Condensed consolidating financial information

12 Months Ended

Dec. 31, 2010

Condensed consolidating financial information [Abstract]

Condensed consolidating financial information

15. Condensed consolidating financial information

Our senior notes are jointly and severally and fully and unconditionally guaranteed by our 100% owned domestic subsidiaries, other than certain regulated subsidiaries including Express Scripts Insurance Company. The following condensed consolidating financial information has been prepared in accordance with the requirements for presentation of such information. Effective September 17, 2010, PMG was sold, effective June 30, 2008, IP was sold and effective April 4, 2008, Custom Medical Products, Inc. (“CMP”) was sold. The assets, liabilities, and operations from these former subsidiaries are included as discontinued operations in those of the non-guarantors. Subsequent to the acquisition of NextRx on December 1, 2009 and Pharmacy Services Division of MSC – Medical Services Company (“MSC”) on July 22, 2008, certain of the assets, liabilities and operations of the 100% owned domestic subsidiaries have been included in those of the guarantors. Certain amounts from prior periods have been reclassified to conform to current period presentation. The following presents the condensed consolidating financial information separately for:

(i) Express Scripts, Inc. (the Parent Company), the issuer of the guaranteed obligations;

(ii) Guarantor subsidiaries, on a combined basis, as specified in the indentures related to Express Scripts’ obligations under the notes;

(iii) Non-guarantor subsidiaries, on a combined basis;

(iv) Consolidating entries and eliminations representing adjustments to (a) eliminate intercompany transactions between or among the Parent Company, the guarantor subsidiaries and the non-guarantor subsidiaries, (b) eliminate the investments in our subsidiaries and (c) record consolidating entries; and

(v) Express Scripts, Inc and subsidiaries on a consolidated basis.

Condensed Consolidating Balance Sheet

(in millions)	Express Scripts, Inc.		Guarantors		Non- Guarantors		Eliminations			Consolidated
As of December 31, 2010
Cash and cash equivalents	$	456.7	$	9.0	$	58.0	$	—		$	523.7
Restricted cash and investments		—		11.7		4.6		—			16.3
Receivables, net		1,175.6		536.2		9.1		—			1,720.9
Other current assets		249.0		396.0		35.4		—			680.4
Total current assets		1,881.3		952.9		107.1		—			2,941.3
Property and equipment, net		231.5		127.2		14.0		—			372.7
Investments in subsidiaries		6,382.2		—		—		(6,382.2	)		—
Intercompany		—		3,214.0		—		(3,214.0	)		—
Goodwill		2,921.4		2,538.8		26.0		—			5,486.2
Other intangible assets, net		1,426.2		294.8		4.0		—			1,725.0
Other assets		20.6		10.1		1.9		—			32.6
Total assets	$	12,863.2	$	7,137.8	$	153.0	$	(9,596.2	)	$	10,557.8
Claims and rebates payable	$	2,664.9	$	1.6	$	—	$	—		$	2,666.5
Accounts payable		634.4		17.7		4.6		—			656.7
Accrued expenses		288.7		294.5		10.7		—			593.9
Current maturities of long-term debt		—		0.1		—		—			0.1
Total current liabilities		3,588.0		313.9		15.3		—			3,917.2
Long-term debt		2,493.7		—		—		—			2,493.7
Intercompany		3,094.8		—		119.2		(3,214.0	)		—
Other liabilities		80.1		455.5		4.7		—			540.3
Stockholders’ equity		3,606.6		6,368.4		13.8		(6,382.2	)		3,606.6
Total liabilities and stockholders’ equity	$	12,863.2	$	7,137.8	$	153.0	$	(9,596.2	)	$	10,557.8
As of December 31, 2009
Cash and cash equivalents	$	1,005.0	$	10.0	$	55.4	$	—		$	1,070.4
Restricted cash and investments		—		7.5		1.6		—			9.1
Receivables, net		1,179.8		1,326.7		9.9		—			2,516.4
Other current assets		196.0		340.6		5.6		—			542.2
Current assets of discontinued operations		—		—		5.4		—			5.4
Total current assets		2,380.8		1,684.8		77.9		—			4,143.5
Property and equipment, net		239.6		96.5		11.0		—			347.1
Investments in subsidiaries		5,970.2		—		—		(5,970.2	)		—
Intercompany		—		2,500.2		—		(2,500.2	)		—
Goodwill		2,939.2		2,533.1		24.8		—			5,497.1
Other intangible assets, net		1,543.9		332.6		4.3		—			1,880.8
Other assets		21.3		8.5		1.9		—			31.7
Noncurrent assets of discontinued operations		—		—		31.0		—			31.0
Total assets	$	13,095.0	$	7,155.7	$	150.9	$	(8,470.4	)	$	11,931.2
Claims and rebates payable	$	2,264.3	$	586.4	$	—	$	—		$	2,850.7
Accounts payable		674.4		29.0		3.0		—			706.4
Accrued expenses		312.7		225.2		11.3		—			549.2
Current maturities of long-term debt		1,340.0		0.1		—		—			1,340.1
Current liabilities of discontinued operations		—		—		10.4		—			10.4
Total current liabilities		4,591.4		840.7		24.7		—			5,456.8
Long-term debt		2,492.5		—		—		—			2,492.5
Intercompany		2,387.2		—		113.0		(2,500.2	)		—
Other liabilities		72.1		356.3		1.7		—			430.1
Stockholders’ equity		3,551.8		5,958.7		11.5		(5,970.2	)		3,551.8
Total liabilities and stockholders’ equity	$	13,095.0	$	7,155.7	$	150.9	$	(8,470.4	)	$	11,931.2

Condensed Consolidating Statement of Operations

(in millions)	Express Scripts, Inc.			Guarantors			Non- Guarantors			Eliminations			Consolidated
For the year ended December 31, 2010
Revenues	$	29,594.6		$	15,287.8		$	90.8		$	—		$	44,973.2
Operating expenses		28,176.8			14,635.8			89.7			—			42,902.3
Operating income		1,417.8			652.0			1.1			—			2,070.9
Interest (expense) income, net		(156.2	)		(6.2	)		0.2			—			(162.2	)
Income before income taxes		1,261.6			645.8			1.3			—			1,908.7
Provision for income taxes		462.3			241.0			0.8			—			704.1
Net income from continuing operations		799.3			404.8			0.5			—			1,204.6
Net loss from discontinued operations, net of tax		—			—			(23.4	)		—			(23.4	)
Equity in earnings of subsidiaries		381.9			—			—			(381.9	)		—
Net income (loss)	$	1,181.2		$	404.8		$	(22.9	)	$	(381.9	)	$	1,181.2
For the year ended December 31, 2009
Revenues	$	14,642.9		$	10,004.2		$	75.2		$	—		$	24,722.3
Operating expenses		13,654.9			9,497.7			72.2			—			23,224.8
Operating income		988.0			506.5			3.0			—			1,497.5
Interest expense, net		(179.6	)		(6.5	)		(3.0	)		—			(189.1	)
Income before income taxes		808.4			500.0			—			—			1,308.4
Provision for income taxes		293.0			185.9			2.9			—			481.8
Net income (loss) from continuing operations		515.4			314.1			(2.9	)		—			826.6
Net income from discontinued operations, net of tax		—			—			1.0			—			1.0
Equity in earnings of subsidiaries		312.2			—			—			(312.2	)		—
Net income (loss)	$	827.6		$	314.1		$	(1.9	)	$	(312.2	)	$	827.6
For the year ended December 31, 2008
Revenues	$	9,674.6		$	12,208.4		$	58.2		$	—		$	21,941.2
Operating expenses		8,865.9			11,737.7			63.3			—			20,666.9
Operating income (loss)		808.7			470.7			(5.1	)		—			1,274.3
Non-operating charges, net		(2.0	)		—			—			—			(2.0	)
Undistributed loss from joint venture		(0.3	)		—			—			—			(0.3	)
Interest expense, net		(49.7	)		(13.1	)		(1.8	)		—			(64.6	)
Income (loss) before income taxes		756.7			457.6			(6.9	)		—			1,207.4
Provision for income taxes		275.4			157.5			(1.4	)					431.5
Net income (loss) from continuing operations		481.3			300.1			(5.5	)		—			775.9
Net income from discontinued operations, net of tax		—			—			0.2			—			0.2
Equity earnings of subsidiaries		294.8			—			—			(294.8	)		—
Net income (loss)	$	776.1		$	300.1		$	(5.3	)	$	(294.8	)	$	776.1

Condensed Consolidating Statement of Cash Flows

(in millions)	Express Scripts, Inc.			Guarantors			Non- Guarantors			Eliminations			Consolidated
For the year ended December 31, 2010
Net cash flows provided by (used in) operating activities	$	1,709.3		$	773.2		$	16.8		$	(381.9	)	$	2,117.4
Cash flows from investing activities:
Purchase of property and equipment		(53.1	)		(61.3	)		(5.5	)		—			(119.9	)
Purchase of short-term investments		—			—			(38.0	)		—			(38.0	)
Other		17.6			(4.3	)		(0.5	)		—			12.8
Net cash used in investing activities – continuing operations		(35.5	)		(65.6	)		(44.0	)		—			(145.1	)
Net cash used in investing activities – discontinued operations		—			—			(0.8	)		—			(0.8	)
Net cash used in investing activities		(35.5	)		(65.6	)		(44.8	)		—			(145.9	)
Cash flows from financing activities:
Repayment of long-term debt		(1,340.1	)		—			—			—			(1,340.1	)
Treasury stock acquired		(1,276.2	)		—			—			—			(1,276.2	)
Tax benefit relating to employee stock-based compensation		58.9			—			—			—			58.9
Net proceeds from employee stock plans		35.3			—			—			—			35.3
Deferred financing fees		(3.9	)		—			—			—			(3.9	)
Other		3.0			—			—			—			3.0
Net transactions with parent		300.9			(708.6	)		25.8			381.9			—
Net cash (used in) provided by financing activities		(2,222.1	)		(708.6	)		25.8			381.9			(2,523.0	)
Effect of foreign currency translation adjustment		—			—			4.8			—			4.8
Net (decrease) increase in cash and cash equivalents		(548.3	)		(1.0	)		2.6			—			(546.7	)
Cash and cash equivalents at beginning of year		1,005.0			10.0			55.4			—			1,070.4
Cash and cash equivalents at end of year	$	456.7		$	9.0		$	58.0		$	—		$	523.7

Condensed Consolidating Statement of Cash Flows

(in millions)	Express Scripts, Inc.			Guarantors			Non- Guarantors			Eliminations			Consolidated
For the year ended December 31, 2009
Net cash flows provided by (used in) operating activities	$	1,684.9		$	385.2		$	13.6		$	(312.2	)	$	1,771.5
Cash flows from investing activities:
Acquisitions, net of cash acquired		(8,881.7	)		(465.9	)		—			4,675.0			(4,672.6	)
Purchase of short-term investments		(1,201.4	)		—			—			—			(1,201.4	)
Sale of short-term investments		1,198.9			—			—			—			1,198.9
Purchase of property and equipment		(116.6	)		(22.6	)		(8.3	)		—			(147.5	)
Other		6.4			(2.7	)		(1.6	)		—			2.1
Net cash (used in) provided by investing activities – continuing operations		(8,994.4	)		(491.2	)		(9.9	)		4,675.0			(4,820.5	)
Net cash used in investing activities – discontinued operations		—			—			(1.9	)		—			(1.9	)
Net cash (used in) provided by investing activities		(8,994.4	)		(491.2	)		(11.8	)		4,675.0			(4,822.4	)
Cash flows from financing activities:
Proceeds from long-term debt, net of discounts		2,491.6			—			—			—			2,491.6
Net proceeds from stock issuance		1,569.1			—			—			—			1,569.1
Repayment of long-term debt		(420.1	)		—			—			—			(420.1	)
Deferred financing fees		(79.5	)		—			—			—			(79.5	)
Tax benefit relating to employee stock-based compensation		13.4			—			—			—			13.4
Net proceeds from employee stock plans		12.5			—			—			—			12.5
Net transactions with parent		4,239.4			107.1			16.3			(4,362.8	)		—
Net cash provided by (used in) financing activities		7,826.4			107.1			16.3			(4,362.8	)		3,587.0
Effect of foreign currency translation adjustment		—			—			3.6			—			3.6
Net increase in cash and cash equivalents		516.9			1.1			21.7			—			539.7
Cash and cash equivalents at beginning of year		488.1			8.9			33.7			—			530.7
Cash and cash equivalents at end of year	$	1,005.0		$	10.0		$	55.4		$	—		$	1,070.4

Condensed Consolidating Statement of Cash Flows

(in millions)	Express Scripts, Inc.			Guarantors			Non- Guarantors			Eliminations			Consolidated
For the year ended December 31, 2008
Net cash flows provided by (used in) operating activities	$	1,265.2		$	84.6		$	48.0		$	(294.8	)	$	1,103.0
Cash flows from investing activities:
Acquisitions, net of cash acquired, and investment in joint venture		(251.5	)		—			—			—			(251.5	)
Purchase of property and equipment		(66.8	)		(9.7	)		(7.3	)		—			(83.8	)
Proceeds from sale of business		27.7			—			—			—			27.7
Other		(11.0	)		—			—			—			(11.0	)
Net cash used in investing activities – continuing operations		(301.6	)		(9.7	)		(7.3	)		—			(318.6	)
Net cash used in investing activities – discontinued operations		—			—			(2.0	)		—			(2.0	)
Net cash used in investing activities		(301.6	)		(9.7	)		(9.3	)		—			(320.6	)
Cash flows from financing activities:
Treasury stock acquired		(494.4	)		—			—			—			(494.4	)
Repayment of long-term debt		(260.0	)		—			—			—			(260.0	)
Tax benefit relating to employee stock-based compensation		42.1			—			—			—			42.1
Net proceeds from employee stock plans		31.9			—			—			—			31.9
Net transactions with parent		(181.4	)		(82.4	)		(31.0	)		294.8			—
Net cash (used in) provided by financing activities		(861.8	)		(82.4	)		(31.0	)		294.8			(680.4	)
Effect of foreign currency translation adjustment		—			—			(6.0	)		—			(6.0	)
Net increase (decrease) in cash and cash equivalents		101.8			(7.5	)		1.7			—			96.0
Cash and cash equivalents at beginning of year		386.3			16.4			32.0			—			434.7
Cash and cash equivalents at end of year	$	488.1		$	8.9		$	33.7		$	—		$	530.7

EXPRESS SCRIPTS, INC.