01—Abstract
Summary
Summary of the 10-K filed May 2, 2012. Cited figures are marked; the original filing is the authoritative source.
McKesson Corporation's 2012 10-K filing details a strong year of revenue growth, primarily driven by its Distribution Solutions segment, which accounted for 97%a of total revenues.
The company reported a 10% increase in revenue to $122.7 billionb, with significant contributions from the acquisition of US Oncology. Gross profit also saw a 10% increase, benefiting from higher generic drug sales and improved margins in both segments. Operating expenses rose due to the US Oncology acquisition and increased employee compensation, but were partly offset by lower litigation charges compared to the prior year.
The company demonstrated a commitment to shareholder returns through substantial share repurchases, including a significant Accelerated Share Repurchase (ASR) program. McKesson's financial position remained robust, with strong operating cash flow supporting its activities and a stable debt-to-capital ratio.
02—Key points
Key Highlights
- McKesson Corporation reported a 10% increase in total revenues, reaching $122.7 billion for the fiscal year ended March 31, 2012.
- The Distribution Solutions segment continues to be the primary revenue driver, accounting for 97% of total revenues, with strong performance driven by market growth and the acquisition of US Oncology.
- Gross profit increased by 10% to $6.6 billion, with gross profit margin improving slightly to 5.35% due to higher generic drug sales and contributions from US Oncology.
- The company actively returned capital to shareholders, repurchasing approximately $1.85 billion of its common stock during the fiscal year, including a $1.2 billion ASR program.
- Operating expenses were impacted by the US Oncology acquisition and higher employee costs, but also benefited from a reduction in Average Wholesale Price (AWP) litigation charges compared to the prior year.
- Net income increased by 17% to $1.4 billion, or $5.59 per diluted share, reflecting revenue growth and effective cost management.
- McKesson maintained a strong liquidity position, with net cash provided by operating activities totaling $2.95 billion.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2012, McKesson Corp kept $0.01.
- Revenue$122.32B100.0%
- Cost of revenue−$115.92B94.8%
- Gross profit$6.40B5.2%
- Operating costs−$4.28B3.5%
- Operating income$2.12B1.7%
- Interest, other & tax−$721.0M0.6%
- Net income$1.40B1.1%
Where FY2012 revenue went
$122.32B- Cost of revenue: $115.92B, 95% of revenue
- Net income: $1.40B, 1.1% of revenue
- R&D: $402.0M, 0.3% of revenue
- SG&A: $3.73B, 3.0% of revenue
- Interest, other & tax: $721.0M, 0.6% of revenue
Kept 1.1% as net incomeNet income $1.40B · 1.1%R&D $402.0M · 0.3%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2012filed May 2, 2012Financial Statements
FY2012 against FY2011
| Line item | FY2012FY2011 | Change |
|---|---|---|
| Revenue | $122.32B$112.08B | +9.1% |
| Cost of Revenue | $115.92B$106.11B | +9.2% |
| Gross Profit | $6.40B$5.97B | +7.2% |
| R&D Expenses | $402.00M$407.00M | −1.2% |
| SG&A Expenses | $3.73B— | — |
| Operating Expenses | $4.28B$4.15B | +3.1% |
| Operating Income | $2.12B$1.82B | +16.6% |
| Net Income | $1.40B$1.20B | +16.7% |
| EPS (Basic) | $5.70$4.65 | +22.6% |
| EPS (Diluted) | $5.59$4.57 | +22.3% |
| Shares Outstanding (Basic) | 246.00M258.00M | −4.7% |
| Shares Outstanding (Diluted) | 251.00M263.00M | −4.6% |
05—Questions
Frequently Asked Questions
What were McKesson's primary revenue drivers in fiscal year 2012?
McKesson's primary revenue driver was its Distribution Solutions segment, which contributed 97% of the company's total revenues. This segment benefited from market growth and the strategic acquisition of US Oncology.
How did McKesson manage its expenses in fiscal year 2012?
Operating expenses increased due to the integration of US Oncology and higher employee compensation. However, these increases were partially offset by lower litigation charges related to Average Wholesale Price (AWP) issues compared to the previous year.
What was McKesson's approach to shareholder returns during the fiscal year?
McKesson demonstrated a strong commitment to shareholder returns by repurchasing approximately $1.85 billion of its common stock. This included a significant $1.2 billion Accelerated Share Repurchase (ASR) program, indicating confidence in the company's financial health and future prospects.
What is the company's outlook regarding future dividends?
McKesson anticipates continuing to pay quarterly cash dividends. However, the actual payment and amount of future dividends are at the discretion of the Board of Directors and depend on the company's future earnings, financial condition, capital requirements, and other factors.
06—Continue