Navigation Links
Cardinal Health Reports First Quarter Results
Date:10/29/2008

- Revenue increases 11 percent to $24 billion - GAAP diluted earnings per share from continuing operations decline 16

percent to $0.69 and 14 percent to $0.74 on a non-GAAP basis

- Spin-off planning remains on target

- Full-year guidance remains unchanged

DUBLIN, Ohio, Oct. 29 /PRNewswire-FirstCall/ -- Cardinal Health, a global provider of products and services that improve the safety and productivity of health care, today reported an 11 percent increase in revenue to $24 billion, driven by strong sales in the Healthcare Supply Chain Services segment and continued growth within Clinical and Medical Products.

For the quarter ended Sept. 30, the Healthcare Supply Chain Services segment achieved double-digit revenue growth, which helped partially offset the expected year-over-year profit decline from previously disclosed contract re-pricings and anti-diversion efforts for controlled substances.

First-quarter GAAP earnings per share (EPS) declined 16 percent from the prior year period to $0.69. Special items primarily related to the restructuring announced on July 8 and impairments resulted in a $0.05 dilutive impact, bringing non-GAAP EPS from continuing operations(1) to $0.74.

In early October, Cardinal Health entered into an agreement with the U.S. Drug Enforcement Administration (DEA) to resume shipments of controlled substances from three of the company's distribution centers, which is anticipated to contribute to growth in the second half of the fiscal year. The company expects these facilities to fully resume shipment of controlled substances by the end of November.

"The company performed as expected with double-digit revenue and profit performance from Clinical and Medical Products, and I am encouraged by continued signs of early progress in the pharmaceutical supply chain business," said R. Kerry Clark, chairman and CEO of Cardinal Health. "We remain focused on driving growth for both segments, while working diligently toward completing the spin-off of our clinical and medical products businesses by the middle of calendar 2009."

The company announced on Sept. 29 that its board of directors had approved plans for a tax-free spin-off of most of its clinical and medical products businesses as a separate, publicly traded company. Completion of the spin-off is subject to final approval by the company's board of directors, confirmation of the tax-free nature of the transaction and the effectiveness of a Form 10 registration statement to be filed with the U.S. Securities and Exchange Commission.

Q1 FY09 SUMMARY

Q1 FY09 Q1 FY08 Y/Y

Revenue $24.3 billion $22 billion 11 %

GAAP Operating

Earnings $426 million $490 million (13)%

Non-GAAP Operating

Earnings(2) $482 million $512 million (6)%

GAAP Earnings from

Continuing Operations $250 million $303 million (18)%

Non-GAAP Earnings

from Continuing

Operations(3) $268 million $318 million (16)%

GAAP Diluted EPS from

Continuing Operations $0.69 $0.82 (16)%

Non-GAAP Diluted EPS from

Continuing Operations $0.74 $0.86 (14)%

FIRST-QUARTER SEGMENT RESULTS

Healthcare Supply Chain Services

Q1 FY09 Q1 FY08 Y/Y

Revenue $23.4 billion $21.1 billion 11 %

Segment Profit $292 million $347 million (16)%

Healthcare Supply Chain Services increased revenue by 11 percent to $23.4 billion, from sales to both pharmaceutical and medical supply chain customers. Sales to bulk customers(4) increased 20 percent to $10.7 billion and sales to non-bulk customers(5) increased 4 percent to $10.6 billion. Segment profit declined 16 percent to $292 million, primarily driven by previously disclosed pharmaceutical contract re-pricings, continued disruption from anti-diversion efforts for pharmaceutical supply chain customers and lower branded price inflation compared to the prior year period.

"In the pharmaceutical supply chain business, we made significant progress towards our key priorities, including rebuilding sales momentum, particularly in the direct store business, growth in our Source Generics program and a resolution with the DEA related to the distribution of controlled drugs," said George Barrett, Cardinal Health vice chairman and CEO of Healthcare Supply Chain Services. "While the positive financial impact of this progress will not be felt immediately, each represents an important milestone in turning the business in a positive direction. Other highlights from the segment include our lab and ambulatory businesses within the medical products supply chain. They performed particularly well for the quarter, and we expect to continue this momentum for the remainder of the fiscal year."

Clinical and Medical Products

Q1 FY09 Q1 FY08 Y/Y

Revenue $1.2 billion $1 billion 12 %

Segment Profit $167 million $145 million 15 %

Revenue for Clinical and Medical Products increased 12 percent to $1.2 billion, driven by continued strength in dispensing, the Enturia acquisition and international sales. Segment profit increased 15 percent to $167 million, driven by the increase in revenue and growth in infection prevention products, including Enturia. Segment profit was partially dampened by a rise in raw material costs.

"Our core infusion and dispensing systems performed well, and our ChloraPrep(R) products from the Enturia acquisition outperformed for the quarter," said David Schlotterbeck, Cardinal Health vice chairman and CEO of Clinical and Medical Products. "As we continue to make progress with our quality system enhancements, we have essentially completed remediation efforts for the Alaris(R) SE pump recall and expect to complete the Alaris(R) System Pump Module recall by the end of the calendar year. In addition, the VIASYS acquisition remains on schedule to meet our synergy targets for fiscal 2010."

ADDITIONAL FIRST QUARTER AND RECENT HIGHLIGHTS:

-- Reached agreements with the DEA and seven U.S. Attorneys' Offices that resulted in reinstated licenses to distribute controlled substances from the company's Auburn, Wash., Lakeland, Fla. and Swedesboro, N.J. distribution centers.

-- Completed the sale of the company's MedSystems and Tecomet businesses, which were non-strategic assets from the VIASYS acquisition.

-- Hosted approximately 400 health care industry leaders at the inaugural Chasing Zero Summit to encourage a zero-tolerance approach to health care associated infections (HAIs).

-- Signed 50 new customers for MedMined(TM) services, the market leader in electronic infection surveillance.

-- The Cardinal Health Foundation launched the second annual $1 million Patient Safety Grant to help U.S. hospitals, health systems and community health clinics improve patient safety and health care quality.

-- Launched myPharmacyTrainer, a proprietary online training site that helps independent pharmacies coach their employees to deliver better patient care, improve customer loyalty and increase sales.

OUTLOOK

Cardinal Health's guidance range for the full year remains unchanged at $3.80 to $3.95 for non-GAAP diluted EPS from continuing operations. Clark said, "It is clear that we are operating in an unprecedented economic environment, yet Cardinal Health remains well positioned with a strong balance sheet that enables ongoing access to capital. While we have not seen any definitive customer credit issues that would change our full-year outlook at this time, we are seeing hospitals delay some purchase decisions that will have some impact to our Clinical and Medical Products segment for the December quarter. We are monitoring this very closely and will continue to take steps to mitigate as much impact as possible."

The company's guidance does not reflect any incremental costs it will incur associated with the spin-off and separation of the two companies. The company expects a significant portion of these costs will be classified as special items in accordance with company practices.

CONFERENCE CALL

Cardinal Health will host a conference call and webcast today at 8:30 a.m. EDT to discuss first quarter results. To access the call and corresponding slide presentation, visit the Investor page at http://www.cardinalhealth.com or dial 617-213-4845, passcode 12574826. Presentation slides, an audio replay and a transcript will be archived on the Web site after the conclusion of the meeting. The audio replay will also be available until 11 p.m. EDT on Oct. 31 by dialing 617-801-6888, passcode 49513300.

UPCOMING EVENTS

The 2008 annual meeting of shareholders will be held Nov. 5 at 2 p.m. EST at Cardinal Health headquarters, 7000 Cardinal Place, Dublin, Ohio. Shareholders are cordially invited to attend in person, or they can access the live webcast of the meeting and corresponding slide presentation from the Investors page at http://www.cardinalhealth.com. A replay and transcript also will be available on the Investors page until 11 p.m. EST on Nov. 19.

Cardinal Health Chief Financial Officer Jeff Henderson will address investors at the Annual Credit Suisse Healthcare Conference in Phoenix on Nov. 12 at 4:30 p.m. EST. Henderson will discuss Cardinal Health's diverse products and services, company performance and strategies for continued growth. To access the live webcast of his remarks or a transcript, go to the Investors page at http://www.cardinalhealth.com.

About Cardinal Health

Headquartered in Dublin, Ohio, Cardinal Health, Inc. (NYSE: CAH) is a $91 billion, global company serving the health care industry with products and services that help hospitals, physician offices and pharmacies reduce costs, improve safety, productivity and profitability, and deliver better care to patients. With a focus on making supply chains more efficient, reducing hospital-acquired infections and breaking the cycle of harmful medication errors, Cardinal Health develops market-leading technologies, including Alaris(R) IV pumps, Pyxis(R) automated dispensing systems, MedMined(TM) electronic infection surveillance service, VIASYS(R) respiratory care products and the CareFusion(TM) patient identification system. The company also manufactures medical and surgical products and is one of the largest distributors of pharmaceuticals and medical supplies worldwide. Ranked No. 19 on the Fortune 500, Cardinal Health employs more than 40,000 people on five continents. More information about the company may be found at http://www.cardinalhealth.com .

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

(2) Non-GAAP operating earnings: Operating earnings excluding special items and impairments, (gain)/loss on sale of assets and other, net.

(3) Non-GAAP earnings from continuing operations: Earnings from continuing operations excluding special items and impairments, (gain)/loss on sale of assets and other, net, both net of tax.

(4) Bulk customers consist of Healthcare Supply Chain Services customers to which the segment distributes pharmaceutical, radiopharmaceutical and over-the-counter health care products to the customers' centralized warehouse operations and mail order businesses.

(5) Non-bulk customers consist of all Healthcare Supply Chain Services customers to which the segment distributes pharmaceutical, radiopharmaceutical and over-the-counter health care products other than bulk customers.

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

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

This news release contains forward-looking statements addressing expectations, prospects, estimates and other matters that are dependent upon future events or developments. These matters are subject to risks and uncertainties that could cause actual results to differ materially from those projected, anticipated or implied. The most significant of these uncertainties are described in Cardinal Health's Form 10-K, Form 10-Q and Form 8-K reports (including all amendments to those reports) and exhibits to those reports, and include (but are not limited to) the following: uncertainties regarding the planned spin-off of the clinical and medical products businesses as a new stand-alone entity, including the timing and terms of any such spin-off and whether such spin-off will be completed, and uncertainties regarding the impact of the planned spin-off on Cardinal Health, the new clinical and medical products company and the potential market for their respective securities; 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; uncertainties relating to timing of generic and branded pharmaceutical introductions and the frequency or rate of branded pharmaceutical price appreciation or generic pharmaceutical price deflation; changes in the distribution patterns or reimbursement rates for health-care products and/or services; the results, consequences, effects or timing of any inquiry or investigation by any regulatory authority or any legal or administrative proceedings; future actions of regulatory bodies or government authorities relating to Cardinal Health's manufacturing or sale of products and other costs or claims that could arise from its manufacturing, compounding or repackaging operations or from its other services; the costs, difficulties and uncertainties related to the integration of acquired businesses; uncertainties related to the recent disruptions in the financial markets, including uncertainties related to the availability and/or cost of credit and the impact of the financial market disruptions on Cardinal Health's customers and vendors; and conditions in the pharmaceutical market and general economic and market conditions. This news release reflects management's views as of Oct. 29, 2008. Except to the extent required by applicable law, Cardinal Health undertakes no obligation to update or revise any forward-looking statement.

CARDINAL HEALTH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)

First Quarter

(in millions, except per Common 2009 2008 % Change

Share amounts)

Revenue $24,347.2 $21,973.4 11 %

Cost of products sold 22,982.7 20,631.2 11 %

Gross margin 1,364.5 1,342.2 2 %

Selling, general and

administrative expenses 882.2 830.1 6 %

Impairments, (gain)/loss on sale

of assets and other, net 3.6 (0.2) N.M.

Special items:

Restructuring charges 49.7 14.8 N.M.

Acquisition integration

charges 2.4 5.4 N.M.

Litigation and other 0.3 2.3 N.M.

Operating earnings 426.3 489.8 (13)%

Interest expense and other 62.4 42.9 45 %

Earnings before income taxes and

discontinued operations 363.9 446.9 (19)%

Provision for income taxes 114.1 143.7 (21)%

Earnings from continuing

operations 249.8 303.2 (18)%

Loss from discontinued

operations (net of tax expense

of $0.6 and $2.0 for the

first quarter of fiscal

2009 and 2008, respectively) (0.7) (1.4) N.M.

Net earnings $249.1 $301.8 (17)%

Basic earnings per Common Share:

Continuing operations $0.70 $0.83 (16)%

Discontinued operations - - N.M.

Net basic earnings per

Common Share $0.70 $0.83 (16)%

Diluted earnings per Common Share:

Continuing operations $0.69 $0.82 (16)%

Discontinued operations - - N.M.

Net diluted earnings per

Common Share $0.69 $0.82 (16)%

Weighted average number of

Common Shares outstanding:

Basic 356.7 363.0

Diluted 361.1 370.2

CARDINAL HEALTH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

September 30, June 30,

(in millions) 2008 2008

Assets

Cash and equivalents $672.2 $1,291.3

Trade receivables, net 5,862.3 5,006.9

Current portion of net investment in

sales-type leases 384.8 383.7

Inventories 7,692.1 6,768.8

Prepaid expenses and other 614.9 593.1

Assets held for sale - 140.4

Total current assets 15,226.3 14,184.2

Property and equipment, net 1,749.5 1,737.2

Net investment in sales-type leases,

less current portion 935.8 916.8

Goodwill and other intangibles, net 6,265.1 6,225.9

Other assets 468.4 384.1

Total assets $24,645.1 $23,448.2

Liabilities and Shareholders' Equity

Current portion of long-term

obligations and other short-term

borrowings $166.5 $159.0

Accounts payable 9,354.6 8,311.8

Other accrued liabilities 1,902.6 1,889.7

Liabilities from businesses held for

sale and discontinued operations 2.4 15.4

Total current liabilities 11,426.1 10,375.9

Long-term obligations, less current

portion and other short-term borrowings 3,597.0 3,687.4

Deferred income taxes and other

liabilities 1,703.9 1,637.4

Total shareholders' equity 7,918.1 7,747.5

Total liabilities and shareholders'

equity $24,645.1 $23,448.2

CARDINAL HEALTH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

First Quarter

(in millions) 2009 2008

Cash Flows From Operating Activities:

Net earnings $249.1 $301.8

Loss from discontinued operations 0.7 1.4

Earnings from continuing

operations 249.8 303.2

Adjustments to reconcile earnings

from continuing operations

to net cash provided by / (used

in) operating activities:

Depreciation and amortization 101.0 94.9

Asset impairments and (gain)/loss

on sale of assets, net 3.6 (0.2)

Equity compensation 24.4 26.1

Provision for bad debts 12.6 5.0

Change in operating assets and

liabilities, net of

effects from acquisitions:

Increase in trade receivables (782.4) (191.9)

(Increase) / decrease in

inventories (873.6) 232.4

Increase in net investment in

sales-type leases (20.2) (24.1)

Increase / (decrease) in accounts

payable 982.6 (63.2)

Other accrued liabilities and

operating items, net (49.8) 57.0

Net cash provided by / (used in)

operating activities -

continuing operations (352.0) 439.2

Net cash used in operating

activities - discontinued operations (0.9) (30.4)

Net cash provided by / (used in)

operating activities (352.9) 408.8

Cash Flows From Investing Activities:

Acquisition of subsidiaries, net of

divestitures and cash acquired (6.1) (88.1)

Proceeds from sale of property and

equipment 1.0 2.5

Additions to property and equipment (89.6) (91.5)

Sale of investment

securities available for sale, net - 131.9

Net cash used in investing

activities - continuing operations (94.7) (45.2)

Net cash used in investing

activities - discontinued operations - -

Net cash used in investing

activities (94.7) (45.2)

Cash Flows From Financing Activities:

Net change in commercial paper and

short-term borrowings 1.2 232.0

Reduction of long-term obligations (152.6) (13.0)

Proceeds from long-term

obligations, net of issuance costs 8.5 0.1

Proceeds from issuance of Common

Shares 17.9 105.5

Tax benefits from exercises of

stock options 3.3 11.6

Dividends on Common Shares (49.8) (44.3)

Purchase of Common Shares in treasury - (674.7)

Net cash used in financing

activities - continuing operations (171.5) (382.8)

Net cash used in financing

activities - discontinued operations - -

Net cash used in financing activities (171.5) (382.8)

Net decrease in cash and equivalents (619.1) (19.2)

Cash and equivalents at beginning

of period 1,291.3 1,308.8

Cash and equivalents at end of

period $672.2 $1,289.6

CARDINAL HEALTH, INC. AND SUBSIDIARIES

BUSINESS ANALYSIS

TOTAL COMPANY

Non-GAAP

First Quarter First Quarter

(in millions) 2009 2008 2009 2008

Revenue

Amount $24,347 $21,973

Growth Rate 11 % 5 %

Operating Earnings

Amount $426 $490 $482 $512

Growth Rate (13)% 9 % (6)% 8 %

Earnings from Continuing Operations

Amount $250 $303 $268 $318

Growth Rate (18)% 4 % (16)% 3 %

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

CARDINAL HEALTH, INC. AND SUBSIDIARIES

SEGMENT BUSINESS ANALYSIS

First Quarter First Quarter

(in millions) 2009 2008 (in millions) 2009 2008

HEALTHCARE SUPPLY CHAIN SERVICES CLINICAL AND MEDICAL PRODUCTS

Revenue(1) Revenue(1)

Amount $23,418 $21,093 Amount $1,155 $1,032

Growth Rate 11 % 4 % Growth Rate 12 % 33 %

Mix 94 % 94 % Mix 5 % 5 %

Segment Profit(2) Segment Profit(2)

Amount $292 $347 Amount $167 $145

Growth Rate (16)% 4 % Growth Rate 15 % 70 %

Mix 60 % 68 % Mix 35 % 28 %

Segment Profit Segment Profit

Margin 1.25 % 1.65 % Margin 14.43 % 14.06 %

First Quarter

(in millions) 2009 2008

ALL OTHER

Revenue(1)

Amount $273 $294

Growth Rate (7)% 5 %

Mix 1 % 1 %

Segment Profit(2)

Amount $24 $22

Growth Rate 7 % (21)%

Mix 5 % 4 %

Segment Profit

Margin 8.76 % 7.62 %

Refer to definitions for an explanation of calculations.

(1) Total consolidated revenue for the three months ended September 30,

2008 is $24.3 billion, which included total segment revenue of $24.8

billion and Corporate revenue of $(0.5) billion. Total consolidated

revenue for the three months ended September 20, 2007 is $22.0

billion, which included total segment revenue of $22.4 billion and

Corporate revenue of $(0.4) billion. Corporate consisted primarily of

elimination of inter-segment revenue.

(2) Total consolidated operating earnings for the three months ended

September 30, 2008 is $426 million, which included total segment

profit of $483 million and Corporate loss of $(57) million. Total

consolidated operating earnings for the three months ended September

30, 2007 is $490 million, which included total segment profit of $514

million and Corporate loss of $(24) million. Corporate includes,

among other things, special items and impairments, (gain)/loss on sale

of assets and other, net.

CARDINAL HEALTH, INC. AND SUBSIDIARIES

ASSET MANAGEMENT ANALYSIS

First Quarter

2009 2008

Receivable Days 21.5 22.2

Days Inventory on Hand 27 28

Debt to Total Capital 32 % 35 %

Net Debt to Capital 28 % 26 %

Return on Equity 12.7% 16.7%

Non-GAAP Return on Equity(1) 13.6% 17.5%

Return on Invested Capital(1) 6.03% 7.17%

Non-GAAP Return on Invested Capital(1) 6.40% 7.49%

Effective Tax Rate from Continuing Operations 31.4% 32.2%

Non-GAAP Effective Tax Rate from

Continuing Operations(1) 36.2% 32.2%

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

(1) See definitions for explanation of changes in method of calculating

these financial measures from prior quarters.

CARDINAL HEALTH, INC. AND SUBSIDIARIES

SCHEDULE OF NOTABLE ITEMS

(in millions, except per Common First Quarter

Share amounts) 2009 2008

Special Items

Restructuring charges $(49.7) $(14.8)

Acquisition integration charges (2.4) (5.4)

Litigation and other (0.3) (2.3)

Total special items (52.4) (22.5)

Tax benefit 17.1 7.7

Special items, net of tax $(35.3) $(14.8)

Decrease to diluted EPS from

continuing operations $(0.10) $(0.04)

Impairments, Gain/(Loss) on Sale of

Assets and Other, Net

Impairments, gain/(loss) on sale of

assets and other, net $(3.6) $0.2

Tax benefit / (expense) 20.9 (0.1)

Impairments, gain/(loss) on sale of

assets and other, net, net of tax $17.3 $0.1

Increase to diluted EPS from

continuing operations $0.05 $-

Weighted Average Number of Diluted

Shares Outstanding 361.1 370.2

CARDINAL HEALTH, INC. AND SUBSIDIARIES

GAAP / NON-GAAP RECONCILIATION

First Quarter 2009

Impairments,

(Gain)/Loss

on Sale

of Assets

(in millions, except per Common Share Special and Other,

amounts) GAAP Items Net Non-GAAP

Operating Earnings

Amount $426 $52 $4 $482

Growth Rate (13)% (6)%

Provision for Income Taxes $114 $17 $21 $152

Earnings from Continuing Operations

Amount $250 $35 ($17) $268

Growth Rate (18)% (16)%

Diluted EPS from Continuing

Operations

Amount $0.69 $0.10 ($0.05) $0.74

Growth Rate (16)% (14)%

First Quarter 2008

Impairments,

(Gain)/Loss

on Sale

of Assets

Special and Other,

GAAP Items Net Non-GAAP

Operating Earnings

Amount $490 $23 - $512

Growth Rate 9 % 8 %

Provision for Income Taxes $144 $8 - $151

Earnings from Continuing Operations

Amount $303 $15 - $318

Growth Rate 4 % 3 %

Diluted EPS from Continuing

Operations

Amount $0.82 $0.04 - $0.86

Growth Rate 15 % 15 %

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

CARDINAL HEALTH, INC. AND SUBSIDIARIES

GAAP / NON-GAAP RECONCILIATION

First Quarter

(in millions) 2009 2008

GAAP Return on Equity 12.7 % 16.7 %

Non-GAAP Return on Equity

Net earnings $249.1 $301.8

Special items, net of tax, in continuing

operations 35.3 14.8

Impairments, (gain)/loss on sale of assets and

other, net, net of tax, in continuing

operations (17.3) (0.1)

Adjusted net earnings $267.1 $316.5

Annualized $1,068.4 $1,266.0

Divided by average shareholders'

equity(1) $7,832.8 $7,222.6

Non-GAAP return on equity(2) 13.6 % 17.5 %

First Quarter

2009 2008

GAAP Return on Invested Capital(2) 6.03 % 7.17 %

Non-GAAP Return on Invested Capital

Net earnings $249.1 $301.8

Special items, net of tax, in continuing

operations 35.3 14.8

Impairments, (gain)/loss on sale of assets and

other, net, net of tax, in continuing

operations (17.3) (0.1)

Interest expense and other, net of tax 39.9 27.5

Adjusted net

earnings $307.0 $344.0

Annualized $1,228.0 $1,376.0

Divided by average total invested

capital(3) $19,177.2 $18,365.9

Non-GAAP return on invested capital(2) 6.40 % 7.49 %

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

average of the prior year's fourth quarter and the current quarter.

(2) See definitions for explanation of changes in method of calculating

these financial measures from prior quarters.

(3) Total invested capital is calculated as the sum of the current portion

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

obligations, total shareholders' equity and unrecorded goodwill. The

average total invested capital is calculated using the average of

total invested capital at the end of the prior year's fourth quarter

and the current quarter. Unrecorded goodwill is $7.5 billion for all

periods presented.

CARDINAL HEALTH, INC. AND SUBSIDIARIES

GAAP / NON-GAAP RECONCILIATION

First Quarter

(in millions) 2009 2008

GAAP Effective Tax Rate from Continuing

Operations 31.4 % 32.2 %

Non-GAAP Effective Tax Rate from Continuing

Operations

Earnings before income taxes and

discontinued operations $363.9 $446.9

Special items 52.4 22.5

Impairments, (gain)/loss on sale of assets

and other, net 3.6 (0.2)

Adjusted earnings before income taxes and

discontinued operations $419.9 $469.2

Provision for income taxes $114.1 $143.7

Special items tax benefit 17.1 7.7

Impairments, (gain)/loss on sale of assets

and other, net, tax impact 20.9 (0.1)

Adjusted provision for income taxes $152.1 $151.3

Non-GAAP effective tax rate from continuing

operations(1) 36.2 % 32.2 %

First Quarter

2009 2008

Debt to Total Capital 32 % 35 %

Net Debt to Capital

Current portion of long-term obligations

and other short-term borrowings $166.5 $386.8

Long-term obligations, less current portion

and other short-term borrowings 3,597.0 3,347.5

Debt $3,763.5 $3,734.3

Cash and equivalents (672.2) (1,289.6)

Net debt $3,091.3 $2,444.7

Total shareholders' equity $7,918.1 $7,068.2

Capital $11,009.4 $9,512.9

Net debt to capital 28 % 26 %

Forward-Looking Non-GAAP Financial Measures

The Company presents non-GAAP earnings from continuing operations and

non-GAAP effective tax rate from continuing operations (and presentations

derived from these financial measures) on a forward-looking basis. The

most directly comparable forward-looking GAAP measures are earnings from

continuing operations and effective tax rate from continuing operations.

The Company is unable to provide a quantitative reconciliation of these

forward-looking non-GAAP measures to the most comparable forward-looking

GAAP measures because the Company cannot reliably forecast special items

and impairments, (gain)/loss on sale of assets and other, 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 the Company's future financial results.

(1) See definitions for explanation of changes in method of calculating

these financial measures from prior quarters.

CARDINAL HEALTH, INC. AND SUBSIDIARIES

DEFINITIONS

GAAP

Debt: long-term obligations plus short-term borrowings

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

equity)

Diluted EPS from Continuing Operations: earnings from continuing

operations divided by diluted weighted average shares outstanding

Effective Tax Rate from Continuing Operations: provision for income taxes

divided by earnings before income taxes and discontinued operations

Operating Cash Flow: net cash provided by / (used in) operating

activities from continuing operations

Segment Profit: segment revenue minus (segment cost of products sold and

segment selling, general and administrative expenses)

Segment Profit Margin: segment profit divided by 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

Return on Invested Capital: annualized net earnings plus interest expense

and other divided by (average total shareholders' equity plus debt plus

unrecorded goodwill)(1)

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

segments

NON-GAAP

Net Debt to Capital: net debt divided by (net debt plus total

shareholders' equity)

Net Debt: debt minus (cash and equivalents and short-term investments

available for sale)

Non-GAAP Diluted EPS from Continuing Operations: non-GAAP earnings from

continuing operations divided by diluted weighted average shares

outstanding

Non-GAAP Diluted EPS from Continuing Operations Growth Rate: (current

period non-GAAP diluted EPS from continuing operations minus prior period

non-GAAP diluted EPS from continuing operations) divided by prior period

non-GAAP diluted EPS from continuing operations

Non-GAAP Earnings from Continuing Operations: earnings from continuing

operations excluding special items and impairments, (gain)/loss on sale

of assets and other, net, both net of tax

Non-GAAP Earnings from Continuing Operations Growth Rate: (current period

non-GAAP earnings from continuing operations minus prior period non-GAAP

earnings from continuing operations) divided by prior period non-GAAP

earnings from continuing operations

Non-GAAP Effective Tax Rate from Continuing Operations: (provision for

income taxes adjusted for special items and impairments, (gain)/loss on

sale of assets and other, net) divided by (earnings before income taxes

and discontinued operations adjusted for special items and impairments,

(gain)/loss on sale of assets and other, net)(2)

Non-GAAP Operating Earnings: operating earnings excluding special items

and impairments, (gain)/loss on sale of assets and other, net

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 special items and impairments, (gain)/loss on sale of assets

and other, net, both net of tax) divided by average shareholders'

equity(2)

Non-GAAP Return on Invested Capital: (annualized net earnings excluding

special items, impairments, (gain)/loss on sale of assets and other, net

and interest expense and other all net of tax) divided by (average total

shareholders' equity plus debt plus unrecorded goodwill)(2)

(1) During the first quarter of fiscal 2009, the Company began to exclude

interest expense from the calculation of GAAP return on invested

capital. Prior year results have been recast to reflect the new

calculation methodology.

(2) During the first quarter of fiscal 2009, the Company began to exclude

the impact of impairments, (gain)/loss on sale of assets and other,

net, net of tax from the calculation of non-GAAP effective tax rate

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

return on invested capital consistent with the calculation of other

non-GAAP financial measures. Prior year results have been recast to

reflect the new calculation methodology.


'/>"/>
SOURCE Cardinal Health, Inc.
Copyright©2008 PR Newswire.
All rights reserved


Related medicine news :

1. Positive Picture of Independent Community Pharmacies Emerges With Release of 2008 NCPA Digest, Sponsored by Cardinal Health
2. Cardinal Health Reports Fiscal 2008 Results, Provides Fiscal 2009 Outlook
3. Cardinal Health Declares Regular Quarterly Dividend
4. Cardinal Health Expands Leader(R) Offering To Help Independent Pharmacies Strengthen Patient Relationships, Solidify Role As Local Health Care Experts
5. Cardinal Health Formalizes Consolidation of Businesses Into Two Primary Operating and Reporting Segments
6. Cardinal Health Increases Quarterly Dividend by 17 Percent
7. Cardinal Health Reports Third Quarter Results
8. Cardinal Health Awards $1 Million to Fund Patient Safety Initiatives
9. Cardinal Health to Announce Third-Quarter Results on May 1
10. Cardinal Health, ClearCount Medical Solutions Sign Primary Distribution Agreement for RFID-Enabled Sponge Counting, Detection System
11. Cardinal Health, GE Healthcare Broaden Relationship to Offer Greater Access to Myoview(TM) Imaging Agent
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:2/5/2016)... ... ... The American public tends to feel uncomfortable about drinking recycled waste water ... well water. The recent experience with lead contaminated water in Flint, Michigan, according to ... increasing public acceptance of recycled waste water as drinking water. , The Flint ...
(Date:2/5/2016)... ... ... Boar’s Head Brand®, one of the nation’s leading providers of premium delicatessen foods, ... out of your party preparation – follow these easy, yet delicious recipes with the ... , “The key to hosting a successful game-day party is creating a flavorful menu ...
(Date:2/5/2016)... (PRWEB) , ... February 05, 2016 , ... Dr. Justin ... announce their 2nd Annual No Cost Dental Day to individuals in need. The event ... purpose of this No Cost Dental Day is to provide dental care to community ...
(Date:2/5/2016)... ... ... Colorize is a web theme package created exclusively for Final ... dynamic moving camera. Colorize is perfect for personal and web related videos and its ... to 5 focus points per scene, stage floor scene presets that are great for ...
(Date:2/5/2016)... ... February 05, 2016 , ... California Mobile Kitchens ... debut of their latest mobile kitchen model, featuring customizable stainless steel interiors and ... commercial kitchens for use anywhere in the U.S. Many of their units can ...
Breaking Medicine News(10 mins):
(Date:2/5/2016)... -- Site Profile: --> ... Speech Recognition People, announced their latest primary healthcare case study where ... turnaround times and to save the practice money. Site ... Challenge: --> ,- Wirral CCG ,- VoicePower ... doctors ,- Wirral CCG ,- VoicePower client since 2013 ...
(Date:2/4/2016)... 2016  Edwards Lifesciences Corporation (NYSE: EW ), ... disease and critical care monitoring, announced today that it ... with Morgan Stanley & Co. LLC to repurchase $325 ... of the Company,s previously authorized program to repurchase up ... --> --> Under ...
(Date:2/4/2016)... , Feb. 4, 2016  SciClone Pharmaceuticals, Inc. ... it has entered into a settlement agreement with ... fully resolving the SEC,s investigation into possible violations ... the terms of the settlement agreement, SciClone has ... including disgorgement, pre-judgment interest and a penalty.  This ...
Breaking Medicine Technology: