UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 0-20199

EXPRESS SCRIPTS, INC.

(Exact name of registrant as specified in its charter)

Delaware		43-1420563
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
One Express Way, St. Louis, MO		63121
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (314) 996-0900

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

     Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.:

Large accelerated filer þ		Accelerated filer o		Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company o

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

Common stock outstanding as of September 30, 2011:		486,508,000 Shares

 

 

EXPRESS SCRIPTS, INC.

INDEX

Part I Financial Information			3
Item 1. Financial Statements (unaudited)			3
a) Unaudited Consolidated Balance Sheet			3
b) Unaudited Consolidated Statement of Operations			4
c) Unaudited Consolidated Statement of Changes in Stockholders’ Equity			5
d) Unaudited Consolidated Statement of Cash Flows			6
e) Notes to Unaudited Consolidated Financial Statements			7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			23
Item 3. Quantitative and Qualitative Disclosures About Market Risk			35
Item 4. Controls and Procedures			35
Part II Other Information
Item 1. Legal Proceedings			36
Item 1A. Risk Factors			38
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			42
Item 3. Defaults Upon Senior Securities — (Not Applicable)
Item 4. Removed and Reserved
Item 5. Other Information — (Not Applicable)
Item 6. Exhibits			42
Signatures			43
Index to Exhibits			44
EX-10.3
EX-10.4
EX-10.5
EX-10.6
EX-12.1
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

EXPRESS SCRIPTS, INC.

		September 30,				December 31,
(in millions, except share data)		2011				2010
Assets
Current assets:
Cash and cash equivalents		$	1,062.6			$	523.7
Restricted cash and investments			19.9				16.3
Receivables, net			1,770.7				1,720.9
Inventories			340.2				382.4
Deferred taxes			45.0				86.0
Prepaid expenses			42.7				177.6
Other current assets			25.3				34.4
Total current assets			3,306.4				2,941.3
Property and equipment, net			388.8				372.7
Goodwill			5,485.4				5,486.2
Other intangible assets, net			1,665.8				1,725.0
Other assets			25.3				32.6
Total assets		$	10,871.7			$	10,557.8
Liabilities and Stockholders’ Equity
Current liabilities:
Claims and rebates payable		$	2,710.9			$	2,666.5
Accounts payable			744.3				656.7
Accrued expenses			688.6				593.9
Current maturities of long-term debt			999.9				0.1
Total current liabilities			5,143.7				3,917.2
Long-term debt			2,989.3				2,493.7
Other liabilities			574.0				540.3
Total liabilities			8,707.0				6,951.2
Stockholders’ Equity:
Preferred stock, 5,000,000 shares authorized, $0.01 par value per share; and no shares issued and outstanding			—				—
Common stock, 1,000,000,000 shares authorized, $0.01 par value per share; shares issued: 690,622,000 and 690,231,000, respectively; shares outstanding: 486,508,000 and 528,069,000, respectively			6.9				6.9
Additional paid-in capital			2,422.5				2,354.4
Accumulated other comprehensive income			15.6				19.8
Retained earnings			6,355.2				5,369.8
			8,800.2				7,750.9
Common stock in treasury at cost, 204,114,000 and 162,162,000 shares, respectively			(6,635.5	)			(4,144.3	)
Total stockholders’ equity			2,164.7				3,606.6
Total liabilities and stockholders’ equity		$	10,871.7			$	10,557.8

See accompanying Notes to Unaudited Consolidated Financial Statements

EXPRESS SCRIPTS, INC.

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
(in millions, except per share data)		2011				2010				2011				2010
Revenues 1		$	11,571.0			$	11,251.8			$	34,026.9			$	33,679.0
Cost of revenues 1			10,735.2				10,487.7				31,661.5				31,494.2
Gross profit			835.8				764.1				2,365.4				2,184.8
Selling, general and administrative			230.7				236.1				628.6				671.8
Operating income			605.1				528.0				1,736.8				1,513.0
Other (expense) income:
Interest income			5.9				2.2				7.8				4.4
Interest expense and other			(94.3	)			(42.2	)			(184.3	)			(127.0	)
			(88.4	)			(40.0	)			(176.5	)			(122.6	)
Income before income taxes			516.7				488.0				1,560.3				1,390.4
Provision for income taxes			192.0				180.9				574.9				515.4
Net income from continuing operations			324.7				307.1				985.4				875.0
Net loss from discontinued operations, net of tax			—				(5.6	)			—				(23.4	)
Net income		$	324.7			$	301.5			$	985.4			$	851.6
Weighted average number of common shares outstanding during the period:
Basic			487.2				531.7				506.1				541.9
Diluted			490.8				537.0				510.3				547.5
Basic earnings (loss) per share:
Continuing operations		$	0.67			$	0.58			$	1.95			$	1.61
Discontinued operations			—				(0.01	)			—				(0.04	)
Net earnings			0.67				0.57				1.95				1.57
Diluted earnings (loss) per share:
Continuing operations		$	0.66			$	0.57			$	1.93			$	1.60
Discontinued operations			—				(0.01	)			—				(0.04	)
Net earnings			0.66				0.56				1.93				1.56

See accompanying Notes to Unaudited Consolidated Financial Statements

EXPRESS SCRIPTS, INC.

		Number
		of Shares				Amount
														Accumulated
										Additional				Other
		Common				Common				Paid-in				Comprehensive				Retained				Treasury
(in millions)		Stock				Stock				Capital				Income				Earnings				Stock				Total
Balance at December 31, 2010			690.2			$	6.9			$	2,354.4			$	19.8			$	5,369.8			$	(4,144.3	)		$	3,606.6
Comprehensive income:
Net income			—				—				—				—				985.4				—				985.4
Other comprehensive income:
Foreign currency translation adjustment			—				—				—				(4.2	)			—				—				(4.2	)
Comprehensive income			—				—				—				(4.2	)			985.4				—				981.2
Treasury stock acquired			—				—				—				—				—				(2,515.7	)			(2,515.7	)
Changes in stockholders’ equity related to employee stock plans			0.4				—				68.1				—				—				24.5				92.6
Balance at September 30, 2011			690.6			$	6.9			$	2,422.5			$	15.6			$	6,355.2			$	(6,635.5	)		$	2,164.7

See accompanying Notes to Unaudited Consolidated Financial Statements

EXPRESS SCRIPTS, INC.

		Nine Months Ended
		September 30,
(in millions)		2011				2010
Cash flows from operating activities:
Net income		$	985.4			$	851.6
Net loss from discontinued operations, net of tax			—				23.4
Net income from continuing operations			985.4				875.0
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			187.5				180.9
Non-cash adjustments to net income			152.9				140.7
Deferred financing fees			44.9				4.1
Changes in operating assets and liabilities:
Accounts receivable			(58.1	)			706.6
Claims and rebates payable			44.4				(253.2	)
Other net changes in operating assets and liabilities			302.9				175.6
Net cash provided by operating activities—continuing operations			1,659.9				1,829.7
Net cash provided by operating activities—discontinued operations			—				12.3
Net cash flows provided by operating activities			1,659.9				1,842.0
Cash flows from investing activities:
Purchases of property and equipment			(98.1	)			(84.6	)
Other			8.5				5.8
Net cash used in investing activities — continuing operations			(89.6	)			(78.8	)
Net cash used in investing activities — discontinued operations			—				(0.8	)
Net cash used in investing activities			(89.6	)			(79.6	)
Cash flows from financing activities:
Treasury stock acquired			(2,515.7	)			(1,276.2	)
Proceeds from long-term debt, net of discounts			1,494.0				—
Deferred financing fees			(62.7	)			(3.9	)
Net proceeds from employee stock plans			28.9				19.3
Tax benefit relating to employee stock compensation			27.3				32.9
Repayment of long-term debt			(0.1	)			(1,340.1	)
Net cash used in financing activities			(1,028.3	)			(2,568.0	)
Effect of foreign currency translation adjustment			(3.1	)			2.7
Net increase (decrease) in cash and cash equivalents			538.9				(802.9	)
Cash and cash equivalents at beginning of period			523.7				1,070.4
Cash and cash equivalents at end of period		$	1,062.6			$	267.5

See accompanying Notes to Unaudited Consolidated Financial Statements

EXPRESS SCRIPTS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Summary of significant accounting policies

          Our significant accounting policies, normally included in financial statements prepared in conformity with generally accepted accounting principles, have been omitted from this Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). However, we believe the disclosures contained in this Form 10-Q are adequate to fairly state the information when read in conjunction with the notes to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2010. For a full description of our accounting policies, refer to the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2010.

          We believe the accompanying unaudited consolidated financial statements reflect all adjustments (consisting of only normal recurring adjustments) necessary to state fairly the unaudited consolidated balance sheet at September 30, 2011, the unaudited consolidated statement of operations for the three and nine months ended September 30, 2011 and 2010, the unaudited consolidated statement of changes in stockholders’ equity for the nine months ended September 30, 2011, and the unaudited consolidated statement of cash flows for the nine months ended September 30, 2011 and 2010. Operating results for the three and nine months ended September 30, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011.

          New Accounting Guidance. In September 2011, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance allowing entities testing goodwill for impairment to perform a qualitative assessment to determine whether further impairment testing is necessary. If entities determine, on the basis of qualitative factors, that it is more likely than not that a reporting unit’s fair value is greater than the carrying amount, a quantitative calculation may not be needed. This update is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. We plan to early adopt the guidance as permitted by the new standard in the fourth quarter of 2011. Adoption of the standard is not expected to have a material impact on our financial position, results of operations, or cash flows.

          In June 2011, the FASB issued authoritative guidance eliminating the option to report other comprehensive income and its components in the statement of changes in equity. Under the new guidance, an entity can elect to present items of net income and other comprehensive income in a single continuous statement or in two separate but consecutive statements. This update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2011. Adoption of the standard will impact the presentation of certain information within the financial statements, but is not expected to have an impact on our financial position, results of operations, or cash flows.

          In May 2011, the FASB issued authoritative guidance containing changes to certain aspects of the measurement of fair value of assets and liabilities and requiring additional disclosures around assets and liabilities measured at fair value using Level 3 inputs (see Note 2 below) as well as disclosures about the use of nonfinancial assets measured or disclosed at fair value if their use differs from their highest and best use. This statement is effective for financial statements issued for annual periods beginning on or after December 15, 2011. Adoption of the standard is not expected to have an impact on our financial position, results of operations, or cash flows.

Note 2 — Fair value measurements

          Accounting guidance regarding fair value measurement establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities; Level 2, defined as inputs other than quoted prices for similar assets and liabilities in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.

          Financial assets accounted for at fair value on a recurring basis include cash equivalents of $933.6 million and $426.3 million, restricted cash and investments of $19.9 million and $16.3 million, and trading securities (included in other assets) of $13.4 million and $13.5 million at September 30, 2011 and December 31, 2010, respectively. These assets are carried at fair value based on quoted prices in active markets for identical securities (Level 1 inputs). Cash equivalents include investments in AAA-rated money market mutual funds with maturities of less than 90 days.

          The carrying value of cash and cash equivalents, accounts receivable, claims and rebates payable, and accounts payable approximated fair values due to the short-term maturities of these instruments. The fair value, which approximates the carrying value, of our bank credit facility was estimated using either quoted market prices or the current rates offered to us for debt with similar maturity. The carrying values and the fair values of our senior notes are shown in the following table:

		September 30, 2011								December 31, 2010
		Carrying				Fair				Carrying				Fair
(in millions)		Amount				Value				Amount				Value
3.125% senior notes due 2016, net of unamortized discount		$	1,494.4			$	1,492.1			$	—			$	—
5.25% senior notes due 2012, net of unamortized discount			999.8				1,027.5				999.6				1,056.0
6.25% senior notes due 2014, net of unamortized discount			997.6				1,095.2				996.9				1,116.0
7.25% senior notes due 2019, net of unamortized discount			497.2				607.6				497.1				586.3
Total		$	3,989.0			$	4,222.4			$	2,493.6			$	2,758.3

          The fair values of our senior notes were estimated based on quoted prices in active markets for identical securities (Level 1 inputs). In determining the fair value of liabilities, we took into consideration the risk of nonperformance. Nonperformance risk refers to the risk that the obligation will not be fulfilled and affects the value at which the liability would be transferred to a market participant. This risk did not have a material impact on the fair value of our liabilities.

Note 3 — Changes in business

          On July 20, 2011, we entered into a definitive merger agreement (the “Merger Agreement”) with Medco Health Solutions, Inc. (“Medco”). The Merger Agreement provides that, upon the terms and subject to the conditions set forth in the Merger Agreement, Medco shareholders will receive total consideration of $23.2 billion composed of $58.83 per share in cash and stock (valued based on the closing price of our stock on September 30, 2011), including $28.80 in cash and 0.81 shares for each Medco share owned. Upon closing of the transactions under the Merger Agreement (“the Transaction”), our shareholders are expected to own approximately 60% of the combined company and Medco shareholders are expected to own approximately 40%. The merger will combine the expertise of two complementary pharmacy benefit managers to accelerate efforts to lower the cost of prescription drugs and improve the quality of care. We anticipate the Transaction will close in the first half of 2012. The Transaction is subject to regulatory clearance and Express Scripts’ and Medco’s shareholder approvals and other customary closing conditions. The Transaction will be accounted for under the authoritative guidance for business combinations.

          Consummation of the Transaction is subject to the expiration or termination of the waiting period under the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”) and other customary conditions, including (i) approval of the Merger Agreement by Medco’s stockholders and Express Scripts’ stockholders, (ii) the approval for listing on the Nasdaq Stock Market of the common stock of a new parent company for Express Scripts and Medco (“Parent”), (iii) the absence of any order prohibiting or restraining the merger, (iv) the effectiveness under the Securities Act of 1933 of a registration statement covering the shares of Parent common stock, (v) the receipt of certain regulatory consents, (vi) subject to certain exceptions, the accuracy of Medco’s and Express Scripts’ representations and warranties in the Merger Agreement, (vii) performance by Medco and Express Scripts of their respective obligations in the Merger Agreement, (viii) the absence of certain governmental appeals, and (ix) the delivery of customary opinions from counsel to Medco and Express Scripts to the effect that the Transaction will qualify as a tax-free exchange for federal income tax purposes.

     On September 2, 2011, Express Scripts and Medco each received a request for additional information (a “second request”) from the U.S. Federal Trade Commission (the “FTC”) in connection with the FTC’s review of the merger. A second request was anticipated by the parties to the mergers at the time of signing of the Merger Agreement. Issuance of the second request extends the waiting period under the HSR Act until 30 days after both parties have substantially complied with the requests, unless the waiting period is terminated sooner by the FTC. The companies have been cooperating with the FTC staff since shortly after the announcement of the merger and intend to continue to work cooperatively with the FTC staff in the review of the merger. Express Scripts intends to respond to the second request as promptly as practicable. While we cannot specify how long it will take to comply with the second request, we continue to anticipate the transactions contemplated by the Merger Agreement will close in the first half of 2012.

Note 4 — Discontinued Operations

          During the second quarter of 2010, we concluded that our Phoenix Marketing Group (“PMG”) line of business was no longer core to our future operations and committed to a plan to dispose of the business. As a result, PMG was classified as a discontinued operation beginning in the second quarter of 2010. Prior to being classified as a discontinued operation, PMG was included in our Emerging Markets (“EM”) segment. PMG was headquartered in Lincoln Park, New Jersey and provided outsourced distribution and verification services to pharmaceutical manufacturers. The results of operations for PMG are reported as discontinued operations for all periods presented in the accompanying unaudited consolidated statements of operations in accordance with applicable accounting guidance. Additionally, for all periods presented, cash flows of our discontinued operations are segregated in our accompanying unaudited consolidated statements of cash flows. In the third quarter of 2010, we completed the sale of PMG.

          Certain information with respect to discontinued operations for the three and nine months ended September 30, 2011 and 2010 is summarized below.

		Three Months Ended,								Nine Months Ended,
		September 30,								September 30,
(in millions)		2011				2010				2011				2010
Revenues		$	—			$	5.2			$	—			$	16.5
Net loss from discontinued operations, net of tax			—				(5.6	)			—				(23.4	)
Income tax benefit from discontinued operations		$	—			$	(2.5	)		$	—			$	(12.9	)

Note 5 — Goodwill and other intangible assets

          The following is a summary of our goodwill and other intangible assets for our two reportable segments Pharmacy Benefit Management (“PBM”) and EM:

		September 30, 2011												December 31, 2010
		Gross								Net				Gross								Net
		Carrying				Accumulated				Carrying				Carrying				Accumulated				Carrying
(in millions)		Amount				Amortization				Amount				Amount				Amortization				Amount
Goodwill
PBM(1)		$	5,512.3			$	(107.4	)		$	5,404.9			$	5,513.1			$	(107.4	)		$	5,405.7
EM(1)			80.5				—				80.5				80.5				—				80.5
		$	5,592.8			$	(107.4	)		$	5,485.4			$	5,593.6			$	(107.4	)		$	5,486.2
Other intangible assets
PBM
Customer contracts		$	2,018.4			$	(457.5	)		$	1,560.9			$	2,018.7			$	(346.4	)		$	1,672.3
Other (2)			96.7				(23.9	)			72.8				20.8				(5.0	)			15.8
			2,115.1				(481.4	)			1,633.7				2,039.5				(351.4	)			1,688.1
EM
Customer relationships			68.4				(37.0	)			31.4				68.4				(32.2	)			36.2
Other			0.7				—				0.7				0.7				—				0.7
			69.1				(37.0	)			32.1				69.1				(32.2	)			36.9
Total other intangible assets		$	2,184.2			$	(518.4	)		$	1,665.8			$	2,108.6			$	(383.6	)		$	1,725.0

          The aggregate amount of amortization expense of other intangible assets for our continuing operations was $55.3 million and $40.1 million for the three months ended September 30, 2011 and 2010, respectively and $135.0 million and $120.1 million for the nine months ended September 30, 2011 and 2010, respectively. In accordance with applicable accounting guidance, amortization for customer contracts related to our agreement to provide PBM services to members of the affiliated health plans of WellPoint has been included as an offset to revenues in the amount of $28.5 million for the three months ended September 30, 2011 and 2010 and $85.5 million for the nine months ended September 30, 2011 and 2010. The future aggregate amount of amortization expense of other intangible assets for our continuing operations is expected to be approximately $197.8 million for 2011, $187.8 million for 2012, $159.1 million for 2013, $153.5 million for 2014 and $135.3 million for 2015. The weighted average amortization period of intangible assets subject to amortization is 14 years in total, and by major intangible class is 5 to 20 years for customer-related intangibles and nine months to 10 years for other intangible assets.

          A summary of the change in the net carrying value of goodwill by business segment is shown in the following table:

(in millions)		PBM				EM				Total
Balance at December 31, 2010		$	5,405.7			$	80.5			$	5,486.2
Foreign currency translation			(0.8	)			—				(0.8	)
Balance at September 30, 2011		$	5,404.9			$	80.5			$	5,485.4

Note 6 — Earnings per share

          Basic earnings per share (“EPS”) is computed using the weighted average number of common shares outstanding during the period. Diluted EPS is computed in the same manner as basic earnings per share but adds the number of additional common shares that would have been outstanding for the period if the dilutive potential common shares had been issued. All shares are calculated under the “treasury stock” method. The following is the reconciliation between the number of weighted average shares used in the basic and diluted EPS calculations for all periods:

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
(in millions)		2011(1)				2010				2011(1)				2010
Weighted average number of common shares outstanding during the period — Basic EPS(2)			487.2				531.7				506.1				541.9
Dilutive common stock equivalents: (3)
Outstanding stock options, “stock-settled” stock appreciation rights (“SSRs”), restricted stock units, and executive deferred compensation units(2)			3.6				5.3				4.2				5.6
Weighted average number of common shares outstanding during the period — Diluted EPS(2)			490.8				537.0				510.3				547.5

Note 7 — Financing

          Long-term debt consists of:

		September 30,				December 31,
(in millions)		2011				2010
3.125% senior notes due 2016, net of unamortized discount		$	1,494.4			$	—
5.25% senior notes due 2012, net of unamortized discount			999.8				999.6
6.25% senior notes due 2014, net of unamortized discount			997.6				996.9
7.25% senior notes due 2019, net of unamortized discount			497.2				497.1
Revolving credit facility due August 29, 2016			—				—
Revolving credit facility due August 13, 2013			—				—
Other			0.2				0.2
Total debt			3,989.2				2,493.8
Less current maturities			999.9				0.1
Long-term debt		$	2,989.3			$	2,493.7

BANK CREDIT FACILITIES

          On August 13, 2010, we entered into a credit agreement with a commercial bank syndicate providing for a three-year revolving credit facility of $750.0 million (none of which was outstanding as of September 30, 2011) available for general corporate purposes. The credit agreement requires us to pay interest periodically on the London Interbank Offered Rates (“LIBOR”) or base rate options, plus a margin ranging from 1.55% to 1.95%, depending on our consolidated leverage ratio. Under the credit agreement we are required to pay commitment fees on the unused portion of the $750.0 million revolving credit facility. The commitment fee ranges from 0.20% to 0.30% depending on our consolidated leverage ratio.

          On August 29, 2011, we entered into a credit agreement (the “new credit agreement”) with a commercial bank syndicate providing for a five-year $4.0 billion term loan facility (the “term facility”) and a $1.5 billion revolving loan facility (the “new revolving facility”). The term facility will be available to pay a portion of the cash consideration in connection with entering into a definitive merger agreement with Medco, as discussed in Note 3, to repay existing indebtedness, and to pay related fees and expenses. The new revolving facility will be available for general corporate purposes and will replace our existing $750.0 million credit facility upon funding of the term facility. Any funding under the new credit agreement will occur concurrently with the consummation of the Transaction, subject to customary closing conditions. The term facility and the new revolving facility both mature on August 29, 2016. The term facility reduces commitments under the bridge facility discussed below by $4.0 billion.

          The new credit agreement requires us to pay interest at the LIBOR or adjusted base rate options, plus a margin. The margin over LIBOR ranges from 1.25% to 1.75% for the term facility and 1.10% to 1.55% for the new revolving facility, and the margin over the base rate options ranges from 0.25% to 0.75% for the term facility and 0.10% to 0.55% for the new revolving facility, depending on our consolidated leverage ratio. Under the new credit agreement we are required to pay commitment fees on the unused portion of the $1.5 billion new revolving facility. The commitment fee ranges from 0.15% to 0.20% depending on our consolidated leverage ratio. Until the funding date, we will also pay a ticking fee on the commitments under the term facility.

BRIDGE FACILITY

          On August 5, 2011, we entered into a credit agreement with Credit Suisse AG, Cayman Islands Branch, as administrative agent, Citibank, N.A., as syndication agent, and the other lenders and agents named within the agreement. The credit agreement provides for a one-year unsecured $14.0 billion bridge term loan facility (the “bridge facility”). In the period leading up to the closing of the merger, we may pursue other financing opportunities to replace all or portions of the bridge facility, or, in the event that we draw upon the bridge facility, we may refinance all or a portion of the bridge facility at a later date. The proceeds from these borrowings may be used to pay a portion of the cash consideration to be paid in the merger and to pay related fees and expenses.

          The bridge facility requires us to pay interest at the greater of LIBOR or adjusted base rate options, plus a margin. The margin over LIBOR ranges from 1.25% to 1.75%, and the margin over the adjusted base rate options ranges from 0.25% to 0.75%, depending on our consolidated leverage ratio. The margin will increase by 0.25% on the 90^th day after the funding date of the facility and by an additional 0.25% every 90 days thereafter. Until the funding date, we will also pay a ticking fee on the commitments under the bridge facility.

SENIOR NOTES

          On May 2, 2011, we issued $1.5 billion aggregate principal amount of 3.125% Senior Notes due 2016 (“2016 Senior Notes”). The 2016 Senior Notes require interest to be paid semi-annually on May 15 and November 15. We may redeem some or all of the 2016 Senior Notes prior to maturity at a price equal to the greater of (1) 100% of the aggregate principal amount of any notes being redeemed, plus accrued and unpaid interest; or (2) the sum of the present values of the remaining scheduled payments of principal and interest on the notes being redeemed, not including unpaid interest accrued to the redemption date, discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the treasury rate plus 20 basis points with respect to any 2016 Senior Notes being redeemed, plus in each case, unpaid interest on the notes being redeemed accrued to the redemption date. The 2016 Senior Notes are jointly and severally and fully and unconditionally guaranteed on a senior basis by most of our current and future 100% owned domestic subsidiaries. We used the net proceeds to repurchase treasury shares.

FINANCING COSTS

          Financing costs of $65.0 million related to the bridge facility are being amortized over nine months. An additional $26.0 million of financing costs related to the bridge facility were expensed as a result of the new credit agreement, which reduced the commitments under the bridge facility by $4.0 billion. Amortization of the $65.0 million deferred financing costs will be accelerated in proportion to the amount by which alternative financing replaces the commitments under the bridge facility. Financing costs of $10.9 million for the issuance of the 2016 Senior Notes are being amortized over 5 years. These deferred financing costs are reflected in other intangible assets, net in the accompanying unaudited consolidated balance sheet.

COVENANTS

          Our bank financing arrangements contain covenants that restrict our ability to incur additional indebtedness, create or permit liens on assets and engage in mergers or consolidations. The covenants also include minimum interest coverage ratios and maximum leverage ratios. At September 30, 2011, we believe we were in compliance in all material respects with all covenants associated with our credit agreements.

Note 8 — Common stock

          On May 27, 2011, we entered into agreements to repurchase shares of our common stock for an aggregate purchase price of $1,750.0 million under an Accelerated Share Repurchase (ASR) agreement. The ASR agreement consists of two agreements, providing for the repurchase of shares of our common stock worth $1.0 billion and $750.0 million, respectively. Upon payment of the purchase price on May 27, 2011, we received 29.4 million shares of our common stock at a price of $59.53 per share.

          At the conclusion of the ASR program, we may receive additional shares, or we may be required to pay additional cash or shares (at our option), based on the daily volume-weighted average price of our common stock over a period beginning after the effective date of the ASR agreements and ending on or before December 16, 2011, subject to extension in accordance with the terms of the agreement. The agreement is subject to an accelerated settlement provision at the option of the investment bank. If the mean daily volume-weighted average price of our common stock, less a discount (the “forward price”), during the term of the ASR program falls below $59.53 per share, the investment bank would be required to deliver additional shares to us. If the forward price rises above $59.53 per share, we would be required to deliver cash or shares, at our option, to the investment bank. During the third quarter of 2011, we settled the $1.0 billion portion of the ASR agreement and received 1.9 million additional shares of our common stock at a final forward price of $53.51 per share. Under the terms of the contract, the maximum number of shares that could be received or delivered under the contracts is 58.8 million. As of September 30, 2011, based on the daily volume-weighted average price of our common stock since the effective date of the agreements, the investment banks would be required to deliver 1.8 million shares to us for the $750.0 million portion of the ASR agreement that has not yet been settled. These shares were not included in the calculation of diluted weighted average common shares outstanding during the period because their effect was anti-dilutive.

          The ASR agreement is accounted for as an initial treasury stock transaction and a forward stock purchase contract. The forward stock purchase contract is classified as an equity instrument under applicable accounting guidance and was deemed to have a fair value of zero at the effective date. The initial repurchase of shares resulted in an immediate reduction of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted net income per share on the effective date of the agreements. The 1.9 million shares received for the settlement of the $1.0 billion portion of the ASR agreement reduced weighted-average common shares outstanding for the third quarter of 2011.

          In addition to the shares repurchased through the ASR, we repurchased 13.0 million shares under our existing stock repurchase program using internally generated cash during the second quarter of 2011 for $765.7 million. Repurchases during 2011 were financed primarily with the proceeds from our 2016 Senior Notes discussed in Note 7, in addition to internally generated cash. Additionally, during the second quarter of 2011, our Board of Directors approved an increase to our stock repurchase program of 50 million shares.

Note 9 — Stock-based compensation plans

          In March 2011, the Board of Directors adopted the Express Scripts, Inc. 2011 Long-Term Incentive Plan (the “2011 LTIP”), which provides for the grant of various equity awards with various terms to our officers, Board of Directors and key employees selected by the Compensation Committee of the Board of Directors. The 2011 LTIP was approved by our stockholders in May 2011 and became effective June 1, 2011. Under the 2011 LTIP, we may issue stock options, stock-settled stock appreciation rights (“SSRs”), restricted stock units, restricted stock awards, performance share awards, and other types of awards. The maximum number of shares available for awards under the 2011 LTIP is 30 million. The maximum term of stock options, SSRs, restricted stock and performance shares granted under the 2011 LTIP is 10 years. Subsequent to the effective date of the 2011 LTIP, no additional awards will be granted under the 2000 Long-Term Incentive Plan (“2000 LTIP”), which provided for the grant of various equity awards with various terms to our officers, Board of Directors and key employees selected by the Compensation Committee of the Board of Directors.

          Under our stock-based compensation plans, we have issued stock options, SSRs, restricted stock awards, restricted stock units, and performance share awards. Awards are typically settled using treasury shares. Due to the nature of the awards, we use the same valuation methods and accounting treatments for SSRs and stock options. During the first nine months of 2011, we granted 2,323,000 stock options with a weighted average fair market value of $17.71. The SSRs and stock options granted under both the 2000 LTIP and 2011 LTIP have three-year graded vesting.

          During the first nine months of 2011, we granted to certain officers and employees approximately 259,000 restricted stock units and performance shares with a weighted average fair market value of $56.53. The restricted stock units granted under both the 2000 LTIP and the 2011 LTIP have three-year graded vesting and the performance shares cliff vest at the end of the three years. The number of performance shares that ultimately vest is dependent upon achieving specific performance targets. Prior to vesting, these shares are subject to forfeiture to us without consideration upon termination of employment under certain circumstances. The original amount of performance share grants is subject to a multiplier of 2.5 based on certain performance metrics. During the first nine months of 2011, approximately 215,000 additional performance shares were granted to certain officers for exceeding certain performance metrics. The total number of non-vested restricted stock and performance share awards was 773,000 at September 30, 2011 and 950,000 at December 31, 2010.

          We recognized stock-based compensation expense of $10.9 million and $13.1 million in the three months ended September 30, 2011 and 2010, respectively and $36.2 million and $37.2 million in the nine months ended September 30, 2011 and 2010, respectively. Unamortized stock-based compensation as of September 30, 2011 was $32.9 million for stock options and SSRs and $18.0 million for restricted stock and performance shares.

          The fair value of options and SSRs granted is estimated on the date of grant using a Black-Scholes multiple option-pricing model with the following weighted average assumptions:

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2011				2010				2011				2010
Expected life of option		3-5 years				3-5 years				3-5 years				3-5 years
Risk-free interest rate			0.3%-2.1	%			0.8%-1.4	%			0.3%-2.2	%			0.8%-2.4	%
Expected volatility of stock			35%-39	%			37%-41	%			35%-39	%			36%-41	%
Expected dividend yield		None				None				None				None

Note 10 — Contingencies

          We record self-insurance accruals based upon estimates of the aggregate liability of claim costs in excess of our insurance coverage. Accruals are estimated using certain actuarial assumptions followed in the insurance industry and our historical experience. The majority of these claims are legal claims and our liability estimate is primarily related to the cost to defend these claims. We do not accrue for settlements, judgments, monetary fines or penalties until such amounts are probable and estimable. Under authoritative accounting guidance, if the range of probable loss is broad, the liability accrued should be based on the lower end of the range.

          In the ordinary course of business there have arisen various legal proceedings, investigations or claims now pending against us or our subsidiaries. In accordance with applicable accounting guidance, we record accruals for certain of our outstanding legal proceedings, investigations or claims when it is probable that a liability will be incurred and the amount of loss can be reasonably estimated. We evaluate, on a quarterly basis, developments in legal proceedings, investigations or claims that could affect the amount of any accrual, as well as any developments that would make a loss contingency both probable and reasonably estimable. We disclose the amount of the accrual if the financial statements would be otherwise misleading, which was not the case for the nine months ending September 30, 2011 and 2010.

          When a loss contingency is not both probable and estimable, we do not establish an accrued liability. However, if the loss (or an additional loss in excess of the accrual) is at least a reasonable possibility and material, then we disclose an estimate of the possible loss or range of loss, if such estimate can be made, or disclose that an estimate cannot be made.

          The assessments of whether a loss is probable or a reasonable possibility, and whether the loss or a range of loss is estimable, often involve a series of complex judgments about future events. We are often unable to estimate a range of reasonably possible losses, particularly where (i) the damages sought are substantial or indeterminate, (ii) the proceedings are in the early stages, or (iii) the matters involve novel or unsettled legal theories or a large number of parties. In such cases, there is considerable uncertainty regarding the timing or ultimate resolution of such matters, including a possible eventual loss, fine, penalty or business impact, if any. Accordingly, for many proceedings, we are currently unable to estimate the loss or a range of possible loss. For a limited number of proceedings, we may be able to reasonably estimate the possible range of loss in excess of any accruals. However, we believe that such matters, individually and in the aggregate, when finally resolved, are not reasonably likely to have a material adverse effect on our consolidated cash flow or financial condition. We also believe that any amount that could be reasonably estimated in excess of accruals, if any, for such proceedings is not material. However, an adverse resolution of one or more of such matters could have a material adverse effect on our results of operations in a particular quarter or fiscal year.

Note 11 — Segment information

          We report segments on the basis of services offered and have determined we have two reportable segments: PBM and EM. Our domestic and Canadian PBM operating segments have similar characteristics and as such have been aggregated into a single PBM reporting segment. During the third quarter of 2011, we reorganized our FreedomFP line of business from our EM segment into our PBM segment. Historical segment information has been retrospectively adjusted to reflect the effect of this change. As described in Note 4, our PMG line of business was classified as a discontinued operation in the second quarter of 2010. The results of operations for PMG, previously included in our EM segment, are reported as discontinued operations for all periods presented in the accompanying unaudited consolidated statements of operations in accordance with applicable accounting guidance.

          Operating income is the measure used by our chief operating decision maker to assess the performance of each of our operating segments. The following table presents information about our reportable segments for the three and nine months ended September 30, 2011 and 2010.

(in millions)		PBM				EM				Total
For the three months ended September 30, 2011
Product revenues:
Network revenues(1)		$	7,491.0			$	—			$	7,491.0
Home delivery and specialty revenues(2)			3,678.4				—				3,678.4
Other revenues			—				330.6				330.6
Service revenues			65.7				5.3				71.0
Total revenues			11,235.1				335.9				11,571.0
Depreciation and amortization expense			59.3				2.0				61.3
Operating income			600.8				4.3				605.1
Interest income											5.9
Interest expense and other											(94.3	)
Income before income taxes											516.7
Capital expenditures			42.8				1.2				44.0
For the three months ended September 30, 2010
Product revenue:
Network revenues(1)		$	7,490.9			$	—			$	7,490.9
Home delivery and specialty revenues(2)			3,369.0				—				3,369.0
Other revenues			—				326.3				326.3
Service revenues			62.6				3.0				65.6
Total revenues			10,922.5				329.3				11,251.8
Depreciation and amortization expense			59.8				1.9				61.7
Operating income			525.5				2.5				528.0
Interest income											2.2
Interest expense and other											(42.2	)
Income before income taxes											488.0
Capital expenditures			32.7				0.8				33.5

(in millions)		PBM				EM				Total
For the nine months ended September 30, 2011
Product revenues:
Network revenues(1)		$	22,138.1			$	—			$	22,138.1
Home delivery and specialty revenues(2)			10,715.6				—				10,715.6
Other revenues			—				952.2				952.2
Service revenues			205.1				15.9				221.0
Total revenues			33,058.8				968.1				34,026.9
Depreciation and amortization expense			181.5				6.0				187.5
Operating income			1,719.3				17.5				1,736.8
Interest income											7.8
Interest expense and other											(184.3	)
Income before income taxes											1,560.3
Capital expenditures			95.6				2.5				98.1
For the nine months ended September 30, 2010
Product revenue:
Network revenues(1)		$	22,596.4			$	—			$	22,596.4
Home delivery and specialty revenues(2)			9,990.0				—				9,990.0
Other revenues			—				889.3				889.3
Service revenues			194.3				9.0				203.3
Total revenues			32,780.7				898.3				33,679.0
Depreciation and amortization expense			175.1				5.8				180.9
Operating income			1,505.6				7.4				1,513.0
Interest income											4.4
Interest expense and other											(127.0	)
Income before income taxes											1,390.4
Capital expenditures			82.7				1.9				84.6

          The following table presents balance sheet information about our reportable segments:

(in millions)		PBM				EM				Total
Total Assets
As of September 30, 2011		$	10,401.3			$	470.4			$	10,871.7
As of December 31, 2010		$	10,155.1			$	402.7			$	10,557.8

          PBM product revenues consist of revenues from the sale of prescription drugs by retail pharmacies in our retail pharmacy networks, revenues from the dispensing of prescription drugs from our home delivery pharmacies and distribution of certain fertility and specialty drugs. EM product revenues consist of specialty distribution activities. PBM service revenues include administrative fees associated with the administration of retail pharmacy networks contracted by certain clients, informed decision counseling services, and specialty distribution services. EM service revenues include revenues from healthcare card administration.

          The following table shows the percentage of total revenue represented by our top five clients and clients representing 10% or greater of our consolidated revenue for each respective period:

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2011				2010				2011				2010
WellPoint			29.9	%			29.4	%			29.7	%			28.7	%
Department of Defense (“DoD”)			21.3	%			19.8	%			21.2	%			19.2	%
Other			6.2	%			6.3	%			6.2	%			6.4	%
Top five clients			57.4	%			55.5	%			57.1	%			54.3	%

          None of our other clients accounted for 10% or more of our consolidated revenues during the three and nine months ended September 30, 2011 or 2010.

          Revenues earned by our Canadian PBM totaled $15.8 million and $12.9 million for the three months ended September 30, 2011 and 2010, respectively and $46.7 million and $37.9 million for the nine months ended September 30, 2011 and 2010, respectively. All other revenues were earned in the United States. Long-lived assets of our Canadian PBM (consisting primarily of fixed assets) totaled $16.1 million and $16.7 million as of September 30, 2011 and December 31, 2010, respectively. All other long-lived assets are domiciled in the United States.

Note 12 — 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. As discussed in Note 4, PMG was sold effective September 17, 2010. The assets, liabilities, and operations from PMG are included as discontinued operations in those of the non-guarantors for all periods presented. 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

		Express								Non-
(in millions)		Scripts, Inc.				Guarantors				Guarantors				Eliminations				Consolidated
As of September 30, 2011
Cash and cash equivalents		$	985.3			$	5.5			$	71.8			$	—			$	1,062.6
Restricted cash and investments			4.0				11.3				4.6				—				19.9
Receivables, net			1,178.0				562.0				30.7				—				1,770.7
Other current assets			39.4				387.4				26.4				—				453.2
Total current assets			2,206.7				966.2				133.5				—				3,306.4
Property and equipment, net			254.6				119.0				15.2				—				388.8
Investments in subsidiaries			6,678.3				—				—				(6,678.3	)			—
Intercompany			—				3,757.0				—				(3,757.0	)			—
Goodwill			2,921.4				2,538.8				25.2				—				5,485.4
Other intangible assets, net			1,395.9				266.3				3.6				—				1,665.8
Other assets			22.5				0.4				2.4				—				25.3
Total assets		$	13,479.4			$	7,647.7			$	179.9			$	(10,435.3	)		$	10,871.7
Claims and rebates payable		$	2,710.5			$	0.4			$	—			$	—			$	2,710.9
Accounts payable			724.7				4.1				15.5				—				744.3
Accrued expenses			177.2				478.4				33.0				—				688.6
Current maturities of long-term debt			999.9				—				—				—				999.9
Total current liabilities			4,612.3				482.9				48.5				—				5,143.7
Long-term debt			2,989.3				—				—				—				2,989.3
Intercompany			3,656.4				—				100.6				(3,757.0	)			—
Other liabilities			56.7				515.3				2.0				—				574.0
Stockholders’ equity			2,164.7				6,649.5				28.8				(6,678.3	)			2,164.7
Total liabilities and stockholders’ equity		$	13,479.4			$	7,647.7			$	179.9			$	(10,435.3	)		$	10,871.7
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

Condensed Consolidating Statement of Operations

		Express								Non-
(in millions)		Scripts, Inc.				Guarantors				Guarantors				Eliminations				Consolidated
For the three months ended September 30, 2011
Revenues		$	7,306.1			$	4,218.3			$	46.6			$	—			$	11,571.0
Operating expenses			6,907.0				4,025.8				33.1				—				10,965.9
Operating income			399.1				192.5				13.5				—				605.1
Interest (expense) income, net			(87.1	)			(1.4	)			0.1				—				(88.4	)
Income before income taxes			312.0				191.1				13.6				—				516.7
Provision for income taxes			117.3				74.2				0.5				—				192.0
Net income from continuing operations			194.7				116.9				13.1				—				324.7
Equity in earnings of subsidiaries			130.0				—				—				(130.0	)			—
Net income (loss)		$	324.7			$	116.9			$	13.1			$	(130.0	)		$	324.7
For the three months ended September 30, 2010
Revenues		$	7,387.7			$	3,840.8			$	23.3			$	—			$	11,251.8
Operating expenses			7,027.3				3,675.3				21.2				—				10,723.8
Operating income			360.4				165.5				2.1				—				528.0
Interest expense, net			(38.2	)			(1.8	)			—				—				(40.0	)
Income before income taxes			322.2				163.7				2.1				—				488.0
Provision for income taxes			117.5				62.0				1.4				—				180.9
Net income from continuing operations			204.7				101.7				0.7				—				307.1
Net loss from discontinued operations, net of tax			—				—				(5.6	)			—				(5.6	)
Equity in earnings of subsidiaries			96.8				—				—				(96.8	)			—
Net income (loss)		$	301.5			$	101.7			$	(4.9	)		$	(96.8	)		$	301.5
For the nine months ended September 30, 2011
Revenues		$	21,718.3			$	12,199.7			$	108.9			$	—			$	34,026.9
Operating expenses			20,452.8				11,744.6				92.7				—				32,290.1
Operating income			1,265.5				455.1				16.2				—				1,736.8
Interest (expense) income, net			(172.5	)			(4.4	)			0.4				—				(176.5	)
Income before income taxes			1,093.0				450.7				16.6				—				1,560.3
Provision for income taxes			400.8				170.2				3.9				—				574.9
Net income from continuing operations			692.2				280.5				12.7				—				985.4
Equity in earnings of subsidiaries			293.2				—				—				(293.2	)			—
Net income (loss)		$	985.4			$	280.5			$	12.7			$	(293.2	)		$	985.4
For the nine months ended September 30, 2010
Revenues		$	22,249.4			$	11,363.6			$	66.0			$	—			$	33,679.0
Operating expenses			21,129.9				10,968.5				67.6				—				32,166.0
Operating income (loss)			1,119.5				395.1				(1.6	)			—				1,513.0
Interest (expense) income, net			(117.9	)			(4.8	)			0.1				—				(122.6	)
Income (loss) before income taxes			1,001.6				390.3				(1.5	)			—				1,390.4
Provision for income taxes			369.2				145.1				1.1				—				515.4
Net income (loss) from continuing operations			632.4				245.2				(2.6	)			—				875.0
Net loss from discontinued operations, net of tax			—				—				(23.4	)			—				(23.4	)
Equity in earnings of subsidiaries			219.2				—				—				(219.2	)			—
Net income (loss)		$	851.6			$	245.2			$	(26.0	)		$	(219.2	)		$	851.6