Cardinal Health Reports Fiscal 2013 Third-Quarter Results and Raises Quarterly Dividend by 10 Percent

Cardinal Health Reports Fiscal 2013 Third-Quarter Results and Raises Quarterly
                            Dividend by 10 Percent

-- Non-GAAP diluted earnings per share (EPS) from continuing operations
increases 28 percent to $1.201

-- Non-GAAP operating earnings increase 11% to $579 million

-- Fiscal 2013 non-GAAP earnings per share guidance raised to $3.67 - $3.71,
which reflects an $0.18 EPS tax benefit from a third-quarter tax settlement

PR Newswire

DUBLIN, Ohio, May 2, 2013

DUBLIN, Ohio, May 2, 2013 /PRNewswire/ --Cardinal Health today reported
fiscal year 2013 third-quarter revenue of $24.6 billion and a 28 percent
increase in non-GAAP diluted earnings per share from continuing operations to
$1.20. The earnings increase was driven by strong non-GAAP operating earnings
growth and a tax settlement, which contributed $0.18 per share. On a GAAP
basis, diluted EPS from continuing operations increased 5 percent to $1.00.
Non-GAAP operating earnings of $579 million increased 11 percent, while
operating earnings on a GAAP basis were down 10 percent to $475 million.

The company raised its fiscal 2013 outlook for non-GAAP diluted EPS from
continuing operations to $3.67 to $3.71. The revised range includes the $0.18
tax settlement previously mentioned.

Cardinal Health also announced that its board of directors approved a 10
percent increase in the company's quarterly dividend to $0.3025 per share, or
$1.21 per share on an annualized basis. The quarterly dividend is payable on
July 15, 2013 to shareholders of record at close of business on July 1, 2013.

"We delivered another solid performance in our fiscal third quarter," said
George Barrett, chairman and chief executive officer of Cardinal Health. "Both
our Pharmaceutical and Medical segments reported double-digit profit growth.
Our organization is successfully innovating and adapting our business lines
and portfolio to an evolving market, with a focus on establishing a strategic
edge in areas of higher growth. This was highlighted during the quarter with
the acquisition of AssuraMed which will enable us to follow the care of
patients to the home." 

Q3 FY13 SUMMARY

                                             Q3 FY13       Q3 FY12       Y/Y
Revenue                                      $24.6 billion $26.9 billion (9%)
                                                                      

Operating Earnings                           $475 million  $527 million  (10%)
                                                                       
Non-GAAP Operating Earnings
                                             $579 million  $524 million  11%
                                                                       
Earnings from Continuing Operations
                                             $346 million  $332 million  4%
                                                                       
Non-GAAP Earnings from Continuing Operations
                                             $412 million  $327 million  26%
                                                                       
Diluted EPS from Continuing Operations
                                             $1.00         $0.95         5%
Non-GAAP Diluted EPS from Continuing                                   
Operations
                                             $1.20         $0.94         28%

Revaluation of the deferred tax liability as a result of an agreement with tax
authorities positively impacted third-quarter fiscal 2013 GAAP and non-GAAP
earnings from continuing operations by $64 million and GAAP and non-GAAP
diluted EPS by $0.18 per share.

In the third quarter of fiscal 2012, a reduction in the fair value of the P4
Healthcare acquisition earn-out liability had positively impacted GAAP
operating earnings by $55 million and GAAP diluted EPS by $0.10 per share.

SEGMENT RESULTS

Pharmaceutical segment

Revenue for the Pharmaceutical segment decreased 10 percent to $22.1 billion
driven by the non-renewal of the Express Scripts contract and brand-to-generic
conversions, partially offset by revenues from new customers. Segment profit
increased 12 percent to $498 million as the company continued to benefit from
a focus on product and customer mix and reflected strong performance from
generics programs.

               Q3 FY13       Q3 FY12       Y/Y
Revenue        $22.1 billion $24.5 billion (10%)
Segment Profit $498 million  $446 million  12%

Medical segment

Revenue for the Medical segment increased 3 percent to $2.5 billion, driven by
acquisitions, partially offset by one fewer sales day. Segment profit
increased 12 percent to $100 million driven by the favorable impact of
commodities and the performance of the preferred product portfolio. The
increase was partially offset by rate compression, driven in part by customer
mix. Results were also moderated by softness in procedural-based utilization.

               Q3 FY13      Q3 FY12      Y/Y
Revenue        $2.5 billion $2.4 billion 3%
Segment Profit $100 million $89 million  12%

ADDITIONAL THIRD-QUARTER AND RECENT HIGHLIGHTS

  oCompleted acquisition of AssuraMed, a leading direct-to-home medical
    supplies distributor
  oNamed one of the National Association of Female Executives Top 50
    companies for 2013
  oLaunched the fourth in a series of Cardinal Health Foundation interactive
    Generation Rx toolkits, which are designed to help reduce the abuse of
    prescription drugs

CONFERENCE CALL

Cardinal Health will host a webcast and conference call today at 8:30 a.m.
Eastern to discuss third-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 877.870.9220 or 631.291.4512.

There is no pre-registration for the call; however, participants are advised
to dial into the call at least 10 minutes prior to the start time.

Presentation slides and an audio replay will be archived on the website after
the conclusion of the meeting. The audio replay will be available until June 1
by dialing 855.859.2056 or 404.537.3406, using passcode 35177390.

UPCOMING WEBCAST EVENTS

  oBank of America Merrill Lynch 2013 Health Care Conference at 8:40 a.m.
    local time on May 14 in Las Vegas
  oGoldman Sachs 34th Annual Global Healthcare Conference at 8:40 a.m. local
    time on June 11 in Rancho Palos Verdes, Calif.

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; uncertainties
relating to the ability of Cardinal Health to successfully mitigate the impact
of the expiration of the pharmaceutical distribution contract with Walgreen
Co. at the end of August 2013; the ability to achieve the expected benefits
from the AssuraMed acquisition, including the expected accretion in non-GAAP
earnings; the timing of generic and branded pharmaceutical introductions and
the frequency or rate of pharmaceutical price appreciation or deflation; the
non-renewal, early termination or a default under one or more key customer or
supplier arrangements or changes to the terms of or level of purchases under
those arrangements; 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; and 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. 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
May 2, 2013. 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)
                                                Third Quarter
(in millions, except per Common Share amounts)  2013       2012       % Change
Revenue                                         $ 24,552   $ 26,918   (9)   %
Cost of products sold                           23,261     25,711     (10)  %
Gross margin                                    1,291      1,207      7     %
Operating expenses:
Distribution, selling, general and              712        683        4     %
administrative expenses
Restructuring and employee severance            33         7          N.M.
Acquisition-related costs                       53         (27)       N.M.
Impairments and loss on disposal of assets      21         17         N.M.
Litigation (recoveries)/charges, net            (3)        —          N.M.
Operating earnings                              475        527        (10)  %
Other income, net                               (6)        (7)        N.M.
Interest expense, net                           34         24         42    %
Earnings before income taxes and discontinued   447        510        (12)  %
operations
Provision for income taxes                      101        178        (43)  %
Earnings from continuing operations             346        332        4     %
Earnings/(loss) from discontinued operations,   (1)        1          N.M.
net of tax
Net earnings                                    $ 345      $ 333      4     %
Basic earnings per Common Share:
Continuing operations                           $ 1.01     $ 0.96     5     %
Discontinued operations                         —          —          N.M.
Net basic earnings per Common Share             $ 1.01     $ 0.96     5     %
Diluted earnings per Common Share:
Continuing operations                           $ 1.00     $ 0.95     5     %
Discontinued operations                         —          —          N.M.
Net diluted earnings per Common Share           $ 1.00     $ 0.95     5     %
Weighted-average number of Common Shares
outstanding:
Basic                                           341        345
Diluted                                         345        349



Schedule 2
Cardinal Health, Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings (Unaudited)
                                                Year-to-Date
(in millions, except per Common Share amounts)  2013       2012       % Change
Revenue                                         $ 75,673   $ 80,788   (6)   %
Cost of products sold                           72,000     77,383     (7)   %
Gross margin                                    3,673      3,405      8     %
Operating expenses:
Distribution, selling, general and              2,099      1,966      7     %
administrative expenses
Restructuring and employee severance            39         12         N.M.
Acquisition-related costs                       106        23         N.M.
Impairments and loss on disposal of assets      27         19         N.M.
Litigation (recoveries)/charges, net            (37)       (3)        N.M.
Operating earnings                              1,439      1,388      4     %
Other income, net                               (17)       (3)        N.M.
Interest expense, net                           87         70         24    %
Earnings before income taxes and discontinued   1,369      1,321      4     %
operations
Provision for income taxes                      448        487        (8)   %
Earnings from continuing operations             921        834        10    %
Loss from discontinued operations, net of tax   (1)        (2)        N.M.
Net earnings                                    $ 920      $ 832      11    %
Basic earnings/(loss) per Common Share:
Continuing operations                           $ 2.70     $ 2.42     12    %
Discontinued operations                         —          (0.01)     N.M.
Net basic earnings per Common Share             $ 2.70     $ 2.41     12    %
Diluted earnings/(loss) per Common Share:
Continuing operations                           $ 2.68     $ 2.39     12    %
Discontinued operations                         (0.01)     (0.01)     N.M.
Net diluted earnings per Common Share           $ 2.67     $ 2.38     12    %
Weighted-average number of Common Shares
outstanding:
Basic                                           341        345
Diluted                                         344        349



Schedule 3
Cardinal Health, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in millions)                                           March31,    June30,
                                                        2013         2012
                                                        (Unaudited)
Assets
Current assets:
Cash and equivalents                                    $   2,305    $ 2,274
Trade receivables, net                                  6,416        6,355
Inventories                                             8,328        7,864
Prepaid expenses and other                              878          1,017
Total current assets                                    17,927       17,510
Property and equipment, net                             1,470        1,551
Goodwill and other intangibles, net                     6,413        4,392
Other assets                                            913          807
Total assets                                            $   26,723   $ 24,260
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable                                        $   12,049   $ 11,726
Current portion of long-term obligations and other      446          476
short-term borrowings
Other accrued liabilities                               1,979        1,972
Total current liabilities                               14,474       14,174
Long-term obligations, less current portion             3,714        2,418
Deferred income taxes and other liabilities             1,705        1,424
Total shareholders' equity                              6,830        6,244
Total liabilities and shareholders' equity              $   26,723   $ 24,260



Schedule 4
Cardinal Health, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
                                        Third Quarter       Year-to-Date
(in millions)                           2013      2012      2013      2012
Cash flows from operating activities:
Net earnings                            $ 345     $ 333     $ 920     $ 832
(Earnings)/loss from discontinued       1         (1)       1         2
operations, net of tax
Earnings from continuing operations     346       332       921       834
Adjustments to reconcile earnings from
continuing operations to net cash
provided by operating activities:
Depreciation and amortization           99        83        275       239
Impairments and loss on disposal of     21        17        27        19
assets
Share-based compensation                22        22        68        63
Provision for bad debts                 9         5         18        7
Change in fair value of contingent      —         (53)      —         (53)
consideration obligation
Change in operating assets and
liabilities, net of effects from
acquisitions:
Decrease/(increase) in trade            (147)     (478)     81        (310)
receivables
Decrease/(increase) in inventories      193       683       (343)     (870)
Increase in accounts payable            183       95        214       1,212
Other accrued liabilities and operating 263       187       166       142
items, net
Net cash provided by operating          989       893       1,427     1,283
activities
Cash flows from investing activities:
Acquisition of subsidiaries, net of     (2,093)   (135)     (2,219)   (143)
cash acquired
Additions to property and equipment     (41)      (58)      (103)     (158)
Proceeds from maturities of             —         11        71        46
held-to-maturity securities
Purchase of other investments           (6)       —         (6)       (11)
Net cash used in investing activities   (2,140)   (182)     (2,257)   (266)
Cash flows from financing activities:
Net change in short-term borrowings     (28)      4         (11)      8
Reduction of long-term obligations      —         (44)      (6)       (45)
Proceeds from long-term obligations,    1,286     —         1,286     —
net of issuance costs
Net proceeds from issuance of Common    37        12        63        23
Shares
Tax proceeds/(disbursements) from       (1)       3         (13)      3
share-based compensation
Dividends on Common Shares              (93)      (74)      (258)     (226)
Purchase of treasury shares             —         —         (200)     (300)
Net cash provided by/(used in)          1,201     (99)      861       (537)
financing activities
Net increase in cash and equivalents    50        612       31        480
Cash and equivalents at beginning of    2,255     1,798     2,274     1,930
period
Cash and equivalents at end of period   $ 2,305   $ 2,410   $ 2,305   $ 2,410



Schedule 5
Cardinal Health, Inc. and Subsidiaries
Total Company Business Analysis
                                                          Non-GAAP
                                    Third Quarter         Third Quarter
(in millions)                       2013       2012       2013      2012
Revenue
Amount                              $ 24,552   $ 26,918
Growth rate                         (9)%       3%
Operating earnings
Amount                              $ 475      $ 527      $ 579     $ 524
Growth rate                         (10)%      18%        11%       6%
Earnings from continuing operations
Amount                              $ 346      $ 332      $ 412     $ 327
Growth rate                         4%         33%        26%       14%
                                                          Non-GAAP
                                    Year-to-Date          Year-to-Date
(in millions)                       2013       2012       2013      2012
Revenue
Amount                              $ 75,673   $ 80,788
Growth rate                         (6)%       6%
Operating earnings
Amount                              $ 1,439    $ 1,388    $ 1,574   $ 1,441
Growth rate                         4%         20%        9%        14%
Earnings from continuing operations
Amount                              $ 921      $ 834      $ 1,010   $ 864
Growth rate                         10%        10%        17%       12%

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
                      Third Quarter                         Third Quarter
(in millions)         2013       2012       (in millions)   2013      2012
Pharmaceutical                              Medical
Revenue                                     Revenue
Amount                $ 22,070   $ 24,508   Amount          $ 2,484   $ 2,414
Growth rate           (10)%      3%         Growth rate     3%        8%
Mix                   90%        91%        Mix             10%       9%
Segment profit                              Segment profit
Amount                $ 498      $ 446      Amount          $ 100     $ 89
Growth rate           12%        9%         Growth rate     12%       (17)%
Mix                   83%        83%        Mix             17%       17%
Segment profit margin 2.26%      1.82%      Segment profit  4.01%     3.70%
                                            margin

Refer to definitions for an explanation of calculations.

Total consolidated revenue for the three months ended March31, 2013 was
$24,552 million, which included total segment revenue of $24,554 million and
Corporate revenue of $(2) million. Total consolidated revenue for the three
months ended March31, 2012 was $26,918 million, which included total segment
revenue of $26,922 million and Corporate revenue of $(4) million. Corporate
revenue consists primarily of elimination of inter-segment revenue.

Total consolidated operating earnings for the three months ended March31,
2013 were $475 million, which included total segment profit of $598 million
and Corporate costs of $(123) million. Total consolidated operating earnings
for the three months ended March31, 2012 were $527 million, which included
total segment profit of $535 million and Corporate costs of $(8) 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. As noted on Schedule 7, of the $8 million
adjustment recorded in the Medical segment during fiscal 2013 related to
certain vendor chargeback billings, $4 million related to the third quarter of
fiscal 2012.

Schedule 7
Cardinal Health, Inc. and Subsidiaries
Segment Business Analysis
                      Year-to-Date                          Year-to-Date
(in millions)         2013       2012       (in millions)   2013      2012
Pharmaceutical                              Medical
Revenue                                     Revenue
Amount                $ 68,314   $ 73,591   Amount          $ 7,363   $ 7,210
Growth rate           (7)%       6%         Growth rate     2%        9%
Mix                   90%        91%        Mix             10%       9%
Segment profit                              Segment profit
Amount                $ 1,339    $ 1,204    Amount          $ 268     $ 253
Growth rate           11%        18%        Growth rate     6%        (14)%
Mix                   83%        83%        Mix             17%       17%
Segment profit margin 1.96%      1.64%      Segment profit  3.63%     3.51%
                                            margin

Refer to definitions for an explanation of calculations.

Total consolidated revenue for the nine months ended March31, 2013 was
$75,673 million, which included total segment revenue of $75,677 million and
Corporate revenue of $(4) million. Total consolidated revenue for the nine
months ended March31, 2012 was $80,788 million, which included total segment
revenue of $80,801 million and Corporate revenue of $(13) million. Corporate
revenue consists primarily of elimination of inter-segment revenue.

Total consolidated operating earnings for the nine months ended March31, 2013
were $1,439 million, which included total segment profit of $1,607 million and
Corporate costs of $(168) million. Total consolidated operating earnings for
the nine months ended March31, 2012 were $1,388 million, which included total
segment profit of $1,457 million and Corporate costs of $(69) 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. Medical segment profit for fiscal 2013 includes
an $8 million favorable out-of-period adjustment to reflect certain vendor
chargeback billings that were delayed when we implemented our medical business
transformation. Of the $8 million adjustment recorded during fiscal 2013, $4
million related to the third quarter of fiscal 2012.

Schedule 8
Cardinal Health, Inc. and Subsidiaries
Schedule of Notable Items
                                    Third Quarter         Year-to-Date
(in millions, except per Common     2013       2012       2013       2012
Share amounts)
Restructuring and employee          $ (33)     $ (7)      $ (39)     $ (12)
severance
Tax benefit                         12         3          15         4
Restructuring and employee          $ (21)     $ (4)      $ (24)     $ (8)
severance, net of tax
Decrease to diluted EPS from        $ (0.06)   $ (0.01)   $ (0.07)   $ (0.02)
continuing operations
Acquisition-Related Costs
Amortization of acquisition-related $ (26)     $ (20)     $ (69)     $ (58)
intangible assets
Tax benefit                         10         7          25         21
Amortization of acquisition-related $ (16)     $ (13)     $ (44)     $ (37)
intangible assets, net of tax
Decrease to diluted EPS from        $ (0.05)   $ (0.04)   $ (0.13)   $ (0.11)
continuing operations
Other acquisition-related costs^1   $ (26)     $ 47       $ (37)     $ 35
Tax benefit/(expense)^1             10         (14)       13         (10)
Other acquisition-related costs,    $ (16)     $ 33       $ (24)     $ 25
net of tax
Increase/(decrease) to diluted EPS  $ (0.05)   $ 0.10     $ (0.07)   $ 0.07
from continuing operations^1
Total acquisition-related costs^2   $ (53)     $ 27       $ (106)    $ (23)
Tax benefit/(expense)               20         (7)        38         11
Total acquisition-related costs,    $ (33)     $ 20       $ (68)     $ (12)
net of tax^2
Increase/(decrease) to diluted EPS  $ (0.10)   $ 0.06     $ (0.20)   $ (0.03)
from continuing operations^2
Impairments and loss on disposal of $ (21)     $ (17)     $ (27)     $ (19)
assets
Tax benefit                         6          7          7          7
Impairments and loss on disposal of $ (15)     $ (10)     $ (20)     $ (12)
assets, net of tax
Decrease to diluted EPS from        $ (0.04)   $ (0.03)   $ (0.06)   $ (0.03)
continuing operations
Litigation recoveries/(charges),    $ 3        $ —        $ 37       $ 3
net
Tax expense                         (1)        —          (14)       (1)
Litigation recoveries/(charges),    $ 2        $ —        $ 23       $ 2
net, net of tax
Increase to diluted EPS from        $ —        $ —        $ 0.06     $ 0.01
continuing operations
Other Spin-Off Costs                $ —        $ (1)      $ —        $ (2)
Tax benefit                         —          —          —          1
Other Spin-Off Costs, net of tax    $ —        $ (1)      $ —        $ (1)
Decrease to diluted EPS from        $ —        $ —        $ —        $ —
continuing operations
Weighted-average number of diluted  345        349        344        349
shares outstanding

^1 Includes a $55 million decrease in the fair value of the total
contingent consideration obligation related to the P4 Healthcare acquisition
for the three months ended March31, 2012. The related tax expense was $20
million and diluted EPS from continuing operations increased $0.10.

^2 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
Asset Management Analysis
                                                Third Quarter   Year-to-Date
                                                2013    2012    2013    2012
Days sales outstanding^1                        23.5    21.7
Days inventory on hand                          27.5    25.0
Days payable outstanding                        39.8    38.3
Net working capital days^2                      11.2    8.5
Debt to total capital                           38   %  29   %
Net debt to capital                             21   %  2    %
Return on equity                                20.7 %  21.9 %  18.9 %  18.7 %
Non-GAAP return on equity                       24.7 %  21.6 %  20.8 %  19.4 %
Effective tax rate from continuing operations^3 22.7 %  34.9 %  32.7 %  36.9 %
Non-GAAP effective tax rate from continuing     25.1 %  35.6 %  32.8 %  37.1 %
operations^3

^1 We changed our method of calculating days sales outstanding and
have revised prior-year information to conform, refer to Schedule 14.

^2 The sum of the components may not equal the total due to rounding.

^3 The revaluation of the deferred tax liability and related interest on
unrepatriated foreign earnings as a result of an agreement with tax
authorities reduced, for fiscal 2013 third quarter, both the effective tax
rate from continuing operations and non-GAAP effective tax rate from
continuing operations by 14.2 and 11.6 percentage points, respectively. The
fiscal 2013 third quarter non-GAAP effective tax rate from continuing
operations, excluding the impact of the tax settlement, would have been 36.7%.

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 10
Cardinal Health, Inc. and Subsidiaries
GAAP / Non-GAAP Reconciliation
                      Third Quarter 2013
                                Operating Earnings     Provision Earnings   Earnings   Diluted    Diluted
                                          Before                            from       EPS        EPS
                                Earnings  Income Taxes for       from       Continuing from       from
                                                                                                  Continuing
                      Operating Growth    and          Income    Continuing Operations Continuing Operations
                                          Discontinued
(in millions, except                                                        Growth                Growth
per Common Share      Earnings  Rate      Operations   Taxes     Operations Rate       Operations Rate
amounts)
GAAP                  $  475    (10)   %  $   447      $  101    $  346     4     %    $  1.00    5      %
Restructuring and     33                  33           12        21                    0.06
employee severance
Acquisition-related   53                  53           20        33                    0.10
costs
Impairments and loss  21                  21           6         15                    0.04
on disposal of assets
Litigation
(recoveries)/charges, (3)                 (3)          (1)       (2)                   —
net
Other Spin-Off Costs  —                   —            —         —                     —
Non-GAAP              $  579    11     %  $   551      $  138    $  412     26    %    $  1.20    28     %
                      Third Quarter 2012
GAAP                  $  527    18     %  $   510      $  178    $  332     33    %    $  0.95    34     %
Restructuring and     7                   7            3         4                     0.01
employee severance
Acquisition-related   (27)                (27)         (7)       (20)                  (0.06)
costs
Impairments and loss  17                  17           7         10                    0.03
on disposal of assets
Litigation
(recoveries)/charges, —                   —            —         —                     —
net
Other Spin-Off Costs  1                   1            —         1                     —
Non-GAAP              $  524    6      %  $   508      $  181    $  327     14    %    $  0.94    16     %
                      Year-to-Date 2013
                                Operating Earnings     Provision Earnings   Earnings   Diluted    Diluted
                                          Before                            from       EPS        EPS
                                Earnings  Income Taxes for       from       Continuing from       from
                                                                                                  Continuing
                      Operating Growth    and          Income    Continuing Operations Continuing Operations
                                          Discontinued
(in millions, except                                                        Growth                Growth
per Common Share      Earnings  Rate      Operations   Taxes     Operations Rate       Operations Rate
amounts)
GAAP                  $  1,439  4      %  $   1,369    $  448    $  921     10    %    $  2.68    12     %
Restructuring and     39                  39           15        24                    0.07
employee severance
Acquisition-related   106                 106          38        68                    0.20
costs
Impairments and loss  27                  27           7         20                    0.06
on disposal of assets
Litigation
(recoveries)/charges, (37)                (37)         (14)      (23)                  (0.06)
net
Other Spin-Off Costs  —                   —            —         —                     —
Non-GAAP              $  1,574  9      %  $   1,504    $  494    $  1,010   17    %    $  2.94    19     %
                      Year-to-Date 2012
GAAP                  $  1,388  20     %  $   1,321    $  487    $  834     10    %    $  2.39    11     %
Restructuring and     12                  12           4         8                     0.02
employee severance
Acquisition-related   23                  23           11        12                    0.03
costs
Impairments and loss  19                  19           7         12                    0.03
on disposal of assets
Litigation
(recoveries)/charges, (3)                 (3)          (1)       (2)                   (0.01)
net
Other Spin-Off Costs  2                   2            1         1                     —
Non-GAAP              $  1,441  14     %  $   1,374    $  509    $  864     12    %    $  2.47    12     %

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

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

Schedule 11
Cardinal Health, Inc. and Subsidiaries
GAAP / Non-GAAP Reconciliation
                                      Third Quarter
(in millions)                         2013                 2012
GAAP return on equity                 20.7    %            21.9    %
Non-GAAP return on equity
Net earnings                          $ 345                $ 333
Restructuring and employee severance, 21                   4
net of tax, in continuing operations
Acquisition-related costs, net of     33                   (20)
tax, in continuing operations
Impairments and loss on disposal of
assets, net of tax, in continuing     15                   10
operations
Litigation (recoveries)/charges, net, (2)                  —
net of tax, in continuing operations
Other Spin-Off Costs, net of tax, in  —                    1
continuing operations
Adjusted net earnings                 $ 412                $ 328
Annualized                            $ 1,648              $ 1,312
                                      Third      Second    Third      Second
                                      Quarter    Quarter   Quarter    Quarter
                                      2013       2013      2012       2012
Total shareholders' equity            $ 6,830    $ 6,542   $ 6,240    $ 5,928
Divided by average shareholders'      $ 6,686              $ 6,084
equity
Non-GAAP return on equity             24.7    %            21.6    %

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

Schedule 12
Cardinal Health, Inc. and Subsidiaries
GAAP / Non-GAAP Reconciliation
                      Year-to-Date
(in millions)         2013                                     2012
GAAP return on equity 18.9    %                                18.7    %
Non-GAAP return on
equity
Net earnings          $ 920                                    $ 832
Restructuring and
employee severance,   24                                       8
net of tax, in
continuing operations
Acquisition-related
costs, net of tax, in 68                                       12
continuing operations
Impairments and loss
on disposal of
assets, net of tax,   20                                       12
in continuing
operations
Litigation
(recoveries)/charges, (23)                                     (2)
net, net of tax, in
continuing operations
Other Spin-Off Costs,
net of tax, in        —                                        1
continuing operations
Adjusted net earnings $ 1,009                                  $ 863
Annualized            $ 1,345                                  $ 1,151
                      Third      Second    First     Fourth    Third      Second    First     Fourth
                      Quarter    Quarter   Quarter   Quarter   Quarter    Quarter   Quarter   Quarter
                      2013       2013      2013      2012      2012       2012      2012      2011
Total shareholders'   $ 6,830    $ 6,542   $ 6,281   $ 6,244   $ 6,240    $ 5,928   $ 5,714   $ 5,849
equity
Divided by average    $ 6,474                                  $ 5,933
shareholders' equity
Non-GAAP return on    20.8    %                                19.4    %
equity

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

Schedule 13
Cardinal Health, Inc. and Subsidiaries
GAAP / Non-GAAP Reconciliation
                                    Third Quarter         Year-to-Date
(in millions)                       2013       2012       2013       2012
GAAP effective tax rate from        22.7    %  34.9    %  32.7    %  36.9    %
continuing operations
Non-GAAP effective tax rate from
continuing operations
Earnings before income taxes and    $ 447      $ 510      $ 1,369    $ 1,321
discontinued operations
Restructuring and employee          33         7          39         12
severance
Acquisition-related costs           53         (27)       106        23
Impairments and loss on disposal of 21         17         27         19
assets
Litigation (recoveries)/charges,    (3)        —          (37)       (3)
net
Other Spin-Off Costs                —          1          —          2
Adjusted earnings before income     $ 551      $ 508      $ 1,504    $ 1,374
taxes and discontinued operations
Provision for income taxes          $ 101      $ 178      $ 448      $ 487
Restructuring and employee          12         3          15         4
severance tax benefit
Acquisition-related costs tax       20         (7)        38         11
benefit/(expense)
Impairments and loss on disposal of 6          7          7          7
assets tax benefit
Litigation (recoveries)/charges,    (1)        —          (14)       (1)
net tax expense
Other Spin-Off Costs tax benefit    —          —          —          1
Adjusted provision for income taxes $ 138      $ 181      $ 494      $ 509
Non-GAAP effective tax rate from    25.1    %  35.6    %  32.8    %  37.1    %
continuing operations
                                    Third Quarter
                                    2013       2012
Debt to total capital               38      %  29      %
Net debt to capital
Current portion of long-term
obligations and other short-term    $ 446      $ 345
borrowings
Long-term obligations, less current 3,714      2,208
portion
Debt                                $ 4,160    $ 2,553
Cash and equivalents                (2,305)    (2,410)
Net debt                            $ 1,855    $ 143
Total shareholders' equity          6,830      6,240
Capital                             $ 8,685    $ 6,383
Net debt to capital                 21      %  2       %

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 and litigation (recoveries)/charges, net, which
are difficult to predict and estimate and are primarily dependent on future
events. Please note that the unavailable reconciling items could significantly
impact our future financial results.

Schedule 14
Cardinal Health, Inc. and Subsidiaries
                                                  Third Quarter
(in millions)                                     2013       2012
Days sales outstanding                            23.5       21.7
Days inventory on hand
Inventories                                       $ 8,328    $ 8,220
Cost of products sold                             $ 23,261   $ 25,711
Chargeback billings                               3,974      3,842
Adjusted cost of products sold                    $ 27,235   $ 29,553
Adjusted cost of products sold divided by 90 days $ 303      $ 328
Days inventory on hand                            27.5       25.0
Days payable outstanding
Accounts payable                                  $ 12,049   $ 12,573
Cost of products sold                             $ 23,261   $ 25,711
Chargeback billings                               3,974      3,842
Adjusted cost of products sold                    $ 27,235   $ 29,553
Adjusted cost of products sold divided by 90 days $ 303      $ 328
Days payable outstanding                          39.8       38.3
Net working capital days^1                        11.2       8.5

^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.

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: non-GAAP earnings from
continuing operations divided by diluted weighted-average shares outstanding.

Non-GAAP Earnings from Continuing Operations: earnings from continuing
operations excluding (1) restructuring and employee severance^1, (2)
acquisition-related costs^2, (3) impairments and loss on disposal of assets^3,
(4) litigation (recoveries)/charges, net^4 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: 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.

^1 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 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).

^2 Costs that consist primarily of transaction costs, integration
costs, changes in the fair value of contingent consideration obligations and
amortization of acquisition-related intangible assets.

^3 Asset impairments and losses from the disposal of assets not
eligible to be classified as discontinued operations are classified within
impairments and loss on disposal of assets within the condensed consolidated
statements of earnings.

^4 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, (614) 757-6225,
debbie.mitchell@cardinalhealth.com; Investors: Sally Curley, (614) 757-7115,
sally.curley@cardinalhealth.com
 
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