal 2022 earnings results beginning at
*All references to net earnings or net loss are to net earnings or net loss attributable to WBA, and all references to EPS are to diluted EPS attributable to WBA.
**"Adjusted," "constant currency" and free cash flow amounts are non-GAAP financial measures. See the appendix to this release for a discussion of non-GAAP financial measures, including a reconciliation to the most closely correlated GAAP measure. The Company defines Adjusted EBITDA as segment operating income/(loss) before depreciation, amortization, and stock-based compensation; in addition to these items, the Company excludes certain other non-GAAP adjustments, when they occur, as further defined.
Cautionary Note Regarding Forward-Looking Statements: This release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These include, without limitation, estimates of and goals for future operating, financial and tax performance and results, including our fiscal year 2023 guidance, our long-term growth algorithm, outlook and targets and related assumptions and drivers, as well as forward-looking statements concerning the expected execution and effect of our business strategies, including the potential impacts on our business of COVID-19, our cost-savings and growth initiatives, including statements relating to our expected cost savings under our Transformational Cost Management Program and expansion and future operating and financial results of our
These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions, known or unknown, that could cause actual results to vary materially from those indicated or anticipated.
These risks, assumptions and uncertainties include those described in Item 1A (Risk Factors) of our Form 10-K for the fiscal year ended
We do not undertake, and expressly disclaim, any duty or obligation to update publicly any forward-looking statement after the date of this release, whether as a result of new information, future events, changes in assumptions or otherwise.
Please refer to the supplemental information presented below for reconciliations of the non-GAAP financial measures used in this release to the most comparable GAAP financial measure and related disclosures.
Notes to Editors:
About
A trusted, global innovator in retail pharmacy with approximately 13,000 locations across the
WBA has more than 315,000 team members and a presence in nine countries through its portfolio of consumer brands:
The Company is proud of its contributions to healthy communities, a healthy planet, an inclusive workplace and a sustainable marketplace. WBA has been recognized for its commitment to operating sustainably: it is an index component of the Dow Jones Sustainability Indices (DJSI) and was named to the 100 Best Corporate Citizens 2021.
(WBA-ER)
|
|||||||||||||||
CONSOLIDATED STATEMENTS OF EARNINGS |
|||||||||||||||
(UNAUDITED) |
|||||||||||||||
(in millions, except per share amounts) |
|||||||||||||||
|
Three months ended
|
|
Twelve months ended
|
||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
Sales |
$ |
32,449 |
|
|
$ |
34,262 |
|
|
$ |
132,703 |
|
|
$ |
132,509 |
|
Cost of sales |
|
26,038 |
|
|
|
26,759 |
|
|
|
104,437 |
|
|
|
104,442 |
|
Gross profit |
|
6,410 |
|
|
|
7,503 |
|
|
|
28,265 |
|
|
|
28,067 |
|
Selling, general and administrative expenses |
|
7,320 |
|
|
|
6,649 |
|
|
|
27,295 |
|
|
|
24,586 |
|
Equity earnings (loss) in AmerisourceBergen |
|
88 |
|
|
|
56 |
|
|
|
418 |
|
|
|
(1,139 |
) |
Operating (loss) income |
|
(822 |
) |
|
|
910 |
|
|
|
1,387 |
|
|
|
2,342 |
|
Other income, net |
|
169 |
|
|
|
85 |
|
|
|
2,998 |
|
|
|
558 |
|
(Loss) earnings before interest and income tax provision |
|
(652 |
) |
|
|
995 |
|
|
|
4,385 |
|
|
|
2,900 |
|
Interest expense, net |
|
105 |
|
|
|
88 |
|
|
|
400 |
|
|
|
905 |
|
(Loss) earnings before income tax provision |
|
(758 |
) |
|
|
908 |
|
|
|
3,985 |
|
|
|
1,995 |
|
Income tax (benefit) provision |
|
(235 |
) |
|
|
586 |
|
|
|
(30 |
) |
|
|
667 |
|
Post tax earnings from other equity method investments |
|
21 |
|
|
|
23 |
|
|
|
50 |
|
|
|
627 |
|
Net (loss) earnings from continuing operations |
|
(501 |
) |
|
|
344 |
|
|
|
4,065 |
|
|
|
1,955 |
|
Net earnings from discontinued operations |
|
— |
|
|
|
268 |
|
|
|
— |
|
|
|
557 |
|
Net (loss) earnings |
|
(501 |
) |
|
|
613 |
|
|
|
4,065 |
|
|
|
2,512 |
|
Net (loss) attributable to non-controlling interests - continuing operations |
|
(86 |
) |
|
|
(14 |
) |
|
|
(271 |
) |
|
|
(39 |
) |
Net earnings attributable to non-controlling interests - discontinued operations |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
9 |
|
Net (loss) earnings attributable to |
$ |
(415 |
) |
|
$ |
627 |
|
|
$ |
4,337 |
|
|
$ |
2,542 |
|
|
|
|
|
|
|
|
|
||||||||
Net (loss) earnings attributable to |
|
|
|
|
|
|
|
||||||||
Continuing operations |
$ |
(415 |
) |
|
$ |
358 |
|
|
$ |
4,337 |
|
|
$ |
1,994 |
|
Discontinued operations |
|
— |
|
|
|
268 |
|
|
|
— |
|
|
|
548 |
|
Total |
$ |
(415 |
) |
|
$ |
627 |
|
|
$ |
4,337 |
|
|
$ |
2,542 |
|
Basic net (loss) earnings per common share: |
|
|
|
|
|
|
|
||||||||
Continuing operations |
$ |
(0.48 |
) |
|
$ |
0.41 |
|
|
$ |
5.02 |
|
|
$ |
2.31 |
|
Discontinued operations |
|
— |
|
|
|
0.31 |
|
|
|
— |
|
|
|
0.63 |
|
Total |
$ |
(0.48 |
) |
|
$ |
0.72 |
|
|
$ |
5.02 |
|
|
$ |
2.94 |
|
Diluted net (loss) earnings per common share: |
|
|
|
|
|
|
|
||||||||
Continuing operations |
$ |
(0.48 |
) |
|
$ |
0.41 |
|
|
$ |
5.01 |
|
|
$ |
2.30 |
|
Discontinued operations |
|
— |
|
|
|
0.31 |
|
|
|
— |
|
|
|
0.63 |
|
Total |
$ |
(0.48 |
) |
|
$ |
0.72 |
|
|
$ |
5.01 |
|
|
$ |
2.93 |
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
||||||||
Basic |
|
864.5 |
|
|
|
865.1 |
|
|
|
864.4 |
|
|
|
864.8 |
|
Diluted |
|
864.5 |
|
|
|
867.2 |
|
|
|
865.9 |
|
|
|
866.4 |
|
|
|||||
CONSOLIDATED BALANCE SHEETS |
|||||
(UNAUDITED) |
|||||
(in millions) |
|||||
|
|
|
|
||
Assets |
|
|
|
||
Current assets: |
|
|
|
||
Cash and cash equivalents |
$ |
1,358 |
|
$ |
559 |
Marketable securities |
|
1,114 |
|
|
634 |
Accounts receivable, net |
|
5,017 |
|
|
5,663 |
Inventories |
|
8,353 |
|
|
8,159 |
Other current assets |
|
1,059 |
|
|
800 |
Total current assets |
|
16,902 |
|
|
15,814 |
|
|
|
|
||
Non-current assets: |
|
|
|
||
Property, plant and equipment, net |
|
11,729 |
|
|
12,247 |
Operating lease right-of-use assets |
|
21,259 |
|
|
21,893 |
|
|
22,280 |
|
|
12,421 |
Intangible assets, net |
|
10,730 |
|
|
9,936 |
Equity method investments |
|
5,495 |
|
|
6,987 |
Other non-current assets |
|
1,730 |
|
|
1,987 |
Total non-current assets |
$ |
73,222 |
|
$ |
65,471 |
Total assets |
$ |
90,124 |
|
$ |
81,285 |
|
|
|
|
||
Liabilities, redeemable non-controlling interests and equity |
|
|
|
||
Current liabilities: |
|
|
|
||
Short-term debt |
$ |
1,059 |
|
$ |
1,305 |
Trade accounts payable |
|
11,255 |
|
|
11,136 |
Operating lease obligations |
|
2,286 |
|
|
2,259 |
Accrued expenses and other liabilities |
|
7,899 |
|
|
7,260 |
Income taxes |
|
84 |
|
|
94 |
Total current liabilities |
|
22,583 |
|
|
22,054 |
|
|
|
|
||
Non-current liabilities: |
|
|
|
||
Long-term debt |
|
10,615 |
|
|
7,675 |
Operating lease obligations |
|
21,517 |
|
|
22,153 |
Deferred income taxes |
|
1,442 |
|
|
1,850 |
Other non-current liabilities |
|
3,560 |
|
|
3,413 |
Total non-current liabilities |
|
37,134 |
|
|
35,091 |
|
|
|
|
||
Redeemable non-controlling interests |
|
1,042 |
|
|
319 |
Total equity |
|
29,366 |
|
|
23,822 |
Total liabilities, redeemable non-controlling interests and equity |
$ |
90,124 |
|
$ |
81,285 |
|
|||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(UNAUDITED) |
|||||||
(in millions) |
|||||||
|
Twelve months ended
|
||||||
|
2022 |
|
2021 |
||||
Cash flows from operating activities: |
|
|
|
||||
Net earnings |
$ |
4,065 |
|
|
$ |
2,512 |
|
Adjustments to reconcile net earnings to net cash provided by operating activities: |
|
|
|
||||
Depreciation and amortization |
|
1,990 |
|
|
|
1,973 |
|
Deferred income taxes |
|
(366 |
) |
|
|
233 |
|
Stock compensation expense |
|
391 |
|
|
|
155 |
|
(Earnings) loss from equity method investments |
|
(468 |
) |
|
|
498 |
|
|
|
834 |
|
|
|
49 |
|
Loss on early extinguishment of debt |
|
6 |
|
|
|
414 |
|
Gain on previously held investment interests |
|
(2,576 |
) |
|
|
— |
|
Gain on sale of business |
|
— |
|
|
|
(322 |
) |
Gain on sale of equity method investments |
|
(559 |
) |
|
|
(321 |
) |
Impairment of equity method investments and investments in debt and equity securities |
|
233 |
|
|
|
— |
|
Other |
|
(146 |
) |
|
|
(64 |
) |
Changes in operating assets and liabilities: |
|
|
|
||||
Accounts receivable, net |
|
808 |
|
|
|
(1,451 |
) |
Inventories |
|
(433 |
) |
|
|
165 |
|
Other current assets |
|
(72 |
) |
|
|
(46 |
) |
Trade accounts payable |
|
244 |
|
|
|
842 |
|
Accrued expenses and other liabilities |
|
(138 |
) |
|
|
1,046 |
|
Income taxes |
|
(51 |
) |
|
|
160 |
|
Other non-current assets and liabilities |
|
137 |
|
|
|
(288 |
) |
Net cash provided by operating activities |
|
3,899 |
|
|
|
5,555 |
|
Cash flows from investing activities: |
|
|
|
||||
Additions to property, plant and equipment |
|
(1,734 |
) |
|
|
(1,379 |
) |
Proceeds from sale-leaseback transactions |
|
1,308 |
|
|
|
856 |
|
Proceeds from sale of business, net of cash disposed |
|
— |
|
|
|
5,527 |
|
Proceeds from sale of other assets |
|
1,334 |
|
|
|
453 |
|
Business, investment and asset acquisitions, net of cash acquired |
|
(2,189 |
) |
|
|
(1,431 |
) |
Other |
|
216 |
|
|
|
46 |
|
Net cash (used for) provided by investing activities |
|
(1,064 |
) |
|
|
4,072 |
|
Cash flows from financing activities: |
|
|
|
||||
Net change in short-term debt with maturities of 3 months or less |
|
(11 |
) |
|
|
(909 |
) |
Proceeds from debt |
|
11,958 |
|
|
|
12,726 |
|
Payments of debt |
|
(8,360 |
) |
|
|
(15,257 |
) |
Acquisition of non-controlling interests |
|
(2,108 |
) |
|
|
— |
|
Stock purchases |
|
(187 |
) |
|
|
(110 |
) |
Proceeds related to employee stock plans, net |
|
27 |
|
|
|
59 |
|
Cash dividends paid |
|
(1,659 |
) |
|
|
(1,617 |
) |
Early debt extinguishment |
|
(1,591 |
) |
|
|
(3,687 |
) |
Other |
|
432 |
|
|
|
(241 |
) |
Net cash used for financing activities |
|
(1,499 |
) |
|
|
(9,036 |
) |
Effect of exchange rate changes on cash, cash equivalents, marketable securities and restricted cash |
|
(47 |
) |
|
|
(66 |
) |
Changes in cash, cash equivalents, marketable securities and restricted cash |
|
|
|
||||
Net increase in cash, cash equivalents, marketable securities and restricted cash |
|
1,288 |
|
|
|
525 |
|
Cash, cash equivalents, marketable securities and restricted cash at beginning of period |
|
1,270 |
|
|
|
746 |
|
Cash, cash equivalents, marketable securities and restricted cash at end of period |
$ |
2,558 |
|
|
$ |
1,270 |
|
SUPPLEMENTAL INFORMATION (UNAUDITED)
REGARDING NON-GAAP FINANCIAL MEASURES
(in millions, except per share amounts)
The following information provides reconciliations of the supplemental non-GAAP financial measures, as defined under
These supplemental non-GAAP financial measures are presented because management has evaluated the Company’s financial results both including and excluding the adjusted items or the effects of foreign currency translation, as applicable, and believes that the supplemental non-GAAP financial measures presented provide additional perspective and insights when analyzing the core operating performance of the Company’s business from period to period and trends in the Company’s historical operating results. These supplemental non-GAAP financial measures should not be considered superior to, as a substitute for or as an alternative to, and should be considered in conjunction with, the GAAP financial measures presented in the press release.
The Company does not provide a reconciliation for non-GAAP estimates on a forward-looking basis where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing or amount of various items that have not yet occurred, are out of the Company’s control and/or cannot be reasonably predicted, and that would impact diluted net earnings per share, the most directly comparable forward-looking GAAP financial measure. For the same reasons, the Company is unable to address the probable significance of the unavailable information. Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures.
Constant currency
The Company also presents certain information related to current period operating results in “constant currency,” which is a non-GAAP financial measure. These amounts are calculated by translating current period results at the foreign currency exchange rates used in the comparable period in the prior year. The company presents such constant currency financial information because it has significant operations outside of
Comparable sales
For the Company's
With respect to the International segment, comparable sales, comparable pharmacy sales and comparable retail sales, are presented on a constant currency basis, which is a non-GAAP financial measure. Refer to the discussion above in "Constant currency" for further details on constant currency calculations.
Key Performance Indicators
The Company considers certain metrics, such as comparable sales, comparable pharmacy sales, comparable retail sales, comparable number of prescriptions, and comparable 30-day equivalent prescriptions, number of payor/ provider partnerships, number of locations of
With respect to the total number of
NET EARNINGS AND DILUTED NET EARNINGS PER SHARE |
|||||||||||||||||
|
|
(in millions) |
|
||||||||||||||
|
|
Three months ended
|
|
Twelve months ended
|
|
||||||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
||||||||
Net (loss) earnings attributable to |
|
$ |
(415 |
) |
|
$ |
358 |
|
|
$ |
4,337 |
|
|
$ |
1,994 |
|
|
Adjustments to operating income: |
|
|
|
|
|
|
|
|
|
||||||||
Adjustments to equity earnings (loss) in AmerisourceBergen 1 |
|
|
63 |
|
|
|
70 |
|
|
|
218 |
|
|
|
1,645 |
|
|
Acquisition-related amortization 2 |
|
|
239 |
|
|
|
156 |
|
|
|
855 |
|
|
|
523 |
|
|
Transformational cost management 3 |
|
|
305 |
|
|
|
79 |
|
|
|
763 |
|
|
|
417 |
|
|
Certain legal and regulatory accruals and settlements 4 |
|
|
34 |
|
|
|
15 |
|
|
|
768 |
|
|
|
75 |
|
|
Acquisition-related costs 5 |
|
|
69 |
|
|
|
29 |
|
|
|
223 |
|
|
|
54 |
|
|
Impairment of goodwill and intangible assets 6 |
|
|
783 |
|
|
|
49 |
|
|
|
783 |
|
|
|
49 |
|
|
LIFO provision 7 |
|
|
71 |
|
|
|
(73 |
) |
|
|
135 |
|
|
|
13 |
|
|
Total adjustments to operating income |
|
|
1,565 |
|
|
|
325 |
|
|
|
3,746 |
|
|
|
2,775 |
|
|
Adjustments to other income, net: |
|
|
|
|
|
|
|
|
|
||||||||
Net investment hedging loss 8 |
|
|
— |
|
|
|
2 |
|
|
|
1 |
|
|
|
8 |
|
|
Impairment of equity method investment and investment in equity securities 9 |
|
|
— |
|
|
|
— |
|
|
|
190 |
|
|
|
— |
|
|
Adjustment to gain on disposal of discontinued operations 10 |
|
|
— |
|
|
|
— |
|
|
|
38 |
|
|
|
— |
|
|
Gain on sale of equity method investment 11 |
|
|
(138 |
) |
|
|
— |
|
|
|
(559 |
) |
|
|
(290 |
) |
|
Gain on previously held investments 12 |
|
|
— |
|
|
|
— |
|
|
|
(2,576 |
) |
|
|
— |
|
|
Total adjustments to other income, net |
|
|
(138 |
) |
|
|
3 |
|
|
|
(2,906 |
) |
|
|
(281 |
) |
|
Adjustments to interest expense, net: |
|
|
|
|
|
|
|
|
|
||||||||
Early debt extinguishment 13 |
|
|
— |
|
|
|
(5 |
) |
|
|
4 |
|
|
|
414 |
|
|
Total adjustments to interest expense, net |
|
|
— |
|
|
|
(5 |
) |
|
|
4 |
|
|
|
414 |
|
|
Adjustments to income tax (benefit) provision: |
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
— |
|
|
|
378 |
|
|
|
— |
|
|
|
378 |
|
|
Equity method non-cash tax 14 |
|
|
16 |
|
|
|
8 |
|
|
|
70 |
|
|
|
(161 |
) |
|
Tax impact of adjustments 14 |
|
|
(285 |
) |
|
|
(38 |
) |
|
|
(752 |
) |
|
|
(283 |
) |
|
Total adjustments to income tax (benefit) provision |
|
|
(270 |
) |
|
|
348 |
|
|
|
(681 |
) |
|
|
(65 |
) |
|
Adjustments to post-tax earnings from other equity method investments: |
|
|
|
|
|
|
|
|
|
||||||||
Adjustments to earnings in other equity method investments 15 |
|
|
9 |
|
|
|
17 |
|
|
|
58 |
|
|
|
(504 |
) |
|
Total adjustments to post-tax earnings from other equity method investments |
|
|
9 |
|
|
|
17 |
|
|
|
58 |
|
|
|
(504 |
) |
|
Adjustments to net loss attributable to non-controlling interests - continuing operations: |
|
|
|
|
|
|
|
|
|
||||||||
Acquisition-related amortization 2 |
|
|
(45 |
) |
|
|
(30 |
) |
|
|
(164 |
) |
|
|
(75 |
) |
|
Transformational cost management 3 |
|
|
— |
|
|
|
(2 |
) |
|
|
(1 |
) |
|
|
1 |
|
|
Acquisition-related costs 5 |
|
|
(13 |
) |
|
|
— |
|
|
|
(32 |
) |
|
|
— |
|
|
LIFO provision 7 |
|
|
— |
|
|
|
5 |
|
|
|
— |
|
|
|
(2 |
) |
|
Early debt extinguishment 13 |
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
Total adjustments to net loss attributable to non-controlling interests - continuing operations |
|
|
(58 |
) |
|
|
(27 |
) |
|
|
(198 |
) |
|
|
(77 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted net earnings attributable to |
|
$ |
694 |
|
|
$ |
1,019 |
|
|
$ |
4,360 |
|
|
$ |
4,256 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net earnings attributable to |
|
$ |
— |
|
|
$ |
268 |
|
|
$ |
— |
|
|
$ |
548 |
|
|
Acquisition-related amortization 2 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
28 |
|
|
Transformational cost management 3 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
Acquisition-related costs 5 |
|
|
— |
|
|
|
44 |
|
|
|
— |
|
|
|
92 |
|
|
Gain on disposal of discontinued operations 10 |
|
|
— |
|
|
|
(322 |
) |
|
|
— |
|
|
|
(322 |
) |
|
Tax impact of adjustments 14 |
|
|
— |
|
|
|
10 |
|
|
|
— |
|
|
|
(6 |
) |
|
Total adjustments to net earnings attributable to |
|
$ |
— |
|
|
$ |
(268 |
) |
|
$ |
— |
|
|
$ |
(206 |
) |
|
Adjusted net earnings attributable to |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
342 |
|
|
Adjusted net earnings attributable to |
|
$ |
694 |
|
|
$ |
1,019 |
|
|
$ |
4,360 |
|
|
$ |
4,598 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted net (loss) earnings per common share - continuing operations (GAAP) 16 |
|
$ |
(0.48 |
) |
|
$ |
0.41 |
|
|
$ |
5.01 |
|
|
$ |
2.30 |
|
|
Adjustments to operating income |
|
|
1.81 |
|
|
|
0.38 |
|
|
|
4.33 |
|
|
|
3.20 |
|
|
Adjustments to other income, net |
|
|
(0.16 |
) |
|
|
— |
|
|
|
(3.36 |
) |
|
|
(0.32 |
) |
|
Adjustments to interest expense, net |
|
|
— |
|
|
|
(0.01 |
) |
|
|
0.01 |
|
|
|
0.48 |
|
|
Adjustments to income tax (benefit) provision |
|
|
(0.31 |
) |
|
|
0.40 |
|
|
|
(0.79 |
) |
|
|
(0.08 |
) |
|
Adjustments to post tax earnings from other equity method investments 15 |
|
|
0.01 |
|
|
|
0.02 |
|
|
|
0.07 |
|
|
|
(0.58 |
) |
|
Adjustments to net loss attributable to non-controlling interests |
|
|
(0.07 |
) |
|
|
(0.03 |
) |
|
|
(0.23 |
) |
|
|
(0.09 |
) |
|
Adjusted diluted net earnings per common share - continuing operations (Non-GAAP measure) 17 |
|
$ |
0.80 |
|
|
$ |
1.17 |
|
|
$ |
5.04 |
|
|
$ |
4.91 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted net earnings per common share - discontinued operations (GAAP) |
|
$ |
— |
|
|
$ |
0.31 |
|
|
$ |
— |
|
|
$ |
0.63 |
|
|
Total adjustments to net earnings attributable to |
|
|
— |
|
|
|
(0.31 |
) |
|
|
— |
|
|
|
(0.24 |
) |
|
Adjusted diluted net earnings per common share - discontinued operations (Non-GAAP measure) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
0.39 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted diluted net earnings per common share (Non-GAAP measure) 17 |
|
$ |
0.80 |
|
|
$ |
1.17 |
|
|
$ |
5.04 |
|
|
$ |
5.31 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding, diluted (in millions) 17 |
|
|
865.3 |
|
|
|
867.2 |
|
|
|
865.9 |
|
|
|
866.4 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
1 |
Adjustments to equity earnings (loss) in AmerisourceBergen consist of the Company’s proportionate share of non-GAAP adjustments reported by AmerisourceBergen consistent with the Company’s non-GAAP measures. The Company recognized equity losses in AmerisourceBergen of |
|
2 |
Acquisition-related amortization includes amortization of acquisition-related intangible assets, inventory valuation adjustments and stock-based compensation fair valuation adjustments. Amortization of acquisition-related intangible assets includes amortization of intangible assets such as customer relationships, trade names, trademarks, developed technology and contract intangibles. Intangible asset amortization excluded from the related non-GAAP measure represents the entire amount recorded within the Company’s GAAP financial statements. The revenue generated by the associated intangible assets has not been excluded from the related non-GAAP measures. Amortization expense, unlike the related revenue, is not affected by operations of any particular period unless an intangible asset becomes impaired, or the estimated useful life of an intangible asset is revised. These charges are primarily recorded within Selling, general and administrative expenses. Business combination accounting principles require us to measure acquired inventory at fair value. The fair value of the inventory reflects cost of acquired inventory and a portion of the expected profit margin. The acquisition-related inventory valuation adjustments exclude the expected profit margin component from cost of sales recorded under the business combination accounting principles. The stock based compensation fair valuation adjustment reflects the difference between the fair value based remeasurement of awards under purchase accounting and the grant date fair valuation. Post-acquisition compensation expense recognized in excess of the original grant date fair value of acquiree awards are excluded from the related non-GAAP measures as these arise from acquisition-related accounting requirements or agreements, and are not reflective of normal operating activities. |
|
3 |
Transformational Cost Management Program charges are costs associated with a formal restructuring plan. These charges are primarily recorded within selling, general and administrative expenses. These costs do not reflect current operating performance and are impacted by the timing of restructuring activity. |
|
4 |
Certain legal and regulatory accruals and settlements relate to significant charges associated with certain legal proceedings, including legal defense costs. In fiscal 2022, the Company recorded a |
|
5 |
Acquisition-related costs are transaction and integration costs associated with certain merger, acquisition and divestitures related activities. These costs include charges incurred related to certain mergers, acquisition and divestitures related activities recorded in operating income, for example, costs related to integration efforts for merger, acquisition and divestitures activities. Examples of such costs include deal costs, severance and stock compensation. These charges are primarily recorded within Selling, general and administrative expenses. These costs are significantly impacted by the timing and complexity of the underlying merger, acquisition and divestitures related activities and do not reflect the Company’s current operating performance. |
|
6 |
Impairment of goodwill and intangible assets do not relate to the ordinary course of the Company’s business. The Company excludes these charges when evaluating operating performance because it does not incur such charges on a predictable basis and exclusion of such charges enables more consistent evaluation of the Company’s operating performance. These charges are recorded within Selling, general and administrative expenses. |
|
7 |
The Company’s |
|
8 |
Gain or loss on certain derivative instruments used as economic hedges of the Company’s net investments in foreign subsidiaries. These charges are recorded within Other income, net. We do not believe this volatility related to mark-to-market adjustment on the underlying derivative instruments reflects the Company’s operational performance. |
|
9 |
Impairment of equity method investment and investment in equity securities includes impairment of certain investments. The Company excludes these charges when evaluating operating performance because these do not relate to the ordinary course of the Company’s business and it does not incur such charges on a predictable basis. Exclusion of such charges enables more consistent evaluation of the Company’s operating performance. These charges are recorded within Other income, net. |
|
10 |
In fiscal 2022, the Company finalized the working capital adjustments with AmerisourceBergen related to the sale of the Alliance Healthcare business, resulting in a |
|
11 |
Includes significant gains on the sale of equity method investments. In fiscal 2022, the Company recorded a gain of |
|
12 |
Includes significant gains on business combinations due to the remeasurement of previously held minority equity interests and debt securities to fair value. In fiscal 2022, the Company recorded such pre-tax gains of |
|
13 |
In fiscal 2022, the Company incurred a |
|
14 |
Adjustments to income tax provision (benefit) include adjustments to the GAAP basis tax provision (benefit) commensurate with non-GAAP adjustments and certain discrete tax items including |
|
15 |
Adjustments to post tax earnings from other equity method investments consist of the proportionate share of certain equity method investees’ non-cash items or unusual or infrequent items consistent with the Company’s non-GAAP adjustments. These charges are recorded within post tax earnings from other equity method investments. Although the Company may have shareholder rights and board representation commensurate with its ownership interests in these equity method investees, adjustments relating to equity method investments are not intended to imply that the Company has direct control over their operations and resulting revenue and expenses. Moreover, these non-GAAP financial measures have limitations in that they do not reflect all revenue and expenses of these equity method investees. In fiscal 2021, due to partial sales of ownership interests in Option Care Health, our then equity method investee |
|
16 |
Due to the anti-dilutive effect resulting from the reported net loss, the impact of potentially dilutive securities on the per share amounts has been omitted from the quarterly calculation of weighted-average common shares outstanding for diluted EPS for the three months ended |
|
17 |
Includes impact of potentially dilutive securities in the quarterly calculation of weighted-average common shares, diluted for adjusted diluted net earnings per common share calculation purposes for the three and twelve months ended |
NON-GAAP RECONCILIATIONS BY SEGMENT |
||||||||||||||||||||
|
|
Three months ended |
||||||||||||||||||
|
|
|
|
International |
|
|
|
Corporate and
|
|
|
||||||||||
Sales |
|
$ |
26,683 |
|
|
$ |
5,144 |
|
|
$ |
622 |
|
|
$ |
— |
|
|
$ |
32,449 |
|
Gross profit (loss) (GAAP) |
|
$ |
5,337 |
|
|
$ |
1,110 |
|
|
$ |
(37 |
) |
|
$ |
— |
|
|
$ |
6,410 |
|
LIFO provision |
|
|
71 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
71 |
|
Acquisition-related amortization |
|
|
5 |
|
|
|
— |
|
|
|
28 |
|
|
|
— |
|
|
|
34 |
|
Adjusted gross profit (loss) (Non-GAAP measure) |
|
$ |
5,413 |
|
|
$ |
1,110 |
|
|
$ |
(9 |
) |
|
$ |
— |
|
|
$ |
6,515 |
|
Selling, general and administrative expenses (GAAP) |
|
$ |
5,174 |
|
|
$ |
1,783 |
|
|
$ |
301 |
|
|
$ |
62 |
|
|
$ |
7,320 |
|
Acquisition-related costs |
|
|
— |
|
|
|
(16 |
) |
|
|
(44 |
) |
|
|
(8 |
) |
|
|
(69 |
) |
Transformational cost management |
|
|
(285 |
) |
|
|
(19 |
) |
|
|
— |
|
|
|
(1 |
) |
|
|
(305 |
) |
Acquisition-related amortization |
|
|
(75 |
) |
|
|
(16 |
) |
|
|
(115 |
) |
|
|
— |
|
|
|
(206 |
) |
Certain legal and regulatory accruals and settlements |
|
|
(34 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(34 |
) |
Impairment of goodwill and intangible assets |
|
|
— |
|
|
|
(783 |
) |
|
|
— |
|
|
|
— |
|
|
|
(783 |
) |
Adjusted selling, general and administrative expenses (Non-GAAP measure) |
|
$ |
4,779 |
|
|
$ |
947 |
|
|
$ |
143 |
|
|
$ |
53 |
|
|
$ |
5,922 |
|
Operating income (loss) (GAAP) |
|
$ |
251 |
|
|
$ |
(672 |
) |
|
$ |
(338 |
) |
|
$ |
(62 |
) |
|
$ |
(822 |
) |
Certain legal and regulatory accruals and settlements |
|
|
34 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
34 |
|
Acquisition-related amortization |
|
|
80 |
|
|
|
16 |
|
|
|
143 |
|
|
|
— |
|
|
|
239 |
|
Transformational cost management |
|
|
285 |
|
|
|
19 |
|
|
|
— |
|
|
|
1 |
|
|
|
305 |
|
Adjustments to equity earnings (loss) in AmerisourceBergen |
|
|
63 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
63 |
|
Acquisition-related costs |
|
|
— |
|
|
|
16 |
|
|
|
44 |
|
|
|
8 |
|
|
|
69 |
|
LIFO provision |
|
|
71 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
71 |
|
Impairment of goodwill and intangible assets |
|
|
— |
|
|
|
783 |
|
|
|
— |
|
|
|
— |
|
|
|
783 |
|
Adjusted operating income (loss) (Non-GAAP measure) |
|
$ |
786 |
|
|
$ |
163 |
|
|
$ |
(151 |
) |
|
$ |
(53 |
) |
|
$ |
744 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross margin (GAAP) |
|
|
20.0 |
% |
|
|
21.6 |
% |
|
|
(5.9 |
)% |
|
|
|
|
19.8 |
% |
||
Adjusted gross margin (Non-GAAP measure) |
|
|
20.3 |
% |
|
|
21.6 |
% |
|
|
(1.4 |
)% |
|
|
|
|
20.1 |
% |
||
Selling, general and administrative expenses percent to sales (GAAP) |
|
|
19.4 |
% |
|
|
34.7 |
% |
|
|
48.4 |
% |
|
|
|
|
22.6 |
% |
||
Adjusted selling, general and administrative expenses percent to sales (Non-GAAP measure) |
|
|
17.9 |
% |
|
|
18.4 |
% |
|
|
23.0 |
% |
|
|
|
|
18.3 |
% |
||
Operating margin 2 |
|
|
0.6 |
% |
|
|
(13.1 |
)% |
|
|
(54.4 |
)% |
|
|
|
|
(2.8 |
)% |
||
Adjusted operating margin (Non-GAAP measure) 2 |
|
|
2.4 |
% |
|
|
3.2 |
% |
|
|
(24.3 |
)% |
|
|
|
|
1.8 |
% |
||
1 |
Operating income (loss) for |
|
2 |
Operating margins and adjusted operating margins have been calculated excluding equity earnings (loss) in AmerisourceBergen and adjusted equity earnings (loss) in AmerisourceBergen, respectively. |
NON-GAAP RECONCILIATIONS BY SEGMENT |
||||||||||||||||||||
|
|
Three months ended |
||||||||||||||||||
|
|
|
|
International |
|
|
|
Corporate and
|
|
|
||||||||||
Sales |
|
$ |
28,755 |
|
|
$ |
5,507 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
34,262 |
|
Gross profit (GAAP) |
|
$ |
6,302 |
|
|
$ |
1,198 |
|
|
$ |
— |
|
|
$ |
3 |
|
|
$ |
7,503 |
|
LIFO provision |
|
|
(73 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(73 |
) |
Acquisition-related amortization |
|
|
5 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5 |
|
Adjusted gross profit (Non-GAAP measure) |
|
$ |
6,234 |
|
|
$ |
1,198 |
|
|
$ |
— |
|
|
$ |
3 |
|
|
$ |
7,436 |
|
Selling, general and administrative expenses (GAAP) |
|
$ |
5,347 |
|
|
$ |
1,152 |
|
|
$ |
26 |
|
|
$ |
124 |
|
|
$ |
6,649 |
|
Acquisition-related costs |
|
|
(4 |
) |
|
|
(16 |
) |
|
|
— |
|
|
|
(9 |
) |
|
|
(29 |
) |
Transformational cost management |
|
|
(66 |
) |
|
|
(12 |
) |
|
|
— |
|
|
|
(2 |
) |
|
|
(80 |
) |
Acquisition-related amortization |
|
|
(132 |
) |
|
|
(18 |
) |
|
|
— |
|
|
|
— |
|
|
|
(151 |
) |
Certain legal and regulatory accruals and settlements |
|
|
(15 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(15 |
) |
Impairment of goodwill and intangible assets |
|
|
— |
|
|
|
(49 |
) |
|
|
— |
|
|
|
— |
|
|
|
(49 |
) |
Adjusted selling, general and administrative expenses (Non-GAAP measure) |
|
$ |
5,131 |
|
|
$ |
1,057 |
|
|
$ |
26 |
|
|
$ |
112 |
|
|
$ |
6,326 |
|
Operating income (loss) (GAAP) |
|
$ |
1,011 |
|
|
$ |
46 |
|
|
$ |
(26 |
) |
|
$ |
(121 |
) |
|
$ |
910 |
|
Certain legal and regulatory accruals and settlements |
|
|
15 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
15 |
|
Acquisition-related amortization |
|
|
137 |
|
|
|
18 |
|
|
|
— |
|
|
|
— |
|
|
|
156 |
|
Transformational cost management |
|
|
66 |
|
|
|
11 |
|
|
|
— |
|
|
|
2 |
|
|
|
79 |
|
Adjustments to equity earnings (loss) in AmerisourceBergen |
|
|
70 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
70 |
|
Acquisition-related costs |
|
|
4 |
|
|
|
16 |
|
|
|
— |
|
|
|
9 |
|
|
|
29 |
|
LIFO provision |
|
|
(73 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(73 |
) |
Impairment of goodwill and intangible assets |
|
|
— |
|
|
|
49 |
|
|
|
— |
|
|
|
— |
|
|
|
49 |
|
Adjusted operating income (Non-GAAP measure) |
|
$ |
1,230 |
|
|
$ |
140 |
|
|
$ |
(26 |
) |
|
$ |
(109 |
) |
|
$ |
1,236 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross margin (GAAP) |
|
|
21.9 |
% |
|
|
21.8 |
% |
|
|
— |
% |
|
|
|
|
21.9 |
% |
||
Adjusted gross margin (Non-GAAP measure) |
|
|
21.7 |
% |
|
|
21.8 |
% |
|
|
— |
% |
|
|
|
|
21.7 |
% |
||
Selling, general and administrative expenses percent to sales (GAAP) |
|
|
18.6 |
% |
|
|
20.9 |
% |
|
|
— |
% |
|
|
|
|
19.4 |
% |
||
Adjusted selling, general and administrative expenses percent to sales (Non-GAAP measure) |
|
|
17.8 |
% |
|
|
19.2 |
% |
|
|
— |
% |
|
|
|
|
18.5 |
% |
||
Operating margin 2 |
|
|
3.3 |
% |
|
|
0.8 |
% |
|
|
— |
% |
|
|
|
|
2.5 |
% |
||
Adjusted operating margin (Non-GAAP measure) 2 |
|
|
3.8 |
% |
|
|
2.5 |
% |
|
|
— |
% |
|
|
|
|
3.2 |
% |
||
1 |
Operating income (loss) for |
|
2 |
Operating margins and adjusted operating margins have been calculated excluding equity earnings (loss) in AmerisourceBergen and adjusted equity earnings (loss) in AmerisourceBergen, respectively. |
|
3 |
Fiscal 2021 data related to |
NON-GAAP RECONCILIATIONS BY SEGMENT |
||||||||||||||||||||
|
|
Twelve months ended |
||||||||||||||||||
|
|
|
|
International |
|
|
|
Corporate and
|
|
|
||||||||||
Sales |
|
$ |
109,078 |
|
|
$ |
21,830 |
|
|
$ |
1,795 |
|
|
$ |
— |
|
|
$ |
132,703 |
|
Gross profit (loss) (GAAP) |
|
$ |
23,669 |
|
|
$ |
4,618 |
|
|
$ |
(22 |
) |
|
$ |
— |
|
|
$ |
28,265 |
|
LIFO provision |
|
|
135 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
135 |
|
Acquisition-related amortization |
|
|
23 |
|
|
|
— |
|
|
|
28 |
|
|
|
— |
|
|
|
51 |
|
Adjusted gross profit (Non-GAAP measure) |
|
$ |
23,827 |
|
|
$ |
4,618 |
|
|
$ |
6 |
|
|
$ |
— |
|
|
$ |
28,452 |
|
Selling, general and administrative expenses (GAAP) |
|
$ |
21,180 |
|
|
$ |
4,964 |
|
|
$ |
806 |
|
|
$ |
345 |
|
|
$ |
27,295 |
|
Acquisition-related costs |
|
|
2 |
|
|
|
(89 |
) |
|
|
(67 |
) |
|
|
(69 |
) |
|
|
(223 |
) |
Transformational cost management |
|
|
(605 |
) |
|
|
(133 |
) |
|
|
— |
|
|
|
(26 |
) |
|
|
(763 |
) |
Acquisition-related amortization |
|
|
(375 |
) |
|
|
(66 |
) |
|
|
(363 |
) |
|
|
— |
|
|
|
(804 |
) |
Certain legal and regulatory accruals and settlements |
|
|
(768 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(768 |
) |
Impairment of goodwill and intangible assets |
|
|
— |
|
|
|
(783 |
) |
|
|
— |
|
|
|
— |
|
|
|
(783 |
) |
Adjusted selling, general and administrative expenses (Non-GAAP measure) |
|
$ |
19,434 |
|
|
$ |
3,893 |
|
|
$ |
376 |
|
|
$ |
251 |
|
|
$ |
23,954 |
|
Operating income (loss) (GAAP) |
|
$ |
2,907 |
|
|
$ |
(346 |
) |
|
$ |
(829 |
) |
|
$ |
(345 |
) |
|
$ |
1,387 |
|
Certain legal and regulatory accruals and settlements |
|
|
768 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
768 |
|
Acquisition-related amortization |
|
|
398 |
|
|
|
66 |
|
|
|
392 |
|
|
|
— |
|
|
|
855 |
|
Transformational cost management |
|
|
604 |
|
|
|
133 |
|
|
|
— |
|
|
|
26 |
|
|
|
763 |
|
Adjustments to equity earnings (loss) in AmerisourceBergen |
|
|
218 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
218 |
|
Acquisition-related costs |
|
|
(2 |
) |
|
|
89 |
|
|
|
67 |
|
|
|
69 |
|
|
|
223 |
|
LIFO provision |
|
|
135 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
135 |
|
Impairment of goodwill and intangible assets |
|
|
— |
|
|
|
783 |
|
|
|
— |
|
|
|
— |
|
|
|
783 |
|
Adjusted operating income (loss) (Non-GAAP measure) |
|
$ |
5,029 |
|
|
$ |
726 |
|
|
$ |
(370 |
) |
|
$ |
(251 |
) |
|
$ |
5,133 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross margin (GAAP) |
|
|
21.7 |
% |
|
|
21.2 |
% |
|
|
(1.2 |
)% |
|
|
|
|
21.3 |
% |
||
Adjusted gross margin (Non-GAAP measure) |
|
|
21.8 |
% |
|
|
21.2 |
% |
|
|
0.3 |
% |
|
|
|
|
21.4 |
% |
||
Selling, general and administrative expenses percent to sales (GAAP) |
|
|
19.4 |
% |
|
|
22.7 |
% |
|
|
44.9 |
% |
|
|
|
|
20.6 |
% |
||
Adjusted selling, general and administrative expenses percent to sales (Non-GAAP measure) |
|
|
17.8 |
% |
|
|
17.8 |
% |
|
|
20.9 |
% |
|
|
|
|
18.1 |
% |
||
Operating margin 2 |
|
|
2.3 |
% |
|
|
(1.6 |
)% |
|
|
(46.2 |
)% |
|
|
|
|
0.7 |
% |
||
Adjusted operating margin (Non-GAAP measure) 2 |
|
|
4.0 |
% |
|
|
3.3 |
% |
|
|
(20.6 |
)% |
|
|
|
|
3.4 |
% |
||
1 |
Operating income (loss) for |
|
2 |
Operating margins and adjusted operating margins have been calculated excluding equity earnings (loss) in AmerisourceBergen and adjusted equity earnings (loss) in AmerisourceBergen, respectively. |
NON-GAAP RECONCILIATIONS BY SEGMENT |
||||||||||||||||||||
|
|
Twelve months ended |
||||||||||||||||||
|
|
|
|
International |
|
|
|
Corporate and
|
|
|
||||||||||
Sales |
|
$ |
112,005 |
|
|
$ |
20,505 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
132,509 |
|
Gross profit (GAAP) |
|
$ |
23,736 |
|
|
$ |
4,328 |
|
|
$ |
— |
|
|
$ |
4 |
|
|
$ |
28,067 |
|
LIFO provision |
|
|
13 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
13 |
|
Acquisition-related amortization |
|
|
11 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
11 |
|
Transformational cost management |
|
|
— |
|
|
|
(2 |
) |
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
Adjusted gross profit (Non-GAAP measure) |
|
$ |
23,759 |
|
|
$ |
4,327 |
|
|
$ |
— |
|
|
$ |
4 |
|
|
$ |
28,089 |
|
Selling, general and administrative expenses (GAAP) |
|
$ |
20,042 |
|
|
$ |
4,101 |
|
|
$ |
57 |
|
|
$ |
385 |
|
|
$ |
24,586 |
|
Acquisition-related amortization |
|
|
(438 |
) |
|
|
(75 |
) |
|
|
— |
|
|
|
— |
|
|
|
(512 |
) |
Transformational cost management |
|
|
(279 |
) |
|
|
(93 |
) |
|
|
— |
|
|
|
(46 |
) |
|
|
(418 |
) |
Certain legal and regulatory accruals and settlements |
|
|
(75 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(75 |
) |
Acquisition-related costs |
|
|
(6 |
) |
|
|
(24 |
) |
|
|
— |
|
|
|
(24 |
) |
|
|
(54 |
) |
Impairment of goodwill and intangible assets |
|
|
— |
|
|
|
(49 |
) |
|
|
— |
|
|
|
— |
|
|
|
(49 |
) |
Adjusted selling, general and administrative expenses (Non-GAAP measure) |
|
$ |
19,245 |
|
|
$ |
3,861 |
|
|
$ |
57 |
|
|
$ |
315 |
|
|
$ |
23,477 |
|
Operating income (loss) (GAAP) |
|
$ |
2,554 |
|
|
$ |
227 |
|
|
$ |
(57 |
) |
|
$ |
(382 |
) |
|
$ |
2,342 |
|
Adjustments to equity earnings (loss) in AmerisourceBergen |
|
|
1,645 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,645 |
|
Acquisition-related amortization |
|
|
448 |
|
|
|
75 |
|
|
|
— |
|
|
|
— |
|
|
|
523 |
|
Transformational cost management |
|
|
279 |
|
|
|
91 |
|
|
|
— |
|
|
|
46 |
|
|
|
417 |
|
Certain legal and regulatory accruals and settlements |
|
|
75 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
75 |
|
Acquisition-related costs |
|
|
6 |
|
|
|
24 |
|
|
|
— |
|
|
|
24 |
|
|
|
54 |
|
Impairment of goodwill and intangible assets |
|
|
— |
|
|
|
49 |
|
|
|
— |
|
|
|
— |
|
|
|
49 |
|
LIFO provision |
|
|
13 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
13 |
|
Adjusted operating income (loss) (Non-GAAP measure) |
|
$ |
5,019 |
|
|
$ |
466 |
|
|
$ |
(57 |
) |
|
$ |
(311 |
) |
|
$ |
5,117 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross margin (GAAP) |
|
|
21.2 |
% |
|
|
21.1 |
% |
|
|
— |
% |
|
|
|
|
21.2 |
% |
||
Adjusted gross margin (Non-GAAP measure) |
|
|
21.2 |
% |
|
|
21.1 |
% |
|
|
— |
% |
|
|
|
|
21.2 |
% |
||
Selling, general and administrative expenses percent to sales (GAAP) |
|
|
17.9 |
% |
|
|
20.0 |
% |
|
|
— |
% |
|
|
|
|
18.6 |
% |
||
Adjusted selling, general and administrative expenses percent to sales (Non-GAAP measure) |
|
|
17.2 |
% |
|
|
18.8 |
% |
|
|
— |
% |
|
|
|
|
17.7 |
% |
||
Operating margin 2 |
|
|
3.3 |
% |
|
|
1.1 |
% |
|
|
— |
% |
|
|
|
|
2.6 |
% |
||
Adjusted operating margin (Non-GAAP measure) 2 |
|
|
4.0 |
% |
|
|
2.3 |
% |
|
|
— |
% |
|
|
|
|
3.5 |
% |
||
1 |
Operating income (loss) for |
|
2 |
Operating margins and adjusted operating margins have been calculated excluding equity earnings (loss) in AmerisourceBergen and adjusted equity earnings (loss) in AmerisourceBergen, respectively. |
|
3 |
Fiscal 2021 data related to |
EQUITY EARNINGS IN AMERISOURCEBERGEN
|
|
Three months ended |
|
Twelve months ended |
||||||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
Equity earnings (loss) in AmerisourceBergen (GAAP) |
|
$ |
88 |
|
|
$ |
56 |
|
|
$ |
418 |
|
|
$ |
(1,139 |
) |
Acquisition-related intangibles amortization |
|
|
38 |
|
|
|
38 |
|
|
|
152 |
|
|
|
127 |
|
Employee severance, litigation, and other |
|
|
13 |
|
|
|
63 |
|
|
|
58 |
|
|
|
1,643 |
|
Certain discrete tax benefit |
|
|
— |
|
|
|
— |
|
|
|
7 |
|
|
|
— |
|
Tax reform |
|
|
5 |
|
|
|
37 |
|
|
|
12 |
|
|
|
(46 |
) |
Impairment of assets |
|
|
— |
|
|
|
— |
|
|
|
5 |
|
|
|
3 |
|
Impairment of non-customer note receivable |
|
|
— |
|
|
|
— |
|
|
|
4 |
|
|
|
— |
|
Gain from antitrust litigation settlements |
|
|
— |
|
|
|
(37 |
) |
|
|
3 |
|
|
|
(37 |
) |
|
|
|
7 |
|
|
|
— |
|
|
|
8 |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3 |
|
LIFO provision |
|
|
5 |
|
|
|
(31 |
) |
|
|
(8 |
) |
|
|
(48 |
) |
Gain on remeasurement of equity investment |
|
|
— |
|
|
|
— |
|
|
|
(18 |
) |
|
|
— |
|
|
|
|
8 |
|
|
|
— |
|
|
|
8 |
|
|
|
— |
|
Gain on sale of businesses |
|
|
(12 |
) |
|
|
— |
|
|
|
(12 |
) |
|
|
— |
|
Non-controlling interest |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
Adjusted equity earnings in AmerisourceBergen (Non-GAAP measure) |
|
$ |
152 |
|
|
$ |
126 |
|
|
$ |
636 |
|
|
$ |
505 |
|
ADJUSTED EFFECTIVE TAX RATE |
||||||||||||||||||||||
|
|
Three months ended |
|
Three months ended |
||||||||||||||||||
|
|
Earnings
|
|
Income tax
|
|
Effective tax
|
|
Earnings
|
|
Income tax |
|
Effective tax
|
||||||||||
Effective tax rate (GAAP) |
|
$ |
(758 |
) |
|
$ |
(235 |
) |
|
31.1 |
% |
|
$ |
908 |
|
|
$ |
586 |
|
|
64.6 |
% |
Impact of non-GAAP adjustments |
|
|
1,428 |
|
|
|
323 |
|
|
|
|
|
324 |
|
|
|
61 |
|
|
|
||
Equity method non-cash tax |
|
|
— |
|
|
|
(16 |
) |
|
|
|
|
— |
|
|
|
(8 |
) |
|
|
||
|
|
|
— |
|
|
|
— |
|
|
|
|
|
— |
|
|
|
(378 |
) |
|
|
||
Adjusted tax rate true-up |
|
|
— |
|
|
|
(37 |
) |
|
|
|
|
— |
|
|
|
(23 |
) |
|
|
||
Subtotal |
|
$ |
670 |
|
|
$ |
35 |
|
|
|
|
$ |
1,231 |
|
|
$ |
239 |
|
|
|
||
Exclude adjusted equity earnings in AmerisourceBergen |
|
|
(152 |
) |
|
|
— |
|
|
|
|
|
(126 |
) |
|
|
— |
|
|
|
||
Adjusted effective tax rate excluding adjusted equity earnings in AmerisourceBergen (Non-GAAP measure) |
|
$ |
519 |
|
|
$ |
35 |
|
|
6.7 |
% |
|
$ |
1,105 |
|
|
$ |
239 |
|
|
21.7 |
% |
|
|
Twelve months ended |
|
Twelve months ended |
||||||||||||||||||
|
|
Earnings
|
|
Income tax
|
|
Effective tax
|
|
Earnings
|
|
Income tax |
|
Effective tax
|
||||||||||
Effective tax rate (GAAP) |
|
$ |
3,985 |
|
|
$ |
(30 |
) |
|
(0.8 |
)% |
|
$ |
1,995 |
|
|
$ |
667 |
|
|
33.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Impact of non-GAAP adjustments |
|
|
845 |
|
|
|
752 |
|
|
|
|
|
2,908 |
|
|
|
283 |
|
|
|
||
Equity method non-cash tax |
|
|
— |
|
|
|
(70 |
) |
|
|
|
|
— |
|
|
|
161 |
|
|
|
||
|
|
|
— |
|
|
|
— |
|
|
|
|
|
— |
|
|
|
(378 |
) |
|
|
||
Subtotal |
|
$ |
4,830 |
|
|
$ |
651 |
|
|
|
|
$ |
4,903 |
|
|
$ |
733 |
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Exclude adjusted equity earnings in AmerisourceBergen |
|
|
(636 |
) |
|
|
— |
|
|
|
|
|
(505 |
) |
|
|
— |
|
|
|
||
Adjusted effective tax rate excluding adjusted equity earnings in AmerisourceBergen (Non-GAAP measure) |
|
$ |
4,194 |
|
|
$ |
651 |
|
|
15.5 |
% |
|
$ |
4,398 |
|
|
$ |
733 |
|
|
16.7 |
% |
FREE CASH FLOW |
||||||||||||||||
|
|
Three months ended |
|
Twelve months ended |
||||||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
Net cash provided by operating activities (GAAP) |
|
$ |
85 |
|
|
$ |
1,245 |
|
|
$ |
3,899 |
|
|
$ |
5,555 |
|
Less: Additions to property, plant and equipment |
|
|
(493 |
) |
|
|
(378 |
) |
|
|
(1,734 |
) |
|
|
(1,379 |
) |
Free cash flow (Non-GAAP measure) 1 |
|
$ |
(407 |
) |
|
$ |
867 |
|
|
$ |
2,165 |
|
|
$ |
4,176 |
|
1 |
Free cash flow is defined as net cash provided by operating activities in a period less additions to property, plant and equipment (capital expenditures) made in that period. This measure does not represent residual cash flows available for discretionary expenditures as the measure does not deduct the payments required for debt service and other contractual obligations or payments for future business acquisitions. Therefore, we believe it is important to view free cash flow as a measure that provides supplemental information to our entire statements of cash flows. |
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FAQ
What were the fourth quarter results for WBA?
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