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| CAH > SEC Filings for CAH > Form 10-Q on 14-May-2004 | All Recent SEC Filings |
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14-May-2004
Quarterly Report
The discussion and analysis presented below are concerned with materialchanges in financial condition and results of operations for the Company'scondensed consolidated balance sheets as of March 31, 2004, and June 30, 2003,and the condensed consolidated statements of earnings for the three andnine-month periods ended March 31, 2004 and 2003.
This discussion and analysis should be read together with management'sdiscussion and analysis included in the 2003 Form 10-K.
Portions of management's discussion and analysis presented below include"forward-looking statements" within the meaning of the Private SecuritiesLitigation Reform Act of 1995. The words "believe," "expect," "anticipate,""project," and similar expressions, among others, identify "forward-lookingstatements," which speak only as of the date the statement was made. Suchforward-looking statements are subject to risks, uncertainties and otherfactors, which could cause actual results to materially differ from those made,projected or implied. The most significant of such risks, uncertainties andother factors are described in Exhibit 99.01 to this Form 10-Q and beginning onpage 8 of the 2003 Form 10-K and are incorporated herein by reference. TheCompany disclaims any obligation to update any forward-looking statement.
OVERVIEW
The following summarizes the Company's results of operations for thethree and nine-month periods ended March 31, 2004.
Three Months Ended Nine Months Ended(in millions, except per Common Share March 31, March 31, ------------------------------------ -------------------------------------amounts) Growth (1) 2004 2003 Growth (1) 2004 2003--------------------------------------------------------------------------------- -------------------------------------Operating revenue 14% $14,638.9 $12,837.3 14% $42,020.8 $36,960.2Operating earnings 9% $664.5 $608.2 6% $1,774.2 $1,666.6Earnings from continuing operations 11% $428.9 $384.9 10% $1,140.2 $1,040.7Net earnings 12% $428.1 $383.1 9% $1,132.5 $1,038.9Diluted earnings per Common Share 15% $0.97 $0.84 12% $2.56 $2.29--------------------------------------------------------------------------------- -------------------------------------
(1) Growth is calculated as the change (increase or decrease) for the three and nine months ended March 31, 2004, compared to the three and nine months ended March 31, 2003.The results of operations during the three and nine months ended March31, 2004, reflect the breadth of products and services the Company offers andthe increasing demand for the Company's diverse portfolio of products andservices, which led to revenue growth in every segment of the Company. TheCompany continues to experience strong demand for integrated solutions fromhealth care providers. These integrated solutions include products and servicesfrom multiple lines of businesses within the Company. These unique arrangementscurrently represent more than $6 billion of annual sales.
The Company has four operating business segments: PharmaceuticalDistribution and Provider Services, Medical Products and Services,Pharmaceutical Technologies and Services and Automation and InformationServices. The Company generated strong operating earnings within its MedicalProducts and Services, Pharmaceutical Technologies and Services and Automationand Information Services segments. These three segments now comprise more thanone-half of the Company's operating earnings. The operating earnings growth inthose three segments was offset partially by the relatively flat earnings withinthe Pharmaceutical Distribution and Provider Services segment, as discussedbelow.
The Company's Pharmaceutical Distribution and Provider Services segmentis in transition in its business model from a "buy and hold" inventoryinvestment model to a "just-in-time" fee-for-service model with regard to thepharmaceutical distribution services it provides for manufacturers.Historically, one way the Company obtained value from manufacturers was bybuying inventories from them, holding those inventories and generating marginson the subsequent sale of those inventories after pharmaceutical pricesincreased. The Company is currently working
with its pharmaceutical manufacturing vendors to transition towards a"just-in-time" fee-for-service business model where the Company will becompensated for the services it provides the manufacturer. To assist in thistransition, the Company has performed an analysis of its pharmaceuticalmanufacturing vendors' "next-best alternative" to utilizing the Company'sservices. This analysis is being used to help develop the Company's total feerequirement for each manufacturer.
During this business model transition, the Company's vendor margins havebeen negatively impacted, resulting in lower operating earnings growth rateswhen compared to the same periods a year ago. However, the Company believes thatthe most severe impact of this transition on its vendor margins occurred in thesecond quarter of fiscal 2004. During the three months ended March 31, 2004,operating earnings were stable when compared to the same period a year ago.
This transition to a new business model also has affected the Company'soperating revenues. While the overall demand for the Company's products has notchanged, the business model guiding how the Company fills certain orders haschanged. The previous "buy and hold" model resulted in the Company holding largequantities of inventories and filling certain "bulk" orders through theCompany's inventory on-hand. These types of sales were classified as "Bulk fromStock" and were reported within operating revenue. With the transition to thisnew business model, the Company will hold less inventory, and therefore will notfill these orders from its own stock with the same frequency, but rather willact more as a pass-through entity and record the revenue within its "BulkDeliveries to Customer Warehouses" line within the income statement. The impactof this change is reflected in the Company's investment in days of inventoryon-hand at quarter-end (i.e., investment declined seven days from a year agoMarch 31 and three days sequentially from December 31, 2003).
The Company and certain product manufacturers are in discussions regardingthe risks of counterfeit products in the supply chain and the manufacturers'concerns regarding the impact of secondary market distribution oncounterfeiting. The Company continues to work with its suppliers to helpminimize the risks associated with counterfeit products in the supply chain.
The Medicare Prescription Drug, Improvement, and Modernization Act (the"Medicare Act") was passed by Congress and enacted by President Bush on December8, 2003. The Medicare Act is the largest expansion of the Medicare program sinceits inception and provides participants with voluntary prescription drugbenefits effective in 2006 with an interim drug discount card. The Medicare Actalso includes provisions relating to medication management programs, genericsubstitution and provider reimbursement. Based upon current information, theCompany believes the Medicare Act may create additional volume demand andprovide incentives for additional utilization of generic drugs.
As a leading provider of products and services supporting the health careindustry, including the distribution of pharmaceuticals and other health careproducts, the Company is monitoring issues regarding importation ofpharmaceuticals and other health care products. The Company is sensitive to theissue of pharmaceutical prices and the pricing disparity between domestic andinternational markets. However, the Company believes that for importation to besuccessful, additional controls and protections would need to be implemented toensure patients and consumers receive safe and effective pharmaceuticalproducts. The Company will continue to work proactively with all participantsand regulators in the pharmaceutical supply chain to help ensure any solution issafe and efficient.
During the nine months ended March 31, 2004, the Company completed severalacquisitions, including Intercare. The Company's trend with regard toacquisitions has been to expand its role as a provider of services to the healthcare industry. This trend has resulted in expansion into service areas which (a)complement the Company's existing operations, and (b) provide opportunities forthe Company to develop synergies with, and thus strengthen, the acquiredbusiness. As the health care industry continues to change, the Company regularlyevaluates possible candidates for merger or acquisition and intends to continueto seek opportunities to expand its role as a provider of services to the healthcare industry through all its reporting segments. There can be no assurance thatit will be able to successfully pursue any such opportunity or consummate anysuch transaction, if pursued. If additional transactions are entered into orconsummated, the Company would incur additional merger- and acquisition-relatedcosts, and may need to enter into funding arrangements for such mergers oracquisitions. There can be no assurance that the integration efforts associatedwith any such transaction would be successful.
GENERAL
The following discussions provide details regarding the results ofoperations of the Company's four operating business segments. See Note 5 in"Notes to Condensed Consolidated Financial Statements" for a description ofthese segments.
RESULTS OF OPERATIONS
Operating Revenue Three Months Ended Nine Months Ended March 31, March 31, ----------------------------------------- --------------------------------------- Percent of Total Percent of Total Operating Revenues Operating Revenues -------------------------- --------------------------------------- Growth (1) 2004 2003 Growth (1) 2004 2003------------------------------------------------------------- -------------------------------------------------------------------Pharmaceutical Distribution and Provider Services 14% 81% 81% 13% 81% 82%Medical Products and Services 14% 13% 13% 12% 13% 13%Pharmaceutical Technologies and Services 14% 5% 5% 39% 5% 4%Automation and Information Services 4% 1% 1% 8% 1% 1%
Total Company 14% 100% 100% 14% 100% 100%----------------------------------------------------------------------------------------------------------------------------------
(1) Growth is calculated as the change (increase or decrease) in the operating revenue for the three and nine months ended March 31, 2004, compared to the three and nine months ended March 31, 2003.TOTAL COMPANY. Total operating revenue for the three and nine monthsended March 31, 2004, increased 14% compared to the same periods of the prioryear. These increases resulted from a higher sales volume across each of theCompany's segments; revenue growth from existing customers; the addition of newcustomers, some of which resulted from new corporate agreements with health careproviders that integrate the Company's diverse offerings; the addition of newproducts; and pharmaceutical price increases.
PHARMACEUTICAL DISTRIBUTION AND PROVIDER SERVICES. This segment'soperating revenue growth of 14% and 13%, respectively, during the three and ninemonths ended March 31, 2004, resulted from strong sales to customers within thissegment's core pharmaceutical distribution business. "Direct Store Door" sales(sales in which the Company breaks down bulk pharmaceuticals to customize ordersfor delivery direct to the health care providers) within the pharmaceuticaldistribution business showed particular strength, increasing 24% during thethree and nine months ended March 31, 2004. The increase in "Direct Store Door"sales was primarily due to increased sales to new and existing customers, inparticular alternate site and health system customers, and pharmaceutical priceincreases. This segment's growth was dampened by the impact of declining "Bulkfrom Stock" sales as described in the "Overview" section. To fully gaugedownstream customer demand within pharmaceutical distribution, three types ofsales should be aggregated. These sales types are "Direct Store Door" and "Bulkfrom Stock" (reported in total as operating revenues) and "Bulk Deliveries toCustomer Warehouses." Revenue growth from these total sales activities was 14%and 16% during the three and nine months ended March 31, 2004, as compared tothe comparable periods a year ago. In addition, the three months ended March 31,2004, included an extra business day when compared to the same period a yearago, which accounted for approximately 2% of this segment's revenue growth forthe three months ended March 31, 2004.
MEDICAL PRODUCTS AND SERVICES. This segment's operating revenue growthof 14% and 12%, respectively, during the three and nine months ended March 31,2004, resulted primarily from increased sales momentum from new and existingcontracts within the distribution business, as well as increased sales from newself-manufactured products. New contracts drove an increase in sales of bothdistributed and self-manufactured products, with sales from the distributionbusiness showing particular strength during the three and nine months endedMarch 31, 2004. Sales of new self-manufactured products, particularlyenhancements within surgeon glove products, contributed to this segment'srevenue growth. This segment's revenue growth has been well above industryaverages during the current fiscal year. Also, this segment's internationalbusiness contributed solid revenue growth during the three months ended March31, 2004. This segment also benefited from the extra business day during thethree months ended March 31, 2004, when compared to the same period a year ago,accounting for approximately 2% of this segment's revenue growth for the threemonths ended March 31, 2004.
PHARMACEUTICAL TECHNOLOGIES AND SERVICES. This segment's operatingrevenue growth of 14% and 39%, respectively, during the three and nine monthsended March 31, 2004, resulted from sales momentum within the pharmaceuticaldevelopment, packaging services and nuclear pharmacy businesses. This segment'srevenue growth for the three months ended March 31, 2004, benefited from theinclusion of Intercare, an acquisition that was completed during December 2003.Intercare's results of operations are not included in the prior period amounts.Also, this segment's revenue growth for the nine months ended March 31, 2004,benefited from the inclusion of Syncor, an acquisition that was completed onJanuary 1, 2003. Syncor's results of operations are not included in the amountsfor the first half of fiscal 2003 (prior to the acquisition). This segment'srevenue growth was partially dampened by a delay in the startup of commercialmanufacturing of key sterile products from signed contracts, which has now begunduring the fourth quarter of fiscal 2004.
AUTOMATION AND INFORMATION SERVICES. This segment's operating revenuegrowth of 4% and 8%, respectively, during the three and nine months ended March31, 2004, primarily reflected sales growth within the medication product lines(such as Pyxis MedStation(R)). A portion of this segment's revenue growth wasdue to the addition of new customers and products. This segment was impacted bya softening of demand at the hospital level. The Company believes that thissoftening is attributable to capital spending pressures being experienced byhospitals. The Company believes that this trend may continue in the short-term;however, the Company remains confident in the long-term prospects for thissegment as patient safety concerns combine with innovative new products to drivefuture demand.
Bulk Deliveries to Customer Warehouses and Other The Pharmaceutical Distribution and Provider Services segment reportsbulk deliveries made to customers' warehouses as revenue. These sales involvethe Company acting as an intermediary in the ordering and subsequent delivery ofpharmaceutical products. Fluctuations in bulk deliveries result largely fromcircumstances that the Company cannot control, including consolidation withincustomers' industries, decisions by customers to either begin or discontinuewarehousing activities and changes in policies by manufacturers related toselling directly to customers. Due to the lack of margin generated through bulkdeliveries, fluctuations in their amount have no significant impact on theCompany's net earnings.
The Pharmaceutical Technologies and Services segment recordsout-of-pocket reimbursements received through its sales and marketing servicesbusiness as revenue. These out-of-pocket expenses, which generally includetravel expenses and other incidental costs, are incurred to fulfill the servicesrequired by various contracts. These contracts provide for the customer toreimburse the Company for these expenses. Due to the Company not generating anymargin from these reimbursements, fluctuations in their amount have no impact onthe Company's net earnings.
Operating Earnings Three Months Ended Nine Months Ended March 31, March 31, ------------------------------------ ------------------------------------- Percent of Total Percent of Total Operating Earnings Operating Earnings ------------------------------------ ------------------------------------- Growth (1) 2004 2003 Growth (1) 2004 2003-----------------------------------------------------------------------------------------------------------------------Pharmaceutical Distribution and Provider Services 0% 48% 52% (2%) 46% 51%Medical Products and Services 11% 26% 24% 10% 26% 25%Pharmaceutical Technologies and Services 22% 16% 14% 33% 17% 14%Automation and Information Services 8% 10% 10% 12% 11% 10%
Total Company (2) 9% 100% 100% 6% 100% 100%-----------------------------------------------------------------------------------------------------------------------
(1) Growth is calculated as the change (increase or decrease) in the operating earnings for the three and nine-month periods ended March 31, 2004, compared to the three and nine-month periods ended March 31, 2003.
(2) The Company's overall operating earnings growth of 9% and 6%, respectively, during the three and nine-month periods ended March 31, 2004, includes the effect of special items. Special items are not allocated to the segments. See Note 4 in "Notes to Condensed Consolidated Financial Statements" for further information regarding the Company's special items.TOTAL COMPANY. Total operating earnings for the three months ended March31, 2004, increased 9% compared to the same period of the prior year. Thisoperating earnings growth resulted primarily from the Company's revenue growthof 14% during the same time period, which yielded a gross margin increase of 7%.Gross margins grew at a slower rate than revenues primarily due to two reasons:(1) the continued dampening effect of reduced vendor margins and competitivepricing within the Pharmaceutical Distribution and Provider Services segmentdriven by changes to its business model (see the "Overview" section for furtherdiscussion); and (2) an increased mix of lower-margin distribution businesswithin the Medical Products and Services segment. Strong expense productivityresulted in only 6% growth in selling, general and administrative expensesduring the three months ended March 31, 2004.
Total operating earnings for the nine months ended March 31, 2004,increased 6% compared to the same period of the prior year. This operatingearnings growth resulted primarily from the Company's revenue growth of 14%during the same time period, which yielded a gross margin increase of 8%. Asdiscussed above, gross margins grew at a slower rate than revenues due todynamics within the Pharmaceutical Distribution and Provider Services andMedical Products and Services segments. The growth rate for the nine monthsended March 31, 2004, was also positively impacted by the inclusion of Syncor,whose results of operations are not included in the first six months of fiscal2003 since the acquisition of Syncor was completed January 1, 2003. Theseincreases were offset partially by the impact of the Company's special items,which totaled expense of $18.0 million during the nine months ended March 31,2004, as compared to income of $9.1 million during the same period a year ago.
The growth rates for the three and nine months ended March 31, 2004,reflect the increased contributions from the Company's operating segmentsoutside of the Pharmaceutical Distribution and Provider Services segment, whichgenerate higher gross margins and operating earnings (as a percentage ofoperating revenue). These segments now account for more than one-half of theCompany's operating earnings.
The Company continues to leverage its expense structure throughdisciplined expense control, and the productivity benefits resulting from scaleassociated with revenue growth and previous investments in automation andtechnology. Selling, general and administrative expenses as a percentage ofrevenue were 4.15% during the three and nine months ended March 31, 2004, ascompared to 4.49% and 4.39%, respectively, for the same periods a year ago. Theoverall increase in operating expenses was primarily a result of the additionalexpenses resulting from acquisitions, higher personnel costs associated with theoverall business growth and an increase in depreciation and amortization costs.Additionally, the Company continues to invest in research and development andstrategic initiatives that will benefit future periods, which are chargedagainst current operating earnings as incurred. The increase in the Company'sexpenses for the three and nine months ended March 31, 2004, was offsetpartially by: (1) a reduction in incentive compensation expenses due to theperformance of the Company's consolidated operations relative to management'sexpectations and established financial performance metrics; and (2) adjustmentsof certain
trade receivable reserves due to changes in customer-specific credit exposures,as well as improvements in customer credit, billing and collection processesyielding significant reductions in past due and uncollectible accounts.
PHARMACEUTICAL DISTRIBUTION AND PROVIDER SERVICES. This segment'soperating earnings were stable during the three months ended March 31, 2004, ascompared to the same period a year ago, and decreased 2% during the nine monthsended March 31, 2004, as compared to the same period a year ago. The absence ofpositive earnings growth in this segment resulted from reduced vendor margins,as further discussed in the "Overview" section, and the impact of competitivepricing within the pharmaceutical distribution industry. These declines wereoffset partially by this segment's revenue growth of 14% and 13% during thethree and nine months ended March 31, 2004, as well as disciplined expensecontrol throughout the segment.
MEDICAL PRODUCTS AND SERVICES. This segment's operating earnings growthof 11% and 10%, respectively, during the three and nine months ended March 31,2004, resulted primarily from this segment's overall revenue growth of 14% and12%, respectively, during the comparable periods, led by sales momentum indistribution contracts. The gross margin impact of an increased mix ofdistributed products, competitive pricing within the industry and increases inraw material costs (principally plastic resin and natural rubber latex) wereoffset partially by manufacturing productivity improvements and disciplinedexpense control.
PHARMACEUTICAL TECHNOLOGIES AND SERVICES. This segment's operatingearnings growth of 22% during the three months ended March 31, 2004, resultedprimarily from this segment's overall revenue growth of 14% during thecomparable period, as well as from favorable product mix and productivityefficiencies. This segment also benefited from the inclusion of Intercare, whoseresults of operations are not included in the prior period since the Intercareacquisition was completed during the second quarter of fiscal 2004. Thissegment's operating earnings growth was dampened by a delay in the startup ofcommercial manufacturing of certain sterile products, as disclosed in thissegment's operating revenue discussion.
This segment's operating earnings growth of 33% during the nine monthsended March 31, 2004, resulted primarily from this segment's overall revenuegrowth of 39% during the comparable period, as well as from productivityefficiencies and disciplined expense control. This segment's operating earningsgrowth during the nine months ended March 31, 2004, also benefited from theinclusion of Syncor, an acquisition that was completed on January 1, 2003.Syncor's results of operations are not included in the first half of fiscal2003. Since Syncor's operating earnings as a percentage of operating revenue isless than the other business units within this segment, its inclusion had adeleveraging effect on operating earnings growth in comparison to revenuegrowth. Also, as noted above, this segment's operating earnings growth wasdampened by a delay in the startup of commercial manufacturing of certainsterile products.
AUTOMATION AND INFORMATION SERVICES. This segment's operating earningsgrowth of 8% and 12%, respectively, during the three and nine months ended March31, 2004, resulted primarily from this segment's overall revenue growth of 4%and 8%, respectively, during the comparable periods in conjunction withoperational improvements and favorable product mix. This segment's growth ratefor the nine months ended March 31, 2004, also benefited from a reduction inreceivable reserves due to improvements in customer-specific credit matters, aswell as general improvements in customer credit, billing and collectionprocedures, which have resulted in significant reductions in past due anduncollectible accounts.
Special Charges See Note 4 in "Notes to Condensed Consolidated Financial Statements"for detail of the Company's special items during the three and nine months endedMarch 31, 2004 and 2003.
Interest Expense and Other The decrease in interest expense and other of $2.9 million and $17.6million, respectively, during the three and nine months ended March 31, 2004,compared to the same periods in the prior fiscal year, resulted from lowerinterest rates and lower borrowing levels as a result of the Company's strongoperating cash flow. The Company also recorded a net gain of approximately $7.1million related to the sale of a non-strategic business during the nine monthsended March 31, 2004.
Provision for Income Taxes The Company's provision for income taxes relative to earnings beforeincome taxes and discontinued operations was 32.7% and 32.9% for the three andnine months ended March 31, 2004, respectively, as compared to 33.4% and 33.9%for the three and nine months ended March 31, 2003. Fluctuations in theeffective tax rate are primarily due
to changes within state and foreign effective tax rates resulting from theCompany's business mix and changes in the tax impact of special items, which mayhave unique tax implications depending on the nature of the item.
Loss from Discontinued Operations See Note 9 in "Notes to Condensed Consolidated Financial Statements"for information on the Company's discontinued operations.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating
activities during the nine months endedMarch 31, 2004, totaled $1,335.4 million,
an increase of $819.6 million whencompared to the same period a year ago. The
increase was primarily the result ofreduced investment in working capital and
improved earnings from continuingoperations. The Company's working capital
investment typically movesdirectionally in line with revenue. However,
management expects the relativeinvestment in working capital to decline due to
the changing business model inthe pharmaceutical distribution industry. For
example, the Company hasrecognized a decline in its days inventory on-hand and
expects this trend tocontinue. This change is expected to have a favorable
impact on operating cashflow during the transition and for the long-term, and to
moderate historicalseasonal fluctuations in working capital. For further
discussion of changeswithin the Company's earnings from continuing operations,
see the "Results ofOperations" section. Additionally, the Company sold lease
receivables forproceeds of $164.2 million during the second quarter of fiscal
2004, as comparedto $200.0 million during the same period a year ago.
Net cash used in investing activities during the nine months ended March31, 2004, increased $602.0 million when compared to the same period a year agoto $819.8 million, primarily the result of cash acquisitions. During the ninemonths ended March 31, 2004, the Company completed several acquisitions,including Intercare. Capital expenditures remained relatively stable, increasing$7.9 million.
Net cash used in financing activities totaled $1,712.4 million during thenine months ended March 31, 2004. During the first quarter of fiscal 2004, theCompany's Board of Directors approved, and management completed, a sharerepurchase program for $1 billion of the Company's Common Shares. The Board ofDirectors approved an additional $500 million share repurchase during the thirdquarter of fiscal 2004, $460.3 million of which has been repurchased through anaccelerated share repurchase program as of March 31, 2004 (see Note 2 in "Notesto Condensed Consolidated Financial Statements" for further informationregarding this share repurchase program). The share repurchases were partiallyoffset by proceeds totaling $144.3 million from stock issued under variousemployee stock plans. Additionally, despite the assumption of debt related toacquisitions during the nine months ended March 31, 2004, the Company reducedtotal debt by $357.0 million. As part of that reduction, two $100.0 millionnotes matured and were retired in February 2004. Dividends totaled $39.4million, up $5.8 million from the prior period.
The Company maintains two $750.0 million revolving credit facilities. Thefacilities are available for general corporate purposes; however, they areprimarily used as backstop liquidity for the Company's commercial paper program.During the third quarter of fiscal 2004, the Company refinanced its maturing364-day, $750.0 million revolving credit facility with a five-year, $750.0million revolving credit facility. Management believes that the extension to afive-year facility enhanced the Company's credit profile by reducing refinancingrisk at nominal marginal cost.
The Company's cash balance as of March 31, 2004, of $527.2 million included$261.2 million outside of the United States. Although the vast majority of thecash held outside the United States is available for repatriation, doing socould subject it to United States federal income tax. In addition to cash, theCompany's sources of liquidity include a $1.5 billion commercial paper program,a $150 million extendable commercial note program and a $250 million accountsreceivable securitization program. All three facilities were unused at quarterend, except for approximately $37 million of standby letters of credit. TheCompany also has lines of credit exceeding $300 million as sources of liquidity.As of March 31, 2004, the Company had in excess of $200 million of remainingcapacity available from these lines of credit.
From time to time, the Company considers and engages in acquisitiontransactions in order to expand its role as a leading provider of services tothe health care industry. The Company regularly evaluates possible candidatesfor merger or acquisition and intends to continue to seek opportunities toexpand its role as a provider of services to the health care industry throughall its reporting segments. If additional transactions are entered into orconsummated, the Company would incur merger- and acquisition-related costs, andmay need to enter into funding arrangements for such mergers or acquisitions.
OFF-BALANCE SHEET ARRANGEMENTS
See Note 11 in "Notes to
Condensed Consolidated Financial Statements"for a discussion of recent
off-balance sheet arrangements.
OTHER
See Note 1 in "Notes to Condensed Consolidated Financial
Statements"for a discussion of recent financial accounting standards.
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