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Last updated on April 17, 2014 at 11:16 EDT

Cardinal Health Reports Strong Q4 And Fiscal Year 2012; Provides Fiscal 2013 Outlook

August 2, 2012

DUBLIN, Ohio, Aug. 2, 2012 /PRNewswire/ — Cardinal Health today reported fourth-quarter fiscal year 2012 revenues of $26.8 billion and non-GAAP diluted earnings per share (EPS) from continuing operations of $0.73, up 22 percent. The company reported fiscal year 2012 revenues increased 5 percent to $108 billion, and non-GAAP diluted EPS from continuing operations increased 15 percent to $3.21.

“We finished our fiscal year with a strong fourth quarter, growing our non-GAAP EPS by 22 percent,” said George Barrett, chairman and chief executive officer of Cardinal Health. “Our Pharmaceutical segment continued its strong momentum, and, as expected, our Medical segment finished the year with profit growth in the fourth quarter and is well-positioned as we begin FY 2013.

“Overall, fiscal 2012 was another strong year, meeting virtually all of our financial goals, including revenues, margin growth, operating earnings, EPS and cash flow. It was also a year in which we made great strides on our strategic priorities – including expansion of our retail independent customer base, improved generic contribution, build out of our Positron Emission Tomography capabilities, accelerating penetration of our specialty solutions, growth in preferred medical products, expansion of our ambulatory franchise and excellent growth in China.”

The outlook for non-GAAP diluted EPS from continuing operations in fiscal 2013 is $3.35 to $3.50 and incorporates the previously announced non-renewal of the Express Scripts contract.

Q4 and Fiscal Year Summary

                Q4 FY12       Q4 FY11        Y/Y  FY12           FY11           Y/Y
                -------       -------        ---  ----           ----           ---
    Revenue          $26.8 billion $26.8 billion   0% $107.6 billion $102.6 billion   5%
    -------          ------------- ------------- ---  -------------- -------------- ---

     Operating
     Earnings         $403 million  $359 million  12%   $1.8 billion   $1.5 billion  18%
     ---------        ------------  ------------ ---    ------------   ------------ ---
     Non-
     GAAP
     Operating
     Earnings
                      $425 million  $375 million  13%   $1.9 billion   $1.6 billion  13%
    ---               ------------  ------------ ---    ------------   ------------ ---

     Earnings
     from
     Continuing
     Operations
                      $236 million  $207 million  14%   $1.1 billion   $966 million  11%
    ---               ------------  ------------ ---    ------------   ------------ ---
     Non-
     GAAP
     Earnings
     from
     Continuing
     Operations
                      $255 million  $214 million  19%   $1.1 billion   $988 million  13%
    ---               ------------  ------------ ---    ------------   ------------ ---

     Diluted
     EPS
     from
     Continuing
     Operations
                             $0.68         $0.58  17%          $3.06          $2.74  12%
    ---                      -----         ----- ---           -----          ----- ---
     Non-
     GAAP
     Diluted
     EPS
     from
     Continuing
     Operations
                             $0.73         $0.60  22%          $3.21          $2.80  15%
    ---                      -----         ----- ---           -----          ----- ---

SEGMENT RESULTS

Pharmaceutical Segment

Fourth-quarter revenue for the Pharmaceutical segment decreased 1 percent to $24.3 billion. The decrease, primarily due to brand-to-generic conversions, was mostly offset by revenue from new customers. Segment profit for the quarter increased 15 percent to $354 million, driven by the overall strong performance of generic programs and the benefits of expanded business with new and existing customers, including strong contributions from retail independents. Segment profit also benefited from performance under branded agreements.

For the full year, revenue for the Pharmaceutical segment increased 4 percent to $97.9 billion, and segment profit increased 17 percent to $1.6 billion.

                    Q4 FY12       Q4 FY11  Y/Y         FY12          FY11   Y/Y
                    -------       -------  ---         ----          ----   ---
    Revenue        $24.3 billion $24.5 billion (1%) $97.9 billion $93.7 billion   4%
    -------        ------------- ------------- ---  ------------- ------------- ---
    Segment Profit  $354 million  $308 million  15%  $1.6 billion  $1.3 billion  17%
    --------------  ------------  ------------ ---   ------------  ------------ ---

Medical Segment

Fourth-quarter revenue for the Medical segment increased 5 percent to $2.4 billion. Segment profit increased 2 percent to $79 million, primarily driven by increased sales of preferred products, offset by expenses related to the new systems implementation. In addition, the negative impact of commodities and foreign exchange moderated to $8 million in the quarter versus prior year.

For the full year, Medical segment revenue increased 8 percent to $9.6 billion, and segment profit decreased 11 percent to $332 million.

                   Q4 FY12      Q4 FY11  Y/Y       FY12         FY11    Y/Y
                   -------      -------  ---       ----         ----    ---
    Revenue        $2.4 billion $2.3 billion   5% $9.6 billion $8.9 billion    8%
    -------        ------------ ------------ ---  ------------ ------------  ---
    Segment Profit  $79 million  $78 million   2% $332 million $373 million (11%)
    --------------  -----------  ----------- ---  ------------ ------------ ----

ADDITIONAL YEAR-END AND RECENT HIGHLIGHTS

  • Increased the regular quarterly dividend by 10.5 percent to $0.2375 per share, effective July 15
  • Closed several acquisitions in China, notably Da Sheng Group, significantly expanding the Cardinal Health footprint in Ningbo, a city of 7.6 million people
  • Selected as the primary healthcare solutions partner by the Medical Oncology Association of Southern California Purchasing Network, Inc.
  • Completed the acquisition of Dik Drug, an Illinois-based pharmaceutical distributor with more than 500 retail independent pharmacy customers

CONFERENCE CALL

Cardinal Health will host a webcast and conference call today at 8:00 a.m. Eastern Daylight Time to discuss fourth-quarter and full-year results and its future outlook. To access the call and corresponding slide presentation, go to the Investors page at cardinalhealth.com. The call also can be accessed by dialing 224.357.2209. Presentation slides and an audio replay will be archived on the website after the conclusion of the meeting. The audio replay will also be available until Sept. 2 by dialing 855.859.2056 or 404.537.3406, access code 98065830.

About Cardinal Health
Headquartered in Dublin, Ohio, Cardinal Health, Inc. (NYSE: CAH) is a $108 billion health care services company that improves the cost-effectiveness of health care. As the business behind health care, Cardinal Health helps pharmacies, hospitals, ambulatory surgery centers and physician offices focus on patient care while reducing costs, enhancing efficiency and improving quality. Cardinal Health is an essential link in the health care supply chain, providing pharmaceuticals and medical products to more than 60,000 locations each day. The company is also a leading manufacturer of medical and surgical products, including gloves, surgical apparel and fluid management products. In addition, the company supports the growing diagnostic industry by supplying medical products to clinical laboratories and operating the nation’s largest network of radiopharmacies that dispense products to aid in the early diagnosis and treatment of disease. Ranked #21 on the Fortune 500, Cardinal Health employs more than 30,000 people worldwide. More information about the company may be found at cardinalhealth.com and @CardinalHealth on Twitter.

(1) See the attached tables for definitions of the non-GAAP financial measures presented in this news release and reconciliations of the differences between the non-GAAP financial measures and their most directly comparable GAAP financial measures.

Cardinal Health uses its website as a channel of distribution for material company information. Important information, including news releases, analyst presentations and financial information regarding Cardinal Health is routinely posted and accessible on the Investors page at cardinalhealth.com.

Cautions Concerning Forward-Looking Statements
This news release contains forward-looking statements addressing expectations, prospects, estimates and other matters that are dependent upon future events or developments. These statements may be identified by words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “will,” “should,” “could,” “would,” “project,” “continue,” “likely,” and similar expressions, and include statements reflecting future results or guidance, statements of outlook and expense accruals. These matters are subject to risks and uncertainties that could cause actual results to differ materially from those projected, anticipated or implied. These risks and uncertainties include competitive pressures in Cardinal Health’s various lines of business; the loss of one or more key customer or supplier relationships or changes to the terms of those relationships; the timing of generic and branded pharmaceutical introductions and the frequency or rate of pharmaceutical price appreciation or deflation; uncertainties due to government health care reform including federal health care reform legislation; changes in the distribution patterns or reimbursement rates for health care products and services; the effects of any investigation or action by any regulatory authority; changes in the cost of commodities such as oil-based resins, cotton, latex and diesel fuel; and uncertainties concerning Cardinal Health’s ability to achieve the expected benefits of its Medical segment’s business transformation project. Cardinal Health is subject to additional risks and uncertainties described in Cardinal Health’s Form 10-K, Form 10-Q and Form 8-K reports and exhibits to those reports. This news release reflects management’s views as of Aug. 2, 2012. Except to the extent required by applicable law, Cardinal Health undertakes no obligation to update or revise any forward-looking statement.

                                                                                                   Schedule 1
                                                                                                   ----------

                                         Cardinal Health, Inc. and Subsidiaries
                                Condensed Consolidated Statements of Earnings (Unaudited)

                                                                   Fourth Quarter
    (in millions, except per Common
     Share amounts)                                                   2012                   2011             % Change
    -------------------------------                                   ----                   ----             --------

    Revenue                                                        $26,764                $26,764                        0 %
    Cost of products sold                                           25,628                 25,720                       (0)%
    Gross margin                                                     1,136                  1,044                        9 %
    ------------                                                     -----                  -----                       ---

    Operating expenses:
    Distribution, selling, general and
     administrative expenses                                           712                    671                        6 %
    Restructuring and employee
     severance                                                           9                      5                      N.M.
    Acquisition-related costs                                           11                     15                      N.M.
    Impairments and loss on disposal of
     assets                                                              1                      -                      N.M.
    Litigation (recoveries)/charges,
     net                                                                 -                     (6)                     N.M.
    Operating earnings                                                 403                    359                       12 %
    ------------------                                                 ---                    ---                       ---

    Other (income)/expenses, net                                         1                     (2)                     N.M.
    Interest expense, net                                               25                     24                        4 %
    Gain on sale of investment in
     CareFusion                                                          -                     (4)                     N.M.
    Earnings before income taxes and
     discontinued operations                                           377                    341                       11 %
    --------------------------------                                   ---                    ---                       ---

    Provision for income taxes                                         141                    134                        5 %
    Earnings from continuing operations                                236                    207                       14 %
    -----------------------------------                                ---                    ---                       ---

    Loss from discontinued operations,
     net of tax                                                          -                     (4)                     N.M.
    Net earnings                                                      $236                   $203                       17 %
    ------------                                                      ----                   ----                       ---

    Basic earnings/(loss) per Common Share:
    Continuing operations                                            $0.68                  $0.59                       15 %
    Discontinued operations                                              -                  (0.01)                     N.M.
    Net basic earnings per Common Share                              $0.68                  $0.58                       17 %
    -----------------------------------                              -----                  -----                       ---

    Diluted earnings/(loss) per Common Share:
    Continuing operations                                            $0.68                  $0.58                       17 %
    Discontinued operations                                              -                  (0.01)                     N.M.
    Net diluted earnings per Common
     Share                                                           $0.68                  $0.57                       19 %
    -------------------------------                                  -----                  -----                       ---

    Weighted average number of Common Shares outstanding:
    Basic                                                              345                    349
    Diluted                                                            349                    355

                                                                                              Schedule 2
                                                                                              ----------

                                         Cardinal Health, Inc. and Subsidiaries
                                      Condensed Consolidated Statements of Earnings

                                                                     Fiscal Year
    (in millions, except per Common
     Share amounts)                                                   2012              2011             % Change
    -------------------------------                                   ----              ----             --------
                                                             (Unaudited)

    Revenue                                                       $107,552          $102,644                        5 %
    Cost of products sold                                          103,011            98,482                        5 %
    Gross margin                                                     4,541             4,162                        9 %
    ------------                                                     -----             -----                       ---

    Operating expenses:
    Distribution, selling, general and
     administrative expenses                                         2,677             2,528                        6 %
    Restructuring and employee
     severance                                                          21                15                      N.M.
    Acquisition-related costs                                           33                90                      N.M.
    Impairments and loss on disposal of
     assets                                                             21                 9                      N.M.
    Litigation (recoveries)/charges,
     net                                                                (3)                6                      N.M.
    Operating earnings                                               1,792             1,514                       18 %
    ------------------                                               -----             -----                       ---

    Other income, net                                                   (1)              (22)                     N.M.
    Interest expense, net                                               95                93                        2 %
    Gain on sale of investment in
     CareFusion                                                          -               (75)                     N.M.
    Earnings before income taxes and
     discontinued operations                                         1,698             1,518                       12 %
    --------------------------------                                 -----             -----                       ---

    Provision for income taxes                                         628               552                       14 %
    Earnings from continuing operations                              1,070               966                       11 %
    -----------------------------------                              -----               ---                       ---

    Loss from discontinued operations,
     net of tax                                                         (1)               (7)                     N.M.
    Net earnings                                                    $1,069              $959                       11 %
    ------------                                                    ------              ----                       ---

    Basic earnings/(loss) per Common Share:
    Continuing operations                                            $3.10             $2.77                       12 %
    Discontinued operations                                              -             (0.02)                     N.M.
    Net basic earnings per Common Share                              $3.10             $2.75                       13 %
    -----------------------------------                              -----             -----                       ---

    Diluted earnings/(loss) per Common Share:
    Continuing operations                                            $3.06             $2.74                       12 %
    Discontinued operations                                              -             (0.02)                     N.M.
    Net diluted earnings per Common
     Share                                                           $3.06             $2.72                       13 %
    -------------------------------                                  -----             -----                       ---

    Weighted average number of Common Shares outstanding:
    Basic                                                              345               349
    Diluted                                                            349               353

                                                                                         Schedule 3
                                                                                         ----------

                                         Cardinal Health, Inc. and Subsidiaries
                                         Condensed Consolidated Balance Sheets

                                                        June 30,                June 30,
    (in millions)                                                       2012                 2011
    ------------                                                        ----                 ----
                                                       (Unaudited)
    Assets
    Cash and
     equivalents                                                      $2,274               $1,929
    Trade
     receivables,
     net                                                               6,355                6,156
    Inventories                                                        7,864                7,334
    Prepaid
     expenses and
     other                                                             1,017                  897
    Total current
     assets                                                           17,510               16,316
    -------------                                                     ------               ------

    Property and
     equipment,
     net                                                               1,551                1,512
    Goodwill and
     other
     intangibles,
     net                                                               4,392                4,259
    Other assets                                                         807                  759
    Total assets                                                     $24,260              $22,846
    ------------                                                     -------              -------

    Liabilities and Shareholders' Equity
    Accounts
     payable                                                         $11,726              $11,332
    Current
     portion of
     long-term
     obligations
     and other
     short-term
     borrowings                                                          476                  327
    Other accrued
     liabilities                                                       1,972                1,711
    Total current
     liabilities                                                      14,174               13,370
    -------------                                                     ------               ------

    Long-term
     obligations,
     less current
     portion                                                           2,418                2,175
    Deferred
     income taxes
     and other
     liabilities                                                       1,424                1,452
    Total
     shareholders'
     equity                                                            6,244                5,849
    --------------                                                     -----                -----
    Total
     liabilities
     and
     shareholders'
     equity                                                          $24,260              $22,846
    --------------                                                   -------              -------
                                                                                                                      Schedule 4
                                                                                                                      ----------

                                                 Cardinal Health, Inc. and Subsidiaries
                                            Condensed Consolidated Statements of Cash Flows

                                                               Fourth Quarter                        Fiscal Year
                                                                                                   -----------
    (in millions)                                                 2012                       2011               2012               2011
    ------------                                                  ----                       ----               ----               ----
                                                          (Unaudited)                (Unaudited)        (Unaudited)
    Cash Flows from Operating Activities:
    Net earnings                                                  $236                       $203             $1,069               $959
    Loss from
     discontinued
     operations                                                      -                          4                  1                  7
    Earnings from
     continuing
     operations                                                    236                        207              1,070                966
    -------------                                                  ---                        ---              -----                ---
    Adjustments to reconcile earnings from continuing
     operations to net cash from operations:
    Depreciation and
     amortization                                                   86                         74                325                313
    Gain on sale of
     investment in
     CareFusion                                                      -                         (4)                 -                (75)
    Impairments and loss
     on disposal of
     assets                                                          1                          -                 21                  9
    Share-based
     compensation                                                   22                         19                 85                 80
    Provision for
     deferred income
     taxes                                                         158                        128                158                128
    Provision for bad
     debts                                                           7                          5                 22                 27
    Change in fair value
     of contingent
     consideration
     obligation                                                    (18)                        (6)               (71)                (7)
    Change in operating assets and liabilities, net of
     effects from acquisitions:
    Decrease/(increase)
     in trade receivables                                          190                        122               (129)              (457)
    Decrease/(increase)
     in inventories                                                375                        384               (495)              (665)
    Increase/(decrease)
     in accounts payable                                          (893)                      (630)               319              1,356
    Other accrued
     liabilities and
     operating items, net                                         (271)                      (179)              (129)              (280)
    Net cash provided by/
     (used in) operating
     activities                                                   (107)                       120              1,176              1,395
    ---------------------                                         ----                        ---              -----              -----

    Cash Flows from Investing Activities:
    Acquisition of
     subsidiaries, net of
     cash acquired                                                 (31)                        (5)              (174)            (2,300)
    Purchase of held-to-
     maturity securities
     and other
     investments                                                   (25)                         -                (35)              (156)
    Additions to property
     and equipment                                                (100)                      (105)              (263)              (291)
    Proceeds from
     divestitures and
     sale of property and
     equipment                                                      (1)                         -                  3                  3
    Proceeds from sale of
     CareFusion                                                      -                          -                  -                706
    Proceeds from
     maturities of held-
     to-maturity
     securities                                                     46                         10                 92                 10
    Net cash used in
     investing activities                                         (111)                      (100)              (377)            (2,028)
    ---------------------                                         ----                       ----               ----             ------

    Cash Flows from Financing Activities:
    Payment of contingent
     consideration                                                   -                        (10)                 -                (10)
    Net change in short-
     term borrowings                                                 5                          5                 13                 46
    Reduction of long-
     term obligations                                             (206)                        (1)              (251)              (229)
    Proceeds from long-
     term obligations,
     net of issuance
     costs                                                         496                          -                496                495
    Proceeds from
     issuance of Common
     Shares                                                         19                         27                 42                 63
    Tax disbursements
     from exercises of
     stock options                                                  (8)                        (5)                (4)               (14)
    Dividends on Common
     Shares                                                        (74)                       (68)              (300)              (274)
    Purchase of treasury
     shares                                                       (150)                         -               (450)              (270)
    Net cash provided by/
     (used in) financing
     activities                                                     82                        (52)              (454)              (193)
    ---------------------                                          ---                        ---               ----               ----

    Net increase/
     (decrease) in cash
     and equivalents                                              (136)                       (32)               345               (826)
    Cash and equivalents
     at beginning of
     period                                                      2,410                      1,961              1,929              2,755
    Cash and equivalents
     at end of period                                           $2,274                     $1,929             $2,274             $1,929
    --------------------                                        ------                     ------             ------             ------
                                                                                                                     Schedule 5
                                                                                                                     ----------

                                              Cardinal Health, Inc. and Subsidiaries
                                                  Total Company Business Analysis

                                                                                         Non-GAAP
                                                 Fourth Quarter                                   Fourth Quarter

    (in millions)                                   2012                          2011                         2012               2011
    ------------                                    ----                          ----                         ----               ----
    Revenue
    Amount                                       $26,764                       $26,764
    Growth rate                                       0 %                           9 %

    Operating earnings
    Amount                                          $403                          $359                         $425               $375
    Growth rate                                      12 %                           7 %                         13 %               17 %

    Earnings from continuing operations
    Amount                                          $236                          $207                         $255               $214
    Growth rate                                      14 %                           7 %                         19 %               17 %

                                                                                         Non-GAAP
                                                 Fiscal Year                                  Fiscal Year

    (in millions)                                   2012                          2011                         2012               2011
    ------------                                    ----                          ----                         ----               ----
    Revenue
    Amount                                      $107,552                      $102,644
    Growth rate                                       5 %                           4 %

    Operating earnings
    Amount                                        $1,792                        $1,514                       $1,866             $1,644
    Growth rate                                      18 %                          16 %                         13 %               18 %

    Earnings from continuing operations
    Amount                                        $1,070                          $966                       $1,119               $988
    Growth rate                                      11 %                          65 %                         13 %               22 %

    Refer to the GAAP/Non-GAAP reconciliation for definitions and calculations supporting the Non-GAAP balances.

                                                                                                                                             Schedule 6
                                                                                                                                             ----------

                                                                  Cardinal Health, Inc. and Subsidiaries
                                                                        Segment Business Analysis

                                                       Fourth Quarter                                                 Fourth Quarter
    (in millions)                                         2012                          2011                 (in millions)             2012               2011
    ------------                                          ----                          ----                 ------------              ----               ----
    Pharmaceutical                                                                            Medical

    Revenue                                                                                   Revenue
    Amount                                             $24,335                       $24,458                 Amount                  $2,432             $2,312
    Growth rate                                            (1)%                          10 %                Growth rate                 5 %                7 %
    Mix                                                    91 %                          91 %                Mix                         9 %                9 %

    Segment profit                                                                            Segment profit
    Amount                                                $354                          $308                 Amount                     $79                $78
    Growth rate                                            15 %                          34 %                Growth rate                 2 %              (24)%
    Mix                                                    82 %                          80 %                Mix                        18 %               20 %
    Segment profit margin                                1.46 %                        1.26 %                Segment profit margin    3.27 %             3.38 %

    Refer to definitions for an explanation of calculations.

    Total consolidated revenue for the three months
     ended June 30, 2012 was $26,764 million, which
     included total segment revenue of $26,767 million
     and Corporate revenue of $(3) million. Total
     consolidated revenue for the three months ended
     June 30, 2011 was $26,764 million, which included
     total segment revenue of $26,770 million and
     Corporate revenue of $(6) million. Corporate
     revenue consists primarily of elimination of
     inter-segment revenue.

    Total consolidated operating earnings for the
     three months ended June 30, 2012 were $403
     million, which included total segment profit of
     $433 million and Corporate costs of $(30)
     million. Total consolidated operating earnings
     for the three months ended June 30, 2011 were
     $359 million, which included total segment profit
     of $386 million and Corporate costs of $(27)
     million. Corporate includes, among other things,
     restructuring and employee severance,
     acquisition-related costs (including
     amortization of acquisition-related intangible
     assets and changes in the fair value of
     contingent consideration obligations),
     impairments and loss on disposal of assets,
     litigation (recoveries)/charges, net and certain
     investment spending that are not allocated to the
     segments.

                                                                                                                                           Schedule 7
                                                                                                                                           ----------

                                                                  Cardinal Health, Inc. and Subsidiaries
                                                                        Segment Business Analysis

                                                         Fiscal Year                                                   Fiscal Year
    (in millions)                                         2012                          2011                 (in millions)           2012               2011
    ------------                                          ----                          ----                 ------------            ----               ----
    Pharmaceutical                                                                            Medical

    Revenue                                                                                   Revenue
    Amount                                             $97,925                       $93,744                 Amount                $9,642             $8,922
    Growth rate                                             4 %                           4 %                Growth rate               8 %                2 %
    Mix                                                    91 %                          91 %                Mix                       9 %                9 %

    Segment profit                                                                            Segment profit
    Amount                                              $1,558                        $1,329                 Amount                  $332               $373
    Growth rate                                            17 %                          31 %                Growth rate             (11)%              (13)%
    Mix                                                    82 %                          78 %                Mix                      18 %               22 %
    Segment profit margin                                1.59 %                        1.42 %                Segment profit margin  3.45 %             4.18 %

    Refer to definitions for an explanation of calculations.

    Total consolidated revenue for the fiscal year
     ended June 30, 2012 was $107,552 million, which
     included total segment revenue of $107,567
     million and Corporate revenue of $(15) million.
     Total consolidated revenue for the fiscal year
     ended June 30, 2011 was $102,644 million, which
     included total segment revenue of $102,666
     million and Corporate revenue of $(22) million.
     Corporate revenue consists primarily of
     elimination of inter-segment revenue.

    Total consolidated operating earnings for the
     fiscal year ended June 30, 2012 were $1,792
     million, which included total segment profit of
     $1,890 million and Corporate costs of $(98)
     million. Total consolidated operating earnings
     for the fiscal year ended June 30, 2011 were
     $1,514 million, which included total segment
     profit of $1,702 million and Corporate costs of
     $(188) million. Corporate includes, among other
     things, restructuring and employee severance,
     acquisition-related costs (including
     amortization of acquisition-related intangible
     assets and changes in the fair value of
     contingent consideration obligations),
     impairments and loss on disposal of assets,
     litigation (recoveries)/charges, net and certain
     investment spending that are not allocated to the
     segments.

                                                                                                                              Schedule 8
                                                                                                                              ----------

                                                  Cardinal Health, Inc. and Subsidiaries
                                                        Schedule of Notable Items

                                                            Fourth Quarter                              Fiscal Year
                                                                                                        -----------
          (in millions, except per Common Share
          amounts)                                               2012                             2011                  2012               2011
         --------------------------------------                  ----                             ----                  ----               ----
         Restructuring and employee severance
         Restructuring and employee severance                     $(9)                             $(5)                 $(21)              $(15)
         Tax benefit                                                3                                2                     8                  5
          Restructuring and employee severance,
          net of tax                                              $(6)                             $(3)                 $(13)              $(10)
         --------------------------------------                   ---                              ---                  ----               ----

          Decrease to diluted EPS from
          continuing operations                                $(0.02)                          $(0.01)               $(0.04)            $(0.03)
         -----------------------------                         ------                           ------                ------             ------

         Acquisition-related costs
          Amortization of acquisition-related
          intangible assets                                      $(20)                            $(14)                 $(78)              $(67)
         Tax benefit                                                8                                8                    29                 21
          Amortization of acquisition-related
          intangible assets, net of tax                          $(12)                             $(6)                 $(49)              $(46)
         ------------------------------------                    ----                              ---                  ----               ----

          Decrease to diluted EPS from
          continuing operations                                $(0.03)                          $(0.02)               $(0.14)            $(0.13)
         -----------------------------                         ------                           ------                ------             ------

         Other acquisition-related costs (1)                       $9                              $(1)                  $45               $(23)
         Tax benefit/(expense) (1)                                (10)                              (2)                  (20)                 1
          Other acquisition-related costs, net
          of tax                                                  $(1)                             $(3)                  $25               $(22)
         -------------------------------------                    ---                              ---                   ---               ----

          Increase/(decrease) to diluted EPS
          from continuing operations (1)         $                  -                           $(0.01)                $0.07             $(0.06)
         -----------------------------------     --------------------                           ------                 -----             ------

         Total acquisition-related costs                         $(11)                            $(15)                 $(33)              $(90)
         Tax benefit/(expense)                                     (2)                               6                     9                 22
          Total acquisition-related costs, net
          of tax                                                 $(13)                             $(9)                 $(24)              $(68)
         -------------------------------------                   ----                              ---                  ----               ----

          Decrease to diluted EPS from
          continuing operations (2)                            $(0.04)                          $(0.03)               $(0.07)            $(0.19)
         -----------------------------                         ------                           ------                ------             ------

          Impairments and loss on disposal of
          assets
          Impairments and loss on disposal of
          assets                                                  $(1)            $                  -                  $(21)               $(9)
         Tax benefit                                                1                                -                     8                  3
          Impairments and loss on disposal of
          assets, net of tax                     $                  -             $                  -                  $(13)               $(6)
         ------------------------------------    --------------------             --------------------                  ----                ---

          Decrease to diluted EPS from
          continuing operations                  $                  -             $                  -                $(0.04)            $(0.02)
         -----------------------------           --------------------             --------------------                ------             ------

         Litigation recoveries/(charges), net
         Litigation recoveries/(charges), net    $                  -                               $6                    $3                $(6)
         Tax expense                                                -                               (3)                   (1)                (1)
          Litigation recoveries/(charges), net,
          net of tax                             $                  -                               $3                    $2                $(7)
         --------------------------------------  --------------------                              ---                   ---                ---

          Increase/(decrease) to diluted EPS
          from continuing operations             $                  -                            $0.01                 $0.01             $(0.02)
         -----------------------------------     --------------------                            -----                 -----             ------

         Other Spin-Off costs
         Other spin-off costs                    $                  -                              $(3)                  $(2)              $(10)
         Tax benefit                                                -                                1                     1                  4
         Other spin-off costs, net of tax        $                  -                              $(2)                  $(1)               $(6)
         --------------------------------        --------------------                              ---                   ---                ---

          Decrease to diluted EPS from
          continuing operations                  $                  -             $                  -  $                  -             $(0.02)
         -----------------------------           --------------------             --------------------  --------------------             ------

         Gain on sale of CareFusion stock
         Gain on sale of CareFusion stock        $                  -                               $4  $                  -                $75
         Tax benefit                                                -                                -                     -                  -
          Gain on sale of CareFusion stock, net
          of tax                                 $                  -                               $4  $                  -                $75
         --------------------------------------  --------------------                              ---  --------------------                ---

          Increase to diluted EPS from
          continuing operations                  $                  -                            $0.01  $                  -              $0.21
         -----------------------------           --------------------                            -----  --------------------              -----

          Weighted average number of diluted
          shares outstanding                                      349                              355                   349                353

          We apply varying tax rates depending on the item's nature and tax jurisdiction
          where it is incurred.

     (1)  Includes a $71 million decrease in the fair value of the total contingent
          consideration obligation related to
          the P4 Healthcare acquisition for the fiscal year. The related tax expense was $29
          million and diluted EPS from continuing operations increased $0.13.

     (2) The sum of the components may not equal the total due to rounding.
                                                                                                  Schedule 9
                                                                                                  ----------

                                       Cardinal Health, Inc. and Subsidiaries
                                              Asset Management Analysis

                                                Fourth Quarter                Fiscal Year
                                                                              -----------
                                               2012                   2011                   2012               2011
                                               ----                   ----                   ----               ----
         Days sales outstanding              22.3                   20.3
         Days inventory on hand              23.9                   22.5
         Days payable outstanding            35.6                   34.8
         Net working capital days(1)         10.5                    8.0

         Debt to total capital                32 %                   30 %
         Net debt to capital                   9 %                    9 %

         Return on equity                   15.1 %                 14.1 %                 17.8 %             17.5 %
         Non-GAAP return on equity          16.3 %                 14.9 %                 18.6 %             18.0 %

          Effective tax rate from
          continuing operations             37.4 %                 39.3 %                 37.0 %             36.4 %
          Non-GAAP effective tax rate
          from continuing operations        36.0 %                 39.6 %                 36.8 %             37.2 %

     (1)  The sum of the components may not equal the total due to
          rounding.

          Refer to the GAAP/Non-GAAP reconciliation for Non-GAAP
          calculations. Refer to DSO, DIOH and DPO for definitions
          and calculations.

                                                                                                                                                                                                                                                                           Schedule 10
                                                                                                                                                                                                                                                                           -----------

                                                                                                                                             Cardinal Health, Inc. and Subsidiaries
                                                                                                                                                 GAAP / Non-GAAP Reconciliation

                                                                                                     Fourth Quarter 2012
                                                                                                     -------------------

                       (in millions, except per Common
                                        Share amounts)                Operating                                                 Earnings                         Provision                 Earnings                    Earnings               Diluted            Diluted
                                                                       Earnings                          Operating               Before                             for                      from                        from                 EPS from          EPS from
                                                                                                          Earnings               Income                            Income                 Continuing         Continuing Operations Growth    Continuing        Continuing
                                                                                                           Growth              Taxes and                           Taxes                  Operations                     Rate                Operations        Operations
                                                                                                            Rate              Discontinued                                                                                                                     Growth Rate
                                                                                                                               Operations
    ---
    GAAP                                                                                 $403                            12 %                $377                                   $141               $236                             14 %            $0.68                    17 %
    ----                                                                                 ----                            ---                 ----                                   ----               ----                             ---             -----                    ---
    Restructuring and employee
     severance                                                                              9                                                   9                                      3                  6                                              0.02
    Acquisition-related costs                                                              11                                                  11                                     (2)                13                                              0.04
    Impairments and loss on disposal of
     assets                                                                                 1                                                   1                                      1                  -                                                 -
    Litigation (recoveries)/charges,
     net                                                                                    -                                                   -                                      -                  -                                                 -
    Other Spin-Off costs                                                                    -                                                   -                                      -                  -                                                 -
    Gain on sale of CareFusion stock                                                        -                                                   -                                      -                  -                                                 -
    Non-GAAP                                                                             $425                            13 %                $398                                   $143               $255                             19 %            $0.73                    22 %
    --------                                                                             ----                            ---                 ----                                   ----               ----                             ---             -----                    ---

                                                                                                   Fourth Quarter 2011
                                                                                                   -------------------
    GAAP                                                                                 $359                             7 %                $341                                   $134               $207                              7 %            $0.58                     7 %
    ----                                                                                 ----                            ---                 ----                                   ----               ----                             ---             -----                    ---
    Restructuring and employee
     severance                                                                              5                                                   5                                      2                  3                                              0.01
    Acquisition-related costs                                                              15                                                  15                                      6                  9                                              0.03
    Impairments and loss on disposal of
     assets                                                                                 -                                                   -                                      -                  -                                                 -
    Litigation (recoveries)/charges,
     net                                                                                   (6)                                                 (6)                                    (3)                (3)                                            (0.01)
    Other Spin-Off costs                                                                    3                                                   3                                      1                  2                                                 -
    Gain on sale of CareFusion stock                                                        -                                                  (4)                                     -                 (4)                                            (0.01)
    Non-GAAP                                                                             $375                            17 %                $354                                   $140               $214                             17 %            $0.60                    20 %
    --------                                                                             ----                            ---                 ----                                   ----               ----                             ---             -----                    ---

                                                                                                     Fiscal Year 2012
                                                                                                     ----------------
    (in millions, except per Common
     Share amounts)                                                   Operating                          Operating              Earnings                         Provision                 Earnings                    Earnings               Diluted            Diluted
                                                                       Earnings                           Earnings               Before                             for                      from                        from                 EPS from          EPS from
                                                                                                        Growth Rate              Income                            Income                 Continuing                  Continuing             Continuing        Continuing
                                                                                                                               Taxes and                           Taxes                  Operations                  Operations             Operations        Operations
                                                                                                                              Discontinued                                                                            Growth Rate                              Growth Rate
                                                                                                                               Operations
    ---
    GAAP                                                                               $1,792                            18 %              $1,698                                   $628             $1,070                             11 %            $3.06                    12 %
    ----                                                                               ------                            ---               ------                                   ----             ------                             ---             -----                    ---
    Restructuring and employee
     severance                                                                             21                                                  21                                      8                 13                                              0.04
    Acquisition-related costs                                                              33                                                  33                                      9                 24                                              0.07
    Impairments and loss on disposal of
     assets                                                                                21                                                  21                                      8                 13                                              0.04
    Litigation (recoveries)/charges,
     net                                                                                   (3)                                                 (3)                                    (1)                (2)                                            (0.01)
    Other Spin-Off costs                                                                    2                                                   2                                      1                  1                                                 -
    Gain on sale of CareFusion stock                                                        -                                                   -                                      -                  -                                                 -
    Non-GAAP                                                                           $1,866                            13 %              $1,772                                   $653             $1,119                             13 %            $3.21                    15 %
    --------                                                                           ------                            ---               ------                                   ----             ------                             ---             -----                    ---

                                                                                                     Fiscal Year 2011
                                                                                                     ----------------
    GAAP                                                                               $1,514                            16 %              $1,518                                   $552               $966                             65 %            $2.74                    69 %
    ----                                                                               ------                            ---               ------                                   ----               ----                             ---             -----                    ---
    Restructuring and employee
     severance                                                                             15                                                  15                                      5                 10                                              0.03
    Acquisition-related costs                                                              90                                                  90                                     22                 68                                              0.19
    Impairments and loss on disposal of
     assets                                                                                 9                                                   9                                      3                  6                                              0.02
    Litigation (recoveries)/charges,
     net                                                                                    6                                                   6                                     (1)                 7                                              0.02
    Other Spin-Off costs                                                                   10                                                  10                                      4                  6                                              0.02
    Gain on sale of CareFusion stock                                                        -                                                 (75)                                     -                (75)                                            (0.21)
    Non-GAAP                                                                           $1,644                            18 %              $1,573                                   $585               $988                             22 %            $2.80                    25 %
    --------                                                                           ------                            ---               ------                                   ----               ----                             ---             -----                    ---

    The sum of the components may not equal the total due to rounding.

    We apply varying tax rates depending on the item's nature and tax jurisdiction where it is incurred.

                                                                                                                                                                                                                                                                                         Schedule 11
                                                                                                                                                                                                                                                                                         -----------

                                                                                                                                  Cardinal Health, Inc. and Subsidiaries
                                                                                                                                      GAAP / Non-GAAP Reconciliation

                                                                                                                       Fourth Quarter
                            (in millions)                   2012                                                                                      2011
                            ------------
                            GAAP return on equity          15.1 %                                                                                    14.1 %
                            ---------------------          -----                                                                                     -----

                            Non-GAAP return on equity
                            Net earnings                                         $236                                                                                                   $203
                             Restructuring and employee
                             severance, net of tax, in
                             continuing operations           6                                                                                       3
                             Acquisition-related costs,
                             net of tax, in continuing
                             operations                    13                                                                                       9
                             Impairments and loss on
                             disposal of assets, net of
                             tax, in continuing
                             operations                                           -                                                                                                      -
                             Litigation
                             (recoveries)/charges, net,
                             net of tax, in continuing
                             operations                                           -                                                                                                     (3)
                             Other spin-off costs, net
                             of tax, in continuing
                             operations                                           -                                                                                                      2
                             Gain on sale of CareFusion
                             stock, net of tax                                    -                                                                                                     (4)
                             CareFusion net loss in
                             discontinued operations (1)                                 -                                                                                                      4
                            Adjusted net earnings                                $255                                                                                                   $214
                            ---------------------                                ----                                                                                                   ----
                            Annualized                                         $1,020                                                                                                   $856
                            ----------                                         ------                                                                                                   ----

                                                     Fourth                              Third                                              Fourth                                              Third
                                                     Quarter                            Quarter                                            Quarter                                             Quarter
                                                     -------                            -------                                            -------                                             -------
                                              2012                    2012                    2011                                                2011
                                              ----                    ----                    ----                                                ----
                            Total shareholders' equity                              $6,244                                             $6,240                                              $5,849                                              $5,657
                             Divided by average
                             shareholders' equity                              $6,242                                                                                                 $5,753
                            ---------------------                              ------                                                                                                 ------
                            Non-GAAP return on equity       16.3 %                                                                                 14.9 %
                            -------------------------       -----                                                                                  -----

                            We apply varying tax rates depending on the item's nature and tax jurisdiction where it is incurred.

    (1)                      To properly reflect the impact of the spin-off, on a non-GAAP basis, CareFusion net earnings
                             included in
                            discontinued operations are excluded from adjusted net earnings for all periods presented.

                                                                                                                                                                                                                                                                                               Schedule 12
                                                                                                                                                                                                                                                                                               -----------

    Cardinal Health, Inc. and Subsidiaries
        GAAP / Non-GAAP Reconciliation

                                                               Fiscal Year                                                                                                                                                    Fiscal Year
                                                               -----------                                                                                                                                                    -----------
                                           (in millions)                                                   2012                                                                                                                             2011
                                           ------------
                                           GAAP return on equity                                          17.8 %                                                                                                                           17.5 %
                                           ---------------------                                          -----                                                                                                                            -----

                                           Non-GAAP return on equity
                                           Net earnings                                                  $1,069                                                                                                                             $959
                                            Restructuring and employee severance, net of tax,
                                            in continuing operations                                         13                                                                                                                               10
                                            Acquisition-related costs, net of tax, in
                                            continuing operations                                            24                                                                                                                               68
                                            Impairments and loss on disposal of assets, net of
                                            tax, in continuing operations                                    13                                                                                                                                6
                                            Litigation (recoveries)/charges, net, net of tax,
                                            in continuing operations                                         (2)                                                                                                                               7
                                            Other spin-off costs, net of tax, in continuing
                                            operations                                                        1                                                                                                                                6
                                           Gain on sale of CareFusion stock, net of tax                       -                                                                                                                              (75)
                                           CareFusion net loss in discontinued operations (1)                 -                                                                                                                                7
                                           Adjusted net earnings                                         $1,118                                                                                                                             $988
                                           ---------------------                                         ------                                                                                                                             ----

                                                                 Fourth                                             Third                                          Second                        First          Fourth           Fourth            Third         Second          First           Fourth
                                                                 Quarter                                           Quarter                                        Quarter                       Quarter        Quarter          Quarter           Quarter        Quarter        Quarter          Quarter
                                                                 -------                                           -------                                        -------                       -------        -------          -------           -------        -------        -------          -------
                                                                                                           2012                                           2012                             2012           2012           2011               2011            2011           2011           2011               2010
                                                                                                           ----                                           ----                             ----           ----           ----               ----            ----           ----           ----               ----
                                           Total shareholders' equity                                    $6,244                                         $6,240                           $5,928         $5,714         $5,849             $5,849          $5,657         $5,421         $5,239             $5,276
                                           Divided by average shareholders' equity                       $5,995                                                                                                                           $5,488
                                           ---------------------------------------                       ------                                                                                                                           ------
                                           Non-GAAP return on equity                                      18.6 %                                                                                                                           18.0 %
                                           -------------------------                                      -----                                                                                                                            -----

                                           We apply varying tax rates depending on the item's nature and tax jurisdiction where it is incurred.

                                       (1) To properly reflect the impact of the spin-off, on a non-GAAP basis, CareFusion net earnings included in discontinued operations are excluded
                                           from adjusted net earnings for all periods presented.

                                                                                                                                         Schedule 13
                                                                                                                                         -----------

                                                        Cardinal Health, Inc. and Subsidiaries
                                                            GAAP / Non-GAAP Reconciliation

                                                                    Fourth Quarter                                     Fiscal Year
                                                                                                                     -----------
    (in millions)                                                      2012                          2011                          2012                2011
    ------------
    GAAP effective tax rate from
     continuing operations                                            37.4 %                        39.3 %                        37.0 %              36.4 %
    ----------------------------                                      -----                         -----                         -----               -----

    Non-GAAP effective tax rate from continuing operations
    Earnings before income taxes and
     discontinued operations                                           $377                          $341                        $1,698              $1,518
    Restructuring and employee
     severance                                                            9                             5                            21                  15
    Acquisition-related costs                                            11                            15                            33                  90
    Impairments and loss on disposal of
     assets                                                               1                             -                            21                   9
    Litigation (recoveries)/charges,
     net                                                                  -                            (6)                           (3)                  6
    Other Spin-Off costs                                                  -                             3                             2                  10
    Gain on sale of CareFusion stock                                      -                            (4)                            -                 (75)
    Adjusted earnings before income
     taxes and discontinued operations                                 $398                          $354                        $1,772              $1,573
    ----------------------------------                                 ----                          ----                        ------              ------

    Provision for income taxes                                         $141                          $134                          $628                $552
    Restructuring and employee
     severance tax benefit                                                3                             2                             8                   5
    Acquisition-related costs tax
     benefit/(expense)                                                   (2)                            6                             9                  22
    Impairments and loss on disposal of
     assets tax benefit                                                   1                             -                             8                   3
    Litigation (recoveries)/charges,
     net tax expense                                                      -                            (3)                           (1)                 (1)
    Other spin-off costs tax benefit                                      -                             1                             1                   4
    Gain on sale of CareFusion stock
     tax benefit                                                          -                             -                             -                   -
    Adjusted provision for income taxes                                $143                          $140                          $653                $585
    -----------------------------------                                ----                          ----                          ----                ----

    Non-GAAP effective tax rate from
     continuing operations                                            36.0 %                        39.6 %                        36.8 %              37.2 %
    --------------------------------                                  -----                         -----                         -----               -----

                                                            Fourth Quarter
                                                                       2012                          2011
    Debt to total capital                                               32 %                          30 %
    ---------------------                                               ---                           ---

    Net debt to capital
    Current portion of long-term
     obligations and other short-term
     borrowings                                                        $476                          $327
    Long-term obligations, less
     current portion                                                  2,418                         2,175
    Debt                                                             $2,894                        $2,502
    ----                                                             ------                        ------
    Cash and equivalents                                             (2,274)                       (1,929)
    Net Debt                                                           $620                          $573
    --------                                                           ----                          ----
    Total shareholders' equity                                        6,244                         5,849
    Capital                                                          $6,864                        $6,422
    -------                                                          ------                        ------
    Net debt to capital                                                  9 %                           9 %
    -------------------                                                 ---                           ---

    We apply varying tax rates depending on the item's nature and tax jurisdiction where it is incurred.

                                                    Forward-Looking Non-GAAP Financial Measures
                                                    -------------------------------------------
    We present non-GAAP earnings from continuing operations and non-GAAP effective tax rate from continuing
    operations (and presentations derived from these financial measures, including per share calculations) on a
    forward-looking basis. The most directly comparable forward-looking GAAP measures are earnings from
    continuing operations and effective tax rate from continuing operations. We are unable to provide a quantitative
    reconciliation of these forward-looking non-GAAP measures to the most directly comparable forward-looking
    GAAP measures because we cannot reliably forecast restructuring and employee severance, acquisition-related
    costs, impairments and loss on disposal of assets, litigation (recoveries)/charges, net, and
    other spin-off costs, which are difficult to predict and estimate and are primarily dependent on future events.
    Please note that the unavailable reconciling items could significantly impact our future financial results.

                                                                   Schedule 14

                              Cardinal Health, Inc. and Subsidiaries

                                                Fourth Quarter
         (in millions)                                       2012                 2011
         ------------
         Days Sales Outstanding                              22.3                 20.3
         ----------------------                              ----                 ----

         Days Inventory on Hand
         Inventories                                       $7,864               $7,334

         Cost of products sold                            $25,628              $25,720
         Chargeback billings                                3,984                3,556
         Adjusted cost of products sold                   $29,612              $29,276
          Adjusted cost of products sold
          divided by 90 days                                 $329                 $325
         Days Inventory on Hand                              23.9                 22.5
         ----------------------                              ----                 ----

         Days Payable Outstanding
         Accounts payable                                 $11,726              $11,332

         Cost of products sold                            $25,628              $25,720
         Chargeback billings                                3,984                3,556
         Adjusted cost of products sold                   $29,612              $29,276
          Adjusted cost of products sold
          divided by 90 days                                 $329                 $325
         Days Payable Outstanding                            35.6                 34.8
         ------------------------                            ----                 ----

         Net Working Capital Days(1)                         10.5                  8.0
         --------------------------                          ----                  ---

     (1)  The sum of the components may not
          equal the total due to rounding.

          Days Sales Outstanding: trade
          receivables, net divided by
          (monthly revenue divided by 30
          days).

          Days Inventory on Hand: inventory
          divided by ((quarterly cost of
          products sold plus chargeback
          billings)
          divided by 90 days). Chargeback
          billings are the difference
          between a product's wholesale
          acquisition
          cost and the contract price
          established between
          pharmaceutical manufacturers and
          the end customer.

          Days Payable Outstanding:
          accounts payable divided by
          ((quarterly cost of products
          sold plus
          chargeback billings) divided by
          90 days).

          Net Working Capital Days: days
          sales outstanding plus days
          inventory on hand less days
          payable
         outstanding.


                   Cardinal Health, Inc. and Subsidiaries

                          Use of Non-GAAP Measures
                          ------------------------

                         This earnings
                         release contains
                         financial measures
                         that are not
                         calculated in
                         accordance with
                         U.S. generally
                         accepted accounting
                         principles
                         ("GAAP").  In
                         general, the
                         measures exclude
                         items and charges
                         that (i) management
                         does not believe
                         reflect Cardinal
                         Health, Inc.'s (the
                         "Company") core
                         business and relate
                         more to strategic,
                         multi-year
                         corporate
                         activities; or (ii)
                         relate to
                         activities or
                         actions that may
                         have occurred over
                         multiple or in
                         prior periods
                         without predictable
                         trends.  Management
                         uses these non-
                         GAAP financial
                         measures internally
                         to evaluate the
                         Company's
                         performance,
                         evaluate the
                         balance sheet,
                         engage in financial
                         and operational
                         planning and
                         determine incentive
                         compensation.

                         Management provides
                         these non-GAAP
                         financial measures
                         to investors as
                         supplemental
                         metrics to assist
                         readers in
                         assessing the
                         effects of items
                         and events on its
                         financial and
                         operating results
                         and in comparing
                         the Company's
                         performance to that
                         of its competitors.
                          However, the non-
                          GAAP financial
                         measures used by
                         the Company may be
                         calculated
                         differently from,
                         and therefore may
                         not be comparable
                         to, similarly
                         titled measures
                         used by other
                         companies.

                         The non-GAAP
                         financial measures
                         disclosed by the
                         Company should not
                         be considered a
                         substitute for, or
                         superior to,
                         financial measures
                         calculated in
                         accordance with
                         GAAP, and the
                         financial results
                         calculated in
                         accordance with
                         GAAP and
                         reconciliations to
                         those financial
                         statements set
                         forth above should
                         be carefully
                         evaluated.

                              Definitions
                              -----------

                         Debt: long-term
                         obligations plus
                         short-term
                         borrowings.

                         Debt to Total
                         Capital: debt
                         divided by (debt
                         plus total
                         shareholders'
                         equity).

                         Net Debt: a Non-
                         GAAP measure
                         defined as debt
                         minus (cash and
                         equivalents).

                         Net Debt to Capital:
                         a Non-GAAP measure
                         defined as net debt
                         divided by (net
                         debt plus total
                         shareholders'
                         equity).

                         Non-GAAP Diluted
                         EPS from Continuing
                         Operations and
                         growth rate
                         calculation (1):
                         non-GAAP earnings
                         from continuing
                         operations divided
                         by diluted weighted
                         average shares
                         outstanding.

                         Non-GAAP Earnings
                         from Continuing
                         Operations and
                         growth rate
                         calculation:
                         earnings from
                         continuing
                         operations
                         excluding (1)
                         restructuring and
                         employee severance
                         (2), (2)
                         acquisition-
                         related costs (3),
                         (3) impairments and
                         loss on disposal of
                         assets 4, (4)
                         litigation
                         (recoveries)/charges,
                         net 5, (5) Other
                         Spin-Off Costs and
                         (6) gain on sale of
                         CareFusion stock,
                         each net of tax.

                         Non-GAAP Effective
                         Tax Rate from
                         Continuing
                         Operations:
                         (provision for
                         income taxes
                         adjusted for (1)
                         restructuring and
                         employee severance,
                         (2) acquisition-
                         related costs, (3)
                         impairments and
                         loss on disposal of
                         assets, (4)
                         litigation
                         (recoveries)/charges,
                         net, (5) Other
                         Spin-Off Costs and
                         (6) gain on sale of
                         CareFusion stock)
                         divided by
                         (earnings before
                         income taxes and
                         discontinued
                         operations adjusted
                         for the same six
                         items).

                         Non-GAAP Operating
                         Earnings and growth
                         rate calculation:
                         operating earnings
                         excluding (1)
                         restructuring and
                         employee severance,
                         (2) acquisition-
                         related costs, (3)
                         impairments and
                         loss on disposal of
                         assets, (4)
                         litigation
                         (recoveries)/charges,
                         net and (5) Other
                         Spin-Off Costs.

                         Non-GAAP Return on
                         Equity: (annualized
                         current period net
                         earnings excluding
                         (1) restructuring
                         and employee
                         severance, (2)
                         acquisition-
                         related costs, (3)
                         impairments and
                         loss on disposal of
                         assets, (4)
                         litigation
                         (recoveries)/charges,
                         net, (5) Other
                         Spin-Off Costs,
                         (6) gain on sale of
                         CareFusion stock
                         and (7) CareFusion
                         net loss in
                         discontinued
                         operations, each
                         net of tax) and
                         divided by average
                         shareholders'
                         equity.

                         Other Spin-Off
                         Costs: costs
                         incurred in
                         connection with our
                         Spin-Off of
                         CareFusion which
                         are included in
                         distribution,
                         selling, general
                         and administrative
                         expenses.

                         Return on Equity:
                         annualized current
                         period net earnings
                         divided by average
                         shareholders'
                         equity.

                         Revenue Mix: segment
                         revenue divided by
                         total segment
                         revenue for all
                         segments.

                         Segment Profit:
                         segment revenue
                         minus (segment cost
                         of products sold
                         and segment
                         distribution,
                         selling, general
                         and administrative
                         expenses).

                         Segment Profit
                         Margin: segment
                         profit divided by
                         segment revenue.

                         Segment Profit Mix:
                         segment profit
                         divided by total
                         segment profit for
                         all segments.

                         In this earnings
                         release growth
                         rates are
                         determined by
                         dividing the
                         difference between
                         current period
                         results and prior
                         period results by
                         prior period
    (1)                  results.

                         Programs whereby the
                         Company
                         fundamentally
                         changes its
                         operations such as
                         closing and
                         consolidating
                         certain
                         manufacturing and
                         distribution
                         facilities, moving
                         manufacturing of a
                         product to another
                         location,
                         outsourcing the
                         production of a
                         product, employee
                         severance
                         (including
                         rationalizing
                         headcount or other
                         significant changes
                         in personnel) and
                         realigning
                         operations
                         (including
                         substantial
                         realignment of the
                         management
                         structure of a
                         business unit in
                         response to
                         changing market
    (2)                  conditions).

                         Costs that consist
                         primarily of
                         transaction costs,
                         integration costs,
                         changes in the fair
                         value of contingent
                         consideration
                         obligations and
                         amortization of
                         acquisition-
                         related intangible
    (3)                  assets.

                         Asset impairments
                         and losses from the
                         disposal of assets
                         not eligible to be
                         classified as
                         discontinued
                         operations are
                         classified within
                         impairments and
                         loss on disposal of
                         assets within the
                         consolidated
                         statements of
    4                    earnings.

                         Loss contingencies
                         related to
                         litigation and
                         regulatory matters
                         and income from
                         favorable
                         resolution of legal
    5                    matters.

SOURCE Cardinal Health


Source: PR Newswire