On February 4, 2020 Aflac Incorporated (NYSE: AFL) reported its fourth quarter results (Press release, Aflac, FEB 4, 2020, View Source [SID1234553849]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

Total revenues were $5.6 billion during the fourth quarter of 2019, compared with $5.1 billion in the fourth quarter of 2018. Net earnings were $782 million, or $1.06 per diluted share, compared with $525 million, or $0.69 per diluted share a year ago.

Net earnings in the fourth quarter of 2019 included pretax net realized investment gains of $34 million, or $0.05 per diluted share, compared with pretax net losses of $322 million, or $0.42 per diluted share a year ago. Included in those net gains were $9 million of losses related to impairments and loan loss reserve changes. Pretax net realized gains also included $36 million in gains from changes in the fair value of equity securities and $10 million of losses from certain derivatives and foreign currency activities, as well as a $17 million gain from sales and redemptions.

The average yen/dollar exchange rate* in the fourth quarter of 2019 was 108.79, or 3.8% stronger than the average rate of 112.87 in the fourth quarter of 2018. For the full year, the average exchange rate was 109.07, or 1.2% stronger than the rate of 110.39 a year ago.

Adjusted earnings* in the fourth quarter were $756 million, compared with $779 million in the fourth quarter of 2018, reflecting a decrease of 3.0%. Adjusted earnings per diluted share* increased 1.0% to $1.03 in the quarter and included $3 million of pretax variable investment income on alternative investments, in line with the company’s expectations. The stronger yen/dollar exchange rate impacted adjusted earnings per diluted share by $0.02. Adjusted earnings per diluted share excluding the impact of foreign currency* decreased 1.0% to $1.01.

For the full year of 2019, total revenues were up 2.5% to $22.3 billion, compared with $21.8 billion for the full year of 2018. Net earnings were $3.3 billion, or $4.43 per diluted share, compared with $2.9 billion, or $3.77 per diluted share, for the full year of 2018. Adjusted earnings for the full year of 2019 were $3.3 billion, or $4.44 per diluted share, compared with $3.2 billion, or $4.16 per diluted share, in 2018. Adjusted earnings also included $32 million of pretax variable investment income on alternative investments, of which $21 million was above the company’s expectations. The stronger yen/dollar exchange rate impacted adjusted earnings per diluted share by $0.02.

Total investments and cash at the end of December 2019 were $138.1 billion, compared with $126.2 billion at December 31, 2018. In the fourth quarter, Aflac Incorporated repurchased $470 million, or 8.9 million of its common shares. For the full year, Aflac repurchased $1.6 billion, or 32.0 million of its common shares. At the end of December, the company had 37.1 million remaining shares authorized for repurchase.

Shareholders’ equity was $29.0 billion, or $39.84 per share, at December 31, 2019, compared with $23.5 billion, or $31.06 per share, at December 31, 2018. Shareholders’ equity at the end of the fourth quarter included a net unrealized gain on investment securities and derivatives of $8.5 billion, compared with a net unrealized gain of $4.2 billion at December 31, 2018. Shareholders’ equity at the end of the fourth quarter also included an unrealized foreign currency translation loss of $1.6 billion, compared with an unrealized foreign currency translation loss of $1.8 billion at December 31, 2018. The annualized return on average shareholders’ equity in the fourth quarter was 10.7% and 12.6% for the full year.

Shareholders’ equity excluding AOCI* was $22.3 billion, or $30.74 per share at December 31, 2019, compared with $21.3 billion, or $28.22 per share, at December 31, 2018. The annualized adjusted return on equity excluding foreign currency impact* in the fourth quarter was 13.4% and 15.1% for the full year.

AFLAC JAPAN

In yen terms, Aflac Japan’s net premium income was ¥345.8 billion for the quarter, or 1.6% lower than a year ago, mainly due to limited-pay products reaching paid-up status. Net investment income, net of amortized hedge costs*, decreased 1.4% to ¥67.1 billion. Total revenues in yen declined 1.6% to ¥413.9 billion. Pretax adjusted earnings in yen for the quarter declined 8.8% on a reported basis and 7.2% on a currency-neutral basis. The pretax adjusted profit margin for the Japan segment was 19.8%, compared with 21.4% a year ago. This reflects a favorable benefit ratio in 2018 and elevated expenses driven by reinvestment in the business in 2019.

For the full year, net premium income in yen was ¥1.4 trillion, or 1.1% lower than a year ago. Net investment income, net of amortized hedge costs, increased 2.2% to ¥271.3 billion. Total revenues in yen were down 0.6% to ¥1.7 trillion. Pretax adjusted earnings were ¥354.8 billion, or 0.2% higher than a year ago.

In dollar terms, net premium income increased 2.1% to $3.2 billion in the fourth quarter. Net investment income, net of amortized hedge costs, increased 2.7% to $618 million. Total revenues increased by 2.2% to $3.8 billion. Pretax adjusted earnings declined 5.1% to $757 million.

For the full year, net premium income in dollars was $12.8 billion, or 0.1% higher than a year ago. Net investment income, net of amortized hedge costs, increased 3.9% to $2.5 billion. Total revenues were up 0.7% to $15.3 billion. Pretax adjusted earnings were $3.3 billion, or 1.7% higher than a year ago.

For the quarter, new annualized premium sales (sales) for protection-type first sector and third sector products decreased 23.6% to ¥18.1 billion, and total sales decreased 23.4% to ¥18.5 billion, or $170 million.

For the full year, sales for protection-type first sector and third sector products decreased 16.8% to ¥78.2 billion, and total sales decreased 16.9% to ¥79.7 billion, or $731 million.

AFLAC U.S.

Aflac U.S. net premium income rose 1.1% to $1.4 billion in the fourth quarter. Net investment income decreased 1.6% to $180 million. Total revenues were up 1.6% to $1.6 billion. Pretax adjusted earnings were $275 million, 0.4% higher than a year ago, despite higher anticipated expenses in the quarter. The pretax adjusted profit margin for the U.S. segment was 16.8%, compared with 17.0% a year ago.

For the full year, net premium income rose 1.8% to $5.8 billion. Net investment income decreased slightly by 1.0% to $720 million. Total revenues were up 1.7% to $6.6 billion. Pretax adjusted earnings were $1.3 billion, 1.0% lower than a year ago.

Aflac U.S. sales decreased 0.7% in the quarter to $534 million. For the full year, total new sales decreased 1.3% to $1.6 billion.

CORPORATE AND OTHER

For the quarter, total revenue increased 14.0% to $106 million, reflecting net investment income of $50 million and lower corporate expenses. Net investment income, which increased $12 million, benefited from a $27 million pretax contribution from the company’s enterprise corporate hedging program. Pretax adjusted earnings were a loss of $9 million, compared with a loss of $26 million a year ago.

For the full year, total revenue increased 15.9% to $393 million, reflecting net investment income of $177 million. Net investment income, which increased $64 million, benefited from a $89 million pretax contribution from the company’s enterprise corporate hedging program. Pretax adjusted earnings were a loss of $72 million, compared with a loss of $139 million a year ago.

DIVIDEND

The board of directors declared the first quarter dividend of $0.28 per share, payable on March 2, 2020 to shareholders of record at the close of business on February 19, 2020.

OUTLOOK

Commenting on the company’s results, Chairman and Chief Executive Officer Daniel P. Amos stated: "We are pleased with the company’s overall performance for the year. Total pretax adjusted earnings increased 2.5%, which is particularly impressive considering our extensive investments to drive future earned premium growth, which will remain a critical strategic focus for 2020. I am pleased with the Board’s decision to increase the dividend, coming off our 37th consecutive year of dividend increases and a recognition of the stability of our earnings and capital generation. It also demonstrates our commitment to rewarding our shareholders.

"As expected, Aflac Japan saw a decline in total earned premium in 2019 mainly due to limited-pay policies reaching paid-up status, which has minimal effect on profitability. Additionally, as we anticipated, full-year third sector and first sector protection sales were down in the mid-teens, primarily reflecting reduced sales of our cancer insurance through Japan Post and following a strong 2018 with the launch of our revised cancer insurance product. Earned premium growth for third and first sector protection products was 1.3%, which was in line with our expectation. As communicated on our 2020 outlook call, we expect a decline in the range of 0.7% in third sector and first sector protection earned premium for the year.

"With respect to our U.S. operations, our financial results for the year were consistent with our expectations and reflected elevated expenses as a result of ongoing investments in our platform, distribution and customer experience. While sales were down slightly for the year, earned premium grew 1.8%. In line with what we communicated on the 2020 outlook call, we expect Aflac U.S. to generate earned premium growth in the range of 1% and maintain stable persistency. We will continue to invest in product development and efforts to facilitate producer growth and productivity, including the measured roll-out of Aflac Dental and Vision that was initiated in January.

"Turning to investments, net investment income closed out a strong year in the face of lower rates in the U.S. and Japan, while at the same time positioning the credit quality of the portfolio to perform well should there be economic weakness. Consistent with Aflac Global Investments’ business strategy, we closed on the acquisition of a non-controlling minority interest in Varagon Capital Partners in January 2020, where we are also making a multi-year commitment to build a portfolio of middle market loans. A natural extension of our external manager program, we expect this strategy to deliver incremental value in future years.

"We remain committed to maintaining strong capital ratios on behalf of our policyholders and maintaining a strong risk-based capital ratio in the U.S. and solvency margin ratio in Japan. We will also continue to reinvest in our business, recognizing that prudent investment in our platform is also critical to our growth strategy and driving efficiencies that ultimately will impact the bottom line. We balance reinvestment with a focus on increasing the dividend and repurchasing shares. We expect share repurchase will be in the range of $1.3 to $1.7 billion in 2020, with the range allowing us to be more tactical in our deployment strategy. As always, this assumes stable capital conditions and the absence of compelling alternatives.

"As we look to 2020, our objective is to produce stable adjusted earnings per diluted share of $4.32 to $4.52, assuming the 2019 weighted-average exchange rate of 109.07 yen to the dollar. As always, we are working very hard to achieve our earnings-per-share objective while also ensuring we deliver on our promise to policyholders."

*See Non-U.S. GAAP Financial Measures section for an explanation of foreign exchange and its impact on the financial statements and definitions of the non-U.S. GAAP financial measures used in this earnings release, as well as a reconciliation of such non-U.S. GAAP financial measures to the most comparable U.S. GAAP financial measures.

On February 4, 2020 Emtora Biosciences, a privately-held, clinical stage life science company developing eRapaTM for the prevention of cancer progression reported a poster presentation at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) and Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) Clinical Immuno-Oncology Symposium to be held in Orlando, FL, February 6-8 (Press release, Emtora Biosciences, FEB 4, 2020, View Source [SID1234553848]). Emtora’s core technology incorporates submicron rapamycin particles into a pH-sensitive polymer, improving bioavailability and allowing for consistent and lower dosing than generic rapamycin. Emtora was awarded a grant from the Cancer Prevention and Research Institute of Texas (CPRIT) in 2019 to continue the advancement of eRapa in a Phase 2a trial, which is scheduled to begin in April 2020.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"We are pleased to share data from our first-in-human trial of eRapa at the ASCO (Free ASCO Whitepaper)-SITC Clinical Immuno-Oncology Symposium this year," commented George Peoples, MD, Chief Medical Officer of Emtora Biosciences. "The trial results are an important validation of eRapa’s potential to positively impact the immune system at low and/or intermittent doses and provide valuable safety, tolerability, and dosing information for the company’s upcoming Phase 2a efficacy study."

The poster features results of the company’s Phase 1b trial of eRapa in 14 low grade prostate cancer (PCa) patients. eRapa capitalizes on the potential of partial and/or intermittent inhibition of the mechanistic target of rapamycin (mTOR) to act as a cancer immuno-oncology and chemopreventative agent. In patients with low-grade PCa, treatment with low dose eRapa was found to be safe and well-tolerated. The dose of 0.5mg daily produced predictable, low, and stable blood concentration levels through the duration of treatment and resulted in a positive immune impact by enhancing CD8+ memory T cells. Further investigation with low dose and/or intermittent dosing of eRapa as a preventive agent in PCa and other indications will be required to establish clinical benefit. The poster is currently available on the conference website.

Poster Presentation Details
Title: Results of a Phase 1b Trial of Encapsulated Rapamycin in Prostate Cancer Patients Under Active Surveillance to Prevent Progression
Presenting Author: Phillip Kemp Bohan, MD
Session Information: Poster Session A
Abstract Number: 34
Date: February 6, 2020, 11:30AM-1:00PM and 6:00PM-7:00PM

On February 4, 2020 Boundless Bio, a company interrogating and targeting extrachromosomal DNA (ecDNA) in aggressive cancers, reported presentations at the following upcoming conferences this month (Press release, Boundless Bio, FEB 4, 2020, View Source [SID1234553847]):

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

5th Annual Biomarker and Companion Diagnostics Conference: Jason Christiansen, Ph.D., Chief Technology Officer of Boundless Bio, will give a presentation titled: "Targeting extrachromosomal DNA (ecDNA), a new approach to treating cancers with high copy number gene amplification." The presentation will take place at 3:25 p.m. PST on Friday, February 7, 2020 in San Diego, California.

BIO CEO & Investor Conference: Zachary Hornby, President and Chief Executive Officer of Boundless Bio, will provide an overview of the company’s efforts to pioneer novel cancer therapeutics directed to ecDNA. The presentation will take place at 1:30 p.m. EST on Monday, February 10, 2020 in New York, New York.
About ecDNA

Extrachromosomal DNA, or ecDNA, are large circles of DNA containing genes that are outside the cells’ chromosomes and can make many copies of themselves. ecDNA can be rapidly replicated within the cell, causing high numbers of oncogene copies, a trait that can be passed to daughter cells in asymmetric ways during cell division. Cells have the ability to upregulate or downregulate ecDNA and resulting oncogenes to ensure survival under selective pressures, including chemotherapy, targeted therapy, immunotherapy, or radiation, making ecDNA one of cancer cells’ primary mechanisms of recurrence and treatment evasion. ecDNA are rarely seen in healthy cells but are found in many solid tumor cancers. They are a key driver of the most aggressive and difficult-to-treat cancers, specifically those characterized by high copy number amplification of oncogenes.

On February 4, 2020 SIRION Biotech GmbH ("SIRION"), a world leader in viral vector-based gene delivery technologies for gene and cell therapy, and InProTher Aps ("InProTher"), a Danish start up supported by Novo Nordisk Foundation’s BioInnovation Institute (BII), reported a broad licensing agreement which includes coverage of SIRION’s adenovirus technologies to cancer vaccines encoding Endogenous Retrovirus (ERV)-derived antigens for active immunotherapy (Press release, Sirion Therapeutics, FEB 4, 2020, View Source [SID1234553846]). In addition, the companies have agreed to the assignment of ownership rights in a patent application for an adenoviral vector capable of encoding a virus-like particle (VLP), which displays an inactive immune-suppressive domain (ISD). This vaccine shows an improved immune response from either or both of the response pathways initiated by CD4 T cells or CD8 T cells. SIRION and InProTher have been collaborating for over five years in the fields of HPV vaccine development and ERVs.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

InProTher is an immunotherapy company that is applying adenovirus technologies both for cloning large nucleic acids and increasing the yield of replication-incompetent adenoviruses. The goal is to develop the world’s first adaptive immune therapy capable of targeting immunosuppressive genes of ancient retroviruses that normally are dormant in the human genome. The retroviral genes are reactivated in cancer and essential for tumor development. InProTher’s proprietary combination of novel technologies is designed to break tolerance to this unique antigen family, thus providing broad anti-cancer efficacy.

As part of this agreement, SIRION Biotech will receive shares of InProTher Aps, as well as representation on their Board of Directors. The parties have also agreed on milestones and royalties should InProTher’s developments pass clinical development hurdles.

"This innovative cancer vaccine approach holds great promise, and our adenovirus was initially developed for such a vaccination. We congratulate InProTher as they prepare to enter clinical development with the support of the BII," said Dr. Christian Thirion, Chief Executive Officer of SIRION.

Peter J. Holst, Ph.D., Interim CEO and CSO of InProTher, is a former Associate Professor at the University of Copenhagen with long-standing experience in immunology, having made pivotal discoveries in the field. "InProTher’s proprietary combination of novel technologies is designed to break tolerance to this unique antigen family, thus providing broad anti-cancer efficacy. SIRION has been a creative, loyal and responsive partner over the years, and their adenovirus technology is ideally suited to our needs."

On February 4, 2020 McKesson Corporation (NYSE:MCK) reported results for the third quarter ended December 31, 2019 (Press release, McKesson, FEB 4, 2020, View Source [SID1234553845]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

Fiscal 2020 Third-Quarter and Year-to-Date Result Summary

1Reflects continuing operations attributable to McKesson, net of tax

2Represents a non-GAAP financial measure; refer to the reconciliations of non-GAAP financial measures included in accompanying schedules

"We delivered solid operating performance and we are pleased to report third-quarter adjusted earnings results ahead of our expectations," said Brian Tyler, chief executive officer. "McKesson’s unwavering focus on strategic and operational execution is demonstrated in the adjusted operating profit growth we reported in the third quarter across our core operating segments. Additionally, we have deployed meaningful capital toward share repurchases year-to-date, delivering further value to our shareholders. Our outlook for fiscal 2020 Adjusted EPS remains unchanged from the prior guidance we provided on January 13th, 2020."

Third-quarter revenues were $59.2 billion, up 5% from a year ago. On an FX-adjusted basis, revenues grew 6%, primarily driven by growth in the U.S. Pharmaceutical and Specialty Solutions segment, largely due to branded pharmaceutical price increases and higher volumes from retail national account customers.

Third-quarter earnings per diluted share of $1.06 included a pre- and post-tax charge of $282 million within our European Pharmaceutical Solutions segment for the remeasurement to fair value of assets and liabilities held for sale related to the expected formation of a new German wholesale joint venture with Walgreens Boots Alliance.

Third-quarter Adjusted Earnings per diluted share was $3.81 compared to $3.40 a year ago, an increase of 12%, primarily driven by growth in the U.S. Pharmaceutical and Specialty Solutions, Medical Surgical and European segments and a lower share count, partially offset by the previously anticipated increase in corporate expenses and a higher tax rate. Prior year third-quarter results included a pre-tax charge of $60 million related to a customer bankruptcy, partially offset by a $17 million pre-tax reversal of an accrued estimated liability related to the New York State Opioid Stewardship Act. Excluding the impact of these prior year items from Adjusted Earnings, third-quarter adjusted results per diluted share increased approximately 7% year-over-year.

For the first nine months of the fiscal year, McKesson returned $2.2 billion of cash to shareholders via $1.9 billion of common stock repurchases and $222 million of dividend payments. During the first nine months of the fiscal year, McKesson used cash from operations of $280 million, and invested $338 million internally, resulting in negative free cash flow of $618 million.

U.S. Pharmaceutical and Specialty Solutions Segment

Third-quarter revenues were $46.9 billion, up 6%, driven primarily by branded pharmaceutical price increases and higher volumes from retail national account customers, partially offset by branded to generic conversions.
Third-quarter operating profit was $687 million and operating margin was 1.46%. Adjusted operating profit was $658 million, up 11% from a year ago. Prior year third-quarter results included a $60 million pre-tax charge related to a customer bankruptcy, partially offset by a $17 million pre-tax reversal of an accrued estimated liability related to the New York State Opioid Stewardship Act. Excluding the net $43 million impact of these prior year items, adjusted operating profit increased approximately 3%, driven by continued growth in the specialty businesses. Adjusted operating margin was 1.40%, up 6 basis points.
European Pharmaceutical Solutions Segment

Third-quarter revenues were $6.9 billion, flat on a reported basis and up 3% on an FX-adjusted basis, driven primarily by growth in the pharmaceutical distribution business.
Third-quarter operating loss was ($303 million) and operating margin was (4.37)%, primarily driven by a pre- and post-tax charge of $282 million for the remeasurement to fair value of assets and liabilities held for sale related to the expected formation of a new German wholesale joint venture with Walgreens Boots Alliance. Adjusted operating profit was $80 million, up 16%, and adjusted operating margin was 1.15%. On an FX-adjusted basis, adjusted operating profit was $82 million, up 19%, and adjusted operating margin was 1.16%, up 16 basis points, driven in part by expense rationalization.
Medical-Surgical Solutions Segment

Third-quarter revenues were $2.1 billion, up 6%, driven primarily by growth in the Primary Care business, largely due to higher pharmaceutical volumes and an early start to influenza season.
Third-quarter operating profit was $124 million and operating margin was 5.79%. Adjusted operating profit was $184 million, up 8%, and adjusted operating margin was 8.59%, up 14 basis points. The year-over-year increase primarily reflects organic growth in the Primary Care business.
Other remaining businesses

Third-quarter revenues were $3.2 billion, up 6% on a reported basis and up 5% on an FX-adjusted basis, primarily driven by growth in the Canadian business.
Third-quarter operating profit was $61 million. Adjusted operating profit was $214 million, down 4% on both a reported and FX-adjusted basis, as increased investment spend within the MRxTS business was partially offset by growth in the Canadian business.
Company Updates

On February 4, 2020, McKesson’s wholly-owned subsidiary, PF2 SpinCo, Inc., filed a registration statement with the Securities and Exchange Commission (SEC) relating to a potential exit of the company from its investment in the Change Healthcare joint venture.
McKesson was selected by the Department of Veterans Affairs to continue to serve as the prime pharmaceutical provider when the current contract expires in August 2020.
On December 12, 2019, McKesson and Walgreens Boots Alliance announced an agreement to create a joint venture that is expected to combine their respective pharmaceutical wholesale businesses in Germany.
For the seventh year in a row, McKesson was honored as one of the "Best Places to Work for LGBTQ Equality" by the Human Rights Campaign (HRC) Foundation, achieving 100 percent on the HRC’s 2020 Corporate Equality Index (CEI).
McKesson appointed Nancy Flores as Executive Vice President, Chief Information and Technology Officer effective January 13, 2020, following Kathy McElligott’s announced retirement.
Fiscal 2020 Outlook

McKesson reaffirmed fiscal 2020 Adjusted Earnings per diluted share guidance range of $14.60 to $14.80, which was previously narrowed and raised from $14.00 to $14.60 on January 13, 2020.
Conference Call Details

The company has scheduled a conference call for today, Tuesday, February 4th at 8:00 AM ET to discuss the company’s financial results. A live audio webcast of the conference call will be available on McKesson’s Investor Relations website at View Source The conference call can also be accessed by dialing 786-815-8297. The password is ‘McKesson’. A telephonic replay of this conference call will be available for 14 calendar days. For individuals wishing to listen to the replay, the dial-in number is 404-537-3406 and the pass code is 6206708. An archive of the conference call will also be available on the company’s Investor Relations website at View Source

Non-GAAP Financial Measures

GAAP refers to the U.S. generally accepted accounting principles. This press release includes GAAP financial measures as well as Non-GAAP financial measures, including Adjusted Earnings, FX-Adjusted results and Free Cash Flow which are financial measures not calculated in accordance with GAAP. Refer to the "Supplemental Non-GAAP Financial Information" section of the accompanying financial statement tables for the definitions and usefulness of the Company’s Non-GAAP financial measures and the attached schedules for reconciliations of the differences between the Non-GAAP financial measures and their most directly comparable GAAP financial measures.

The company does not provide forward-looking guidance on a GAAP basis as McKesson is unable to provide a quantitative reconciliation of this forward-looking non-GAAP measure to the most directly comparable forward-looking GAAP measure, without unreasonable effort, because McKesson cannot reliably forecast LIFO inventory-related adjustments, gains from antitrust legal settlements, restructuring, impairment and related charges, and other adjustments, which are difficult to predict and estimate. These items are inherently uncertain and depend on various factors, many of which are beyond the company’s control, and as such, any associated estimate and its impact on GAAP performance could vary materially.