filings.toolsCardinal Health (CAH) 10-K risk factor changes: FY2016 vs FY2015
The 2016-06-30 10-K against the 2015-06-30 one, compared heading by heading and sentence by sentence. One of these filings carries no fiscal year tag, so its year is the calendar year of the period end.
All filing items1,059 rewritten575 added464 removed2,136 unchanged
Summary
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- Sentence by sentence, 575 added, 464 removed, 1,059 rewritten and 2,136 unchanged across 1 item that differ.
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| Item | Added | Removed | Rewritten | Unchanged |
|---|---|---|---|---|
| Full document | 575 | 464 | 1,059 | 2,136 |
Underlined words on a shaded ground are new in FY2016; struck-through words were in FY2015. Sentences that are wholly new or wholly gone are labelled rather than marked.
Full document
1,059 rewritten, 575 added, 464 removed, 2,136 unchanged
| [Table of [removed: Contents](#s37B9D659EFA156ACBF93BDBFD124B775)] [added: Contents](#s9C74349E73435D3DBE5B3F79556E68AE)] | | |
For the fiscal year ended June 30, [removed: 2015][added: 2016]
[removed: ][added: ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [added: o]
The aggregate market value of voting stock held by non-affiliates or registrant on December 31, [removed: 2014,] [added: 2015,] was the following: [removed: $26,604,792,216.][added: $29,344,021,222.]
The number of the registrant’s common shares, without par value, outstanding as of July [removed: 31, 2015,] [added: 29, 2016,] was the following: [removed: 327,359,492.][added: 318,588,961.]
Portions of the registrant’s Definitive Proxy Statement to be filed for its [removed: 2015] [added: 2016] Annual Meeting of Shareholders are incorporated by reference into the sections of this Form 10-K addressing the requirements of Part III of Form 10-K.
| Cardinal Health Fiscal [removed: 2015] [added: 2016] Form 10-K |
| [Key [removed: Highlights](#sa52ee9b8893e43bf9d813665a53546be)] [added: Highlights](#s9b99f4bf8cbf4ab2b70ed485752006b4)] | [removed: [3](#sa52ee9b8893e43bf9d813665a53546be)] [added: [2](#s94fecfde99d64d7dac2d5a9a12bd2522)] |
| [Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#s176f771386f840c291381afd8611c1ba)] [added: Operations](#sBBACFC8C0EA15FDAB4848BC2E0FFA031)] | [removed: [8](#s176f771386f840c291381afd8611c1ba)] [added: [8](#sBBACFC8C0EA15FDAB4848BC2E0FFA031)] |
| [Selected Financial [removed: Data](#s789ea1823d954caf996cd48707f90104)] [added: Data](#s560fcc29084848dcb5e03065334611de)] | [removed: [25](#s789ea1823d954caf996cd48707f90104)] [added: [26](#s560fcc29084848dcb5e03065334611de)] |
| [Quantitative and Qualitative Disclosures [removed: About] [added: about] Market [removed: Risk](#s0686A237605855EC8B6DCED768DF437C)] [added: Risk](#s5E0720F5C6D958EAB05CE30C42A956EB)] | [removed: [26](#s0686A237605855EC8B6DCED768DF437C)] [added: [27](#s5E0720F5C6D958EAB05CE30C42A956EB)] |
| [removed: [Risk Factors](#s950F8541FE02527BADDD055A0E492E27)] [added: Risk Factors] | [removed: [34](#s950F8541FE02527BADDD055A0E492E27)] | [added: |]
| [Legal [removed: Proceedings](#s1A76B0E59A925A51A9A0C3CEC11C3513)] [added: Proceedings](#s95EDB09DE5CC5C66891537E4618DCB98)] | [removed: [37](#s1A76B0E59A925A51A9A0C3CEC11C3513)] [added: [39](#s95EDB09DE5CC5C66891537E4618DCB98)] |
| [Market for Registrant's Common [removed: Equity](#sD99428489F8756A290283178FC4AB643)] [added: Equity](#s8AC0026B8D275EE8A566343718514D71)] | [removed: [38](#sD99428489F8756A290283178FC4AB643)] [added: [40](#s8AC0026B8D275EE8A566343718514D71)] |
[removed: | [Financial] [added: Financial] Statements and Supplementary [removed: Data](#s5A1CED24193850F18B459264FC8F293D) | [43](#s5A1CED24193850F18B459264FC8F293D) |][added: Data]
| [removed: [Directors,] [added: Directors,] Executive Officers, and Corporate [removed: Governance](#s43c51d0288db47f5b64b23ce70403032)] [added: Governance] | [removed: [72](#s43c51d0288db47f5b64b23ce70403032)] | [added: |]
| [removed: [Security] [added: 12 | Security] Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#s28d269d61d4b48b59554312e9a55ffa6)] [added: Matters] | [removed: [73](#s28d269d61d4b48b59554312e9a55ffa6)] [added: (b)] |
| [Form 10-K Cross Reference [removed: Index](#s682ff42c909d4bdf9313aa917731b889)] [added: Index](#sCE676E8637A353ADA0AF6BF1DE7EC3E1)] | [removed: [78](#s682ff42c909d4bdf9313aa917731b889)] [added: [79](#sCE676E8637A353ADA0AF6BF1DE7EC3E1)] |
| [removed: [Additional Information](#s1e9c4028151a43f8b84d7919595a25ad)] [added: Additional Information] | [removed: [80](#s1e9c4028151a43f8b84d7919595a25ad)] | [added: |]
| 1 | Cardinal Health \| Fiscal [removed: 2015] [added: 2016] Form 10-K | |
This [removed: Key Highlights] [added: "Key Highlights"] section provides a brief overview of Cardinal Health, Inc. and does not contain all of the information you should consider.
References to fiscal [removed: 2015, 2014] [added: 2016, 2015] and [removed: 2013] [added: 2014 in these consolidated financial statements] are to the fiscal years ended June 30, [removed: 2015, 2014] [added: 2016, 2015] and [removed: 2013,] [added: 2014,] respectively.
Except as otherwise specified, information in this Form 10-K is provided as of June 30, [removed: 2015.][added: 2016.]
In [added: this "Key Highlights" section and] the [removed: accompanying financial analysis] [added: "Fiscal 2016 Overview" section] of [removed: information,] [added: Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A"),] we [removed: sometimes] use [removed: information] [added: financial measures that are] derived from consolidated financial data but [added: are] not presented in our financial statements [added: that are] prepared in accordance with U.S. generally accepted accounting principles (“GAAP”).
[removed: Certain of these data] [added: These measures] are considered “non-GAAP financial measures” under the Securities and Exchange Commission (“SEC”) rules.
The reasons we use these non-GAAP financial measures and the reconciliations to their most directly comparable GAAP financial measures are included in the [removed: “Supplemental Information” section following Management’s Discussion] [added: “Explanation] and [removed: Analysis] [added: Reconciliation] of [added: Non-GAAP] Financial [removed: Condition and Results of Operations ("MD&A")] [added: Measures” section following MD&A] in this Form 10-K.
| | Cardinal Health \| Fiscal [removed: 2015] [added: 2016] Form 10-K | 2 |
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| 3 | Cardinal Health \| Fiscal [removed: 2015] [added: 2016] Form 10-K | |
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| | Cardinal Health \| Fiscal [removed: 2015] [added: 2016] Form 10-K | 4 |
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| 5 | Cardinal Health \| Fiscal [removed: 2015] [added: 2016] Form 10-K | |
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| | Cardinal Health \| Fiscal [removed: 2015] [added: 2016] Form 10-K | 6 |
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| 7 | Cardinal Health \| Fiscal [removed: 2015] [added: 2016] Form 10-K | |
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This segment also operates nuclear pharmacies and cyclotron facilities, provides pharmacy [removed: operations,] [added: management services to hospitals as well as] medication therapy management and patient outcomes services to [removed: hospitals and] [added: hospitals,] other healthcare [removed: providers,] [added: providers and payers,] provides services to healthcare companies supporting the [added: development,] marketing, [removed: distribution] and [removed: payment for] [added: distribution of] specialty pharmaceutical [removed: products and manufacturers] [added: products,] and repackages generic pharmaceuticals and over-the-counter healthcare products.
10-K 1 a16q4_10kx63016xform10-k.htm 10-K
| [Explanation and Reconciliation of Non-GAAP Financial Measures](#s56A4530AA91551848DC7EEF44221C2A0) | [23](#s56A4530AA91551848DC7EEF44221C2A0) |
| [Business](#se8e88a622dbc4535b77b930b954e7396) | [29](#se8e88a622dbc4535b77b930b954e7396) |
| [Properties](#sdd2e35b8128f422cbfcd0cda443b0b8d) | [39](#sdd2e35b8128f422cbfcd0cda443b0b8d) |
| [Reports](#s467b5c22f722467db72aff97109520e7) | [42](#s467b5c22f722467db72aff97109520e7) |
| [Exhibits](#s91BD4347E0B2552D8F222BE5A134FB80) | [75](#s91BD4347E0B2552D8F222BE5A134FB80) |
| [Additional Information](#sa65a9a62f8d3480b96f0875282c7c9c5) | [81](#sa65a9a62f8d3480b96f0875282c7c9c5) |
Cardinal Health, Inc. is an Ohio corporation formed in 1979 and is a global integrated healthcare services and products company providing customized solutions for hospital systems, pharmacies, ambulatory surgery centers, clinical laboratories and physician offices worldwide.
We provide clinically proven medical products and pharmaceuticals and cost-effective solutions that enhance supply chain efficiency from hospital to home.
We connect patients, providers, payers, pharmacists, and manufacturers for integrated care coordination and better patient management.
This segment distributes medical products to patients in the home in the United States.
This segment also provides post-acute care management and transition services and software to hospitals, other healthcare providers and payers.
We use "non-GAAP financial measures" as well as GAAP financial measures in the "Fiscal 2016 Overview" section.
The increases in both GAAP and non-GAAP operating earnings were due to sales growth from existing and new pharmaceutical distribution customers, performance under our Pharmaceutical segment generics program, and acquisitions, partially offset by the adverse impact of customer pricing changes.
GAAP operating earnings were negatively impacted by increased acquisition-related amortization, partially offset by litigation recoveries.
| ($ per share) | 2016 | | | | 2015 | | | | Change | |
The sum of the components may not equal the total due to rounding.
During fiscal 2016, GAAP diluted earnings per share attributable to Cardinal Health, Inc. ("diluted EPS") increased 20 percent to $4.32 and non-GAAP diluted EPS increased 20 percent to $5.24.
The increase in fiscal 2016 GAAP diluted EPS also reflects the prior-year loss on extinguishment of debt.
The decrease in cash and equivalents during the fiscal 2016 was driven by $3.6 billion deployed for acquisitions, $512 million paid in dividends, $651 million paid for share repurchases, and $465 million in capital expenditures, partially offset by $3.0 billion in cash provided by operating activities.
On October 2, 2015, we completed the acquisition of the Cordis business ("Cordis") from Ethicon, Inc., a wholly-owned subsidiary of Johnson & Johnson, for $1.9 billion using cash on hand and proceeds from our debt offering in June 2015.
naviHealth
On August 26, 2015, we acquired a 71 percent ownership interest in naviHealth Holdings, LLC ("naviHealth") for $238 million, net of cash acquired of $53 million.
The acquisition of naviHealth, a leader in post-acute care management solutions, expands our ability to help hospitals, other healthcare providers, and payers manage the complex processes of patient discharge.
We consolidate the results of naviHealth in our consolidated financial statements and report its results in our Medical segment.
The portion of naviHealth net earnings attributable to third-
At June 30, 2016, our ownership interest in naviHealth was 82 percent due to an additional capital contribution in connection with an acquisition by naviHealth.
Refer to Note 12 for further information on this acquisition.
Refer to Note 2 of the "Notes to Consolidated Financial Statements" for additional information on acquisitions.
Within our Pharmaceutical segment, we expect segment profit for fiscal 2017 to be essentially flat compared to fiscal 2016.
The factors contributing to our expectation include less profit growth from the segment’s generics program and the loss of a large pharmaceutical distribution customer beginning April 1, 2016, combined with the adverse impact of customer pricing changes similar to those in fiscal 2016.
While we expect that the segment’s generics program will be positively impacted by benefits from both Red Oak Sourcing and new generic pharmaceutical launches, we expect that both of these items will have significantly less of a year-over-year positive segment profit
impact in fiscal 2017 than fiscal 2016.
The impact of these factors will be more pronounced in the first quarter of fiscal 2017, when we expect Pharmaceutical segment profit to be significantly less than in the prior-year period and consolidated operating earnings to be less than in the prior-year period.
Fiscal 2016 Compared to Fiscal 2015
Fiscal 2016 Pharmaceutical segment revenue grew primarily due to sales growth from existing and new pharmaceutical distribution customers, including continued branded pharmaceutical price appreciation, all of which increased revenue by $16.9 billion.
Acquisitions also contributed $2.1 billion to revenue growth.
Fiscal 2016 Medical segment revenue grew primarily due to acquisitions, net of divestitures, which contributed $645 million, and sales growth from existing businesses.
Fiscal 2015 Medical segment revenue grew primarily due to acquisitions which contributed $344 million.
10-K 1 a15q4_10kx63015xform10-k.htm ANNUAL REPORT
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| --- | --- |
| [Supplemental Information](#s65f599f1bb9349ed947cdb642a9776b6) | [23](#s65f599f1bb9349ed947cdb642a9776b6) |
| [Business](#sab5b5c1d15b04807a080a8f0544b60aa) | [28](#sab5b5c1d15b04807a080a8f0544b60aa) |
| [Properties](#s69f2bee8feee41779fbd5ce7fd16e080) | [37](#s69f2bee8feee41779fbd5ce7fd16e080) |
| [Reports](#s5660F4D493E150959C9D9772C3E30DC7) | [40](#s5660F4D493E150959C9D9772C3E30DC7) |
| [Exhibits](#sEB7B3B949C0D5C3B9A2B43FAE9FC7A2E) | [74](#sEB7B3B949C0D5C3B9A2B43FAE9FC7A2E) |
| [Signatures](#s2DD93FB335D25BE399C76156EC9FF5E0) | [79](#s2DD93FB335D25BE399C76156EC9FF5E0) |
As used in this report, “we,” “our,” “us” and similar pronouns refer to Cardinal Health, Inc. and its subsidiaries, unless the context requires otherwise.
Cardinal Health, Inc. is an Ohio corporation formed in 1979.
We are a healthcare services and products company that improves the cost-effectiveness of health care.
We help pharmacies, hospitals, and other healthcare providers focus on patient care while reducing costs, enhancing efficiency and improving quality.
We also provide medical products to patients in the home.
Revenue growth was negatively impacted in fiscal 2015 due to the previously disclosed expiration of our pharmaceutical distribution contract with Walgreen Co. ("Walgreens") on August 31, 2013.
GAAP diluted EPS increased $0.24 or 7 percent to $3.61 during fiscal 2015 and non-GAAP diluted EPS increased $0.54 or 14 percent to $4.38 during fiscal 2015.
GAAP diluted EPS was also impacted by a $37 million after-tax loss on extinguishment of debt in the current year.
These acquisitions are both discussed in more detail in "Significant Developments in Fiscal 2015 and Trends" that follows this section.
During fiscal 2015, net cash provided by operating activities of $2.5 billion was deployed for share repurchases of $1.0 billion, acquisitions of $503 million and cash dividends of $460 million.
Cordis
On March 1, 2015, we entered into a binding offer letter with Ethicon, Inc., a wholly-owned subsidiary of Johnson & Johnson, to purchase its Cordis business for a purchase price of $1.9 billion in cash, subject
to certain adjustments.
On May 27, 2015, Ethicon accepted the offer.
Cordis is a global company, with operations in more than 50 countries.
The acquisition is expected to close in approximately 20 principal countries during the second quarter of fiscal 2016 and in the remaining countries afterward, subject to regulatory approval and customary closing conditions.
We expect this acquisition to significantly reduce GAAP operating earnings and earnings before income taxes and discontinued operations in fiscal 2016, largely due to the expected impact of amortization and other acquisition-related costs.
Generic Sourcing Venture with CVS Health
Both companies have contributed sourcing and supply chain expertise to the 50/50 venture and have committed to source generic pharmaceuticals through arrangements negotiated by the venture.
We are required to pay 39
quarterly payments of $25.6 million to CVS Health which commenced in October 2014.
Due to the achievement of a milestone, the quarterly payment to CVS Health will increase by $10 million beginning in fiscal 2016.
In addition, if an additional milestone is achieved, the quarterly payment will increase in fiscal 2017 by a further $10 million resulting in a maximum quarterly payment of $45.6 million if all milestones are met.
Within our Pharmaceutical segment, pharmaceutical price appreciation on brand products and some generic products positively impacted our earnings during fiscal 2015, but, as is generally the case, the frequency and magnitude of future brand and generic product price appreciation is uncertain and the impact on earnings may be less in fiscal 2016 than in fiscal 2015.
See the Pharmaceutical Segment discussion within the "Business" section for additional information regarding pharmaceutical price appreciation and generic pharmaceutical product launches.
Revenue growth for fiscal 2015 compared to fiscal 2014 was primarily due to acquisitions ($344 million).
Revenue for fiscal 2014 compared to fiscal 2013 was negatively impacted by the Walgreens contract expiration ($16.9 billion) and by the expiration of our pharmaceutical distribution contract with Express Scripts, Inc. ("Express Scripts") on September 30, 2012 ($2.0 billion).
This decrease was partially offset by sales growth from existing pharmaceutical distribution customers ($7.1 billion).
Revenue growth for fiscal 2014 compared to fiscal 2013 was primarily due to acquisitions ($816 million).
An excerpt. Shown here: 40 of 1,059 rewritten, 40 of 575 added and 40 of 464 removed. The counts are complete. For every sentence, read Full document in the FY2016 filing and the FY2015 filing.