News & Media

Archives

Cardinal Health Reports Strong Fiscal 2011 Growth on Record Revenues; Provides Fiscal 2012 Outlook
  • Fourth-quarter revenue increases 9 percent to $27 billion; Full-year revenue increases 4 percent to $103 billion
  • Fourth-quarter diluted earnings per share from continuing operations increase by 7 percent to $0.58, or 18 percent to $0.59 on a non-GAAP basis1
  • Fiscal 2011 diluted earnings per share from continuing operations increase by 69 percent to $2.74, or 20 percent to $2.67 on a non-GAAP basis
  • Fiscal 2012 outlook for non-GAAP diluted earnings per share of $3.04 to $3.19 based on new non-GAAP definition that excludes amortization of acquisition-related intangible assets2; fiscal 2011 diluted EPS under new non-GAAP definition is $2.80

DUBLIN, Ohio, Aug. 4, 2011 /PRNewswire/ — Cardinal Health today reported fourth-quarter fiscal 2011 revenues of $26.8 billion and non-GAAP diluted earnings per share (EPS) from continuing operations of $0.59, up 18 percent. For fiscal 2011, revenues increased 4 percent to $103 billion, and non-GAAP diluted EPS increased 20 percent to $2.67.

Outlook for non-GAAP diluted earnings per share from continuing operations in fiscal 2012 is $3.04 to $3.19 under the company’s new non-GAAP definition, which excludes approximately $0.14 of amortization of acquisition-related intangible assets in fiscal 2012. Fiscal 2011 non-GAAP diluted EPS from continuing operations under this new non-GAAP definition is $2.80.

“Fiscal 2011 was an outstanding year for us. Our organization executed against our key operational and financial objectives and took action on a number of important strategic priorities which will strengthen our long-term positioning,” said George Barrett, chairman and chief executive officer of Cardinal Health. “Our Pharmaceutical Segment finished the year with another excellent quarter, recording 30 percent profit growth over the prior year, which reflects strong growth from strengthened generic programs and solid contribution from the acquisitions we completed earlier in the fiscal year. And although commodity costs and sluggish utilization continued to challenge our Medical Segment, we are taking actions to mitigate their impact. The underlying performance of the business is strong, and the strategic initiatives we implemented this year position us to best serve our customers’ evolving needs.”

Q4 and Fiscal 2011 SUMMARY


 

Q4 FY11

Q4 FY10

Y/Y

FY11

FY10

Y/Y

 

Revenue

$26.8 billion

$24.5 billion

9%

$102.6 billion

$98.5 billion

4%

 

 

 

 

 

 

 

 
 

Operating Earnings


$359 million


$334 million


 7%


$1.5 billion


$1.3 billion


     16%

 

Non-GAAP Operating Earnings3


$362 million


$317 million


14%


$1.6 billion


$1.4 billion


14%

 

 

 

 

 

 

 

 
 

Earnings from Continuing Operations


$207 million


$194 million


7%


$966 million


$587 million


 65%

 

Non-GAAP Earnings from Continuing Operations4


$208 million


$181 million


15%


$941 million


$804 million


17%

 

 

 

 

 

 

 

 
 

Diluted EPS from Continuing Operations


$0.58


$0.54


7%


      $2.74


$1.62


     69%

 

Non-GAAP Diluted EPS from Continuing Operations


$0.59


$0.50


18%


$2.67


$2.22


20%

 
             

SEGMENT RESULTS

Pharmaceutical Segment

Fourth-quarter revenue for the Pharmaceutical Segment, driven by recent acquisitions and sales to existing customers, increased 10 percent to $24.5 billion. Acquisitions contributed 6 percentage points to the quarterly revenue growth. Sales to non-bulk customers increased 20 percent to $13.8 billion. Segment profit for the quarter increased 30 percent to $295 million, reflecting the contribution from strong generics programs, as well as acquisitions, which contributed 12 percentage points to the segment profit growth in the quarter. Solid performance under our branded manufacturer agreements also was a positive driver.

For the full year, revenue for the Pharmaceutical Segment increased 4 percent to $93.7 billion, and segment profit increased 26 percent to $1.3 billion.


 

Q4 FY11

Q4 FY10

Y/Y

FY11

FY10

Y/Y

 

Revenue

$24.5 billion

$22.3 billion

10%

$93.7 billion

$89.8 billion

4%

 

Segment Profit

$295 million

$227 million

30%

$1.3 billion

$1.0 billion

26%

 
             

 

Medical Segment

Fourth-quarter revenue for the Medical Segment increased 7 percent to $2.3 billion, primarily from sales growth to existing customers and the impact of transitioning the company’s distribution model with CareFusion from a fee-for-service-based arrangement to a traditional branded distribution agreement. Segment profit decreased 24 percent to $78 million, primarily driven by the negative impact of commodity price increases, certain inventory-related charges and investments made to enhance business IT systems, which were partially offset by the impact of increased volume to existing customers and net new business.

For the full year, Medical Segment revenue increased 2 percent to $8.9 billion, and segment profit decreased 14 percent to $370 million.


 

Q4 FY11

Q4 FY10

Y/Y

FY11

FY10

Y/Y

 

Revenue

$2.3 billion

$2.2 billion

7%

$8.9 billion

$8.8 billion

2%

 

Segment Profit

$78 million

$102 million

(24%)

$370 million

$428 million

(14%)

 
             

 

ADDITIONAL YEAR-END AND RECENT HIGHLIGHTS

  • Increased the regular quarterly dividend by 10 percent to $0.215 per share, effective July 2011
  • Announced election of David P. King, chairman and chief executive officer, Laboratory Corp. of America Holdings, to Cardinal Health board of directors
  • Announced addition of South Carolina Oncology Associates (SCOA), the largest community oncology practice in the state, serving more than 800 patients per day, to the company’s VitalSource GPO, representing another important step in building Cardinal Health Specialty Solutions
  • In partnership with Aetna, announced expansion of evidence-based program to improve cancer care treatment and cost efficiency
  • Opened The Center for the Advancement of Molecular Imaging, a new, first-of-its-kind collaboration laboratory that will expedite the development of nuclear imaging agents that treat complex diseases 

CONFERENCE CALL

Cardinal Health will host a webcast and conference call today at 8:00 a.m. Eastern Daylight Time to discuss fourth-quarter and full-year results and its future outlook. To access the call and corresponding slide presentation, go to the Investors page at cardinalhealth.com/investors. The call also can be accessed by dialing 617-224-4326, passcode 35900182. Presentation slides and an audio replay will be archived on the website after the conclusion of the meeting. The audio replay will also be available until Sept. 4 by dialing 617-801-6888, passcode 10207611.

UPCOMING EVENTS

  • Robert W. Baird 2011 Healthcare Conference on Sept. 7 at 10:30 a.m. Eastern Daylight Time at the New York Palace Hotel
  • Stifel Nicolaus Healthcare Conference on Sept. 8 at 9 a.m. Eastern Daylight Time at the Four Seasons in Boston

At these events, Cardinal Health executives will discuss the company’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/investors.


About Cardinal Health
Headquartered in Dublin, Ohio, Cardinal Health, Inc. (NYSE: CAH) is a $103 billion health care services company that improves the cost-effectiveness of health care. As the business behind health care, Cardinal Health helps pharmacies, hospitals, ambulatory surgery centers and physician offices focus on patient care while reducing costs, enhancing efficiency and improving quality. Cardinal Health is an essential link in the health care supply chain, providing pharmaceuticals and medical products to more than 60,000 locations each day. The company is also a leading manufacturer of medical and surgical products, including gloves, surgical apparel and fluid management products. In addition, the company supports the growing diagnostic industry by supplying medical products to clinical laboratories and operating the nation's largest network of radiopharmacies that dispense products to aid in the early diagnosis and treatment of disease. Ranked #19 on the Fortune 500, Cardinal Health employs more than 30,000 people worldwide. More information about the company may be found at cardinalhealth.com and @CardinalHealth on Twitter.

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

2 In fiscal 2012, Cardinal Health will use a new definition of non-GAAP diluted EPS from continuing operations.  The new definition excludes amortization of acquisition-related intangible assets in addition to the items currently excluded.  The attached tables present the new non-GAAP diluted EPS from continuing operations and other non-GAAP earnings measures for fiscal 2011 and 2010 and a reconciliation of the differences between the new non-GAAP measures and their most directly comparable GAAP financial measures and non-GAAP measures under the historical definition.

3 Non-GAAP operating earnings: Operating earnings excluding (1) restructuring and employee severance, (2) acquisition-related costs, (3) impairments and loss on sale of assets, (4) litigation (recoveries)/charges, net, and (5) Other Spinoff Costs included within distribution, selling, general and administrative expenses.

4 Non-GAAP earnings from continuing operations:  Earnings from continuing operations excluding (1) restructuring and employee severance, (2) acquisition-related costs, (3) impairments and loss on sale of assets, (4) litigation (recoveries)/charges, net, (5) Other Spinoff Costs (as defined at the end of the attached tables), and (6) 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 website as a channel of distribution for material company information. Important information, including news releases, analyst presentations and financial information regarding Cardinal Health is routinely posted and accessible on the Investors page at cardinalhealth.com.

Cautions Concerning Forward-Looking Statements
This news release contains forward-looking statements addressing expectations, prospects, estimates and other matters that are dependent upon future events or developments. These statements may be identified by words such as "expect," "anticipate," "intend," "plan," "believe," "will," "should," "could," "would," "project," "continue," and similar expressions, and include statements reflecting future results or guidance, statements of outlook and expense accruals. These matters are subject to risks and uncertainties that could cause actual results to differ materially from those projected, anticipated or implied. These risks and uncertainties include (but are not limited to) uncertainties related to demand for Cardinal Health's products and services; uncertainties relating to Cardinal Health's ability to retain customers and employees of acquired businesses, including Kinray, Yong Yu and P4 Healthcare, and to achieve the expected benefits from the acquired businesses; uncertainties due to government health care reform including 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; 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 effects of any investigation by any regulatory authority, including with respect to compliance with the Foreign Corrupt Practices Act. 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 Aug. 4, 2011. Except to the extent required by applicable law, Cardinal Health undertakes no obligation to update or revise any forward-looking statement.  


 

 

 

 

 

 

 

Schedule 1

 

 

 

 

 

 

 

 

 
 

CARDINAL HEALTH, INC. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 
 

 

 

 

Fourth Quarter


 

 
 

(in millions, except per Common Share amounts)


 

2011


 

2010


 

% Change

 

 

 

 

 

 

 

 

 
 

Revenue


 

$ 26,763.5


 

$ 24,459.6


 

9 %

 

Cost of products sold


 

25,720.1


 

23,555.5


 

9 %

 

Gross margin


 

1,043.4


 

904.1


 

15 %

 

Operating expenses:


 

 

 

 

 

 
 

 

Distribution, selling, general and administrative expenses


 

683.8


 

588.2


 

16 %

 

 

Restructuring and employee severance


 

4.9


 

6.4


 

N.M.

 

 

Acquisition-related costs


 

1.1


 

8.3


 

N.M.

 

 

Impairments and loss on sale of assets


 

0.4


 

0.9


 

N.M.

 

 

Litigation (recoveries)/charges, net


 

(5.6)


 

(33.6)


 

N.M.

 

Operating earnings


 

358.8


 

333.9


 

7 %

 

 

 

 

 

 

 

 

 
 

Other (income)/expense, net


 

(2.6)


 

2.3


 

N.M.

 

Interest expense, net


 

23.8


 

24.5


 

(3)%

 

Gain on sale of investment in CareFusion


 

(3.7)


 

(1.3)


 

N.M.

 

Earnings before income taxes and discontinued operations


 

341.3


 

308.4


 

11 %

 

 

 

 

 

 

 

 

 
 

Provision for income taxes


 

134.0


 

114.6


 

17 %

 

Earnings from continuing operations


 

207.3


 

193.8


 

7 %

 

 

 

 

 

 

 

 

 
 

Earnings/(loss) from discontinued operations (net of tax expense


 

 

 

 

 

 
 

 

of $4.7 million and $0.0 million for the fourth quarter of fiscal
2011 and 2010, respectively)


 

(4.6)


 

29.7


 

N.M.

 

Net earnings


 

$      202.7


 

$      223.5


 

(9)%

 

 

 

 

 

 

 

 

 
 

Basic earnings/(loss) per Common Share:


 

 

 

 

 

 
 

Continuing operations


 

$        0.59


 

$        0.54


 

9 %

 

Discontinued operations


 

(0.01)


 

0.08


 

N.M.

 

 

Net basic earnings per Common Share


 

$        0.58


 

$        0.62


 

(6)%

 

 

 

 

 

 

 

 

 
 

Diluted earnings/(loss) per Common Share:


 

 

 

 

 

 
 

Continuing operations


 

$        0.58


 

$        0.54


 

7 %

 

Discontinued operations


 

(0.01)


 

0.08


 

N.M.

 

 

Net diluted earnings per Common Share


 

$        0.57


 

$        0.62


 

(8)%

 

 

 

 

 

 

 

 

 
 

Weighted average number of Common Shares outstanding:


 

 

 

 

 

 
 

Basic


 

349.4


 

358.3


 

 
 

Diluted


 

354.6


 

361.8


 

 
 
               


 

 

 

 

 

 

 

 

Schedule 2

 

 

 

 

 

 

 

 

 
 

CARDINAL HEALTH, INC. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 
 

 

 

 

Fiscal Year


 

 
 

(in millions, except per Common Share amounts)


 

2011


 

2010


 

% Change

 

 

 

 

 

 

 

 

 
 

Revenue


 

$ 102,644.2


 

$ 98,502.8


 

4 %

 

Cost of products sold


 

98,482.2


 

94,722.1


 

4 %

 

Gross margin


 

4,162.0


 

3,780.7


 

10 %

 

Operating expenses:


 

 

 

 

 

 
 

 

Distribution, selling, general and administrative expenses


 

2,594.8


 

2,408.0


 

8 %

 

 

Restructuring and employee severance


 

15.5


 

90.7


 

N.M.

 

 

Acquisition-related costs


 

22.9


 

8.4


 

N.M.

 

 

Impairments and loss on sale of assets


 

8.6


 

29.1


 

N.M.

 

 

Litigation (recoveries)/charges, net


 

6.2


 

(62.4)


 

N.M.

 

Operating earnings


 

1,514.0


 

1,306.9


 

16 %

 

 

 

 

 

 

 

 

 
 

Other income, net


 

(21.8)


 

(13.5)


 

63 %

 

Interest expense, net


 

92.8


 

113.5


 

(18)%

 

Loss on extinguishment of debt


 

-


 

39.9


 

N.M.

 

Gain on sale of investment in CareFusion


 

(75.3)


 

(44.6)


 

N.M.

 

Earnings before income taxes and discontinued operations


 

1,518.3


 

1,211.6


 

25 %

 

 

 

 

 

 

 

 

 
 

Provision for income taxes


 

552.1


 

624.6


 

(12)%

 

Earnings from continuing operations


 

966.2


 

587.0


 

65 %

 

 

 

 

 

 

 

 

 
 

Earnings/(loss) from discontinued operations (net of tax expense


 

 

 

 

 

 
 

 

of $8.0 million and $35.5 million for fiscal 2011 and 2010, respectively)


 

(7.2)


 

55.2


 

N.M.

 

Net earnings


 

$        959.0


 

$      642.2


 

49 %

 

 

 

 

 

 

 

 

 
 

Basic earnings/(loss) per Common Share:


 

 

 

 

 

 
 

Continuing operations


 

$          2.77


 

$        1.64


 

69 %

 

Discontinued operations


 

(0.02)


 

0.15


 

N.M.

 

 

Net basic earnings per Common Share


 

$          2.75


 

$        1.79


 

54 %

 

 

 

 

 

 

 

 

 
 

Diluted earnings/(loss) per Common Share:


 

 

 

 

 

 
 

Continuing operations


 

$          2.74


 

$        1.62


 

69 %

 

Discontinued operations


 

(0.02)


 

0.15


 

N.M.

 

 

Net diluted earnings per Common Share


 

$          2.72


 

$        1.77


 

54 %

 

 

 

 

 

 

 

 

 
 

Weighted average number of Common Shares outstanding:


 

 

 

 

 

 
 

Basic


 

348.6


 

358.8


 

 
 

Diluted


 

352.5


 

361.4


 

 
 
               


 

 

 

 

 

 

Schedule 3

 

 

 

 

 

 

 
 

CARDINAL HEALTH, INC. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 
 

 

 

 

 
 

 

 

 

June 30,


 

June 30,

 

(in millions)


 

2011


 

2010

 

 

 

 

(UNAUDITED)


 

 
 

 

 

 

 

 

 
 

Assets


 

 

 

 
 

Cash and equivalents


 

$       1,929.3


 

$    2,755.3

 

Trade receivables, net


 

6,155.7


 

5,170.6

 

Inventories


 

7,334.2


 

6,355.9

 

Prepaid expenses and other


 

896.7


 

637.1

 

 

Total current assets


 

16,315.9


 

14,918.9

 

 

 

 

 

 

 
 

Property and equipment, net


 

1,512.2


 

1,468.8

 

Investment in CareFusion


 

-


 

691.5

 

Goodwill and other intangibles, net


 

4,259.0


 

2,253.2

 

Other assets


 

758.8


 

657.8

 

 

Total assets


 

$     22,845.9


 

$  19,990.2

 

 

 

 

 

 

 
 

 

 

 

 

 

 
 

Liabilities and Shareholders' Equity


 

 

 

 
 

Accounts payable


 

$     11,331.5


 

$    9,494.9

 

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

326.7


 

233.2

 

Other accrued liabilities


 

1,711.3


 

1,809.5

 

 

Total current liabilities


 

13,369.5


 

11,537.6

 

 

 

 

 

 

 
 

Long-term obligations, less current portion


 

2,175.3


 

1,896.1

 

Deferred income taxes and other liabilities


 

1,452.5


 

1,280.4

 

 

Total shareholders' equity


 

5,848.6


 

5,276.1

 

 

Total liabilities and shareholders' equity


 

$     22,845.9


 

$  19,990.2

 
           


 

 

 

 

 

 

 

 

 

Schedule 4

 

 
 

CARDINAL HEALTH, INC. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

 

 
 

 
 

 

 

 

 

 

 

 

 

 
 

 

 

Fourth Quarter


 

Fiscal Year

 

(in millions)


 

2011


 

2010


 

2011


 

2010

 

 

 

 

 

 

 

 

 

 
 

CASH FLOWS FROM OPERATING ACTIVITIES:


 

 

 

 

 

 

 

 
 

Net earnings


 

$    202.7


 

$    223.5


 

$    959.0


 

$       642.2

 

    (Earnings)/loss from discontinued operations


 

4.6


 

(29.7)


 

7.2


 

(55.2)

 

Earnings from continuing operations


 

207.3


 

193.8


 

966.2


 

587.0

 

Adjustments to reconcile earnings from continuing
operations to net cash from operations:


 

 

 

 

 

 

 

 
 

Depreciation and amortization


 

74.1


 

60.0


 

313.3


 

254.4

 

Loss on extinguishment of debt


 

-


 

-


 

-


 

39.9

 

Gain on sale of investment in CareFusion


 

(3.7)


 

(1.3)


 

(75.3)


 

(44.6)

 

Impairments and loss on sale of assets


 

0.4


 

0.9


 

8.6


 

29.1

 

Share-based compensation


 

19.1


 

20.6


 

79.5


 

99.5

 

Provision for deferred income taxes


 

128.0


 

120.2


 

128.0


 

120.2

 

Provision for bad debts


 

5.1


 

(6.4)


 

27.2


 

26.8

 

Change in operating assets and liabilities, net of
     effects from acquisitions:


 

 

 

 

 

 

 

 
 

Decrease/(increase) in trade receivables


 

121.7


 

386


 

(457.2)


 

20.6

 

Decrease/(increase) in inventories


 

383.5


 

858.5


 

(664.7)


 

477.4

 

Increase/(decrease) in accounts payable


 

(629.9)


 

(1,271.7)


 

1,356.5


 

451.0

 

Other accrued liabilities and operating items, net


 

(185.7)


 

(35.9)


 

(287.0)


 

(74.6)

 

Net cash provided by operating activities—continuing operations


 

119.9


 

324.7


 

1,395.1


 

1,986.7

 

Net cash provided by/(used in) operating activities—discontinued operations


 

-


 

(0.4)


 

(0.5)


 

147.4

 

Net cash provided by operating activities


 

119.9


 

324.3


 

1,394.6


 

2,134.1

 

 

 

 

 

 

 

 

 

 
 

CASH FLOWS FROM INVESTING ACTIVITIES:


 

 

 

 

 

 

 

 
 

Proceeds from divestitures and sale of property and equipment


 

0.1


 

141.3


 

3.0


 

158.6

 

Acquisition of subsidiaries, net of cash acquired


 

(4.5)


 

-


 

(2,299.5)


 

(32.0)

 

Purchase of held-to-maturity investment securities


 

-


 

-


 

(155.6)


 

-

 

Additions to property and equipment


 

(105.4)


 

(119.8)


 

(291.3)


 

(260.3)

 

Proceeds from sale of CareFusion common stock


 

-


 

-


 

705.9


 

270.7

 

Proceeds from maturities of held-to-maturity securities


 

9.5


 

-


 

9.5


 

-

 

Net cash provided by/(used in) investing activities—continuing operations


 

(100.3)


 

21.5


 

(2,028.0)


 

137.0

 

Net cash used in investing activities—discontinued operations


 

-


 

-


 

-


 

(9.9)

 

Net cash provided by/(used in) investing activities


 

(100.3)


 

21.5


 

(2,028.0)


 

127.1

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 
 

CASH FLOWS FROM FINANCING ACTIVITIES:


 

 

 

 

 

 

 

 
 

Payment of contingent consideration


 

(10.2)


 

-


 

(10.2)


 

-

 

Net change in short-term borrowings


 

4.9


 

-


 

46.4


 

-

 

Reduction of long-term obligations


 

(0.5)


 

(0.4)


 

(228.6)


 

(1,485.5)

 

Proceeds from long-term obligations, net of issuance costs


 

-


 

-


 

494.5


 

-

 

Proceeds from issuance of Common Shares


 

27.0


 

15.5


 

63.0


 

40.0

 

Tax disbursements from exercises of stock options


 

(5.0)


 

(1.3)


 

(13.7)


 

(16.1)

 

Payment of premiums for debt extinguishment


 

-


 

-


 

-


 

(66.4)

 

Dividends on Common Shares


 

(68.3)


 

(62.9)


 

(274.2)


 

(253.1)

 

Purchase of treasury shares


 

-


 

(180.2)


 

(269.8)


 

(230.2)

 

Net cash used in financing activities—continuing operations


 

(52.1)


 

(229.3)


 

(192.6)


 

(2,011.3)

 

Net cash provided by financing activities—
           discontinued operations


 

-


 

-


 

-


 

1,283.8

 

Net cash used in financing activities


 

(52.1)


 

(229.3)


 

(192.6)


 

(727.5)

 

 

 

 

 

 

 

 

 

 
 

NET INCREASE/(DECREASE) IN CASH AND EQUIVALENTS


 

(32.5)


 

116.5


 

(826.0)


 

1,533.7

 

 

 

 

 

 

 

 

 

 
 

CASH AND EQUIVALENTS AT BEGINNING OF PERIOD


 

1,961.8


 

2,638.8


 

2,755.3


 

1,221.6

 

 

 

 

 

 

 

 

 

 
 

CASH AND EQUIVALENTS AT END OF PERIOD


 

$ 1,929.3


 

$ 2,755.3


 

$ 1,929.3


 

$    2,755.3

 
                 


 

 

 

 

 

 

 

 Schedule 5

 

 

 

 

 

 

 

 

 

 
 

CARDINAL HEALTH, INC. AND SUBSIDIARIES

 

BUSINESS ANALYSIS

 

 
 

TOTAL COMPANY

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

Non-GAAP

 

 

 

Fourth Quarter


 

Fourth Quarter

 

(in millions)


 

2011


 

2010


 

2011


 

2010

 

 

 

 

 

 

 

 

 

 
 

Revenue


 

 

 

 

 

 

 

 
 

Amount


 

$26,764


 

$24,460


 

 

 

 
 

Growth Rate


 

9 %


 

0.5 %


 

 

 

 
 

 

 

 

 

 

 

 

 

 
 

Operating Earnings


 

 

 

 

 

 

 

 
 

Amount


 

$359


 

$334


 

$362


 

$317

 

Growth Rate


 

7 %


 

9 %


 

14 %


 

(11)%

 

 

 

 

 

 

 

 

 

 
 

Earnings from Continuing Operations


 

 

 

 

 

 

 

 
 

Amount


 

$207


 

$194


 

$208


 

$181

 

Growth Rate


 

7 %


 

(4)%


 

15 %


 

(21)%

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

Non-GAAP

 

 

 

Fiscal Year


 

Fiscal Year

 

 

 

2011


 

2010


 

2011


 

2010

 

 

 

 

 

 

 

 

 

 
 

Revenue


 

 

 

 

 

 

 

 
 

Amount


 

$102,644


 

$98,503


 

 

 

 
 

Growth Rate


 

4 %


 

3 %


 

 

 

 
 

 

 

 

 

 

 

 

 

 
 

Operating Earnings


 

 

 

 

 

 

 

 
 

Amount


 

$1,514


 

$1,307


 

$1,577


 

$1,383

 

Growth Rate


 

16 %


 

1 %


 

14 %


 

(2)%

 

 

 

 

 

 

 

 

 

 
 

Earnings from Continuing Operations


 

 

 

 

 

 

 

 
 

Amount


 

$966


 

$587


 

$941


 

$804

 

Growth Rate


 

65 %


 

(23)%


 

17 %


 

(2)%

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 
 

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

 
                 


 

Schedule 6

 

CARDINAL HEALTH, INC. AND SUBSIDIARIES

 

SEGMENT BUSINESS ANALYSIS

 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 
 

 
 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

Fourth Quarter


 

 

 

Fourth Quarter

 

(in millions)


 

2011


 

2010


 

(in millions)


 

2011


 

2010

 

 

 

 

 

 

 

 

 

 

 

 
 

PHARMACEUTICAL


 

 

 

 

 

MEDICAL


 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 
 

Revenue


 

 

 

 

 

Revenue


 

 

 

 
 

Amount


 

$24,458


 

$22,307


 

Amount


 

$2,312


 

$2,158

 

Growth Rate


 

10 %


 

0.2 %


 

Growth Rate


 

7 %


 

3 %

 

Mix


 

91 %


 

91 %


 

Mix


 

9 %


 

9 %

 

 

 

 

 

 

 

 

 

 

 

 
 

Segment Profit


 

 

 

 

 

Segment Profit


 

 

 

 
 

Amount


 

$295


 

$227


 

Amount


 

$78


 

$102

 

Growth Rate


 

30 %


 

(17)%


 

Growth Rate


 

(24)%


 

22 %

 

Mix


 

79 %


 

69 %


 

Mix


 

21 %


 

31 %

 

Segment Profit Margin


 

1.21 %


 

1.02 %


 

Segment Profit Margin


 

3.35 %


 

4.75 %

 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 
 

Refer to definitions for an explanation of calculations.

 

 
 

Total consolidated revenue for the three months ended June 30, 2011 was $26,764 million, which included total segment revenue of $26,770 million and Corporate revenue of ($6) million. Total consolidated revenue for the three months ended June 30, 2010 was $24,460 million, which included total segment revenue of $24,465 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 June 30, 2011 were $359 million, which included total segment profit of $373 million and Corporate costs of ($14) million. Total consolidated operating earnings for the three months ended June 30, 2010 were $334 million, which included total segment profit of $329 million and Corporate income of $5 million. Corporate includes, among other things, restructuring and employee severance, acquisition-related costs, impairments and loss on sale of assets, litigation (recoveries)/charges, net and certain investment spending that are not allocated to the segments.

 
                     


 

Schedule 7

 

CARDINAL HEALTH, INC. AND SUBSIDIARIES

 

SEGMENT BUSINESS ANALYSIS

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 
 

 
 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 
 

 

Fiscal Year


 

 

Fiscal Year

 

(in millions)

2011


 

2010


 

(in millions)

2011


 

2010

 

 

 

 

 

 

 

 

 

 
 

PHARMACEUTICAL


 

 

 

 

MEDICAL


 

 

 
 

 

 

 

 

 

 

 

 

 
 

Revenue


 

 

 

 

Revenue


 

 

 
 

Amount

$93,744


 

$89,790


 

Amount

$8,922


 

$8,750

 

Growth Rate

4 %


 

2 %


 

Growth Rate

2 %


 

7 %

 

Mix

91 %


 

91 %


 

Mix

9 %


 

9 %

 

 

 

 

 

 

 

 

 

 
 

Segment Profit


 

 

 

 

Segment Profit


 

 

 
 

Amount

$1,265


 

$1,002


 

Amount

$370


 

$428

 

Growth Rate

26 %


 

(3)%


 

Growth Rate

(14)%


 

11 %

 

Mix

77 %


 

70 %


 

Mix

23 %


 

30 %

 

Segment Profit Margin

1.35 %


 

1.12 %


 

Segment Profit Margin

4.15 %


 

4.89 %

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 
 

Refer to definitions for an explanation of calculations.

 

 
 

Total consolidated revenue for the fiscal year ended June 30, 2011 was $102,644 million, which included total segment revenue of $102,666 million and Corporate revenue of ($22) million. Total consolidated revenue for the fiscal year ended June 30, 2010 was $98,503 million, which included total segment revenue of $98,540 million and Corporate revenue of ($37) million.  Corporate revenue consists primarily of elimination of inter-segment revenue.

 

 
 

Total consolidated operating earnings for the fiscal year ended June 30, 2011 were $1,514 million, which included total segment profit of $1,635 million and Corporate costs of ($121) million. Total consolidated operating earnings for the fiscal year ended June, 2010 were $1,307 million, which included total segment profit of $1,430 million and Corporate costs of ($123) million. Corporate includes, among other things, restructuring and employee severance, acquisition-related costs, impairments and loss on sale of assets, litigation (recoveries)/charges, net and certain investment spending that are not allocated to the segments.

 
                 


 

 

 

 

 

 

 

 

 

 

Schedule 8

 

 

 

 

 

 

 

 

 

 

 
 

CARDINAL HEALTH, INC. AND SUBSIDIARIES

 

SCHEDULE OF NOTABLE ITEMS

 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

Fourth Quarter


 

Fiscal Year

 

 

(in millions, except per Common Share amounts)


 

2011


 

2010


 

2011


 

2010

 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 
 

 

Restructuring and Employee Severance


 

 

 

 

 

 

 

 
 

 

Restructuring and employee severance


 

$   (4.9)


 

$   (6.4)


 

$ (15.5)


 

$   (90.7)

 

 

 Tax benefit


 

1.8


 

1.7


 

5.8


 

31.7

 

 

Restructuring and employee severance, net of tax


 

$   (3.1)


 

$   (4.7)


 

$   (9.7)


 

$   (59.0)

 

 

 

 

 

 

 

 

 

 

 
 

 

Decrease to diluted EPS from continuing operations


 

$ (0.01)


 

$ (0.01)


 

$ (0.03)


 

$   (0.16)

 

 

 

 

 

 

 

 

 

 

 
 

 

Acquisition-Related Costs


 

 

 

 

 

 

 

 
 

 

Acquisition-related costs


 

$   (1.1)


 

$   (8.3)


 

$ (22.9)


 

$     (8.4)

 

 

 Tax benefit/(expense)


 

(1.5)


 

2.7


 

0.8


 

2.7

 

 

Acquisition related costs, net of tax


 

$   (2.6)


 

$   (5.6)


 

$ (22.1)


 

$     (5.7)

 

 

 

 

 

 

 

 

 

 

 
 

 

Decrease to diluted EPS from continuing operations


 

$ (0.01)


 

$ (0.02)


 

$ (0.06)


 

$   (0.02)

 

 

 

 

 

 

 

 

 

 

 
 

 

Impairments and Loss on Sale of Assets


 

 

 

 

 

 

 

 
 

 

Impairments and loss on sale of assets


 

$   (0.4)


 

$   (0.9)


 

$   (8.6)


 

$   (29.1)

 

 

 Tax benefit/(expense)


 

0.1


 

(1.9)


 

3.2


 

(5.1)

 

 

Impairments and loss on sale of asset, net of tax


 

$   (0.3)


 

$   (2.8)


 

$   (5.4)


 

$   (34.2)

 

 

 

 

 

 

 

 

 

 

 
 

 

Decrease to diluted EPS from continuing operations


 

$       -


 

$ (0.01)


 

$ (0.02)


 

$   (0.09)

 

 

 

 

 

 

 

 

 

 

 
 

 

Litigation (Recoveries)/Charges, Net


 

 

 

 

 

 

 

 
 

 

Litigation (recoveries)/charges, net


 

$    5.6


 

$  33.6


 

$   (6.2)


 

$    62.4

 

 

 Tax expense


 

(2.2)


 

(12.3)


 

(0.8)

-

(23.2)

 

 

Litigation (recoveries)/charges, net, net of tax


 

$    3.4


 

$  21.3


 

$   (7.0)


 

$    39.2

 

 

 

 

 

 

 

 

 

 

 
 

 

Increase/(decrease) to diluted EPS from continuing operations


 

$  0.01


 

$  0.06


 

$ (0.02)


 

$    0.11

 

 

 

 

 

 

 

 

 

 

 
 

 

Other Spin-Off Costs


 

 

 

 

 

 

 

 
 

 

Other spin-off costs (1)


 

$   (2.2)


 

$   (1.6)


 

$   (9.6)


 

$   (53.1)

 

 

 Tax benefit/(expense)(2)


 

0.8


 

4.7


 

3.6


 

(148.5)

 

 

Other spin-off costs, net of tax


 

$   (1.4)


 

$    3.1


 

$   (6.0)


 

$ (201.6)

 

 

 

 

 

 

 

 

 

 

 
 

 

Increase/(decrease) to diluted EPS from continuing operations


 

$       -


 

$  0.01


 

$ (0.02)


 

$   (0.56)

 

 

 

 

 

 

 

 

 

 

 
 

 

Gain on Sale of CareFusion Stock


 

 

 

 

 

 

 

 
 

 

Gain on sale of CareFusion stock


 

$    3.7


 

$    1.3


 

$  75.3


 

$    44.6

 

 

 Tax expense


 

-


 

-


 

-


 

-

 

 

Gain on sale of CareFusion stock, net of tax


 

$    3.7


 

$    1.3


 

$  75.3


 

$    44.6

 

 

 

 

 

 

 

 

 

 

 
 

 

Increase to diluted EPS from continuing operations


 

$  0.01


 

$       -


 

$  0.21


 

$    0.12

 

 

 

 

 

 

 

 

 

 

 
 

 

Weighted Average Number of Diluted Shares Outstanding


 

354.6


 

361.8


 

352.5


 

361.4

 

 

 

 

 

 

 

 

 

 

 
 

(1) Other spin-off costs included in other income, net for the fiscal year ended June 30, 2011 and 2010 were $0 million and $2.4 million, respectively. Other spin-off costs also included the $39.9 million loss on extinguishment of debt for the fiscal year ended June 30, 2010. The remaining other spin-off costs are included within distribution, selling, general and administrative expenses for all periods presented.  

 

 
 

(2)  The fiscal 2010 tax expense associated with the other spin-off costs included $168.3 million related to the anticipated repatriation of a portion of cash loaned to our entities within the United States.  

 
                   


 

 

 

 

 

 

 

 

 

 

Schedule 9

 

 

 

 

 

 

 

 

 

 

 
 

 

CARDINAL HEALTH, INC. AND SUBSIDIARIES

 

 

ASSET MANAGEMENT ANALYSIS

 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

Fourth Quarter


 

Fiscal Year

 

 

 

 

2011


 

2010


 

2011


 

2010

 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 
 

 

Days Sales Outstanding


 

20.3


 

18.6


 

 

 

 
 

 

Days Inventory on Hand


 

22.5


 

21.5


 

 

 

 
 

 

Days Payable Outstanding


 

34.8


 

32.1


 

 

 

 
 

 

Net Working Capital Days


 

8.0


 

8.0


 

 

 

 
 

 

 

 

 

 

 

 

 

 

 
 

 

Debt to Total Capital


 

30 %


 

29 %


 

 

 

 
 

 

Net Debt to Capital


 

9 %


 

(13)%


 

 

 

 
 

 

 

 

 

 

 

 

 

 

 
 

 

Return on Equity


 

14.1%


 

16.8 %


 

17.5%


 

10.9%

 

 

Non-GAAP Return on Equity


 

14.4%


 

15.8%


 

17.2%


 

16.3%

 

 

 

 

 

 

 

 

 

 

 
 

 

Effective Tax Rate from Continuing Operations


 

39.3%


 

37.2%


 

36.4%


 

51.6%

 

 

Non-GAAP Effective Tax Rate from Continuing Operations

39.0%


 

37.7%


 

37.5%


 

37.5%

 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 
 

Refer to the GAAP / Non-GAAP Reconciliation for non-GAAP calculations.  Refer to DSO, DIOH and DPO below for definitions and calculation.

 
                   


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Schedule 10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

CARDINAL HEALTH, INC. AND SUBSIDIARIES

 

GAAP / NON-GAAP RECONCILIATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

(in millions, except per Common Share amounts)


 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

Fourth Quarter 2011


 

 

Fiscal Year 2011

 

 

Operating

Earnings

Operating

Earnings

Growth

Rate

Earnings

Before

Income

Taxes and

Discontinued

Operations

Provision

for Income

Taxes(1)

Earnings from

Continuing

Operations

Earnings

from

Continuing

Operations

Growth

Rate

Diluted EPS from

Continuing

Operations

Diluted EPS

from

Continuing Operations

Growth

Rate


 

Operating

Earnings

Operating

Earnings

Growth

Rate

Earnings

Before

Income Taxes

and

Discontinued

Operations

Provision

for

Income

Taxes(1)

Earnings

from

Continuing

Operations

Earnings from Continuing

Operations

Growth

Rate

Diluted EPS

From

Continuing

Operations

Diluted EPS

from

Continuing

Operations

Growth Rate

 

GAAP

$359

7 %

$341

$134

$207

7 %

$0.58

7 %


 

$1,514

16 %

$1,518

$552

$966

65 %

$2.74

69 %

 

Restructuring and Employee Severance

$5


 

$5

$2

$3


 

$0.01


 

 

$16


 

$16

$6

$10


 

$0.03


 
 

Acquisition-Related Costs

$1


 

$1

($2)

$3


 

$0.01


 

 

$23


 

$23

$1

$22


 

$0.06


 
 

Impairments and Loss on Sale of Assets

-


 

-

-

-


 

-


 

 

$9


 

$9

$3

$5


 

$0.02


 
 

Litigation (Recoveries)/Charges, Net

($6)


 

($6)

($2)

($3)


 

($0.01)


 

 

$6


 

$6

($1)

$7


 

$0.02


 
 

Other Spinoff Costs

$2


 

$2

$1

$1


 

-


 

 

$10


 

$10

$4

$6


 

$0.02


 
 

Gain on Sale of CareFusion Stock

-


 

($4)

-

($4)


 

($0.01)


 

 

-


 

($75)

-

($75)


 

($0.21)


 
 

Non-GAAP

$362

14 %

$341

$133

$208

15 %

$0.59

18 %


 

$1,577

14 %

$1,506

$565

$941

17 %

$2.67

20 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
                                   


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

Fourth Quarter 2010


 

 

Fiscal Year 2010

 

 

Operating

Earnings

Operating

Earnings

Growth

Rate

Earnings Before

Income Taxes

and Discontinued

Operations

Provision for

Income Taxes(1)

Earnings from

Continuing

Operations

Earnings from

Continuing

Operations

Growth Rate

Diluted EPS from

Continuing

Operations

Diluted EPS from

Continuing

Operations

Growth Rate


 

Operating

Earnings

Operating

Earnings

Growth Rate

Earnings Before

Income

Taxes

and Discontinued

Operations

Provision for

Income Taxes(1)

Earnings from

Continuing

Operations

Earnings from

Continuing

Operations

Growth Rate

Diluted EPS from

Continuing

Operations

Diluted EPS from

Continuing

Operations

Growth Rate

 

GAAP

$334

9 %

$308

$115

$194

(4)%

$0.54

(4)%


 

$1,307

1 %

$1,212

$625

$587

(23)%

$1.62

(23)%

 

Restructuring and Employee Severance

$6


 

$6

$2

$5


 

$0.01


 

 

$91


 

$91

$32

$59


 

$0.16


 
 

Acquisition-Related Costs

$8


 

$8

$3

$6


 

$0.02


 

 

$8


 

$8

$3

$6


 

$0.02


 
 

Impairments and Loss on Sale of Assets

$1


 

$1

($2)

$3


 

$0.01


 

 

$29


 

$29

($5)

$34


 

$0.09


 
 

Litigation (Recoveries)/Charges, Net

($34)


 

($34)

($12)

($21)


 

($0.06)


 

 

($62)


 

($62)

($23)

($39)


 

($0.11)


 
 

Other Spinoff Costs

$2


 

$2

$5

($3)


 

($0.01)


 

 

$11


 

$53

($149)

$202


 

$0.56


 
 

Gain on Sale of CareFusion Stock

-


 

($1)

-

($1)


 

-


 

 

-


 

($45)

-

($45)


 

($0.12)


 
 

Non-GAAP

$317

(11)%

$291

$110

$181

(21)%

$0.50

(21)%


 

$1,383

(2)%

$1,286

$482

$804

(2)%

$2.22

(2)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

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

 

 
 

(1) We apply varying tax rates depending upon the tax jurisdiction where the items are incurred.

 
                                   


 

 

 Schedule 11

 

 
 

CARDINAL HEALTH, INC. AND SUBSIDIARIES

 

GAAP / NON-GAAP RECONCILIATION

 

 
 

 

 

 

 

 

 

 

 
 

 

 

 

Fourth Quarter


 

 

 

Fourth Quarter

 

 

(in millions)


 

2011


 

 

 

2010

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 
 

 

GAAP Return on Equity


 

14.1 %


 

 

 

16.8%

 

 

 

 

 

 

 

 

 
 

 

Non-GAAP Return on Equity


 

 

 

 

 

 
 

 

Net earnings


 

$              202.7


 

 

 

$              223.5

 

 

Restructuring and employee severance, net of tax, in continuing operations(1)


 

3.1


 

 

 

4.7

 

 

Acquisition-related costs, net of tax, in continuing operations(1)


 

2.6


 

 

 

5.6

 

 

Impairments and loss on sale of assets, net of tax, in continuing operations(1)


 

0.3


 

 

 

2.8

 

 

Litigation (recoveries)/charges, net, net of tax, in continuing operations(1)


 

(3.4)


 

 

 

(21.3)

 

 

Other spin-off costs, net of tax(1)


 

1.4


 

 

 

(3.1)

 

 

Gain on sale of CareFusion stock, net of tax(1)


 

(3.7)


 

 

 

(1.3)

 

 

CareFusion net (earnings)/loss in discontinued operations(1),(2)


 

4.4


 

 

 

(0.4)

 

 

 Adjusted net earnings


 

$              207.4


 

 

 

$              210.5

 

 

 Annualized


 

829.6


 

 

 

842.0

 

 

 Divided by average shareholders' equity(3)


 

5,752.7


 

 

 

5,318.5

 

 

Non-GAAP Return on Equity


 

14.4%


 

 

 

15.8%

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 
 

(1)

We apply 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.  

 

 

 
 

(3)

The average shareholders' equity shown above is calculated using the average of the prior and current quarters.

 
               


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Schedule 12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

CARDINAL HEALTH, INC. AND SUBSIDIARIES


 
 

GAAP / NON-GAAP RECONCILIATION


 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

Fiscal Year


 

 

 

 

 

 

 

 

 

Fiscal Year


 

 

 

 

 

 

 

 
 

(in millions) 


 

2011


 

 

 

 

 

 

 

 

 

2010


 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

GAAP Return on Equity 


 

17.5 %


 

 

 

 

 

 

 

 

 

10.9 %


 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

Non-GAAP Return on Equity


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

Net earnings 


 

$                       959.0


 

 

 

 

 

 

 

 

 

$                       642.2


 

 

 

 

 

 

 

 
 

Restructuring and employee severance, net of tax, in continuing operations(1)


 

9.7


 

 

 

 

 

 

 

 

 

59.0


 

 

 

 

 

 

 

 
 

Acquisition-related costs, net of tax, in continuing operations(1)


 

22.1


 

 

 

 

 

 

 

 

 

5.7


 

 

 

 

 

 

 

 
 

Impairments and loss on sale of assets, net of tax, in continuing operations(1)


 

5.4


 

 

 

 

 

 

 

 

 

34.2


 

 

 

 

 

 

 

 
 

Litigation (recoveries)/charges, net, net of tax, in continuing operations(1)


 

7.0


 

 

 

 

 

 

 

 

 

(39.2)


 

 

 

 

 

 

 

 
 

Other spin-off costs, net of tax(1)


 

6.0


 

 

 

 

 

 

 

 

 

201.6


 

 

 

 

 

 

 

 
 

Gain on sale of CareFusion stock, net of tax(1)


 

(75.3)


 

 

 

 

 

 

 

 

 

(44.6)


 

 

 

 

 

 

 

 
 

CareFusion net (earnings)/loss in discontinued operations(1, 2)


 

7.7


 

 

 

 

 

 

 

 

 

(15.0)


 

 

 

 

 

 

 

 
 

 Adjusted net earnings 


 

$                       941.6


 

 

 

 

 

 

 

 

 

$                       843.9


 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

Fourth Quarter


 

Third Quarter


 

Second Quarter


 

First Quarter


 

Fourth Quarter


 

Fourth Quarter


 

Third Quarter


 

Second Quarter


 

First Quarter


 

Fourth Quarter

 

 

 

2011


 

2011


 

2011


 

2011


 

2010


 

2010


 

2010


 

2010


 

2010


 

2009

 

Non-GAAP Shareholders' Equity


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

Total shareholders' equity 


 

$                    5,848.6


 

$                    5,656.8


 

$        5,421.4


 

$                    5,239.0


 

$                    5,276.1


 

$                    5,276.1


 

$                    5,360.9


 

$                    5,226.1


 

$                    4,941.2


 

$                    8,724.7

 

Non-cash dividend related to CareFusion spin-off


 

-


 

-


 

-


 

-


 

-


 

-


 

-


 

-


 

-


 

(3,687.7)

 

Non-GAAP shareholders' equity


 

$                    5,848.6


 

$                    5,656.8


 

$        5,421.4


 

$                    5,239.0


 

$                    5,276.1


 

$                    5,276.1


 

$                    5,360.9


 

$                    5,226.1


 

$                    4,941.2


 

$                    5,037.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 Divided by average shareholders' equity


 

5,488.4


 

 

 

 

 

 

 

 

 

5,168.3


 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

Non-GAAP Return on Equity


 

17.2%


 

 

 

 

 

 

 

 

 

16.3%


 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

(1) We apply 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.  

 
                                         


 

 

 

 

 

 

 

 

 

 

 

Schedule 13

 

 

 

 

 

 

 

 

 

 

 

 
 

CARDINAL HEALTH, INC. AND SUBSIDIARIES

 

GAAP / NON-GAAP RECONCILIATION

 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

Fourth Quarter


 

Fiscal Year

 

 

(in millions)


 

 

2011


 

2010


 

2011


 

2010

 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 
 

 

GAAP Effective Tax Rate from Continuing Operations


 

39.3 %


 

37.2 %


 

36.4 %


 

51.6 %

 

 

 

 

 

 

 

 

 

 

 

 
 

 

Non-GAAP Effective Tax Rate from Continuing Operations


 

 

 

 

 

 

 

 
 

 

Earnings before income taxes and discontinued operations


 

$    341.3


 

$    308.4


 

$ 1,518.3


 

$      1,211.6

 

 

Restructuring and employee severance


 

4.9


 

6.4


 

15.5


 

90.7

 

 

Acquisition-related costs


 

 

1.1


 

8.3


 

22.9


 

8.4

 

 

Impairments and loss on sale of assets


 

0.4


 

0.9


 

8.6


 

29.1

 

 

Litigation (recoveries)/charges, net


 

(5.6)


 

(33.6)


 

6.2


 

(62.4)

 

 

Other spin-off costs


 

 

2.2


 

1.6


 

9.6


 

53.1

 

 

Gain on sale of CareFusion stock


 

(3.7)


 

(1.3)


 

(75.3)


 

(44.6)

 

 

 Adjusted earnings before income taxes and discontinued operations


 

$    340.6


 

$    290.7


 

$ 1,505.8


 

$      1,285.9

 

 

 

 

 

 

 

 

 

 

 

 
 

 

Provision for income taxes(1)


 

 

$    134.0


 

$    114.6


 

$    552.1


 

$         624.6

 

 

Restructuring and employee severance tax benefit(1)


 

1.8


 

1.7


 

5.8


 

31.7

 

 

Acquisition-related costs tax benefit/(expense)(1)


 

(1.5)


 

2.7


 

0.8


 

2.7

 

 

Impairments and loss on sale of assets tax benefit/(expense)(1)


 

0.1


 

(1.9)


 

3.2


 

(5.1)

 

 

Litigation (recoveries)/charges, net tax expense(1)


 

(2.2)


 

(12.3)


 

(0.8)


 

(23.2)

 

 

Other spin-off costs tax benefit/(expense)(1)


 

0.8


 

4.7


 

3.6


 

(148.5)

 

 

Gain on sale of CareFusion stock tax expense(1)


 

-


 

-


 

-


 

-

 

 

 Adjusted provision for income taxes


 

$    133.0


 

$    109.5


 

$    564.7


 

$         482.2

 

 

 

 

 

 

 

 

 

 

 

 
 

 

Non-GAAP Effective Tax Rate from Continuing Operations


 

39.0%


 

37.7%


 

37.5%


 

37.5%

 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 
 
                     


 

 

 

 

 

 
 

 

 

 

 

Fourth Quarter

 

 

 

 

 

2011


 

2010

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 
 

 

Debt to Total Capital


 

 

30%


 

29%

 

 

 

 

 

 

 

 
 

 

Net Debt to Capital


 

 

 

 

 
 

 

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


 

$    326.7


 

$    233.2

 

 

Long-term obligations, less current portion


 

2,175.3


 

1,896.1

 

 

Debt


 

 

$ 2,502.0


 

$ 2,129.3

 

 

Cash and equivalents


 

 

(1,929.3)


 

(2,755.3)

 

 

 Net debt


 

 

$    572.7


 

$  (626.0)

 

 

Total shareholders' equity


 

 

$ 5,848.6


 

$ 5,276.1

 

 

Capital


 

 

$ 6,421.3


 

$ 4,650.1

 

 

 Net Debt to Capital


 

 

9%


 

(13)%

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 
 

(1)   We apply varying tax rates depending upon the tax jurisdiction where the items are incurred.  

 
             


 

 

 

 

 

Schedule 14

 

 

 

 

 

 
 

CARDINAL HEALTH, INC. AND SUBSIDIARIES

 

 
 

 

 

 

 

 
 

 

 

 

 

 
 

 

 

Fourth Quarter

 

(in millions)


 

2011


 

2010

 

 

 

 

 

 
 

Days Sales Outstanding


 

20.3


 

18.6

 

 

 

 

 

 
 

Days Inventory on Hand


 

 

 

 
 

Inventories


 

$   7,334.2


 

$   6,355.9

 

 

 

 

 

 
 

Cost of products sold


 

$ 25,720.1


 

$ 23,555.5

 

Chargeback billings


 

3,555.9


 

3,066.0

 

 Adjusted cost of products sold


 

$ 29,276.0


 

$ 26,621.5

 

 

 

 

 

 
 

Adjusted cost of products sold divided by 90 days


 

$      325.3


 

$      295.8

 

 

 

 

 

 
 

Days Inventory on Hand


 

22.5


 

21.5

 

 

 

 

 

 
 

Days Payable Outstanding


 

 

 

 
 

Accounts payable


 

$ 11,331.5


 

$   9,494.9

 

 

 

 

 

 
 

Cost of products sold


 

$ 25,720.1


 

$ 23,555.5

 

Chargeback billings


 

3,555.9


 

3,066.0

 

 Adjusted cost of products sold


 

$ 29,276.0


 

$ 26,621.5

 

 

 

 

 

 
 

Adjusted cost of products sold divided by 90 days


 

$      325.3


 

$      295.8

 

 

 

 

 

 
 

Days Payable Outstanding


 

34.8


 

32.1

 

 

 

 

 

 
 

Net Working Capital Days


 

8.0


 

8.0

 

 

 

 

 

 
 

 

 

 

 

 
 

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

 

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

 

Days Payable Outstanding: accounts payable divided by ((quarterly cost of products sold plus chargeback billings) divided by 90 days). Chargeback billings are the difference between a product’s wholesale acquisition cost and the contract price established between pharmaceutical manufacturers and the end customer.

 

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

 
         


 

 

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)/loss on Sale of CareFusion Stock: realized gains and losses from the sale of our ownership of CareFusion common stock retained in connection with the spin-off

 

 

Other Spin-Off Costs: costs and tax charges incurred in connection with our spin-off of CareFusion that are not included in restructuring and employee severance, acquisition-related costs, impairments and loss on sale of assets and litigation (recoveries)/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 our entities within the United States

 

 

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 - definitions of non-GAAP terms under historical definitions; new non-GAAP terms are described on the following pages

 

 

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) acquisition-related costs, (3) impairments and loss on sale of assets, (4) litigation (recoveries)/charges, net, (5) Other Spin-Off Costs and (6) (gain)/loss 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) acquisition-related costs, (3) impairments and loss on sale of assets, (4) litigation (recoveries)/charges, net, (5) Other Spin-Off Costs and (6) (gain)/loss on sale of CareFusion stock) divided by (earnings before income taxes and discontinued operations adjusted for (1) restructuring and employee severance, (2) acquisition-related costs, (3) impairments and loss on sale of assets, (4) litigation (recoveries)/charges, net, (5) Other Spin-Off Costs and (6) (gain)/loss on sale of CareFusion stock)

 

 

Non-GAAP Operating Earnings:  operating earnings excluding (1) restructuring and employee severance, (2) acquisition-related costs, (3) impairments and loss on sale of assets, (4) litigation (recoveries)/charges, net and (5) Other Spin-Off Costs included within distribution, selling, general and administrative expense

 

 

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) acquisition-related costs, (3) impairments and loss on sale of assets, (4) litigation (recoveries)/charges, net, (5) Other Spin-Off Costs, (6) (gain)/loss on sale of CareFusion stock (7) CareFusion net earnings in discontinued operations, each net of tax) and divided by average shareholders' equity adjusted for the $3.7 billion non-cash dividend issued in connection with the spin-off

 
   


 

Schedule 15

 

CARDINAL HEALTH, INC. AND SUBSIDIARIES

 

GAAP / NEW NON-GAAP RECONCILIATION

 

 
 

Note:  Beginning in fiscal 2012, we will use new non-GAAP definitions. The new definitions exclude amortization of acquisition-related intangible assets in addition to the items currently excluded.  The tables below present the new non-GAAP measures for each quarter of fiscal 2011, the comparable GAAP measures, and a reconciliation of the differences between GAAP measures, the new non-GAAP measures, and non-GAAP measures under the historical definitions.

 
 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

(in millions, except per Common Share amounts)


 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

First Quarter 2011


 

Second Quarter 2011

 

 

Operating

Earnings

Operating

Earnings

Growth

Rate

Earnings

Before Income

Taxes and

Discontinued

Operations

Provision for

Income Taxes(1)

Earnings from

Continuing

Operations

Earnings from

Continuing Operations

Growth

Rate

Diluted EPS

from

Continuing

Operations

Diluted EPS

from

Continuing

Operations

Growth

Rate


 

Operating

Earnings

Operating

Earnings

Growth

Rate

Earnings

Before Income

Taxes and

Discontinued

Operations

Provision

for Income

Taxes(1)

Earnings from

Continuing

Operations

Earnings from

Continuing

Operations

Growth

Rate

Diluted EPS

from

Continuing

Operations

Diluted EPS

from

Continuing Operations

Growth Rate

 

GAAP

$364

52 %

$424

$130

$294

N.M.

$0.84

N.M.


 

$344

(6)%

$328

$113

$215

(7)%

$0.61

(5)%

 

Restructuring and Employee Severance

$2


 

$2

$1

$1


 

-


 

 

$3


 

$3

$1

$2


 

-


 
 

Acquisition-Related Costs

$1


 

$1

-

$1


 

-


 

 

$18


 

$18

$2

$16


 

$0.05


 
 

Impairments and Loss on Sale of Assets

$2


 

$2

$1

$1


 

-


 

 

$2


 

$2

$1

$1


 

-


 
 

Litigation (Recoveries)/Charges, Net

$1


 

$1

$1

$1


 

-


 

 

$6


 

$6

-

$6


 

$0.02


 
 

Other Spinoff Costs

$2


 

$2

$1

$1


 

-


 

 

$5


 

$5

$2

$3


 

$0.01


 
 

(Gain)/Loss on Sale of CareFusion Stock

-


 

($75)

-

($75)


 

($0.21)


 

 

-


 

-

-

-


 

-


 
 

Historical Non-GAAP

$372

15 %

$357

$133

$225

16 %

$0.64

19 %


 

$378

5%

$361

$119

$243

17%

$0.69

21%

 

Adjustment: Amortization of Acquisition-Related Intangibles

$10


 

$10

$4

$6


 

$0.02


 

 

$15


 

$15

$2

$13


 

$0.04


 
 

New Non-GAAP

$382

17 %

$368

$136

$231

18 %

$0.66

22 %


 

$393

9%

$376

$121

$256

23%

$0.73

26%

 

New Non-GAAP Effective Tax Rate(2)


 

 

 

37.1%(3)


 

 

 

 

 

 

 

 

32.0%(4)


 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
                                   


 

 

Third Quarter 2011


 

Fourth Quarter 2011

 

 

Operating

Earnings

Operating

Earnings

Growth

Rate

Earnings

Before

Income

Taxes and

Discontinued

Operations

Provision for

Income Taxes(1)

Earnings

from

Continuing

Operations

Earnings

from

Continuing

Operations

Growth

Rate

Diluted EPS

from

Continuing

Operations

Diluted EPS

from

Continuing

Operations

Growth

Rate


 

Operating

Earnings

Operating

Earnings

Growth

Rate

Earnings

Before

Income

Taxes and

Discontinued

Operations

Provision for

Income Taxes(1)

Earnings

from

Continuing

Operations

Earnings

from

Continuing

Operations

Growth

Rate

Diluted EPS

from

Continuing

Operations

Diluted EPS

from

Continuing

Operations

Growth

Rate

 

GAAP

$447

22%

$425

$176

$250

11%

$0.71

15%


 

$359

7 %

$341

$134

$207

7 %

$0.58

7 %

 

Restructuring and Employee Severance

$6


 

$6

$2

$4


 

$0.01


 

 

$5


 

$5

$2

$3


 

$0.01


 
 

Acquisition-Related Costs

$3


 

$3

-

$2


 

$0.01


 

 

$1


 

$1

($2)

$3


 

$0.01


 
 

Impairments and Loss on Sale of Assets

$5


 

$5

$2

$3


 

$0.01


 

 

-


 

-

-

-


 

-


 
 

Litigation (Recoveries)/Charges, Net

$4


 

$4

-

$4


 

$0.01


 

 

($6)


 

($6)

($2)

($3)


 

($0.01)


 
 

Other Spinoff Costs

$1


 

$1

-

-


 

-


 

 

$2


 

$2

$1

$1


 

-


 
 

(Gain)/Loss on Sale of CareFusion Stock

-


 

$3

-

$3


 

$0.01


 

 

-


 

($4)

-

($4)


 

($0.01)


 
 

Historical Non-GAAP

$466

21%

$447

$181

$266

20%

$0.75

23%


 

$362

14 %

$341

$133

$208

15 %

$0.59

18 %

 

Adjustment: Amortization of Acquisition-Related Intangibles

$28


 

$28

$7

$21


 

$0.06


 

 

$14


 

$14

$7

$6


 

$0.02


 
 

New Non-GAAP

$493

27%

$475

$188

$286

28%

$0.81

31%


 

$375

17 %

$354

$140

$214

17 %

$0.60

20 %

 

New Non-GAAP Effective Tax Rate(2)


 

 

 

39.7%(5)


 

 

 

 

 

 

 

 

39.6%(6)


 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

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

 

 
 

(1) We apply varying tax rates depending upon the tax jurisdiction where the items are incurred.

 

(2) The new non-GAAP effective tax rate is calculated by dividing the new non-GAAP provision for income taxes by the new non-GAAP earnings before income taxes and discontinued operations.

 

(3) For Q1 FY11 the GAAP effective tax rate was 30.6% ($130/$424), and the non-GAAP effective tax rate was 37.1% ($133/$357) under the historical definition, and 37.1% ($136/$368) under the new non-GAAP definition.

 

(4)  For Q2 FY11 the GAAP effective tax rate was 34.4% ($113/$328), and the non-GAAP effective tax rate was 32.8% ($119/$361) under the historical definition, and 32.0% ($121/$376) under the new non-GAAP definition.

 

(5) For Q3 FY11 the GAAP effective tax rate was 41.3% ($176/$425), and the non-GAAP effective tax rate was 40.5% ($181/$447) under the historical definition, and 39.7% ($188/$475) under the new non-GAAP definition.

 

(6) For Q4 FY11 the GAAP effective tax rate was 39.3% ($134/$341), and the non-GAAP effective tax rate was 39.0% ($133/$341) under the historical definition, and 39.6% ($140/$354) under the new non-GAAP definition.

 
                                   


 

 Schedule 16

 

 
 

CARDINAL HEALTH, INC. AND SUBSIDIARIES

 

GAAP / NEW NON-GAAP RECONCILIATION

 

 
 

Note:  Beginning in fiscal 2012, we will use new non-GAAP definitions. The new definitions exclude amortization of acquisition-related intangible assets in addition to the items currently excluded.  The tables below present the new non-GAAP measures for each quarter of fiscal 2010, the comparable GAAP measures, and a reconciliation of the differences between GAAP measures, the new non-GAAP measures, and non-GAAP measures under the historical definitions.

 
 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

(in millions, except per Common Share amounts)


 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

First Quarter 2010


 

Second Quarter 2010

 

 

Operating

Earnings

Operating

Earnings
Growth
Rate

Earnings

Before Income

Taxes and

Discontinued

Operations

Provision for

Income

Taxes(1)

Earnings

from

Continuing

Operations

Earnings

from

Continuing

Operations

Growth Rate

Diluted EPS

from

Continuing

Operations

Diluted EPS

from

Continuing

Operations

Growth Rate


 

Operating

Earnings

Operating

Earnings

Growth Rate

Earnings

Before Income

Taxes and

Discontinued

Operations

Provision for

Income Taxes(1)

Earnings from

Continuing

Operations

Earnings from

Continuing

Operations

Growth

Rate

Diluted EPS

from Continuing

Operations

Diluted EPS

from Continuing

Operations

Growth Rate

 

GAAP

$240

(16)%

$175

$237

($62)

N.M.

($0.17)

N.M.


 

$367

17 %

$365

$135

$230

36 %

$0.64

36 %

 

Restructuring and Employee Severance

$60


 

$60

$17

$42


 

$0.12


 

 

$10


 

$10

$3

$8


 

$0.02


 
 

Acquisition-Related Costs

-


 

-

-

-


 

-


 

 

$1


 

$1

-

-


 

-


 
 

Impairments and Loss on Sale of Assets

$24


 

$24

$8

$16


 

$0.04


 

 

-


 

-

-

-


 

-


 
 

Litigation (Recoveries)/Charges, Net

-


 

-

-

-


 

-


 

 

($25)


 

($25)

($10)

($16)


 

($0.04)


 
 

Other Spinoff Costs

-


 

$42

($156)

$198


 

$0.55


 

 

$5


 

$5

$1

$4


 

$0.01


 
 

(Gain)/Loss on Sale of CareFusion Stock

-


 

-

-

-


 

-


 

 

-


 

($20)

-

($20)


 

($0.06)


 
 

Historical Non-GAAP

$323

4 %

$300

$106

$194

15%

$0.54

15%


 

$358

6%

$336

$129

$207

13%

$0.57

12%

 

Adjustment: Amortization of Acquisition-Related Intangibles

$3


 

$3

$1

$2


 

-


 

 

$3


 

$3

$1

$2


 

-


 
 

New Non-GAAP

$326

4 %

$303

$107

$196

15%

$0.54

15%


 

$361

6%

$339

$130

$208

13%

$0.58

14%

 

New Non-GAAP Effective Tax Rate(2)


 

 

 

35.4%(3)


 

 

 

 

 

 

 

 

38.5%(4)


 

 

 

 
 
                                   


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

Third Quarter 2010


 

Fourth Quarter 2010

 

 

Operating

Earnings

Operating

Earnings

Growth

Rate

Earnings

Before Income

Taxes and

Discontinued

Operations

Provision for

Income Taxes(1)

Earnings

from

Continuing

Operations

Earnings

from

Continuing

Operations

Growth

Rate

Diluted EPS

from

Continuing

Operations

Diluted EPS

from

Continuing

Operations

Growth Rate


 

Operating

Earnings

Operating

Earnings

Growth Rate

Earnings

Before Income

Taxes and

Discontinued

Operations

Provision for

Income Taxes(1)

Earnings

from

Continuing

Operations

Earnings

from

Continuing

Operations

Growth Rate

Diluted EPS

from

Continuing

Operations

Diluted EPS

from

Continuing Operations

Growth Rate

 

GAAP

$366

(4)%

$363

$138

$225

5%

$0.62

3%


 

$334

9 %

$308

$115

$194

(4)%

$0.54

(4)%

 

Restructuring and Employee Severance

$14


 

$14

$10

$4


 

$0.01


 

 

$6


 

$6

$2

$5


 

$0.01


 
 

Acquisition-Related Costs

($1)


 

($1)

-

-


 

-


 

 

$8


 

$8

$3

$6


 

$0.02


 
 

Impairments and Loss on Sale of Assets

$4


 

$4

($12)

$16


 

$0.04


 

 

$1


 

$1

($2)

$3


 

$0.01


 
 

Litigation (Recoveries)/Charges, Net

($3)


 

($3)

($1)

($2)


 

($0.01)


 

 

($34)


 

($34)

($12)

($21)


 

($0.06)


 
 

Other Spinoff Costs

$4


 

$4

$1

$3


 

$0.01


 

 

$2


 

$2

$5

($3)


 

($0.01)


 
 

(Gain)/Loss on Sale of CareFusion Stock

-


 

($23)

-

($23)


 

($0.06)


 

 

-


 

($1)

-

($1)


 

-


 
 

Historical Non-GAAP

$385

(7)%

$359

$137

$222

(6)%

$0.61

(8)%


 

$317

(11)%

$291

$110

$181

(21)%

$0.50

(21)%

 

Adjustment: Amortization of Acquisition-Related Intangibles

$3


 

$3

$1

$2


 

-


 

 

$2


 

$2

$1

$1


 

-


 
 

New Non-GAAP

$388

(7)%

$362

$138

$224

(6)%

$0.62

(6)%


 

$320

(11)%

$293

$110

$183

(21)%

$0.50

(22)%

 

New Non-GAAP Effective Tax Rate(2)


 

 

 

38.2 %(5)


 

 

 

 

 

 

 

 

37.7%(6)


 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

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


(1) We apply varying tax rates depending upon the tax jurisdiction where the items are incurred.                        

(2) The new non-GAAP effective tax rate is calculated by dividing the new non-GAAP provision for income taxes by the new non-GAAP earnings before income taxes and discontinued operations.                        

(3) For Q1 FY10 the GAAP effective tax rate was 135.3% ($237/$175), and the non-GAAP effective tax rate was 35.4% ($106/$300) under the historical definition, and 35.4% ($107/$303) under the new non-GAAP definition.                        

(4) For Q2 FY10 the GAAP effective tax rate was 36.9% ($135/$365), and the non-GAAP effective tax rate was 38.5% ($129/$336) under the historical definition, and 38.5% ($130/$339) under the new non-GAAP definition.                        

(5) For Q3 FY10 the GAAP effective tax rate was 38.1% ($138/$363), and the non-GAAP effective tax rate was 38.2% ($137/$359) under the historical definition, and 38.2% ($138/$362) under the new non-GAAP definition.                        

(6) For Q4 FY10 the GAAP effective tax rate was 37.2% ($115/$308), and the non-GAAP effective tax rate was 37.7% ($110/$291) under the historical definition, and 37.7% ($110/$293) under the new non-GAAP definition.            

 
                                   


 

 Schedule 17

 

CARDINAL HEALTH, INC. AND SUBSIDIARIES

 

GAAP / NEW NON-GAAP RECONCILIATION

 

Note: Beginning in fiscal 2012, we will use new non-GAAP definitions. The new definitions exclude amortization of acquisition-related intangible assets in addition to the items currently excluded.  The tables below present the new non-GAAP measures for fiscal year 2011 and fiscal year 2010, the comparable GAAP measures and a reconciliation of the differences between the GAAP measures, the new non-GAAP measures and non-GAAP measures under the historical definition.

 
 


 

 
 

 

 

 

 

 

 

 

 

 
 

(in millions, except per Common Share amounts)


 

 

 

 
 

 

 

 

 

 

 

 

 

 
 

 

Fiscal Year 2011

 

 

Operating

Earnings

Operating

Earnings

Growth

Rate

Earnings

Before

Income

Taxes and

Discontinued

Operations

Provision

for

Income

Taxes(1)

Earnings

from

Continuing

Operations

Earnings

from

Continuing

Operations

Growth

Rate

Diluted

EPS from

Continuing

Operations

Diluted

EPS from

Continuing

Operations

Growth

Rate

 

GAAP

$1,514

16 %

$1,518

$552

$966

65 %

$2.74

69 %

 

Restructuring and Employee Severance

$16


 

$16

$6

$10


 

$0.03


 
 

Acquisition-Related Costs

$23


 

$23

$1

$22


 

$0.06


 
 

Impairments and Loss on Sale of Assets

$9


 

$9

$3

$5


 

$0.02


 
 

Litigation (Recoveries)/Charges, Net

$6


 

$6

($1)

$7


 

$0.02


 
 

Other Spinoff Costs

$10


 

$10

$4

$6


 

$0.02


 
 

Gain on Sale of CareFusion Stock

-


 

($75)

-

($75)


 

($0.21)


 
 

Historical Non-GAAP

$1,577

14 %

$1,506

$565

$941

17 %

$2.67

20 %

 

Adjustment: Amortization of Acquisition-Related Intangibles

$67


 

$67

$21

$46


 

$0.13


 
 

New Non-GAAP

$1,644

18 %

$1,573

$585

$988

22 %

$2.80

25 %

 

New Non-GAAP Effective Tax Rate(2)


 

 

 

37.2%(3)


 

 

 

 
 
                 


 

 

 

 

 

 

 

 

 

 
 

 

Fiscal Year 2010

 

 

Operating

Earnings

Operating

Earnings

Growth Rate

Earnings

Before

Income Taxes

and

Discontinued

Operations

Provision for

Income Taxes(1)

Earnings

from

Continuing

Operations

Earnings

from

Continuing

Operations

Growth Rate

Diluted EPS

from

Continuing

Operations

Diluted EPS

from

Continuing

Operations

Growth Rate

 

GAAP

$1,307

1 %

$1,212

$625

$587

(23)%

$1.62

(23)%

 

Restructuring and Employee Severance

$91


 

$91

$32

$59


 

$0.16


 
 

Acquisition-Related Costs

$8


 

$8

$3

$6


 

$0.02


 
 

Impairments and Loss on Sale of Assets

$29


 

$29

($5)

$34


 

$0.09


 
 

Litigation (Recoveries)/Charges, Net

($62)


 

($62)

($23)

($39)


 

($0.11)


 
 

Other Spinoff Costs

$11


 

$53

($149)

$202


 

$0.56


 
 

Gain on Sale of CareFusion Stock

-


 

($45)

-

($45)


 

($0.12)


 
 

Historical Non-GAAP

$1,383

(2)%

$1,286

$482

$804

(2)%

$2.22

(2)%

 

Adjustment: Amortization of Acquisition-Related Intangibles

$10


 

$10

$4

$7


 

$0.02


 
 

New Non-GAAP

$1,394

(3)%

$1,296

$486

$810

(2)%

$2.24

(2)%

 

New Non-GAAP Effective Tax Rate(2)


 

 

 

37.5%(4)


 

 

 

 
 

 

 

 

 

 

 

 

 

 
 

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

(1) We apply varying tax rates depending upon the tax jurisdiction where the items are incurred.

(2) The new non-GAAP effective tax rate is calculated by dividing the new non-GAAP provision for income taxes by the new non-GAAP earnings before income taxes and discontinued operations.

(3) For FY11 the GAAP effective tax rate was 36.4% ($552/$1,518), and the non-GAAP effective tax rate was 37.5% ($565/$1,506) under the historical definition, and 37.2% ($585/$1,573) under the new non-GAAP definition.

(4) For FY10 the GAAP effective tax rate was 51.6% ($625/$1,212), and the non-GAAP effective tax rate was 37.5% ($482/$1,286) under the historical definition, and 37.5% ($486/$1,296) under the new non-GAAP definition.


Forward-Looking Non-GAAP Financial Measures

We present non-GAAP earnings from continuing operations and non-GAAP effective tax rate from continuing operations (and presentations derived from these financial measures, including per share calculations) on a forward-looking basis under a new definition that excludes amortization of acquisition-related intangible assets, which we currently estimate to be $0.14 for fiscal 2012. The most directly comparable forward-looking GAAP measures are earnings from continuing operations and effective tax rate from continuing operations.  We are unable to provide a quantitative reconciliation of these forward-looking non-GAAP measures to the most directly comparable forward-looking GAAP measures because we cannot reliably forecast restructuring and employee severance, acquisition-related costs, impairments and loss on sale of assets, litigation (recoveries)/charges, net, and other spin-off costs, which are difficult to predict and estimate and are primarily dependent on future events.  Please note that the unavailable reconciling items could significantly impact our future financial results.


 
 
                 


 

 Schedule 18

 

 
 

CARDINAL HEALTH, INC. AND SUBSIDIARIES

 

RECONCILIATION OF SEGMENT PROFIT TO ADJUSTED SEGMENT PROFIT

 

 
 

Note:  Beginning in fiscal 2012, we will use a new measure for computing segment profit.  The new measure excludes amortization of acquisition-related intangible assets in addition to the items currently excluded from segment profit.  The tables below present segment profit as historically presented as well as segment profit adjusted to exclude amortization of acquisition-related intangible assets for each quarter and full year of fiscal 2011 and 2010.

 
 


 

 
 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

Fiscal


 

Fourth

Quarter


 

Third

Quarter


 

Second

Quarter


 

First

Quarter


 

Fiscal


 

Fourth

Quarter


 

Third

Quarter


 

Second

Quarter


 

First

Quarter

 

(in millions)


 

2011


 

2011


 

2011


 

2011


 

2011


 

2010


 

2010


 

2010


 

2010


 

2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

PHARMACEUTICAL


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

As Reported;


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

Segment Profit


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

Amount


 

$1,265


 

$295


 

$384


 

$289


 

$296


 

$1,002


 

$227


 

$307


 

$260


 

$208

 

Growth Rate


 

26 %


 

30 %


 

25 %


 

11 %


 

42 %


 

(3)%


 

(17)%


 

7 %


 

(1)%


 

(2)%

 

Mix


 

77 %


 

79 %


 

78 %


 

74 %


 

78 %


 

70 %


 

69 %


 

74 %


 

72 %


 

64 %

 

Segment Profit Margin


 

1.35 %


 

1.21 %


 

1.61 %


 

1.25 %


 

1.33 %


 

1.12 %


 

1.02 %


 

1.38 %


 

1.14 %


 

0.92 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

Adjustment:


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

Amortization of acquisition-related intangibles


 

$64


 

$13


 

$27


 

$14


 

$10


 

$10


 

$2


 

$3


 

$2


 

$3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

As Adjusted:


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

Segment Profit - As Adjusted


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

Amount


 

$1,329


 

$308


 

$411


 

$304


 

$306


 

$1,011


 

$229


 

$309


 

$262


 

$211

 

Growth Rate


 

31 %


 

34 %


 

33 %


 

16 %


 

45 %


 

(4)%


 

(17)%


 

7 %


 

(1)%


 

(2)%

 

Mix


 

78 %


 

80 %


 

79 %


 

75 %


 

79 %


 

70 %


 

69 %


 

74 %


 

72 %


 

65 %

 

Segment Profit Margin


 

1.42 %


 

1.26 %


 

1.73 %


 

1.31 %


 

1.37 %


 

1.13 %


 

1.03 %


 

1.39 %


 

1.15 %


 

0.94 %

 
                                         


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

Fiscal


 

Fourth

Quarter


 

Third

Quarter


 

Second

Quarter


 

First

Quarter


 

Fiscal


 

Fourth

Quarter


 

Third

Quarter


 

Second

Quarter


 

First

Quarter

 

(in millions)


 

2011


 

2011


 

2011


 

2011


 

2011


 

2010


 

2010


 

2010


 

2010


 

2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

MEDICAL


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

As Reported;


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

Segment Profit


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

Amount


 

$370


 

$78


 

$107


 

$102


 

$83


 

$428


 

$102


 

$108


 

$103


 

$115

 

Growth Rate


 

(14)%


 

(24)%


 

(1)%


 

0 %


 

(28)%


 

11 %


 

22 %


 

(16)%


 

38 %


 

17 %

 

Mix


 

23 %


 

21 %


 

22 %


 

26 %


 

22 %


 

30 %


 

31 %


 

26 %


 

28 %


 

36 %

 

Segment Profit Margin


 

4.15 %


 

3.35 %


 

4.80 %


 

4.63 %


 

3.82 %


 

4.89 %


 

4.75 %


 

5.08 %


 

4.59 %


 

5.13 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

Adjustment:


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

Amortization of acquisition-related intangibles


 

$3


 

$1


 

$1


 

$1


 

$1


 

$1


 

$0


 

$0


 

$0


 

$0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

Segment Profit - As Adjusted


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

Amount


 

$373


 

$78


 

$108


 

$103


 

$84


 

$429


 

$103


 

$108


 

$103


 

$115

 

Growth Rate


 

(13)%


 

(24)%


 

0 %


 

0 %


 

(27)%


 

11 %


 

22 %


 

(16)%


 

37 %


 

17 %

 

Mix


 

22 %


 

20 %


 

21 %


 

25 %


 

21 %


 

30 %


 

31 %


 

26 %


 

28 %


 

35 %

 

Segment Profit Margin


 

4.18 %


 

3.38 %


 

4.84 %


 

4.67 %


 

3.85 %


 

4.90 %


 

4.76 %


 

5.09 %


 

4.60 %


 

5.15 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

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

 
                                         


 

SOURCE: Cardinal Health


Get news alerts by email

Complete the form below to receive e-mail notifications of our news releases. You will receive an email which you must reply to in order to confirm your subscription. You may unsubscribe from our list at anytime.