Cardinal Health Reports Fiscal 2013 First-Quarter Results

          Cardinal Health Reports Fiscal 2013 First-Quarter Results

- Operating earnings increase 11 percent to $457 million, or 6 percent to $469
million on a non-GAAP basis(1)

- Diluted earnings per share from continuing operations increase 16 percent to
$0.79, or 11 percent to $0.81 on a non-GAAP basis

- Board of directors approves further 16 percent dividend increase

PR Newswire

DUBLIN, Ohio, Oct. 30, 2012

DUBLIN, Ohio, Oct. 30, 2012 /PRNewswire/ --Cardinal Health today reported
fiscal year 2013 first-quarter revenue of $25.9 billion and an 11 percent
increase in non-GAAP diluted earnings per share (EPS) from continuing
operations to $0.81.

In addition, the company reaffirmed its fiscal 2013 outlook for non-GAAP
diluted EPS from continuing operations of $3.35 to $3.50.

"We were pleased to report a solid beginning to our fiscal 2013. As we had
expected, revenue was down, as a result of the pharmaceutical industry's wave
of brand-to-generic conversions. Our margin expansion continued to be strong,
led by our Pharmaceutical segment andfueled by excellent contribution from
our generic programs," said George Barrett, chairman and chief executive
officer of Cardinal Health."Our Medical segment started the year more slowly
than we planned, largely due to lighter than expected procedure volumes and
some continued operational cleanup of our major systems and process
transformation. We continue to target double digit segment profit growth for
our Medical segment for fiscal year 2013.

"The just-announced decision to increase the dividend by another 16 percent
underscores our commitment to a differentiated dividend. This adds to the 10.5
percent increase realized in July, bringing our anticipated annualized payout
ratio to over 30 percent of our fiscal 2013 outlook for non-GAAP EPS. Combined
with the $200 million in share repurchases completed year-to-date in fiscal
2013, these actions reinforce our commitment to returning capital to
shareholders while driving the underlying growth in the business," he
continued.

Q1 FY13 SUMMARY

                                              Q1 FY13       Q1 FY12       Y/Y
Revenue                                       $25.9 billion $26.8 billion (3%)
                                                                       

Operating Earnings                            $457 million  $412 million  11%
                                                                        
Non-GAAP Operating Earnings
                                              $469 million  $442 million  6%
                                                                        
Earnings from Continuing Operations
                                              $272 million  $237 million  15%
                                                                        
Non-GAAP Earnings from Continuing Operations
                                              $281 million  $256 million  9%
                                                                        
Diluted EPS from Continuing Operations
                                              $0.79         $0.68         16%
Non-GAAP Diluted EPS from Continuing                                    
Operations
                                              $0.81         $0.73         11%

SEGMENT RESULTS

Pharmaceutical segment

As expected, revenue for the Pharmaceutical segment declined 4 percent to
$23.5 billion, driven primarily by brand-to-generic conversions, partially
offset by sales to new customers within pharmaceutical distribution and higher
specialty solutions volume. Segment profit increased 10 percent to $400
million, with the growth primarily reflecting contribution from our generics
programs.

               Q1 FY13       Q1 FY12       Y/Y
Revenue        $23.5 billion $24.4 billion (4%)
Segment Profit $400 million  $363 million  10%

Medical segment

Revenue for the Medical segment was up 1 percent to $2.4 billion. Last year's
acquisition of Futuremed and growth in our preferred products was partially
offset by one fewer sales day and lower sales to existing customers due in
part to lower-than-expected procedural volume in the hospital market. Segment
profit declined 6 percent to $74 million primarily driven by the volume
softness and the net impact of the information systems-related issues.

               Q1 FY13      Q1 FY12      Y/Y
Revenue        $2.4 billion $2.4 billion 1%
Segment Profit $74 million  $79 million  (6%)

ADDITIONAL FIRST-QUARTER AND RECENT HIGHLIGHTS

  oElected Clayton M. Jones, chairman, president and CEO of Rockwell Collins,
    to board of directors.
  oLaunched evidence-based clinical pathways with Health Alliance Plan and
    Physician Resource Management to improve quality and curb cancer care
    costs for patients in Michigan.
  oLaunched ambulatory surgery center solution, Manage My ASC, to help
    surgical center owners and managers improve operational and financial
    performance.
  oIntroduced SecureSeal™ Octyl Topical Skin Adhesive making the company's
    topical skin adhesive portfolio the most comprehensive in the market. 

CONFERENCE CALL

Cardinal Health will host a webcast and conference call today at 8:30 a.m.
Eastern time to discuss first-quarter results. To access the call and
corresponding slide presentation, go to the Investors page at
cardinalhealth.com. The call also can be accessed by dialing 224.357.2209.
There is no access code for the call. 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 Nov. 30 by dialing 855.859.2056 or
404.537.3406, access code 35940715.

UPCOMING EVENTS

  oAnnual Meeting of Shareholders at 8 a.m. local time on Nov. 2 at the
    company headquarters in Dublin, Ohio
  oCredit Suisse Healthcare Conference at 8:30 a.m. local time on Nov. 14 at
    the Arizona Biltmore Hotel in Phoenix.

At these events, Cardinal Health 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, go to the Investors
page at cardinalhealth.com.

About Cardinal Health

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

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

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

Cautions Concerning Forward-Looking Statements
This news release contains forward-looking statements addressing expectations,
prospects, estimates and other matters that are dependent upon future events
or developments. These statements may be identified by words such as "expect,"
"anticipate," "intend," "plan," "believe," "will," "should," "could," "would,"
"project," "continue," "likely," and similar expressions, and include
statements reflecting future results or guidance, statements of outlook and
expense accruals. These matters are subject to risks and uncertainties that
could cause actual results to differ materially from those projected,
anticipated or implied. These risks and uncertainties include competitive
pressures in Cardinal Health's various lines of business; the loss of one or
more key customer or supplier relationships or changes to the terms of those
relationships, including our relationships with CVS Caremark Corporation and
Walgreen Co.; the timing of generic and branded pharmaceutical introductions
and the frequency or rate of pharmaceutical price appreciation or deflation;
uncertainties due to government health care reform including federal health
care reform legislation; changes in the distribution patterns or reimbursement
rates for health care products and services; the effects of any investigation
or action by any regulatory authority; changes in the cost of commodities such
as oil-based resins, cotton, latex and diesel fuel; uncertainties concerning
Cardinal Health's ability to achieve the expected benefits of its Medical
segment's business transformation project; and with respect to future
dividends, the decision by Cardinal Health's board of directors to declare
such dividends, which decision will depend on Cardinal Health's surplus,
earnings, cash flows, financial condition and prospects at the time any such
action is considered. Cardinal Health is subject to additional risks and
uncertainties described in Cardinal Health's Form 10-K, Form 10-Q and Form 8-K
reports and exhibits to those reports. This news release reflects management's
views as of October 30, 2012. Except to the extent required by applicable law,
Cardinal Health undertakes no obligation to update or revise any
forward-looking statement.



Schedule 1
Cardinal Health, Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings (Unaudited)
                                                First Quarter
(in millions, except per Common Share amounts)  2013       2012       % Change
Revenue                                         $ 25,889   $ 26,792   (3)   %
Cost of products sold                           24,730     25,708     (4)   %
Gross margin                                    1,159      1,084      7     %
Operating expenses:
Distribution, selling, general and              690        644        7     %
administrative expenses
Restructuring and employee severance            5          3          N.M.
Acquisition-related costs                       28         27         N.M.
Impairments and loss on disposal of assets      1          1          N.M.
Litigation (recoveries)/charges, net            (22)       (3)        N.M.
Operating earnings                              457        412        11    %
Other (income)/expense, net                     (8)        4          N.M.
Interest expense, net                           26         23         11    %
Earnings before income taxes and discontinued   439        385        14    %
operations
Provision for income taxes                      167        148        13    %
Earnings from continuing operations             272        237        15    %
Loss from discontinued operations, net of tax   (1)        —          N.M.
Net earnings                                    $ 271      $ 237      15    %
Basic earnings per Common Share:
Continuing operations                           $ 0.80     $ 0.69     16    %
Discontinued operations                         —          —          N.M.
Net basic earnings per Common Share             $ 0.80     $ 0.69     16    %
Diluted earnings per Common Share:
Continuing operations                           $ 0.79     $ 0.68     16    %
Discontinued operations                         —          —          N.M.
Net diluted earnings per Common Share           $ 0.79     $ 0.68     16    %
Weighted-average number of Common Shares
outstanding:
Basic                                           341        345
Diluted                                         344        349



Schedule 2
Cardinal Health, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in millions)                                         September30,  June30,
                                                      2012           2012
                                                      (Unaudited)
Assets
Current assets:
Cash and equivalents                                  $   2,440      $ 2,274
Trade receivables, net                                6,449          6,355
Inventories                                           8,105          7,864
Prepaid expenses and other                            1,013          1,017
Total current assets                                  18,007         17,510
Property and equipment, net                           1,511          1,551
Goodwill and other intangibles, net                   4,441          4,392
Other assets                                          861            807
Total assets                                          $   24,820     $ 24,260
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable                                      $   12,215     $ 11,726
Current portion of long-term obligations and other    471            476
short-term borrowings
Other accrued liabilities                             1,983          1,972
Total current liabilities                             14,669         14,174
Long-term obligations, less current portion           2,408          2,418
Deferred income taxes and other liabilities           1,462          1,424
Total shareholders' equity                            6,281          6,244
Total liabilities and shareholders' equity            $   24,820     $ 24,260



Schedule 3
Cardinal Health, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
                                                            First Quarter
(in millions)                                               2013      2012
Cash flows from operating activities:
Net earnings                                                $ 271     $ 237
Loss from discontinued operations, net of tax               1         —
Earnings from continuing operations                         272       237
Adjustments to reconcile earnings from continuing
operations to net cash from operations:
Depreciation and amortization                               88        78
Impairments and loss on disposal of assets                  1         1
Share-based compensation                                    24        20
Provision for bad debts                                     1         1
Change in operating assets and liabilities, net of effects
from acquisitions:
Increase in trade receivables                               (71)      (69)
Increase in inventories                                     (207)     (161)
Increase in accounts payable                                464       410
Other accrued liabilities and operating items, net          (4)       (13)
Net cash provided by operating activities                   568       504
Cash flows from investing activities:
Acquisition of subsidiaries, net of cash acquired           (100)     (7)
Additions to property and equipment                         (26)      (45)
Proceeds from maturities of held-to-maturity securities     23        10
Net cash used in investing activities                       (103)     (42)
Cash flows from financing activities:
Net change in short-term borrowings                         (10)      (5)
Reduction of long-term obligations                          (4)       —
Proceeds from issuance of Common Shares                     21        18
Tax disbursements from share-based compensation             (22)      (17)
Dividends on Common Shares                                  (84)      (77)
Purchase of treasury shares                                 (200)     (300)
Net cash used in financing activities                       (299)     (381)
Net increase in cash and equivalents                        166       81
Cash and equivalents at beginning of period                 2,274     1,930
Cash and equivalents at end of period                       $ 2,440   $ 2,011



Schedule 4
Cardinal Health, Inc. and Subsidiaries
Total Company Business Analysis
                                                 Non-GAAP
                         First Quarter           First Quarter
(in millions)            2013        2012        2013     2012
Revenue
Amount                   $ 25,889    $ 26,792
Growth rate              (3)      %  10       %
Operating earnings
Amount                   $ 457       $ 412       $ 469    $ 442
Growth rate              11       %  13       %  6     %  16    %
Earnings from continuing

operations
Amount                   $ 272       $ 237       $ 281    $ 256
Growth rate              15       %  (19)     %  9     %  11    %

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



Schedule 5
Cardinal Health, Inc. and Subsidiaries
Segment Business Analysis
                    First Quarter                         First Quarter
(in millions)       2013        2012        (in millions) 2013       2012
Pharmaceutical                              Medical
Revenue                                     Revenue
Amount              $ 23,498    $ 24,418    Amount        $ 2,393    $ 2,380
Growth rate         (4)      %  10       %  Growth rate   1       %  10      %
Mix                 91       %  91       %  Mix           9       %  9       %
Segment profit                              Segment
                                            profit
Amount              $ 400       $ 363       Amount        $ 74       $ 79
Growth rate         10       %  19       %  Growth rate   (6)     %  (5)     %
Mix                 84       %  82       %  Mix           16      %  18      %
Segment profit      1.70     %  1.49     %  Segment       3.11    %  3.32    %
margin                                      profit margin

Refer to definitions for an explanation of calculations.
Total consolidated revenue for the three months ended September 30, 2012 was
$25,889 million, which included total segment revenue of $25,891 million and
Corporate revenue of $(2) million. Total consolidated revenue for the three
months ended September 30, 2011 was $26,792 million, which included total
segment revenue of $26,798 million and Corporate revenue of $(6) million.
Corporate revenue consists primarily of elimination of inter-segment revenue.
Total consolidated operating earnings for the three months ended September 30,
2012 were $457 million, which included total segment profit of $474 million
and Corporate costs of $(17) million. Total consolidated operating earnings
for the three months ended September 30, 2011 were $412 million, which
included total segment profit of $442 million and Corporate costs of $(30)
million. Corporate includes, among other things, restructuring and employee
severance, acquisition-related costs, impairments and loss on disposal of
assets, litigation (recoveries)/charges, net and certain investment spending
that are not allocated to the segments.



Schedule 6
Cardinal Health, Inc. and Subsidiaries
Schedule of Notable Items
                                                          First Quarter
(in millions, except per Common Share amounts)            2013       2012
Restructuring and employee severance                      $ (5)      $ (3)
Tax benefit                                               2          1
Restructuring and employee severance, net of tax          $ (3)      $ (2)
Decrease to diluted EPS from continuing operations        $ (0.01)   $ (0.01)
Acquisition-Related Costs
Amortization of acquisition-related intangible assets     $ (21)     $ (19)
Tax benefit                                               8          6
Amortization of acquisition-related intangible assets,    $ (13)     $ (13)
net of tax
Decrease to diluted EPS from continuing operations        $ (0.04)   $ (0.04)
Other acquisition-related costs                           $ (7)      $ (9)
Tax benefit                                               2          3
Other acquisition-related costs, net of tax               $ (5)      $ (6)
Decrease to diluted EPS from continuing operations        $ (0.01)   $ (0.02)
Total acquisition-related costs^1                         $ (28)     $ (27)
Tax benefit                                               10         9
Total acquisition-related costs, net of tax^1             $ (18)     $ (18)
Decrease to diluted EPS from continuing operations^1      $ (0.05)   $ (0.05)
Impairments and loss on disposal of assets                $ (1)      $ (1)
Tax benefit                                               —          —
Impairments and loss on disposal of assets, net of tax    $ (1)      $ (1)
Decrease to diluted EPS from continuing operations        $ —        $ —
Litigation recoveries/(charges), net                      $ 22       $ 3
Tax expense                                               (9)        (1)
Litigation recoveries/(charges), net, net of tax          $ 13       $ 2
Increase to diluted EPS from continuing operations        $ 0.04     $ 0.01
Other Spin-Off Costs                                      $ —        $ (1)
Tax benefit                                               —          1
Other Spin-Off Costs, net of tax                          $ —        $ —
Decrease to diluted EPS from continuing operations        $ —        $ —
Weighted-average number of diluted shares outstanding     344        349

^1           The sum of the components may not equal the total due to
             rounding.
We apply varying tax rates depending on the item's nature and tax jurisdiction
where it is incurred.



Schedule 7
Cardinal Health, Inc. and Subsidiaries
Asset Management Analysis
                                                       First Quarter
                                                       2013     2012
Days sales outstanding^1                               22.4     20.9
Days inventory on hand                                 25.4     23.0
Days payable outstanding                               38.3     36.1
Net working capital days^2                             9.5      7.9
Debt to total capital                                  31    %  31   %
Net debt to capital                                    7     %  8    %
Return on equity                                       17.3  %  16.4 %
Non-GAAP return on equity                              17.9  %  17.7 %
Effective tax rate from continuing operations          38.1  %  38.4 %
Non-GAAP effective tax rate from continuing operations 37.8  %  38.1 %

^1We changed our method of calculating days sales outstanding and have
revised prior year information to conform.
^2 The sum of the components may not equal the total due to rounding.
Refer to the GAAP/Non-GAAP reconciliation for definitions and calculations
supporting the Non-GAAP balances. Refer to DSO, DIOH and DPO for definitions
and calculations.



Schedule 8
Cardinal Health, Inc. and Subsidiaries
GAAP / Non-GAAP Reconciliation
                      First Quarter 2013
                                Operating Earnings     Provision Earnings   Earnings   Diluted    Diluted
                                          Before                            from       EPS        EPS
                                Earnings  Income Taxes for       from       Continuing from       from
                                                                                                  Continuing
(in millions, except  Operating Growth    and          Income    Continuing Operations Continuing Operations
per                                       Discontinued
 Common Share        Earnings  Rate      Operations   Taxes     Operations Growth     Operations Growth
amounts)                                                                    Rate                  Rate
GAAP                  $  457    11    %   $    439     $  167    $   272    15     %   $  0.79    16      %
Restructuring and     5                   5            2         3                     0.01
employee severance
Acquisition-related   28                  28           10        18                    0.05
costs
Impairments and loss  1                   1            —         1                     —
on disposal of assets
Litigation
(recoveries)/charges, (22)                (22)         (9)       (13)                  (0.04)
net
Other Spin-Off Costs  —                   —            —         —                     —
Non-GAAP              $  469    6     %   $    451     $  170    $   281    9      %   $  0.81    11      %
                      First Quarter 2012
GAAP                  $  412    13    %   $    385     $  148    $   237    (19)   %   $  0.68    (19)    %
Restructuring and     3                   3            1         2                     0.01
employee severance
Acquisition-related   27                  27           9         18                    0.05
costs
Impairments and loss  1                   1            —         1                     —
on disposal of assets
Litigation
(recoveries)/charges, (3)                 (3)          (1)       (2)                   (0.01)
net
Other Spin-Off Costs  1                   1            1         —                     —
Non-GAAP              $  442    16    %   $    414     $  158    $   256    11     %   $  0.73    11      %

The sum of the components may not equal the total due to rounding.
We apply varying tax rates depending on the item's nature and tax jurisdiction
where it is incurred.



Schedule 9
Cardinal Health, Inc. and Subsidiaries
GAAP / Non-GAAP Reconciliation
                                      First Quarter
(in millions)                         2013                 2012
GAAP return on equity                 17.3    %            16.4    %
Non-GAAP return on equity
Net earnings                          $ 271                $ 237
Restructuring and employee severance, 3                    2
net of tax, in continuing operations
Acquisition-related costs, net of     18                   18
tax, in continuing operations
Impairments and loss on disposal of
assets, net of tax, in continuing     1                    1
operations
Litigation (recoveries)/charges, net, (13)                 (2)
net of tax, in continuing operations
Other Spin-Off Costs, net of tax, in  —                    —
continuing operations
Adjusted net earnings                 $ 280                $ 256
Annualized                            $ 1,120              $ 1,024
                                      First      Fourth    First      Fourth
                                      Quarter    Quarter   Quarter    Quarter
                                      2013       2012      2012       2011
Total shareholders' equity            $ 6,281    $ 6,244   $ 5,714    $ 5,849
Divided by average shareholders'      $ 6,263              $ 5,781
equity
Non-GAAP return on equity             17.9    %            17.7    %

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



Schedule 10
Cardinal Health, Inc. and Subsidiaries
GAAP / Non-GAAP Reconciliation
                                                          First Quarter
(in millions)                                             2013       2012
GAAP effective tax rate from continuing operations        38.1    %  38.4    %
Non-GAAP effective tax rate from continuing operations
Earnings before income taxes and discontinued operations  $ 439      $ 385
Restructuring and employee severance                      5          3
Acquisition-related costs                                 28         27
Impairments and loss on disposal of assets                1          1
Litigation (recoveries)/charges, net                      (22)       (3)
Other Spin-Off Costs                                      —          1
Adjusted earnings before income taxes and discontinued    $ 451      $ 414
operations
Provision for income taxes                                $ 167      $ 148
Restructuring and employee severance tax benefit          2          1
Acquisition-related costs tax benefit                     10         9
Impairments and loss on disposal of assets tax benefit    —          —
Litigation (recoveries)/charges, net tax expense          (9)        (1)
Other Spin-Off Costs tax benefit                          —          1
Adjusted provision for income taxes                       $ 170      $ 158
Non-GAAP effective tax rate from continuing operations    37.8    %  38.1    %
                                                          First Quarter
                                                          2013       2012
Debt to total capital                                     31      %  31      %
Net debt to capital
Current portion of long-term obligations and other        $ 471      $ 333
short-term borrowings
Long-term obligations, less current portion               2,408      2,195
Debt                                                      $ 2,879    $ 2,528
Cash and equivalents                                      (2,440)    (2,011)
Net debt                                                  $ 439      $ 517
Total shareholders' equity                                6,281      5,714
Capital                                                   $ 6,720    $ 6,231
Net debt to capital                                       7       %  8       %

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

Forward-Looking Non-GAAP Financial Measures

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



Schedule 11
Cardinal Health, Inc. and Subsidiaries
                                                  First Quarter
(in millions)                                     2013       2012
Days sales outstanding                            22.4       20.9
Days inventory on hand
Inventories                                       $ 8,105    $ 7,497
Cost of products sold                             $ 24,730   $ 25,708
Chargeback billings                               3,976      3,610
Adjusted cost of products sold                    $ 28,706   $ 29,318
Adjusted cost of products sold divided by 90 days $ 319      $ 326
Days inventory on hand                            25.4       23.0
Days payable outstanding
Accounts payable                                  $ 12,215   $ 11,749
Cost of products sold                             $ 24,730   $ 25,708
Chargeback billings                               3,976      3,610
Adjusted cost of products sold                    $ 28,706   $ 29,318
Adjusted cost of products sold divided by 90 days $ 319      $ 326
Days payable outstanding                          38.3       36.1
Net working capital days^1                        9.5        7.9

^1 The sum of the components may not equal the total due to rounding. ^
Days Sales Outstanding (DSO): trade receivables, net divided by (quarterly
revenue divided by 90 days). Beginning in the first quarter of fiscal 2013, we
changed our method of calculating DSO in order to align it with the 90-day
convention that we use in the calculation of Days Inventory on Hand and Days
Payable Outstanding. Prior to this change we calculated DSO by dividing trade
receivable, net by(monthly revenue divided by 30 days). In connection with
this change, we have revised prior year information to conform to the new
method of calculating DSO.
Days Inventory on Hand: inventory divided by ((quarterly cost of products sold
plus chargeback billings) divided by 90 days). Chargeback billings are the
difference between a product's wholesale acquisition cost and the contract
price established between pharmaceutical manufacturers and the end customer.
Days Payable Outstanding: accounts payable divided by ((quarterly cost of
products sold plus chargeback billings) divided by 90 days).
Net Working Capital Days: days sales outstanding plus days inventory on hand
less days payable outstanding. To conform to the new method of calculating
DSO, we have revised prior year information.



Cardinal Health, Inc. and Subsidiaries

Use of Non-GAAP Measures

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

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

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

Definitions

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

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

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

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

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

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

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

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

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

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

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

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

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

Segment Profit Margin: segment profit divided by segment revenue.

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

         In this earnings release growth rates are determined by dividing the
^1  difference between current period results and prior period results by
         prior period results.
         Programs whereby the Company fundamentally changes its operations
         such as closing and consolidating facilities, moving manufacturing of
         a product to another location, production or business process
^2   sourcing, employee severance (including rationalizing headcount or
         other significant changes in personnel) and realigning operations
         (including substantial realignment of the management structure of a
         business unit in response to changing market conditions).
         Costs that consist primarily of transaction costs, integration costs,
^3 changes in the fair value of contingent consideration obligations and
         amortization of acquisition-related intangible assets.
         Asset impairments and losses from the disposal of assets not eligible
^4 to be classified as discontinued operations are classified within
         impairments and loss on disposal of assets within the condensed
         consolidated statements of earnings.
^5   Loss contingencies related to litigation and regulatory matters and
         income from favorable resolution of legal matters.



SOURCE Cardinal Health

Website: http://www.cardinalhealth.com
Contact: Media: Debbie Mitchell, +1-614-757-6225,
debbie.mitchell@cardinalhealth.com; Investors: Sally Curley, +1-614-757-7115,
sally.curley@cardinalhealth.com
 
Press spacebar to pause and continue. Press esc to stop.