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Cardinal Health Reports Third-Quarter Results
  • Revenue increases to $24.3 billion
  • Earnings from continuing operations increase 5 percent to $225 million or
  • 3 percent to $0.62 on a per diluted share basis
  • Non-GAAP diluted earnings per share (EPS) from continuing operations decline 8 percent to $0.61
  • Fiscal 2010 non-GAAP diluted EPS outlook increases to $2.15 to $2.20
  • Preliminary fiscal 2011 non-GAAP diluted EPS outlook in the range of $2.35 to $2.45

DUBLIN, Ohio, April 29, 2010 /PRNewswire-FirstCall/ — Cardinal Health today reported fiscal third-quarter revenue of $24.3 billion and non-GAAP diluted earnings per share (EPS) from continuing operations(1) of $0.61.

The quarter was highlighted by a 7 percent increase in Pharmaceutical segment profit and strong operating cash flow of $879 million for the quarter.

GAAP operating earnings declined 4 percent to $366 million, or 7 percent to $385 million on a non-GAAP basis. SG&A expense was higher sequentially and year over year due to performance-based employee compensation that reflects the company's expected fiscal 2010 results.

Third-quarter GAAP earnings from continuing operations were $225 million or $0.62 per share. GAAP results include a positive $0.01 per share net after-tax contribution, primarily from the gain on the sale of CareFusion stock and partially offset by the after-tax impact from impairments and loss on the sale of assets.

"We are pleased with our third-quarter performance and our continued momentum for the year," said George Barrett, chairman and CEO of Cardinal Health. "We had strong performance from our Pharmaceutical segment, which was better than we anticipated. As expected, our Medical segment declined versus the same period last year, but grew sequentially from the prior quarter. We were particularly encouraged by the year-over-year growth in our gross margin rate, and another strong quarter of operating cash flow and working capital improvements."

Q3 FY10 SUMMARY

                                      Q3 FY10         Q3 FY09      Y/Y
                                      -------         -------      ---
  Revenue                          $24.3 billion   $24.1 billion      1%
  -------                          -------------   -------------    ---


  Operating Earnings                $366 million    $381 million    (4)%
  ------------------                ------------    ------------    ---
  Non-GAAP Operating Earnings(2)    $385 million    $415 million    (7)%
  ------------------------------    ------------    ------------    ---


  Earnings from Continuing
   Operations                       $225 million    $215 million      5%
  ------------------------          ------------    ------------    ---
  Non-GAAP Earnings from
   Continuing                       $222 million    $237 million    (6)%
  ----------------------            ------------    ------------    ---
   Operations(3)
   -------------


  Diluted EPS from Continuing
   Operations                              $0.62           $0.60      3%
  ---------------------------              -----           -----    ---
  Non-GAAP Diluted EPS from
   Continuing                              $0.61           $0.66    (8)%
  -------------------------                -----           -----    ---
   Operations
   ----------

 

THIRD-QUARTER SEGMENT RESULTS

Pharmaceutical Segment

Revenue for the Pharmaceutical segment increased to $22.2 billion. Sales to non-bulk customers increased 0.5 percent to $11.3 billion and sales to bulk customers increased 0.5 percent to $10.9 billion. Segment profit increased 7 percent to $307 million primarily driven by solid performance from branded manufacturer agreements, positive margin contribution from the company's generic programs and disciplined expense management. The increase in segment profit was partially offset by previously disclosed contract repricings and the Medicine Shoppe International transition. The company continues to actively manage supply disruptions of medical isotopes for its nuclear pharmacy business. These shortages are now expected to continue through at least the first quarter of next fiscal year.

In addition, the company completed the sale of its SpecialtyScripts business during the third quarter and recently entered into a definitive agreement to sell its Martindale generic injectible manufacturing business, which it expects to close before the end of the fiscal year.

                   Q3 FY10         Q3 FY09      Y/Y
                   -------         -------      ---
  Revenue       $22.2 billion   $22.1 billion    0.5%
  -------       -------------   -------------    ---
  Segment
   Profit        $307 million    $286 million      7%
  -------        ------------    ------------    ---


Medical Segment

Revenue for the Medical segment increased 7 percent to $2.1 billion, primarily from sales growth with existing domestic customers and strong revenue growth from the Canadian business. As expected, segment profit declined 16 percent year over year to $108 million, primarily due to an unusual year-over-year comparison in the cost of goods sold, the aforementioned impact of performance-based employee compensation and increased investment spend associated with the Medical Business Transformation. The decline in segment profit was partially offset by the positive profit impact from revenue growth within the lab and ambulatory businesses and preferred products. Segment profit increased sequentially from the second quarter as anticipated and is expected to return to year-over-year growth for the fourth quarter.

                  Q3 FY10        Q3 FY09       Y/Y
                  -------        -------       ---
  Revenue       $2.1 billion   $2.0 billion       7%
  -------       ------------   ------------     ---
  Segment
   Profit       $108 million   $128 million    (16)%
  -------       ------------   ------------    ----


FISCAL Q4 AND FISCAL 2011 OUTLOOK

"With the first nine months of the fiscal year behind us, we are trending slightly better than our previous expectations, and we now anticipate non-GAAP diluted EPS from continuing operations for fiscal 2010 will be in the range of $2.15 to $2.20," Barrett said.

"Although we don't typically provide annual guidance at the end of the third quarter, this has been a year of transitions for Cardinal Health, and we wanted to provide an early look at fiscal 2011. Based on the progress we've made year-to-date, our preliminary view of fiscal 2011 non-GAAP diluted EPS from continuing operations is in the range of $2.35 to $2.45. We expect to provide more specifics for fiscal 2011 when we report fourth-quarter and full-year results."

CONFERENCE CALL

Cardinal Health will host a conference call and webcast today at 8:30 a.m. EDT to discuss third-quarter results. To access the call and corresponding slide presentation, go to the Investors page at cardinalhealth.com/investors or dial 617.213.4850, passcode 26885216. Presentation slides and an audio replay will be archived on the Web site after the conclusion of the meeting. The audio replay will also be available until 11:30 p.m. on May 6 by dialing 617.801.6888, passcode 70784421.

UPCOMING EVENTS

Cardinal Health will be participating in the following New York-based health care investor conferences:

  • Bank of America Merrill Lynch Health Care Conference: Tuesday, May 11 at 10 a.m. EDT
  • Citi Investment Research's 2010 Global Healthcare Conference: Wednesday, May 26 at 11 a.m. EDT
  • Bernstein Strategic Decisions Conference: Thursday, June 3 at 10 a.m. EDT

At these events, company executives will discuss Cardinal Health's diverse products and services, company performance and strategies for continued growth. To access more details and live webcasts of these events, including remarks, go to the Investors page at cardinalhealth.com.


About Cardinal Health
Headquartered in Dublin, Ohio, Cardinal Health, Inc. (NYSE:CAH) is a $96 billion health care services company that improves the cost-effectiveness of health care. As the business behind health care, Cardinal Health helps pharmacies, hospitals and ambulatory care sites focus on patient care while reducing costs, improving efficiency and quality, and increasing profitability. 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 #17 on the Fortune 500, Cardinal Health employs more than 30,000 people worldwide. More information about the company may be found at cardinalhealth.com.

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

2 Non-GAAP operating earnings: Operating earnings excluding (1) restructuring and employee severance, (2) impairments and loss on sale of assets, (3) litigation (credits)/charges, net, and (4) Other Spinoff Costs (as defined at the end of the attached tables) included within distribution, selling, general and administrative expenses.

3 Non-GAAP earnings from continuing operations: Earnings from continuing operations excluding (1) restructuring and employee severance, (2) impairments and loss on sale of assets, (3) litigation (credits)/charges, net, (4) Other Spinoff Costs, and (5) gain on sale of CareFusion stock, each net of tax.

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 cardinalhealth.com.

Cardinal Health uses its Web site 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 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 (but are not limited to) uncertainties and risks regarding: the effect of the CareFusion spinoff on Cardinal Health; the performance of CareFusion and the proceeds realized from future sales of CareFusion stock; uncertainties due to government health care reform including the recently enacted federal health care reform legislation; 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; disruptions in the supply of medical isotopes for the nuclear pharmacy business; the timing of generic and branded pharmaceutical introductions and the frequency or rate of branded pharmaceutical price appreciation or generic pharmaceutical price deflation; 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 or administrative proceedings; the effects of disruptions in the financial markets, including uncertainties related to the availability and/or cost of credit on Cardinal Health's customers and vendors; and conditions in the pharmaceutical market and general economic and market conditions. In addition, 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 (including all amendments to those reports) and exhibits to those reports. This news release reflects management's views as of April 29, 2010. 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
               CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)


                                             Third Quarter
                                             -------------
  (in millions, except per Common
   Share amounts)                          2010           2009  % Change
                                           ----           ----

  Revenue                             $24,342.8      $24,089.3        1 %
  Cost of products sold                23,332.7       23,102.4        1 %
                                       --------       --------
  Gross margin                          1,010.1          986.9        2 %
  Operating expenses
    Distribution, selling, general
     and administrative expenses          628.6          573.0       10 %
    Restructuring and employee
     severance                             13.9           31.7      N.M.
    Impairments and loss on sale of
     assets                                 4.2            0.7      N.M.
    Litigation (credits)/charges, net      (2.9)           0.6      N.M.
                                           ----            ---
  Operating earnings                      366.3          380.9       (4)%

  Other (income)/expense, net (1)          (1.4)           6.5      N.M.
  Interest expense, net                    27.7           30.3       (9)%
  Gain on sale of CareFusion common
   stock (1)                              (23.2)             -      N.M.
                                          -----            ---
  Earnings before income taxes and
   discontinued operations                363.2          344.1        6 %

  Provision for income taxes              138.4          129.0        7 %
                                          -----          -----
  Earnings from continuing
   operations                             224.8          215.1        5 %

  Earnings/(loss) from
   discontinued operations (net of
   tax benefit/(expense) of $(7.0)
   million and $6.0 million for the
   third quarter of fiscal 2010 and
   2009, respectively)                     (2.4)       97.8    N.M.

  Net earnings                           $222.4         $312.9      (29)%
                                         ------         ------

  Basic earnings/(loss) per Common
   Share:
  Continuing operations                   $0.63          $0.60        5 %
  Discontinued operations                 (0.01)          0.28      N.M.
                                          -----           ----
    Net basic earnings per Common
     Share                                $0.62          $0.88      (30)%
                                          =====          =====

  Diluted earnings/(loss) per
   Common Share:
  Continuing operations                   $0.62          $0.60        3 %
  Discontinued operations                 (0.01)          0.27      N.M.
                                          -----           ----
    Net diluted earnings per Common
     Share                                $0.61          $0.87      (30)%
                                          =====          =====

  Weighted average number of Common
   Shares outstanding:
  Basic                                   358.7          358.1
  Diluted                                 361.8          360.9

  (1)  During the third quarter of fiscal 2010, the Company began
  presenting the gain on sale of CareFusion common stock separately on
  its condensed consolidated statements of earnings.  This amount had
  previously been included in other (income)/expense, net.  Prior
  periods have been changed to conform with this new presentation.


                        CARDINAL HEALTH, INC. AND SUBSIDIARIES
              CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)


                                               Year-to-Date
                                               ------------
  (in millions, except per Common
   Share amounts)                            2010           2009   % Change
                                             ----           ----

  Revenue                               $74,043.2      $71,644.3         3 %
  Cost of products sold                  71,166.6       68,841.0         3 %
                                         --------       --------
  Gross margin                            2,876.6        2,803.3         3 %
  Operating expenses
    Distribution, selling, general and
     administrative expenses              1,819.8        1,741.8         4 %
    Restructuring and employee
     severance                               84.4           69.3       N.M.
    Impairments and loss on sale of
     assets                                  28.2           11.2       N.M.
    Litigation (credits)/charges, net       (28.8)           0.3       N.M.
                                            -----            ---
  Operating earnings                        973.0          980.7        (1)%

  Other (income)/expense, net (1)           (15.7)          28.7       N.M.
  Interest expense, net                      88.9           81.9         9 %
  Loss on extinguishment of debt             39.9              -       N.M.
  Gain on sale of CareFusion common
   stock (1)                                (43.3)             -       N.M.
                                            -----            ---
  Earnings before income taxes and
   discontinued operations                  903.2          870.1         4 %

  Provision for income taxes                510.0          313.9       N.M.
                                            -----          -----
  Earnings from continuing operations       393.2          556.2       (29)%

  Earnings from discontinued
   operations (net of tax expense of
   $35.5 million and $82.7 million
   for fiscal 2010 and 2009 year-to-
   date, respectively)                       25.5       322.2    N.M.

  Net earnings                             $418.7         $878.4       (52)%
                                           ------         ------

  Basic earnings per Common Share:
  Continuing operations                     $1.10          $1.56       (29)%
  Discontinued operations                    0.07           0.90       N.M.
                                             ----           ----
    Net basic earnings per Common Share     $1.17          $2.46       (52)%
                                            =====          =====

  Diluted earnings per Common Share:
  Continuing operations                     $1.09          $1.54       (29)%
  Discontinued operations                    0.07           0.89       N.M.
                                             ----           ----
    Net diluted earnings per Common
     Share                                  $1.16          $2.43       (52)%
                                            =====          =====

  Weighted average number of Common
   Shares outstanding:
  Basic                                     359.0          357.3
  Diluted                                   361.2          361.0

  (1)  During the third quarter of fiscal 2010, the Company began
  presenting the gain on sale of CareFusion common stock separately on
  its condensed consolidated statements of earnings.  This amount had
  previously been included in other (income)/expense, net.  Prior
  periods have been changed to conform with this new presentation.


                   CARDINAL HEALTH, INC. AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED BALANCE SHEETS

                                                   March 31,  June 30,
  (in millions)                                          2010      2009
                                                         ----      ----
                                                  (UNAUDITED)
  Assets
  Cash and equivalents                               $2,638.8  $1,221.6
  Trade receivables, net                              5,550.2   5,214.9
  Inventories                                         7,214.9   6,832.8
  Prepaid expenses and other                            534.5     523.0
  Assets from businesses held for sale and
   discontinued operations                              138.9   7,189.4
                                                        -----   -------
    Total current assets                             16,077.3  20,981.7
                                                     --------  --------

  Property and equipment, net                         1,406.1   1,464.5
  Investment in CareFusion                              805.2         -
  Goodwill and other intangibles, net                 2,261.8   2,266.9
  Other assets                                          719.8     405.7
                                                        -----     -----
    Total assets                                    $21,270.2 $25,118.8
                                                    ========= =========


  Liabilities and Shareholders' Equity
  Current portion of long-term obligations and
   other short-term borrowings                         $232.6    $366.2
  Accounts payable                                   10,766.6   9,041.9
  Other accrued liabilities                           1,712.9   1,496.2
  Liabilities from businesses held for sale and
   discontinued operations                               35.3   1,370.9
                                                         ----   -------
    Total current liabilities                        12,747.4  12,275.2
                                                     --------  --------

  Long-term obligations, less current portion and
   other short-term borrowings                        1,875.6   3,271.6
  Deferred income taxes and other liabilities         1,286.3     847.3
    Total shareholders' equity                        5,360.9   8,724.7
    Total liabilities and shareholders' equity      $21,270.2 $25,118.8
                                                    ========= =========




                       CARDINAL HEALTH, INC. AND SUBSIDIARIES
             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

                         Third Quarter               Year-to-Date
                         -------------               ------------
  (in millions)         2010          2009           2010            2009
                        ----          ----           ----            ----

  Cash Flows From
   Operating
   Activities:
  Net earnings        $222.4        $312.9         $418.7          $878.4
  (Earnings)/loss
   from
   discontinued
   operations            2.4         (97.8)         (25.5)         (322.2)
                         ---         -----          -----          ------
    Earnings from
     continuing
     operations        224.8         215.1          393.2           556.2
  Adjustments to
   reconcile
   earnings from
   continuing
   operations
    to net cash
     provided by
     operating
     activities:
    Depreciation
     and
     amortization       68.6          52.7          194.4           168.8
    Loss on debt
     extinguishment        -             -           39.9               -
    Gain on sale of
     CareFusion
     common stock      (23.2)            -          (43.3)              -
    Impairments and
     loss on sale
     of assets           4.2           0.7           28.2            11.2
    Share-based
     payment
     compensation       21.7          32.4           79.0            82.6
    Provision for
     bad debts          11.8          23.5           33.2            45.2
  Change in
   operating
   assets and
   liabilities,
   net of
    effects from
     acquisitions:
    Increase in
     trade
     receivables      (634.5)       (743.8)        (365.4)         (982.4)
    Decrease/
     (increase) in
     inventories       746.1         476.5         (381.1)       (1,343.7)
    Increase in
     accounts
     payable           223.5         335.5        1,722.7         1,634.6
    Other accrued
     liabilities
     and operating
     items, net        235.3         318.4          (38.8)           32.0
                       -----         -----          -----            ----
      Net cash
       provided by
       operating
       activities -
       continuing
       operations      878.3      711.0      1,662.0        204.5
      Net cash
       provided by/
       (used in)
       operating
       activities -
       discontinued
       operations        1.1      (93.2)       147.9        624.4
                         ---         -----          -----           -----
  Net cash
   provided by
   operating
   activities          879.4         617.8        1,809.9           828.9
                       -----         -----        -------           -----

  Cash Flows From
   Investing
   Activities:
  Acquisition of
   subsidiaries,
   net of
   divestitures
   and cash
   acquired             12.8      (12.3)       (19.2)       (18.5)
  Proceeds from
   sale of
   property and
   equipment             1.5           0.2            5.8            12.6
  Additions to
   property and
   equipment           (61.9)        (61.1)        (141.8)         (191.6)
  Proceeds from
   sale of
   CareFusion
   common stock        135.7             -          270.7               -
                       -----           ---          -----             ---
      Net cash
       provided by/
       (used in)
       investing
       activities -
       continuing
       operations       88.1      (73.2)       115.5       (197.5)
      Net cash used
       in investing
       activities -
       discontinued
       operations          -      (19.9)        (9.9)       (71.5)
                         ---         -----           ----           -----
  Net cash
   provided by/
   (used in)
   investing
   activities           88.1      (93.1)       105.6       (269.0)
                        ----         -----          -----          ------

  Cash Flows From
   Financing
   Activities:
  Net change in
   commercial
   paper and
   short-term
   borrowings              -     (101.1)           -            -
  Reduction of
   long-term
   obligations          (0.3)         (2.6)      (1,485.2)         (307.1)
  Proceeds from
   long-term
   obligations,
   net of
   issuance costs          -        3.1            -         24.5
  Issuance of
   Common Shares        (3.4)         18.0           24.5            38.7
  Tax expense
   from stock
   options              (8.8)         (2.5)         (14.8)           (0.2)
  Payment of
   premiums for
   debt
   extinguishment          -             -          (66.4)              -
  Dividends on
   Common Shares       (63.0)        (50.1)        (190.2)         (150.1)
  Purchase of
   treasury
   shares                  -             -          (50.0)              -
                         ---           ---          -----             ---
      Net cash used
       in financing
       activities -
       continuing
       operations      (75.5)    (135.2)    (1,782.1)      (394.2)
      Net cash
       provided by/
       (used in)
       financing
       activities -
       discontinued
       operations          -       (0.3)     1,283.8         (2.7)
                         ---          ----        -------            ----
  Net cash used
   in financing
   activities          (75.5)       (135.5)        (498.3)         (396.9)
                       -----        ------         ------          ------

  Net increase in
   cash and
   equivalents         892.0         389.2        1,417.2           163.0

  Cash and
   equivalents at
   beginning of
   period            1,746.8         582.6        1,221.6           808.8
                     -------         -----        -------           -----

  Cash and
   equivalents at
   end of period    $2,638.8        $971.8       $2,638.8          $971.8
                    ========        ======       ========          ======



                  CARDINAL HEALTH, INC. AND SUBSIDIARIES
                             BUSINESS ANALYSIS

                              TOTAL COMPANY

                                                          Non-GAAP
                                Third Quarter          Third Quarter
                                -------------          -------------
  (in millions)               2010          2009    2010         2009
                              ----          ----    ----         ----

  Revenue
  Amount                   $24,343       $24,089
  Growth Rate                   1 %          10 %

  Operating Earnings
  Amount                      $366          $381    $385         $415
  Growth Rate                  (4)%            -     (7)%          2 %

  Earnings from Continuing
   Operations
  Amount                      $225          $215    $222         $237
  Growth Rate                   5 %          (9)%    (6)%         (7)%
                                                     ---          ---


                                                    Non-GAAP
                              Year-to-Date        Year-to-Date
                              ------------        ------------
                              2010          2009    2010         2009
                              ----          ----    ----         ----

  Revenue
  Amount                   $74,043       $71,644
  Growth Rate                   3 %           9 %

  Operating Earnings
  Amount                      $973          $981  $1,066       $1,062
  Growth Rate                  (1)%          (7)%      -          (3)%

  Earnings from Continuing
   Operations
  Amount                      $393          $556    $622         $587
  Growth Rate                 (29)%         (16)%     6 %        (15)%
                                                     ---         ----

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


                  CARDINAL HEALTH, INC. AND SUBSIDIARIES
                         SEGMENT BUSINESS ANALYSIS

                      Third Quarter                           Third Quarter
                      -------------                           -------------
  (in millions)     2010          2009  (in millions)     2010         2009
                    ----          ----                    ----         ----

  PHARMACEUTICAL                        MEDICAL

  Revenue                               Revenue
  Amount         $22,226       $22,118  Amount          $2,123       $1,976
  Growth Rate       0.5 %          11 % Growth Rate         7 %         (2)%
  Mix                91 %          92 % Mix                 9 %          8 %

  Segment Profit                        Segment Profit
  Amount            $307          $286  Amount            $108         $128
  Growth Rate         7 %           2 % Growth Rate       (16)%          1 %
  Mix                74 %          69 % Mix                26 %         31 %
  Segment Profit                         Segment Profit
   Margin          1.38 %        1.29 %  Margin          5.08 %       6.49 %
  --------------   -----         -----  --------------   -----        -----

  Refer to definitions for an explanation of calculations.

  Total consolidated revenue for the three months ended March 31, 2010
  was $24,343 million, which included total segment revenue of $24,349
  million and Corporate revenue of $(6) million.  Total consolidated
  revenue for the three months ended March 31, 2009 was $24,089
  million, which included total segment revenue of $24,094 million and
  Corporate revenue of $(5) million.  Corporate revenue consists
  primarily of elimination of inter-segment revenue.

  Total consolidated operating earnings for the three months ended
  March 31, 2010 were $366 million, which included total segment
  profit of $415 million and Corporate loss of $49 million.  Total
  consolidated operating earnings for the three months ended March 31,
  2009 were $381 million, which included total segment profit of $414
  million and Corporate loss of $33 million.  Corporate includes,
  among other things, restructuring and employee severance,
  impairments and loss on sale of assets, litigation
  (credits)/charges, net and certain investment spending that are not
  allocated to the segments.


                   CARDINAL HEALTH, INC. AND SUBSIDIARIES
                          SEGMENT BUSINESS ANALYSIS

                      Year-to-Date                            Year-to-Date
                      ------------                            ------------
  (in millions)     2010          2009  (in millions)     2010         2009
                    ----          ----                    ----         ----

  PHARMACEUTICAL                        MEDICAL

  Revenue                               Revenue
  Amount         $67,483       $65,600  Amount          $6,592       $6,070
  Growth Rate         3 %          10 % Growth Rate         9 %          3 %
  Mix                91 %          92 % Mix                 9 %          8 %

  Segment Profit                        Segment Profit
  Amount            $775          $762  Amount            $325         $301
  Growth Rate         2 %          (5)% Growth Rate         8 %           -
  Mix                70 %          72 % Mix                30 %         28 %
  Segment Profit                         Segment Profit
   Margin          1.15 %        1.16 %  Margin          4.93 %       4.95 %
  --------------   -----         -----  --------------   -----        -----

  Refer to definitions for an explanation of calculations.

  Total consolidated revenue for the nine months ended March 31, 2010
  was $74,043 million, which included total segment revenue of $74,075
  million and Corporate revenue of $(32) million.  Total consolidated
  revenue for the nine months ended March 31, 2009 was $71,644
  million, which included total segment revenue of $71,670 million and
  Corporate revenue of $(26) million.  Corporate revenue consists
  primarily of elimination of inter-segment revenue.

  Total consolidated operating earnings for the nine months ended March
  31, 2010 were $973 million, which included total segment profit of
  $1,100 million and Corporate loss of $127 million.  Total
  consolidated operating earnings for the nine months ended March 31,
  2009 were $981 million, which included total segment profit of
  $1,063 million and Corporate loss of $82 million.  Corporate
  includes, among other things, restructuring and employee severance,
  impairments and loss on sale of assets, litigation
  (credits)/charges, net and certain investment spending that are not
  allocated to the segments.



                      CARDINAL HEALTH, INC. AND SUBSIDIARIES
                             SCHEDULE OF NOTABLE ITEMS


                                   Third Quarter          Year-to-Date
                                   -------------          ------------
  (in millions, except per
   Common Share amounts)          2010        2009     2010        2009
                                  ----        ----     ----        ----


  Restructuring and Employee
   Severance
  Restructuring and employee
   severance                    $(13.9)     $(31.7)  $(84.4)     $(69.3)
    Tax benefit                   10.0         4.9     30.1        19.0
                                  ----         ---     ----        ----
    Restructuring and employee
     severance, net of tax       $(3.9)     $(26.8)  $(54.3)     $(50.3)
                                 =====      ======   ======      ======

    Decrease to diluted EPS
     from continuing operations $(0.01)     $(0.08)  $(0.15)     $(0.14)
                                ======      ======   ======      ======

  Impairments and Loss on
   Sale of Assets
  Impairments and loss on
   sale of assets                $(4.2)      $(0.7)  $(28.2)     $(11.2)
    Tax benefit/(expense)        (11.5)        6.7     (3.3)       30.9
                                 -----         ---     ----        ----
    Impairments and loss on
     sale of asset, net of tax  $(15.7)       $6.0   $(31.5)      $19.7
                                ======        ====   ======       =====

    Increase/(decrease) to
     diluted EPS from
     continuing operations      $(0.04)      $0.02   $(0.09)      $0.05
                                ======       =====   ======       =====

  Litigation Credits/
   (Charges), Net
  Litigation credits/
   (charges), net                 $2.9       $(0.6)   $28.8       $(0.3)
    Tax benefit/(expense)         (1.1)        0.2    (10.9)        0.1
                                  ----         ---    -----         ---
    Litigation credits/
     (charges), net, net of tax   $1.8       $(0.4)   $17.9       $(0.2)
                                  ====       =====    =====       =====

    Increase to diluted EPS
     from continuing operations  $0.01          $-    $0.05          $-
                                 =====         ===    =====         ===

  Other Spin-Off Costs
  Other spin-off costs (1)       $(3.7)      $(0.7)  $(51.5)      $(0.7)
    Tax benefit/(expense) (2)      1.2         0.3   (153.2)        0.3
                                   ---         ---   ------         ---
    Other spin-off costs, net
     of tax                      $(2.5)      $(0.4) $(204.7)      $(0.4)
                                 =====       =====  =======       =====

    Decrease to diluted EPS
     from continuing operations $(0.01)         $-   $(0.56)         $-
                                ======         ===   ======         ===

  Gain on Sale of CareFusion
   Stock
  Gain on sale of CareFusion
   stock                         $23.2          $-    $43.3          $-
    Tax expense                      -           -        -           -
                                   ---                  ---
    Gain on sale of CareFusion
     stock, net of tax           $23.2          $-    $43.3          $-
                                 =====         ===    =====         ===

    Increase to diluted EPS
     from continuing operations  $0.06          $-    $0.12          $-
                                 =====         ===    =====         ===

  Weighted Average Number of
   Diluted Shares Outstanding    361.8       360.9    361.2       361.0

  (1)  Other spin-off costs included in other (income)/expense, net
  for the three and nine months ended March 31, 2010 were $(0.2)
  million and $2.4 million, respectively. Other spin-off costs also
  include the $39.9 million loss on extinguishment of debt for the
  nine months ended March 31, 2010.    The remaining other spin-off
  costs are included within distribution, selling, general and
  administrative expenses for all periods presented.

  (2)  The fiscal 2010 year-to-date tax expense associated with the
  other spin-off costs includes $171.9 million related to the
  anticipated repatriation of a portion of cash loaned to the
  Company's entities within the United States.



                   CARDINAL HEALTH, INC. AND SUBSIDIARIES
                          ASSET MANAGEMENT ANALYSIS


                                        Third Quarter       Year-To-Date
                                        -------------       ------------
                                      2010        2009  2010        2009
                                      ----        ----  ----        ----


  Receivable Days                     18.9        19.5
  Days Inventory on Hand                25          27

  Debt to Total Capital                28 %        30 %
  Net Debt to Capital                 (11)%        24 %

  Return on Equity                   16.8 %       15.1%  9.2%       14.5%
  Non-GAAP Return on Equity           16.9%       20.9% 16.5%       18.3%

  Effective Tax Rate from Continuing
   Operations                         38.1%      37.5 % 56.5%       36.1%
  Non-GAAP Effective Tax Rate from
   Continuing Operations              38.2%      37.3 % 37.5%       38.3%

  Refer to the GAAP / Non-GAAP Reconciliation for non-GAAP calculations.


   CARDINAL HEALTH, INC. AND SUBSIDIARIES
       GAAP / NON-GAAP RECONCILIATION

                                   Third Quarter 2010
                                   ------------------
                                                             Litigation
                              Restructuring Impairments and (Credits)/
  (in millions, except per      and Employee   Loss on Sale    Charges,
   Common Share amounts)   GAAP   Severance      of Assets       Net

  Operating Earnings
  Amount                    $366          $14              $4        ($3)
  Growth Rate                (4)%

  Earnings Before Income
   Taxes and Discontinued
   Operations               $363          $14              $4        ($3)

  Provision for Income
   Taxes (1)                $138          $10            ($12)       ($1)

  Earnings from Continuing
   Operations
  Amount                    $225           $4             $16        ($2)
  Growth Rate                 5 %

  Diluted EPS from
   Continuing Operations
  Amount                   $0.62        $0.01           $0.04     ($0.01)
  Growth Rate                 3 %


                                      Third Quarter 2010
                                      ------------------
                                                Gain on Sale
                                                     of
  (in millions, except per Common  Other Spin-   CareFusion
   Share amounts)                    Off Costs      Stock     Non-GAAP

  Operating Earnings
  Amount                                     $4            -       $385
  Growth Rate                                                       (7)%

  Earnings Before Income Taxes and
   Discontinued Operations                   $4         ($23)      $359

  Provision for Income Taxes (1)             $1            -       $137

  Earnings from Continuing
   Operations
  Amount                                     $3         ($23)      $222
  Growth Rate                                                       (6)%

  Diluted EPS from Continuing
   Operations
  Amount                                  $0.01       ($0.06)     $0.61
  Growth Rate                                                       (8)%

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

  (1) The Company applies varying tax rates depending upon the tax
  jurisdiction where the items are incurred.


   CARDINAL HEALTH, INC. AND SUBSIDIARIES
       GAAP / NON-GAAP RECONCILIATION

                                     Year-To-Date 2010
                                     -----------------
                                                 Impairments Litigation
                                  Restructuring and Loss on (Credits)/
  (in millions, except per         and Employee     Sale of    Charges,
   Common Share amounts)      GAAP   Severance      Assets       Net

  Operating Earnings
  Amount                       $973          $84          $28       ($29)
  Growth Rate                   (1)%

  Earnings Before Income
   Taxes and Discontinued
   Operations                  $903          $84          $28       ($29)

  Provision for Income Taxes
   (1)                         $510          $30          ($3)      ($11)

  Earnings from Continuing
   Operations
  Amount                       $393          $54          $32       ($18)
  Growth Rate                  (29)%

  Diluted EPS from Continuing
   Operations
  Amount                      $1.09        $0.15        $0.09     ($0.05)
  Growth Rate                  (29)%


                                        Year-To-Date 2010
                                        -----------------
                                                 Gain on Sale
                                                      of
  (in millions, except per Common  Other Spin-    CareFusion
   Share amounts)                    Off Costs       Stock     Non-GAAP

  Operating Earnings
  Amount                                     $9             -     $1,066
  Growth Rate                                                          -

  Earnings Before Income Taxes and
   Discontinued Operations                  $52          ($43)      $995

  Provision for Income Taxes (1)          ($153)            -       $373

  Earnings from Continuing
   Operations
  Amount                                   $205          ($43)      $622
  Growth Rate                                                         6 %

  Diluted EPS from Continuing
   Operations
  Amount                                  $0.56        ($0.12)     $1.72
  Growth Rate                                                         6 %

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

  (1) The Company applies varying tax rates depending upon the tax
  jurisdiction where the items are incurred.


   CARDINAL HEALTH, INC. AND SUBSIDIARIES
       GAAP / NON-GAAP RECONCILIATION

                                   Third Quarter 2009
                                   ------------------
                                                             Litigation
                              Restructuring Impairments and (Credits)/
                                and Employee   Loss on Sale    Charges,
                           GAAP   Severance      of Assets       Net


  Operating Earnings
  Amount                    $381          $32              $1         $1
  Growth Rate                  -

  Earnings Before Income
   Taxes and Discontinued
   Operations               $344          $32              $1         $1

  Provision for Income
   Taxes (1)                $129           $5              $7          -

  Earnings from Continuing
   Operations
  Amount                    $215          $27             ($6)         -
  Growth Rate                (9)%

  Diluted EPS from
   Continuing Operations
  Amount                   $0.60        $0.08          ($0.02)         -
  Growth Rate                (9)%


                                     Third Quarter 2009
                                     ------------------
                                               Gain on Sale
                                                    of
                                   Other Spin-  CareFusion
                                     Off Costs      Stock   Non-GAAP


  Operating Earnings
  Amount                                     $1           -      $415
  Growth Rate                                                      2 %

  Earnings Before Income Taxes and
   Discontinued Operations                   $1           -      $378

  Provision for Income Taxes (1)              -           -      $141

  Earnings from Continuing
   Operations
  Amount                                      -           -      $237
  Growth Rate                                                     (7)%

  Diluted EPS from Continuing
   Operations
  Amount                                      -           -     $0.66
  Growth Rate                                                     (7)%

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

  (1) The Company applies varying tax rates depending upon the tax
  jurisdiction where the items are incurred.


   CARDINAL HEALTH, INC. AND SUBSIDIARIES
       GAAP / NON-GAAP RECONCILIATION

                                     Year-To-Date 2009
                                     -----------------
                                                Impairments Litigation
                                 Restructuring and Loss on (Credits)/
                                  and Employee     Sale of    Charges,
                             GAAP   Severance      Assets       Net


  Operating Earnings
  Amount                      $981          $69          $11          -
  Growth Rate                  (7)%

  Earnings Before Income
   Taxes and Discontinued
   Operations                 $870          $69          $11          -

  Provision for Income Taxes
   (1)                        $314          $19          $31          -

  Earnings from Continuing
   Operations
  Amount                      $556          $50         ($20)         -
  Growth Rate                 (16)%

  Diluted EPS from
   Continuing Operations
  Amount                     $1.54        $0.14       ($0.05)         -
  Growth Rate                 (15)%


                                         Year-To-Date 2009
                                         -----------------
                                                  Gain on Sale
                                                       of
                                      Other Spin-  CareFusion
                                        Off Costs      Stock   Non-GAAP


  Operating Earnings
  Amount                                        $1           -    $1,062
  Growth Rate                                                        (3)%

  Earnings Before Income Taxes and
   Discontinued Operations                      $1           -      $951

  Provision for Income Taxes (1)                 -           -      $364

  Earnings from Continuing Operations
  Amount                                        $1           -      $587
  Growth Rate                                                       (15)%

  Diluted EPS from Continuing
   Operations
  Amount                                         -           -     $1.63
  Growth Rate                                                       (14)%

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

  (1) The Company applies varying tax rates depending upon the tax
  jurisdiction where the items are incurred.


                                     CARDINAL HEALTH, INC. AND SUBSIDIARIES
                                         GAAP / NON-GAAP RECONCILIATION


                              Third                 Third
                             Quarter               Quarter
                              -------               -------
  (in millions)                  2010                  2009
                                 ----                  ----


  GAAP Return on Equity         16.8 %                 15.1%

  Non-GAAP Return on Equity
  Net earnings                 $222.4                $312.9
  Restructuring and employee
   severance, net of tax, in
   continuing operations(1)       3.9                  26.8
  Impairments and loss on
   sale of assets, net of
   tax, in continuing
   operations(1)                 15.7                  (6.0)
  Litigation
   (credits)/charges, net,
   net of tax, in continuing
   operations(1)                 (1.8)                  0.4
  Other spin-off costs, net
   of tax(1)                      2.5                   0.4
  Gain on sale of CareFusion
   stock, net of tax(1)         (23.2)                    -
  CareFusion net earnings in
   discontinued operations,
   net of tax(1, 2)               4.7                 (98.0)
                                  ---                 -----
    Adjusted net earnings      $224.2                $236.5

    Annualized                 $896.8                $946.0

                              Third     Second      Third     Second
                             Quarter    Quarter    Quarter    Quarter
                                       -------    --------   -------
                                 2010        2010      2009        2009
                                 ----        ----      ----        ----
  Non-GAAP Shareholders'
   Equity
  Total shareholders' equity $5,360.9    $5,226.1  $8,434.5    $8,127.9
  Non-cash dividend related
   to CareFusion spin-off           -           -  (3,758.0)   (3,758.0)
  Non-GAAP shareholders'
   equity                    $5,360.9    $5,226.1  $4,676.5    $4,369.9
                             --------    --------  --------    --------

    Divided by average
     shareholders' equity     5,293.5               4,523.2

  Non-GAAP return on equity      16.9%                 20.9%

  (1)  The Company applies varying tax rates depending upon the tax
  jurisdiction where the items are incurred.

  (2)  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.


                                      CARDINAL HEALTH, INC. AND SUBSIDIARIES
                                          GAAP / NON-GAAP RECONCILIATION


                           Year-To-Date
                           ------------
  (in millions)                    2010
                                   ----


  GAAP Return on Equity            9.2 %

  Non-GAAP Return on
   Equity
  Net earnings                   $418.7
  Restructuring and
   employee severance, net
   of tax, in continuing
   operations(1)                   54.3
  Impairments and loss on
   sale of assets, net of
   tax, in continuing
   operations(1)                   31.5
  Litigation
   (credits)/charges, net,
   net of tax, in
   continuing
   operations(1)                  (17.9)
  Other spin-off costs,
   net of tax(1)                  204.7
  Gain on sale of
   CareFusion stock, net
   of tax(1)                      (43.3)
  CareFusion net earnings
   in discontinued
   operations, net of
   tax(1, 2)                      (15.4)
                                  -----
    Adjusted net earnings        $632.6

    Annualized                   $843.5

                               Third      Second      First    Fourth
                              Quarter     Quarter    Quarter   Quarter
                             --------    -------    --------  -------
                                   2010        2010      2010      2009
                                   ----        ----      ----      ----
  Non-GAAP Shareholders'
   Equity
  Total shareholders'
   equity                      $5,360.9    $5,226.1  $4,941.2  $8,724.7
  Non-cash dividend
   related to CareFusion
   spin-off                           -           -         -  (3,758.0)
  Non-GAAP shareholders'
   equity                      $5,360.9    $5,226.1  $4,941.2  $4,966.7
                               --------    --------  --------  --------

    Divided by average
     shareholders' equity       5,123.7

  Non-GAAP return on
   equity                          16.5%


  (1)  The Company applies varying tax rates depending upon the tax
  jurisdiction where the items are incurred.

  (2)  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.


                              CARDINAL HEALTH, INC. AND SUBSIDIARIES
                                  GAAP / NON-GAAP RECONCILIATION


                       Year-To-
                         Date
                        --------
  (in millions)             2009
                            ----


  GAAP Return on
   Equity                   14.5%

  Non-GAAP Return on
   Equity
  Net earnings            $878.4
  Restructuring and
   employee severance,
   net of tax, in
   continuing
   operations(1)            50.3
  Impairments and loss
   on sale of assets,
   net of tax, in
   continuing
   operations(1)           (19.7)
  Litigation
   (credits)/charges,
   net, net of tax, in
   continuing
   operations(1)             0.2
  Other spin-off
   costs, net of
   tax(1)                    0.4
  Gain on sale of
   CareFusion stock,
   net of tax(1)               -
  CareFusion net
   earnings in
   discontinued
   operations, net of
   tax(1, 2)              (319.1)
                          ------
    Adjusted net
     earnings             $590.5

    Annualized            $787.3

                         Third                      First      Fourth
                        Quarter   Second Quarter   Quarter    Quarter
                       --------   --------------  --------    -------
                            2009            2009        2009       2008
                            ----            ----        ----       ----
  Non-GAAP
   Shareholders'
   Equity
  Total shareholders'
   equity               $8,434.5        $8,127.9    $7,918.1   $7,747.5
  Non-cash dividend
   related to
   CareFusion spin-
   off                  (3,758.0)       (3,758.0)   (3,758.0)  (3,758.0)
  Non-GAAP
   shareholders'
   equity               $4,676.5        $4,369.9    $4,160.1   $3,989.5
                        --------        --------    --------   --------

    Divided by average
     shareholders'
     equity              4,299.0

  Non-GAAP return on
   equity                   18.3%


  (1) The Company applies varying tax rates depending upon the tax
  jurisdiction where the items are incurred.

  (2) 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.


                              CARDINAL HEALTH, INC. AND SUBSIDIARIES
                                  GAAP / NON-GAAP RECONCILIATION


                                  Third Quarter            Year-to-Date
                                  -------------            ------------
  (in millions)                 2010           2009    2010         2009
                                ----           ----    ----         ----


  GAAP Effective Tax
   Rate from Continuing
   Operations                  38.1 %         37.5 %  56.5 %       36.1 %

  Non-GAAP Effective
   Tax Rate from
   Continuing Operations
  Earnings before income
   taxes and
   discontinued
   operations                 $363.2         $344.1  $903.2       $870.1
  Restructuring and
   employee severance           13.9           31.7    84.4         69.3
  Impairments and loss
   on sale of assets             4.2            0.7    28.2         11.2
  Litigation
   (credits)/charges,
   net                          (2.9)           0.6   (28.8)         0.3
  Other spin-off costs           3.7            0.7    51.5          0.7
  Gain on sale of
   CareFusion stock            (23.2)             -   (43.3)           -
                               -----            ---   -----          ---
    Adjusted earnings
     before income taxes
     and discontinued
     operations               $358.9         $377.8  $995.2       $951.6

  Provision for income
   taxes(1)                   $138.4         $129.0  $510.0       $313.9
  Restructuring and
   employee severance
   tax benefit(1)               10.0            4.9    30.1         19.0
  Impairments and loss
   on sale of assets,
   tax benefit/
   (expense)(1)                (11.5)           6.7    (3.3)        30.9
  Litigation (credits)/
   charges, net tax
   benefit/(expense)(1)         (1.1)           0.2   (10.9)         0.1
  Other spin-off costs
   tax benefit/
   (expense)(1)                  1.2            0.3  (153.2)         0.3
  Gain on sale of
   CareFusion stock tax
   expense(1)                      -              -       -            -
                                 ---            ---     ---          ---
    Adjusted provision for
     income taxes             $137.0         $141.1  $372.7       $364.2

  Non-GAAP effective
   tax rate from
   continuing operations        38.2%          37.3%   37.5%        38.3%


                                Third Quarter
                                -------------
                                2010           2009
                                ----           ----


  Debt to Total Capital           28%            30%

  Net Debt to Capital
  Current portion of
   long-term
   obligations and other
   short-term
   borrowings                 $232.6      $359.8
  Long-term
   obligations, less
   current portion and
   other short-term
   borrowings                1,875.6     3,300.6
                             -------        -------
    Debt                    $2,108.2       $3,660.4
  Cash and equivalents     (2,638.8)         (971.8)
                            --------         ------
    Net debt                 $(530.6)      $2,688.6
  Total shareholders'
   equity                   $5,360.9       $8,434.5
  Capital                   $4,830.3      $11,123.1
    Net Debt to Capital         (11)%            24%

  (1) The Company applies varying tax rates depending upon the tax
  jurisdiction where the items are incurred.

  Forward-Looking Non-GAAP Financial Measures
  The Company presents 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.  The Company is unable to provide a quantitative
  reconciliation of these forward-looking non-GAAP measures to the
  most directly comparable forward-looking GAAP measures because the
  Company cannot reliably forecast restructuring and employee
  severance, impairments and loss on sale of assets, litigation
  (credits)/charges, net, other spin-off costs and gains or losses on
  sale of CareFusion stock, 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

                                                 Third Quarter
                                                 -------------
  (in millions)                                 2010           2009
                                                ----           ----

  Days Inventory on Hand
  Inventories                               $7,214.9       $7,748.0

  Cost of products sold                    $23,332.7      $23,102.4
  Chargeback billings                        3,053.2        2,981.5
                                             -------        -------
    Adjusted cost of products sold         $26,385.9      $26,083.9

  Adjusted cost of products sold divided
   by 90 days                                 $293.2         $289.8

  Days inventory on hand                          25             27

  Days Inventory on Hand: inventory divided by ((quarterly costs 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.


                    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
  Gain on Sale of CareFusion Stock: realized gains and losses from the
  sale of the Company's ownership of CareFusion common stock retained
  in connection with the spin-off
  Other Spin-Off Costs: costs and tax charges incurred in connection
  with the Company's spin-off of CareFusion that are not included in
  restructuring and employee severance, impairments and loss on sale
  of assets and litigation (credits)/charges, net.  Other spin-off
  costs include, among other things, the loss on extinguishment of
  debt and the income tax charge related to the anticipated
  repatriation of a portion of cash loaned to the Company's entities
  within the United States
  Receivable Days: trade receivables, net divided by (monthly revenue
  divided by 30 days)
  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
  Return on Equity:  annualized net earnings divided by average
  shareholders' equity
  Revenue Mix:  segment revenue divided by total segment revenue for
  all segments

  NON-GAAP
  Net Debt to Capital:  net debt divided by (net debt plus total
  shareholders' equity)
  Net Debt:  debt minus (cash and equivalents)
  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 (1) restructuring and employee
  severance, (2) impairments and loss on sale of assets, (3)
  litigation (credits)/charges, net, (4) Other Spin-Off Costs and (5)
  gain on sale of CareFusion stock, each 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 (1) restructuring and employee
  severance, (2) impairments and loss on sale of assets, (3)
  litigation (credits)/charges, net, (4) Other Spin-Off Costs and (5)
  gain on sale of CareFusion stock) divided by (earnings before income
  taxes and discontinued operations adjusted for (1) restructuring and
  employee severance, (2) impairments and loss on sale of assets, (3)
  litigation (credits)/charges, net, (4) Other Spin-Off Costs and (5)
  gain on sale of CareFusion stock)
  Non-GAAP Operating Earnings:  operating earnings excluding (1)
  restructuring and employee severance, (2) impairments and loss on
  sale of assets, (3) litigation credits/(charges), net and (4) Other
  Spin-Off Costs included within distribution, selling, general and
  administrative expenses
  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 Return on Equity:   (annualized current period net earnings
  excluding (1) restructuring and employee severance, (2) impairments
  and loss on sale of assets, (3) litigation (credits)/charges, net,
  (4) Other Spin-Off Costs, (5) CareFusion net earnings in
  discontinued operations and (6) gain on sale of CareFusion stock,
  each net of tax) divided by average shareholders' equity adjusted
  for the $3.8 billion non-cash dividend issued in connection with
  the spin-off

Source: Cardinal Health, Inc.

CONTACT: Media: Troy Kirkpatrick, +1-614-757-6225,
troy.kirkpatrick@cardinalhealth.com; Investors: Sally Curley, +1-614-757-7115,
sally.curley@cardinalhealth.com

Web Site: www.cardinalhealth.com/


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