Cardinal Health Reports Fourth-Quarter, Year-End Results

Monitor this Company

* Full-year revenue increases 9 percent to $87 billion; earnings per share from continuing operations decline to $2.07, but rise 20 percent to $3.42

     on a non-GAAP basis * Fourth-quarter earnings from continuing operations decline 22 percent to $238 million, $0.61 per share, primarily due to merger-related charges of

     $88 million

    * Fourth-quarter non-GAAP earnings from continuing operations rise 5

     percent to $345 million, 14 percent to $0.89 per share

    DUBLIN, Ohio, Aug. 9 /-/ -- Cardinal Health, a global provider of products and services that improve the safety and productivity of health care, reported fourth-quarter results today that highlighted the company's fast-growing clinical and medical products businesses, which turned in double-digit revenue and profit growth for the period.

    During the fourth quarter, ended June 30, consolidated revenue increased 5 percent to $22.3 billion and earnings from continuing operations declined 22 percent to $238 million primarily due to merger-related charges from the company's recent acquisition of VIASYS Healthcare. On a non-GAAP basis, earnings from continuing operations increased 5 percent to $345 million(1), or 14 percent to $0.89(2) on a diluted per-share basis.

    R. Kerry Clark, chief executive officer of Cardinal Health said: "Fiscal 2007 was a strong year and marks an inflection point in the performance of the company. In the fourth quarter, our core supply chain services sector performed as we previously indicated, and delivered robust full-year results. Within the sector, pharmaceutical supply chain had a good year and we continue to anticipate a strong fiscal 2008 for this business.

    "Within our clinical and medical products sector, we delivered excellent performance during the fourth quarter and have great momentum as we begin fiscal 2008. This sector complements our supply chain business and continues to differentiate Cardinal Health in the market. It has also emerged as significant, value-creating growth engine by contributing more than 25 percent of total segment profit during the year."

    Q4 and FY07 Year-to-Date Summary

     Q4 FY07 Q4 FY06 Y/Y FY07 Y/Y

    Revenue $22.3 billion $21.3 billion 5% $86.9 billion 9%

    Operating

     Earnings $421 million $487 million (14%) $1.4 billion (26%)

    Non-GAAP

     Operating

     Earnings(3) $538 million $521 million 3% $2.2 billion 12%

    Earnings

     from

     Continuing

     Operations $238 million $304 million (22%) $840 million (28%)

    Non-GAAP

     Earnings

     from Continuing

     Operations $345 million $328 million 5% $1.4 billion 13%

    Diluted EPS

     from

     Continuing

     Operations $0.61 $0.72 (15%) $2.07 (24%)

    Non-GAAP

     Diluted EPS

     from Continuing

     Operations $0.89 $0.78 14% $3.42 20%

    Fourth-quarter segment results:

    * Revenue for the Healthcare Supply Chain Services-Pharmaceutical segment

     grew 4 percent during the quarter to $19.6 billion, with core, direct-

     store-door pharmaceutical sales increasing 7 percent to $10.4 billion

     and sales to bulk customers increasing 4 percent to $8.8 billion.

     Revenue in the prior-year period included specialty distribution sales

     of $225 million, a business the company has since sold. Segment profit

     declined 3 percent to $303 million driven by the timing of several items

     in the fourth quarter of last year.

     For the full year, segment revenue grew 9 percent to $76.6 billion and

     segment profit increased 14 percent to $1.3 billion.

    * Revenue for the Healthcare Supply Chain Services-Medical segment

     increased 5 percent to $1.9 billion and segment profit declined 2

     percent to $83 million. Segment profit was impacted by an increase in

     customer-related write-offs from the prior-year of $7 million. With new

     management and additional investments made in operations, the company

     continues to expect the segment to achieve profitable growth later in

     fiscal 2008.

     For the full year, segment revenue rose 4 percent to $7.5 billion and

     segment profit increased 1 percent to $318 million.

    * Revenue for the Clinical Technologies and Services segment increased 17

     percent to $756 million from continued strong sales of Alaris(R) and

     Pyxis(R) products. With a favorable product mix and ongoing operational

     improvements, segment profit increased 50 percent from the prior-year

     period to $144 million. In addition, the segment continues to achieve

     greater installation productivity from customer service investments made

     earlier in the year. Backlog and committed contracts for Pyxis products

     grew to record levels and are expected to provide momentum throughout

     fiscal 2008.

     For the full year, segment revenue grew 11 percent to $2.7 billion and

     segment profit increased 20 percent to $386 million.

    * Revenue for the Medical Products Manufacturing segment increased 14

     percent to $500 million with strong sales in nearly all product

     categories and demand for new products contributing to segment profit

     growth of 27 percent to $58 million. Segment profit margins expanded as

     the business continued to benefit from a shift to higher margin products

     and its One Cardinal Health restructuring efforts and sourcing

     initiatives. The addition of VIASYS Healthcare, which Cardinal Health

     acquired late in the quarter, contributed 3 percentage points of revenue

     growth to the segment and had a negligible impact on segment profit.

     For the full year, segment revenue increased 12 percent to $1.8 billion

     and segment profit rose 20 percent to $198 million.

    Additional fourth-quarter and recent highlights include:

    * Repurchasing $1.6 billion of Cardinal Health shares during the quarter

     and $4.1 billion during fiscal 2007 and to date. The company announced

     yesterday an additional two-year, $2 billion repurchase authorization.

    * Successful completion of the VIASYS Healthcare acquisition in late June

     and the implementation of global integration teams to achieve the

     projected three-year synergies of $85 million to $100 million.

    * Cardinal Health's 2007 Retail Business Conference in Boston where the

     company announced new services, including an expansion of its Leader(R)

     Total Pharmacy Manager offering for retail independent pharmacies.

    * Signing six new contracts with key hospitals and health systems to

     provide medication management solutions that integrate Cardinal Health's

     distribution, automation and bedside verification products and services.

     These strategic agreements highlight the success of the company's

     integrated offerings and its integrated hospital sales organization.

     Sales to hospitals now represent approximately 20 percent of Cardinal

     Health's annual revenue.

    * Growing sales of Cardinal Health's proprietary generic-formulary program

     by more than 30 percent during the year.

    * Reaching agreements to resolve an SEC investigation and securities-

     related litigation that pertained to financial reporting and disclosures

     from 2000 to 2004.

    * Announcing a planned expansion of the company's headquarters in Central

     Ohio with the addition of 700 positions that will relocate from

     operations in Northern Illinois.

    Fiscal 2007 Results

    Revenue for the full year climbed 9 percent to $87 billion and earnings from continuing operations declined 28 percent to $840 million. On a non-GAAP basis, earnings from continuing operations rose 13 percent to $1.4 billion from the prior year. Diluted EPS from continuing operations declined 24 percent to $2.07. Non-GAAP diluted EPS from continuing operations increased 20 percent to $3.42.

    Outlook

    Cardinal Health reiterated its fiscal 2008 guidance range of $3.95 to $4.15 for non-GAAP diluted EPS from continuing operations.

    Conference Call

    Cardinal Health will host a conference call and webcast at 8:30 a.m. EDT to discuss the results. To access the call and corresponding slide presentation, go to the Investor page at http://www.cardinalhealth.com. The conference call may also be accessed by calling 617-213-4858, conference passcode 33769240. An audio replay will be available until 5 p.m. EDT on Aug. 13 at 617-801-6888, passcode 46687143. A transcript and audio replay will also be available at http://www.cardinalhealth.com.

    About Cardinal Health

    Headquartered in Dublin, Ohio, Cardinal Health, Inc. (NYSE: CAH) is an $87 billion, global company serving the health-care industry with products and services that help hospitals, physician offices and pharmacies reduce costs, improve safety, productivity and profitability, and deliver better care to patients. With a focus on making supply chains more efficient, reducing hospital-acquired infections and breaking the cycle of harmful medication errors, Cardinal Health develops market-leading technologies, including Alaris(R) IV pumps, Pyxis(R) automated dispensing systems, MedMined(TM) data mining software and the CareFusion(TM) patient identification system. The company also manufactures medical and surgical products and is one of the largest distributors of pharmaceuticals and medical supplies worldwide. Ranked No. 19 on the Fortune 500 and No. 1 in its sector on Fortune's ranking of Most Admired firms, Cardinal Health employs more than 40,000 people on five continents. More information about the company may be found at http://www.cardinalhealth.com.

    (1) Non-GAAP earnings from continuing operations: Earnings from continuing operations excluding special items and impairment charges and other, both net of tax.

    (2) Non-GAAP diluted EPS from continuing operations: Non-GAAP earnings from continuing operations divided by diluted weighted average shares outstanding.

    (3) Non-GAAP operating earnings: Operating earnings excluding special items and impairment charges and other.

    A reconciliation of the differences between these non-GAAP financial measures and their most directly comparable GAAP financial measures is provided in the attached tables and at http://www.cardinalhealth.com.

    This news release contains forward-looking statements addressing expectations, prospects, estimates and other matters that are dependent upon future events or developments. These matters are subject to risks and uncertainties that could cause actual results to differ materially from those projected, anticipated or implied. The most significant of these uncertainties are described in Cardinal Health's Form 10-K, Form 10-Q and Form 8-K reports (including all amendments to those reports) and exhibits to those reports, and include (but are not limited to) the following: competitive pressures in its various lines of business; the loss of one or more key customer or supplier relationships or changes to the terms of those relationships; uncertainties relating to timing of generic introductions and the frequency or rate of pharmaceutical price appreciation; changes in the distribution patterns or reimbursement rates for health-care products and/or services; the results, consequences, effects or timing of any inquiry or investigation by any regulatory authority or any legal and administrative proceedings; uncertainties related to finalizing the pending settlement of the class-action securities litigation, including obtaining court approval of the settlement; successful integration of Cardinal Health and VIASYS Healthcare and the ability to achieve synergies from the acquisition; and general economic and market conditions. This news release reflects management's views as of August 9, 2007. Except to the extent required by applicable law, Cardinal Health undertakes no obligation to update or revise any forward- looking statement.

     CARDINAL HEALTH, INC. AND SUBSIDIARIES

     CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)

     Fourth Quarter

    (in millions, except per Common

     Share amounts) 2007 2006 % Change

    Revenue $22,262.8 $21,251.7 5%

    Cost of products sold 20,905.4 19,959.5 5%

    Gross margin 1,357.4 1,292.2 5%

    Selling, general and administrative

     expenses 819.3 770.9 6%

    Impairment charges and other (0.6) 1.2 N.M.

    Special items:

     Restructuring charges 11.7 19.6 N.M.

     Merger charges 87.5 5.4 N.M.

     Litigation and Other 19.0 7.8 N.M.

    Operating earnings 420.5 487.3 (14)%

    Interest expense and other 19.1 27.7 (31)%

    Earnings before income taxes and

     discontinued operations 401.4 459.6 (13)%

    Provision for income taxes 163.7 155.8 5%

    Earnings from continuing operations 237.7 303.8 (22)%

    Earnings from discontinued

     operations (net of tax expense of

     $448.3 and $14.6 for the fourth

     quarter of fiscal 2007 and 2006,

     respectively) 664.5 17.3 N.M.

    Net earnings $902.2 $321.1 181%

    Basic Earnings per Common Share:

    Continuing operations $0.63 $0.73 (14)%

    Discontinued operations 1.76 0.04 N.M.

     Net basic earnings per Common Share $2.39 $0.77 210%

    Diluted Earnings per Common Share:

    Continuing operations $0.61 $0.72 (15)%

    Discontinued operations 1.72 0.04 N.M.

     Net diluted earnings per Common Share $2.33 $0.76 207%

    Weighted Average Number of Shares

     Outstanding:

    Basic 378.2 413.8

    Diluted 387.4 421.7

     CARDINAL HEALTH, INC. AND SUBSIDIARIES

     CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)

     Fiscal Year

    (in millions, except per Common Share

     amounts) 2007 2006 % Change

    Revenue $86,852.0 $79,664.2 9%

    Cost of products sold 81,606.7 74,850.2 9%

    Gross margin 5,245.3 4,814.0 9%

    Selling, general and administrative

     expenses 3,082.3 2,882.8 7%

    Impairment charges and other 17.3 5.8 N.M.

    Special items:

     Restructuring charges 40.1 47.6 N.M.

     Merger charges 101.5 25.4 N.M.

     Litigation and Other 630.4 7.5 N.M.

    Operating earnings 1,373.7 1,844.9 (26)%

    Interest expense and other 121.4 104.5 16%

    Earnings before income taxes and

     discontinued operations 1,252.3 1,740.4 (28)%

    Provision for income taxes 412.6 577.1 (29)%

    Earnings from continuing operations 839.7 1,163.3 (28)%

    Earnings / (loss) from discontinued

     operations (net of tax (expense) /

     benefit of ($20.4) and $22.9 for

     fiscal 2007 and 2006, respectively) 1,091.4 (163.2) N.M.

    Net earnings $1,931.1 $1,000.1 93%

    Basic Earnings per Common Share:

    Continuing operations $2.13 $2.76 (23)%

    Discontinued operations 2.76 (0.38) N.M.

     Net basic earnings per Common Share $4.89 $2.38 105%

    Diluted Earnings per Common Share:

    Continuing operations $2.07 $2.71 (24)%

    Discontinued operations 2.70 (0.38) N.M.

     Net diluted earnings per Common

     Share $4.77 $2.33 105%

    Weighted Average Number of Shares

     Outstanding:

    Basic 394.9 421.2

    Diluted 404.7 428.5

     CARDINAL HEALTH, INC. AND SUBSIDIARIES

     CONSOLIDATED BALANCE SHEETS (UNAUDITED)

     June 30, June 30,

    (in millions) 2007 2006

    Assets

    Cash and equivalents $1,308.8 $1,187.3

    Short-term investments available for sale 132.0 498.4

    Trade receivables, net 4,714.4 3,808.8

    Current portion of net investment in

     sales-type leases 354.8 290.1

    Inventories 7,383.2 7,493.0

    Prepaid expenses and other 651.3 558.8

    Assets held for sale and discontinued

     operations - 2,739.5

     Total current assets 14,544.5 16,575.9

    Property and equipment, net 1,647.0 1,505.0

    Net investment in sales-type leases,

     less current portion 820.7 754.7

    Goodwill and other intangibles, net 5,860.9 4,283.4

    Other assets 280.7 314.3

     Total assets $23,153.8 $23,433.3

    Liabilities and Shareholders' Equity

    Current portion of long-term

     obligations and other short-term borrowings $16.0 $199.0

    Accounts payable 9,162.2 8,907.8

    Other accrued liabilities 2,247.3 1,941.1

    Liabilities from businesses held for

     sale and discontinued operations 34.2 534.2

     Total current liabilities 11,459.7 11,582.1

    Long-term obligations, less current

     portion and other short-term borrowings 3,457.3 2,588.6

    Deferred income taxes and other liabilities 859.9 771.9

     Total shareholders' equity 7,376.9 8,490.7

     Total liabilities and shareholders'

     equity $23,153.8 $23,433.3

     CARDINAL HEALTH, INC. AND SUBSIDIARIES

     CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

     Fourth Quarter Fiscal Year

     (in millions) 2007 2006 2007 2006

     Cash Flows From Operating Activities:

     Net earnings $902.2 $321.1 $1,931.1 $1,000.1

     (Earnings) / loss from

     discontinued operations (664.5) (17.3) (1,091.4) 163.2

     Earnings from continuing

     operations 237.7 303.8 839.7 1,163.3

     Adjustments to reconcile earnings

     from continuing operations

     to net cash provided by

     operating activities:

     Depreciation and amortization 85.0 77.8 322.1 297.6

     Asset impairments 1.2 1.3 19.2 5.6

     Purchased in-process research

     and development 84.5 - 84.5 -

     Equity compensation 28.8 45.2 138.1 207.8

     Provision for deferred income taxes 11.7 (5.7) 11.7 (5.7)

     Provision for bad debts 7.0 10.1 24.0 24.6

     Change in operating assets and

     liabilities, net of effects from

     acquisitions:

     (Increase) / decrease in trade

     receivables 36.6 (58.9) (783.1) (895.3)

     (Increase) / decrease in

     inventories 205.9 46.0 217.4 (356.1)

     Increase in net investment in

     sales-type leases (53.8) (31.0) (130.8) (113.1)

     Increase / (decrease) in accounts

     payable (268.6) 34.6 224.4 1,538.0

     Other accrued liabilities and

     operating items, net (667.6) (25.4) 35.8 (16.5)

     Net cash provided by / (used

     in) operating activities -

     continuing operations (291.6) 397.8 1,003.0 1,850.2

     Net cash provided by operating

     activities - discontinued

     operations 104.9 98.9 220.1 270.6

     Net cash provided by / (used in)

     operating activities (186.7) 496.7 1,223.1 2,120.8

     Cash Flows From Investing Activities:

     Acquisition of subsidiaries, net

     of cash acquired (1,480.9) (256.6) (1,629.8) (362.2)

     Proceeds from sale of property

     and equipment 5.6 6.4 9.2 13.4

     Additions to property and

     equipment (114.3) (91.4) (357.4) (339.8)

     Sale / (purchase) of investment

     securities available for sale,

     net 168.0 0.8 366.5 (398.6)

     Net cash used in investing

     activities - continuing

     operations (1,421.6) (340.8) (1,611.5) (1,087.2)

     Net cash provided by / (used

     in) investing activities -

     discontinued operations

     (including proceeds of

     $3,228.9 from the sale of

     discontinued operations in

     fiscal 2007) 3,228.9 (21.0) 3,148.7 (100.0)

     Net cash provided by / (used in)

     investing activities 1,807.3 (361.8) 1,537.2 (1,187.2)

     Cash Flows From Financing Activities:

     Net change in commercial paper

     and short-term borrowings (293.3) (40.4) (38.9) (37.0)

     Reduction of long-term obligations (51.1) (3.8) (784.0) (257.6)

     Proceeds from long-term

     obligations, net of issuance costs 601.7 93.9 1,453.4 594.4

     Proceeds from issuance of Common

     Shares 233.7 13.3 552.6 240.8

     Tax benefits from exercises of

     stock options 1.1 6.3 29.9 45.3

     Dividends on Common Shares (34.9) (25.2) (144.4) (101.8)

     Purchase of treasury shares (1,636.7) (527.0) (3,662.0) (1,499.9)

     Net cash used in financing

     activities - continuing

     operations (1,179.5) (482.9) (2,593.4) (1,015.8)

     Net cash provided by / (used

     in) financing activities -

     discontinued operations 1.2 (31.4) (45.4) (16.4)

     Net cash used in financing

     activities (1,178.3) (514.3) (2,638.8) (1,032.2)

     Net increase / (decrease) in cash

     and equivalents 442.3 (379.4) 121.5 (98.6)

     Cash and equivalents at beginning

     of period 866.5 1,566.7 1,187.3 1,285.9

     Cash and equivalents at end of

     period $1,308.8 $1,187.3 $1,308.8 $1,187.3

     CARDINAL HEALTH, INC. AND SUBSIDIARIES

     BUSINESS ANALYSIS

     TOTAL COMPANY

     Non-GAAP

     Fourth Quarter Fourth Quarter

     (in millions) 2007 2006 2007 2006

     Revenue

     Amount $22,263 $21,252

     Growth Rate 5% 13%

     Operating Earnings

     Amount $421 $487 $538 $521

     Growth Rate (14)% (4)% 3% (7)%

     Earnings from Continuing Operations

     Amount $238 $304 $345 $328

     Growth Rate (22)% 11% 5% 3%

     Non-GAAP

     Fiscal Year Fiscal Year

     (in millions) 2007 2006 2007 2006

     Revenue

     Amount $86,852 $79,664

     Growth Rate 9% 10%

     Operating Earnings

     Amount $1,374 $1,845 $2,163 $1,931

     Growth Rate (26)% 4% 12% (2)%

     Earnings from Continuing Operations

     Amount $840 $1,163 $1,384 $1,225

     Growth Rate (28)% 9% 13% 3%

     See the GAAP / Non-GAAP Reconciliation for definitions and calculations

     supporting the non-GAAP balances.

     CARDINAL HEALTH, INC. AND SUBSIDIARIES

     SEGMENT BUSINESS ANALYSIS

     HEALTHCARE SUPPLY CHAIN SERVICES CLINICAL AND MEDICAL PRODUCTS

     Fourth Quarter Fourth Quarter

     (in millions) 2007 2006 (in millions) 2007 2006

     PHARMACEUTICAL CLINICAL TECHNOLOGIES AND SERVICES

     Revenue Revenue

     Amount $19,556 $18,752 Amount $756 $649

     Growth Rate 4% 14% Growth Rate 17% 9%

     Mix 86% 87% Mix 3% 3%

     Segment Profit (1) Segment Profit (1)

     Amount $303 $312 Amount $144 $96

     Growth Rate (3)% (14)% Growth Rate 50% 33%

     Mix 52% 58% Mix 24% 18%

     Segment Profit Segment Profit

     Margin 1.55% 1.66% Margin 19.06% 14.81%

     MEDICAL MEDICAL PRODUCTS MANUFACTURING

     Revenue Revenue

     Amount $1,929 $1,837 Amount $500 $440

     Growth Rate 5% 5% Growth Rate 14% 7%

     Mix 9% 8% Mix 2% 2%

     Segment Profit (1) Segment Profit (1)

     Amount $83 $85 Amount $58 $46

     Growth Rate (2)% (16)% Growth Rate 27% 25%

     Mix 14% 16% Mix 10% 8%

     Segment Profit Segment Profit

     Margin 4.32% 4.63% Margin 11.60% 10.40%

     (1) Refer to the definitions for an explanation of how the Company

     calculates segment profit.

     CARDINAL HEALTH, INC. AND SUBSIDIARIES

     SEGMENT BUSINESS ANALYSIS

     HEALTHCARE SUPPLY CHAIN SERVICES CLINICAL AND MEDICAL PRODUCTS

     Fiscal Year Fiscal Year

     (in millions) 2007 2006 (in millions) 2007 2006

     PHARMACEUTICAL CLINICAL TECHNOLOGIES AND SERVICES

     Revenue Revenue

     Amount $76,573 $70,047 Amount $2,687 $2,430

     Growth Rate 9% 10% Growth Rate 11% 11%

     Mix 86% 86% Mix 3% 3%

     Segment Profit (1) Segment Profit (1)

     Amount $1,300 $1,143 Amount $386 $320

     Growth Rate 14% (7)% Growth Rate 20% 35%

     Mix 59% 59% Mix 18% 17%

     Segment Profit Segment Profit

     Margin 1.70% 1.63% Margin 14.35% 13.18%

     MEDICAL MEDICAL PRODUCTS MANUFACTURING

     Revenue Revenue

     Amount $7,514 $7,199 Amount $1,836 $1,633

     Growth Rate 4% 6% Growth Rate 12% 6%

     Mix 9% 9% Mix 2% 2%

     Segment Profit (1) Segment Profit (1)

     Amount $318 $314 Amount $198 $165

     Growth Rate 1% (14)% Growth Rate 20% (6)%

     Mix 14% 16% Mix 9% 8%

     Segment Profit Segment Profit

     Margin 4.23% 4.37% Margin 10.76% 10.08%

     (1) Refer to the definitions for an explanation of how the Company

     calculates segment profit.

     CARDINAL HEALTH, INC. AND SUBSIDIARIES

     QUARTERLY SEGMENT BUSINESS ANALYSIS - FISCAL YEAR 2007

     HEALTHCARE SUPPLY CHAIN SERVICES

     Fiscal

     (in millions) Q1 Q2 Q3 Q4 Year

     PHARMACEUTICAL

     Revenue

     Amount $18,533 $19,238 $19,246 $19,556 $76,573

     Growth Rate 12% 13% 8% 4% 9%

     Mix 87% 87% 86% 86% 86%

     Segment Profit (1)

     Amount $289 $328 $380 $303 $1,300

     Growth Rate 28% 19% 15% (3)% 14%

     Mix 64% 60% 62% 52% 59%

     Segment Profit Margin 1.56% 1.71% 1.97% 1.55% 1.70%

     MEDICAL

     Revenue

     Amount $1,806 $1,872 $1,907 $1,929 $7,514

     Growth Rate 2% 6% 4% 5% 4%

     Mix 8% 8% 9% 9% 9%

     Segment Profit (1)

     Amount $64 $82 $89 $83 $318

     Growth Rate (1)% 15% (5)% (2)% 1%

     Mix 14% 14% 14% 14% 14%

     Segment Profit Margin 3.55% 4.38% 4.65% 4.32% 4.23%

     The sum of the components may not equal fiscal year amounts due to

     rounding.

     (1) Refer to the definitions for an explanation of how the Company

     calculates segment profit.

     CARDINAL HEALTH, INC. AND SUBSIDIARIES

     QUARTERLY SEGMENT BUSINESS ANALYSIS - FISCAL YEAR 2007

     CLINICAL AND MEDICAL PRODUCTS

     Fiscal

     (in millions) Q1 Q2 Q3 Q4 Year

     CLINICAL TECHNOLOGIES AND SERVICES

     Revenue

     Amount $594 $662 $674 $756 $2,687

     Growth Rate 3% 10% 12% 17% 11%

     Mix 3% 3% 3% 3% 3%

     Segment Profit (1)

     Amount $51 $92 $98 $144 $386

     Growth Rate (10)% 16% 12% 50% 20%

     Mix 12% 17% 16% 24% 18%

     Segment Profit Margin 8.66% 13.87% 14.58% 19.06% 14.35%

     MEDICAL PRODUCTS MANUFACTURING

     Revenue

     Amount $424 $455 $458 $500 $1,836

     Growth Rate 11% 15% 11% 14% 12%

     Mix 2% 2% 2% 2% 2%

     Segment Profit (1)

     Amount $46 $47 $47 $58 $198

     Growth Rate 36% 17% 4% 27% 20%

     Mix 10% 9% 8% 10% 9%

     Segment Profit Margin 10.86% 10.32% 10.20% 11.60% 10.76%

     The sum of the components may not equal fiscal year amounts due to

     rounding.

    (1) Refer to the definitions for an explanation of how the Company

     calculates segment profit.

     CARDINAL HEALTH, INC. AND SUBSIDIARIES

     QUARTERLY SEGMENT BUSINESS ANALYSIS - FISCAL YEAR 2006

     HEALTHCARE SUPPLY CHAIN SERVICES

     Fiscal

     (in millions) Q1 Q2 Q3 Q4 Year

     PHARMACEUTICAL

     Revenue

     Amount $16,533 $16,977 $17,785 $18,752 $70,047

     Growth Rate 10% 8% 9% 14% 10%

     Mix 86% 86% 86% 87% 86%

     Segment Profit 1

     Amount $225 $276 $329 $312 $1,143

     Growth Rate 7% 8% (16)% (14)% (7)%

     Mix 59% 59% 59% 58% 59%

     Segment Profit Margin 1.36% 1.63% 1.85% 1.66% 1.63%

     MEDICAL

    ` Revenue

     Amount $1,763 $1,770 $1,829 $1,837 $7,199

     Growth Rate 6% 5% 7% 5% 6%

     Mix 9% 9% 9% 8% 9%

     Segment Profit 1

     Amount $65 $71 $93 $85 $314

     Growth Rate (19)% (13)% (11)% (16)% (14)%

     Mix 17% 15% 17% 16% 16%

     Segment Profit Margin 3.66% 4.03% 5.11% 4.63% 4.37%

     The sum of the components may not equal fiscal year amounts due to

     rounding.

     (1) Refer to the definitions for an explanation of how the Company

     calculates segment profit.

     CARDINAL HEALTH, INC. AND SUBSIDIARIES

     QUARTERLY SEGMENT BUSINESS ANALYSIS - FISCAL YEAR 2006

     CLINICAL AND MEDICAL PRODUCTS

     Fiscal

     (in millions) Q1 Q2 Q3 Q4 Year

     CLINICAL TECHNOLOGIES AND SERVICES

     Revenue

     Amount $576 $603 $603 $649 $2,430

     Growth Rate 10% 10% 15% 9% 11%

     Mix 3% 3% 3% 3% 3%

     Segment Profit (1)

     Amount $57 $79 $88 $96 $320

     Growth Rate 42% 16% 54% 33% 35%

     Mix 15% 17% 16% 18% 17%

     Segment Profit Margin 9.88% 13.15% 14.61% 14.81% 13.18%

     MEDICAL PRODUCTS MANUFACTURING

     Revenue

     Amount $383 $397 $413 $440 $1,633

     Growth Rate 8% 3% 6% 7% 6%

     Mix 2% 2% 2% 2% 2%

     Segment Profit (1)

     Amount $34 $40 $45 $46 $165

     Growth Rate 29% (26)% (24)% 25% (6)%

     Mix 9% 9% 8% 8% 8%

     Segment Profit Margin 8.82% 10.10% 10.87% 10.40% 10.08%

     The sum of the components may not equal fiscal year amounts due to

     rounding.

     (1) Refer to the definitions for an explanation of how the Company

     calculates segment profit.

     CARDINAL HEALTH, INC. AND SUBSIDIARIES

     ASSET MANAGEMENT ANALYSIS

     Fourth Quarter Fiscal Year

     2007 2006 2007 2006

     Receivable Days 20.5 15.9

     Days Inventory on Hand 28 30

     Debt to Total Capital 32% 25%

     Net Debt to Capital 22% 11%

     Return on Equity 47.3% 15.0% 23.5% 11.5%

     Non-GAAP Return on Equity 17.3% 16.2% 16.9% 12.4%

     Return on Invested Capital 18.43% 6.09% 9.38% 4.73%

     Non-GAAP Return on Invested Capital 7.00% 6.88% 7.14% 5.38%

     Effective Tax Rate from Continuing

     Operations 40.8% 33.9% 33.0% 33.2%

     Non-GAAP Effective Tax Rate from

     Continuing Operations 33.5% 33.6% 32.4% 32.9%

     See the GAAP / Non-GAAP Reconciliation for definitions and calculations

     supporting the non-GAAP balances.

     CARDINAL HEALTH, INC. AND SUBSIDIARIES

     SCHEDULE OF NOTABLE ITEMS

     Fourth Quarter Fiscal Year

     (in millions, except per Common

     Share amounts) 2007 2006 2007 2006

     Special Items

     Restructuring charges $(11.7) $(19.6) $(40.1) $(47.6)

     Merger charges (87.5) (5.4) (101.5) (25.4)

     Litigation and other (19.0) (7.8) (630.4) (7.5)

     Total special items (118.2) (32.8) (772.0) (80.5)

     Tax benefit 10.4 9.8 243.1 22.6

     Special items, net of tax $(107.8) $(23.0) $(528.9) $(57.9)

     Decrease to diluted EPS from

     continuing operations $(0.28) $(0.06) $(1.31) $(0.14)

     Impairment Charges and Other

     Impairment charges and other $0.6 $(1.2) $(17.3) $(5.8)

     Tax (expense) / benefit (0.2) 0.4 1.6 2.0

     Net impairment charges and other,

     net of tax $0.4 $(0.8) $(15.7) $(3.8)

     Decrease to diluted EPS from

     continuing operations $0.00 $(0.00) $(0.04) $(0.01)

     Non-Recurring and Other Items

     Total non-recurring $- $- $- $-

     Vendor credit adjustment (1) - - - (25.9)

     Total non-recurring and other items - - - (25.9)

     Tax benefit - - - 8.4

     Total non-recurring and other items,

     net of tax $- $- $- $(17.5)

     Decrease to diluted EPS from

     continuing operations $- $- $- $(0.04)

     Weighted Average Number of Diluted

     Shares Outstanding 387.4 421.7 404.7 428.5

    (1) During the fourth quarter of fiscal 2007, the Company reversed $3.5

     million of the vendor credit adjustment reserve established in fiscal

     2006. However, beginning in fiscal 2007, the Company ceased using the

     category non-recurring and other items; therefore, the reversal of the

     reserve is not included as a notable item.

     CARDINAL HEALTH, INC. AND SUBSIDIARIES

     GAAP / NON-GAAP RECONCILIATION

     Fourth Quarter 2007

     Impairment

     (in millions, except per Common Special Charges Non-

     Share amounts) GAAP Items and Other GAAP

     Operating Earnings

     Amount $421 $118 ($1) $538

     Growth Rate (14)% 3%

     Provision for Income Taxes $164 $10 - $174

     Earnings from Continuing Operations

     Amount $238 $108 - $345

     Growth Rate (22)% 5%

     Diluted EPS from Continuing

     Operations

     Amount $0.61 $0.28 - $0.89

     Growth Rate (15)% 14%

     Fourth Quarter 2006

     Impairment

     Special Charges Non-

     GAAP Items and Other GAAP

     Operating Earnings

     Amount $487 $33 $1 $521

     Growth Rate (4)% (7)%

     Provision for Income Taxes $156 $10 - $166

     Earnings from Continuing Operations

     Amount $304 $23 $1 $328

     Growth Rate 11% 3%

     Diluted EPS from Continuing

     Operations

     Amount $0.72 $0.06 - $0.78

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

     CARDINAL HEALTH, INC. AND SUBSIDIARIES

     GAAP / NON-GAAP RECONCILIATION

     Fiscal Year 2007

     Impairment

     (in millions, except per Common Special Charges Non-

     Share amounts) GAAP Items and Other GAAP

     Operating Earnings

     Amount $1,374 $772 $17 $2,163

     Growth Rate (26)% 12%

     Provision for Income Taxes $413 $243 $2 $657

     Earnings from Continuing Operations

     Amount $840 $529 $16 $1,384

     Growth Rate (28)% 13%

     Diluted EPS from Continuing

     Operations

     Amount $2.07 $1.31 $0.04 $3.42

     Growth Rate (24)% 20%

     Fiscal Year 2006

     Impairment

     Special Charges Non-

     GAAP Items and Other GAAP

     Operating Earnings

     Amount $1,845 $81 $6 $1,931

     Growth Rate 4% (2)%

     Provision for Income Taxes $577 $23 $2 $602

     Earnings from Continuing Operations

     Amount $1,163 $58 $4 $1,225

     Growth Rate 9% 3%

     Diluted EPS from Continuing

     Operations

     Amount $2.71 $0.14 $0.01 $2.86

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

     CARDINAL HEALTH, INC. AND SUBSIDIARIES

     GAAP / NON-GAAP RECONCILIATION

     Fourth Quarter Fiscal Year

     (in millions) 2007 2006 2007 2006

     GAAP Return on Equity 47.3% 15.0% 23.5% 11.5%

     Non-GAAP Return on Equity

     Net earnings $902.2 $321.1 $1,931.1 $1,000.1

     Special items, net of tax, in

     continuing operations 107.8 23.0 528.9 57.9

     Special items, net of tax, in

     discontinued operations - 0.9 4.4 12.8

     Gain on sale of PTS, net of tax,

     in discontinued operations (679.5) - (1,072.4) -

     Adjusted net earnings $330.5 $345.0 $1,392.0 $1,070.8

     Annualized 1,322.0 1,380.0 1,392.0 1,070.8

     Divided by average

     shareholders' equity (1) $7,623.2 $8,538.7 $8,213.2 $8,660.1

     Non-GAAP return on equity 17.3% 16.2% 16.9% 12.4%

     Fourth Quarter Fiscal Year

     (in millions) 2007 2006 2007 2006

     GAAP Return on Invested Capital 18.43% 6.09% 9.38% 4.73%

     Non-GAAP Return on Invested

     Capital

     Net earnings $902.2 $321.1 $1,931.1 $1,000.1

     Special items, net of tax, in

     continuing operations 107.8 23.0 528.9 57.9

     Special items, net of tax, in

     discontinued operations - 0.9 4.4 12.8

     Interest expense and other,

     net of tax 12.2 17.8 77.7 66.8

     Gain on sale of PTS, net of

     tax, in discontinued

     operations (679.5) - (1,072.4) -

     Adjusted net earnings $342.7 $362.8 $1,469.7 $1,137.6

     Annualized 1,370.8 1,451.2 1,469.7 1,137.6

     Divided by average total

     invested capital (2) $19,583.8 $21,080.6 $20,580.7 $21,146.3

     Non-GAAP return on invested

     capital 7.00% 6.88% 7.14% 5.38%

    (1) The average shareholders' equity shown above is calculated using the

     average of the prior and current quarters except for year-to-date

     which is calculated as the average of the prior years' fourth quarter

     plus each of the current year quarters.

    (2) The average total invested capital shown above is calculated using the

     average of the prior and current quarters except for year-to-date

     which is calculated as the average of the prior year fourth quarter

     plus each of the current year quarters. Total invested capital is

     calculated as the sum of the current portion of long-term obligations

     and other short-term borrowings, long-term obligations, current

     portion of long-term obligations and other short-term borrowings in

     discontinued operations, long-term obligations in discontinued

     operations, total shareholders' equity and unrecorded goodwill.

     Beginning in the fourth quarter of 2007, unrecorded goodwill is $7.5

     billion. For all other periods presented, unrecorded goodwill is $9.7

     billion. Current portion of long-term obligations and other short-

     term borrowings in discontinued operations, and long-term obligations

     in discontinued operations were $59.2 million, $46.6 million, $41.3

     million and $12.3 million at June 30, 2006, September 30, 2006,

     December 31, 2006 and March 31, 2007, respectively, and $81.1 million,

     $84.7 million, $79.2 million and $86.6 million at June 30, 2005,

     September 30, 2005, December 31, 2005 and March 31, 2006, respectively.

     CARDINAL HEALTH, INC. AND SUBSIDIARIES

     GAAP / NON-GAAP RECONCILIATION

     Fourth Quarter Fiscal Year

     (in millions) 2007 2006 2007 2006

     GAAP Effective Tax Rate from

     Continuing Operations 40.8% 33.9% 33.0% 33.2%

     Non-GAAP Effective Tax Rate from

     Continuing Operations

     Earnings before income taxes and

     discontinued operations $401.4 $459.6 $1,252.3 $1,740.4

     Special items 118.2 32.8 772.0 80.5

     Adjusted earnings before income

     taxes and discontinued operations $519.6 $492.4 $2,024.3 $1,820.9

     Provision for income taxes $163.7 $155.8 $412.6 $577.1

     Special items tax benefit 10.4 9.8 243.1 22.6

     Adjusted provision for income taxes $174.1 $165.6 $655.7 $599.7

     Non-GAAP effective tax rate from

     continuing operations 33.5% 33.6% 32.4% 32.9%

     Fourth Quarter

     2007 2006

     Debt to Total Capital 32% 25%

     Net Debt to Capital

     Current portion of long-term

     obligations and other short-term

     borrowings $16.0 $199.0

     Long-term obligations, less current

     portion and other short-term borrowings 3,457.3 2,588.6

     Debt 3,473.3 2,787.6

     Cash and equivalents (1,308.8) (1,187.3)

     Short-term investments available for sale (132.0) (498.4)

     Net debt $2,032.5 $1,101.9

     Total shareholders' equity $7,376.9 $8,490.7

     Capital $9,409.4 $9,592.6

     Net debt to capital 22% 11%

     Forward-Looking Non-GAAP Financial Measures

     The Company presents non-GAAP operating earnings, non-GAAP earnings from

     continuing operations, non-GAAP return on equity and non-GAAP effective

     tax rate from continuing operations (and presentations derived from these

     financial measures) on a forward-looking basis. The most directly

     comparable forward-looking GAAP measures are operating earnings, earnings

     from continuing operations, return on equity and effective tax rate from

     continuing operations. The Company is unable to provide a quantitative

     reconciliation of these forward-looking non-GAAP measures to the most

     comparable forward-looking GAAP measures because the Company cannot

     reliably forecast special items and impairment charges and other, which

     are difficult to predict and estimate and are primarily dependent on

     future events. Please note that the unavailable reconciling items could

     significantly impact the Company's future financial results.

     CARDINAL HEALTH, INC. AND SUBSIDIARIES

     DEFINITIONS

    GAAP

    Debt: long-term obligations plus short-term borrowings

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

    Diluted EPS from Continuing Operations: earnings from continuing operations divided by diluted weighted average shares outstanding

    Effective Tax Rate from Continuing Operations: provision for income taxes divided by earnings before income taxes and discontinued operations

    Operating Cash Flow: net cash provided by / (used in) operating activities from continuing operations

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

    Segment Profit Margin: segment profit divided by revenue

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

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

    Return on Invested Capital: annualized net earnings divided by (average total shareholders' equity plus debt plus unrecorded goodwill)

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

    NON-GAAP

    Economic Profit: segment net operating earnings, after-tax minus (tangible capital multiplied by weighted average cost of capital); Tangible Capital is the quarterly average calculated as total assets allocated to the segment less (total liabilities allocated to the segment, goodwill and intangibles, cash and equivalents and short term investments available for sale)

    Economic Profit Margin: economic profit divided by revenue

    Net Debt to Capital: net debt divided by (net debt plus total shareholders' equity)

    Net Debt: debt minus (cash and equivalents and short-term investments available for sale)

    Non-GAAP Diluted EPS from Continuing Operations: non-GAAP earnings from continuing operations divided by diluted weighted average shares outstanding

    Non-GAAP Diluted EPS from Continuing Operations Growth Rate: (current period non-GAAP diluted EPS from continuing operations minus prior period non- GAAP diluted EPS from continuing operations) divided by prior period non-GAAP diluted EPS from continuing operations

    Non-GAAP Earnings from Continuing Operations: earnings from continuing operations excluding special items and impairment charges and other, both net of tax

    Non-GAAP Earnings from Continuing Operations Growth Rate: (current period non-GAAP earnings from continuing operations minus prior period non-GAAP earnings from continuing operations) divided by prior period non-GAAP earnings from continuing operations

    Non-GAAP Effective Tax Rate from Continuing Operations: (provision for income taxes adjusted for special items) divided by earnings before income taxes and discontinued operations adjusted for special items)

    Non-GAAP Operating Earnings: operating earnings excluding special items and impairment charges and other

    Non-GAAP Operating Earnings Growth Rate: (current period non-GAAP operating earnings minus prior period non-GAAP operating earnings) divided by prior period non-GAAP operating earnings

    Non-GAAP Operating Margin: non-GAAP operating earnings divided by revenue

    Non-GAAP Return on Equity: (annualized current period net earnings plus special items minus special items tax benefit) divided by average shareholders' equity (1)

    Non-GAAP Return on Invested Capital: (annualized net earnings plus special items minus special items tax benefit plus interest expense and other, net of tax) divided by (average total shareholders' equity plus debt plus unrecorded goodwill) (1)

    (1) For the three months ended June 30, 2007, the numerator in calculating this non-GAAP financial measure also excludes the $679.5 million net of tax gain on the sale of PTS recorded in discontinued operations in the fourth quarter of fiscal 2007. For the fiscal year ended June 30, 2007, the numerator in calculating this non-GAAP financial measure also excludes the $1.1 billion net of tax gain on the sale of PTS recorded in discontinued operations of which $425 million was recorded in the second quarter of fiscal 2007.
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