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Cardinal Health Reports Fiscal 2008 Results, Provides Fiscal 2009 Outlook

Company Exploring Spin-Off of Clinical And Medical Products Businesses

DUBLIN, Ohio, Aug. 7 /PRNewswire-FirstCall/ -- Cardinal Health, a global provider of products and services that improve the safety and productivity of health care, today reported an increase in fiscal 2008 revenue of 5 percent to $91 billion and a 76 percent increase in GAAP earnings per share (EPS) to $3.64. On a non-GAAP basis, EPS grew 11 percent to $3.80(1) for the year.

As the company had forecasted, the medical supply chain segment improved profit in the second half of the year, driven by double-digit growth in its core U.S. medical distribution business. Significant steps were taken in the pharmaceutical distribution business during the year to accelerate a recovery, which the company expects in the second half of fiscal 2009.

Results during the quarter and year continued to highlight growth within the company's medical technology segments. Combined revenue for the Clinical Technologies and Services, and Medical Products and Technologies segments grew by 24 percent to $5.6 billion and profit increased 36 percent to nearly $800 million for the year.

Cardinal Health also announced that its board of directors has supported a management recommendation to actively explore a potential separation of the company's primary operating and reporting segments, which could involve a tax-free spin-off of the clinical and medical products businesses as a separate, publicly traded company. Cardinal Health plans to announce its decision within approximately 60 to 90 days.

"For two years, we have been taking steps to sharpen our focus on health care supply chain services and clinical and medical products, culminating with our announcement in July to operate these businesses in two distinct segments that reflect the unique characteristics and requirements of each," said R. Kerry Clark, chairman and chief executive officer of Cardinal Health. "As we now consider a spin-off of our clinical and medical products businesses, our goal is simple: to have two thriving businesses, delivering maximum value to customers and shareholders over the long term."

Fiscal 2008 Results

Consolidated revenue for fiscal 2008 grew 5 percent to $91 billion and GAAP earnings from continuing operations rose 58 percent to $1.3 billion. Diluted earnings per share from continuing operations grew 76 percent to $3.64, or 11 percent to $3.80 on a non-GAAP basis. Earnings in the prior year were negatively affected by a $600 million expense to resolve securities litigation.

During the fourth quarter, ended June 30, consolidated revenue increased 3 percent to $23 billion, and earnings from continuing operations increased 39 percent to $330 million. Earnings in the fourth quarter of the prior year were dampened by merger-related charges from the company's acquisition of VIASYS Healthcare. Excluding the impact of merger charges and other items, non-GAAP earnings from continuing operations increased 1 percent to $348 million(2), or 9 percent to $0.97 on a diluted per-share basis.

"Overall, fourth quarter results were in line with our expectations," Clark said. "We continued to demonstrate to customers the value of our clinically differentiated medical technologies, where we delivered a year of very strong growth on the top and bottom lines. We also made steady progress throughout the year in our medical supply chain segment and, in particular, are very pleased with the results in our hospital, lab and ambulatory care distribution business.

    "In our pharmaceutical supply chain segment, we believe we are on the
right path to resolve the license suspensions that have kept us from
distributing controlled substances from three of our 24 distribution centers.
This will be a critical step in our efforts to drive improvements in the
business. And while we won't speculate on the ultimate outcome, we are in
constructive settlement discussions with the DEA and have recorded a reserve
of $23.5 million in connection with those discussions.  We have made good
progress in enhancing our controls and are eager to return to full service
levels for our customers."



    Q4 and FY08 Summary
                               Q4 FY08       Q4 FY07    Y/Y       FY08     Y/Y

    Revenue                 $23 billion    $22 billion   3%   $91 billion   5%

    Operating Earnings      $543 million  $421 million  29%  $2.1 billion  55%
    Non-GAAP Operating
     Earnings(3)            $568 million  $538 million   6%  $2.2 billion   3%

    Earnings from
     Continuing Operations  $330 million  $238 million  39%  $1.3 billion  58%
    Non-GAAP Earnings from
     Continuing Operations  $348 million  $345 million   1%  $1.4 billion   -

    Diluted EPS from
     Continuing Operations         $0.92         $0.61  51%         $3.64  76%
    Non-GAAP Diluted EPS from
     Continuing Operations         $0.97         $0.89   9%         $3.80  11%

Fourth-quarter and full-year segment results

Revenue for the Healthcare Supply Chain Services - Pharmaceutical segment increased 1 percent to $19.8 billion for the quarter with sales to bulk customers increasing by 9 percent. Sales to non-bulk customers decreased by 5 percent, primarily due to the transfer of volume from non-bulk to bulk sales by a large customer and the loss of business associated with controlled substance anti-diversion efforts. As expected, segment profit declined 15 percent to $258 million, driven by previously disclosed customer re-pricings, and direct-store-door customer losses, including the impact of anti-diversion efforts. The profit decline was partially offset by branded pharmaceutical price increases and greater profit from distribution service agreement fees.

For the year, segment revenue reached $79.3 billion, an increase of 4 percent, and segment profit was $1.1 billion, declining 14 percent from last year.

Fourth-quarter revenue for the Healthcare Supply Chain Services - Medical segment increased 8 percent to $2.1 billion, driven by increased sales to existing hospital, laboratory and ambulatory customers. Segment profit for the quarter decreased 3 percent to $81 million, but included a previously disclosed corporate allocation adjustment that reduced profit by 6 percentage points. Strong, double-digit profit growth from the distribution of medical and surgical products in the U.S. partially offset the decline in segment profit from other factors. As the company had forecasted, segment profit grew in the second half of fiscal 2008 compared to the second half of fiscal 2007.

Full-year revenue for the segment increased 8 percent to $8.1 billion, and full-year profit declined 5 percent to $303 million.

The Medical Products and Technologies segment reported a 46 percent increase in fourth-quarter revenue to $727 million, primarily driven by the acquisitions of VIASYS Healthcare and Enturia, but also organic growth in the core infection prevention and respiratory businesses. Segment profit increased 63 percent to $95 million and included a favorable impact of 38 percentage points from acquisitions. During the quarter, the company discovered it had failed to recognize profit on a portion of intercompany sales from fiscal 2006 to 2008. As a result, approximately $16 million was recorded as income for the fourth quarter that pertained to prior periods. The VIASYS integration continues to be ahead of schedule to achieve planned synergy goals by 2010.

For the full year, segment revenue increased 47 percent to $2.7 billion and segment profit grew 52 percent to $300 million, including 39 percentage points from acquisitions.

Compared to a record quarter in the prior year, fourth-quarter revenue for the Clinical Technologies and Services segment increased 3 percent to $780 million, driven by continued strength in installations of medication dispensing products. Excluding Pharmacy Services, revenue increased 9 percent. Segment profit for the quarter exceeded company expectations, rising 8 percent to $156 million driven by favorable product mix and a positive impact from foreign exchange.

Full-year revenue for the segment increased 8 percent to $2.9 billion and segment profit increased 29 percent to $497 million.

Additional fourth-quarter and recent highlights include:

-- Reaching a definitive agreement to sell Tecomet, a maker of orthopedic implants, to Charlesbank Capital Partners and Tecomet management, with plans to close within 60 days;

-- Reaching a definitive agreement to acquire Borschow Medical and Hospital Supplies, Inc., the largest distributor of pharmaceutical products and medical supplies in Puerto Rico;

-- Completing the acquisition of assets of privately held Enturia, Inc., the manufacturer of infection prevention products sold under the ChloraPrep(R) brand name;

-- Introducing the Pyxis(R) DuoStation, a new system that leverages the company's industry-leading dispensing technologies to enable clinicians access to a patient's medications and medical supplies from one system;

-- Launching four new offerings for retail independent pharmacies at the company's 19th annual Retail Business Conference, including a private-label brand of durable medical equipment, front-of-store management system, automated calling technology and automated pill counting systems;

-- A three-year agreement to serve as primary supply chain partner for Prime Therapeutics, one of the nation's largest pharmacy benefit managers, which serves approximately 14.6 million members nationwide;

-- Contracts with Premier for Alaris(R) infusion systems, Presource(R) custom procedure packs, Convertors(R) surgical drapes and gowns, third-party instrument repair, respiratory equipment, Pyxis(R) medication and supply automation products, and ChloraPrep(R) brand chlorhexidine gluconate (CHG) skin prep products.

Outlook

"In fiscal 2009, we plan to make incremental investments of up to $100 million to strengthen R&D in the clinical and medical products business and improve information technology in the supply chain services business," Clark said. "These investments will affect our earnings growth rates in fiscal 2009, but are important, foundational moves that we believe will accelerate future growth in both segments."

For fiscal 2009, the company expects revenue growth of 6 to 7 percent. Non-GAAP diluted EPS from continuing operations is expected to be in a range of $3.80 to $3.95 based on investments the company plans to make in new product development and information technology, and previously disclosed challenges in the pharmaceutical distribution business that are expected to continue through the first half of the fiscal year, coupled with a particularly unfavorable comparison in the first quarter due to strong branded price inflation in the prior year period.

As a result, non-GAAP EPS in the first quarter is expected to be around $0.70. The company forecasts EPS to return to more normal levels in the second quarter, with overall company results stronger in the second half of the year.


    Fiscal 2009 Financial Goals
    Revenue Growth       6-7%
    Non-GAAP EPS        $3.80 - $3.95

    Segment                               Revenue Growth      Profit Growth
    Healthcare Supply Chain Services           >6%             Flat to (5%)
    Clinical and Medical Products             >10%                 >20%

(Please reference the company's slide presentation for corporate and segment assumptions related to fiscal 2009 guidance, including that the potential separation of the clinical and medical products businesses does not occur during fiscal 2009. The presentation is posted on the Investor page at www.cardinalhealth.com).

The Healthcare Supply Chain Services segment is expected to return to profitable growth in the second half of the year. The first half of the year will continue to be affected by the company's ability to resolve license suspensions to distribute controlled substances from three of its pharmaceutical distribution centers, previously disclosed repricing of some major contracts and volatility in the Nuclear Pharmacy Services business leading to the launch of generic sestimibi.

The Clinical and Medical Products segment is expected to continue on a strong growth trajectory based on momentum in current product lines and approximately 50 new product introductions or enhancements planned during the next 18 months.

Conference Call

Cardinal Health will host a conference call and webcast at 8:30 a.m. EDT to discuss the results. To access the call and corresponding slide presentation, go to the Investor page at www.cardinalhealth.com. The conference call may also be accessed by calling 617-213-4850, conference passcode 97674427. An audio replay will be available until 11 p.m. EDT on Aug. 9 at 617-801-6888, passcode 28260453. A transcript and audio replay will also be available at 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) infection surveillance services 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 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 earnings from continuing operations:  Earnings from
        continuing operations excluding special items and impairment charges
        and other, both net of tax.

    (3) Non-GAAP operating earnings:  Operating earnings excluding special
        items and impairment charges and other.

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.

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 decision to explore the separation of the company's clinical and medical products businesses and regarding the impacts of such decision if the separation is accomplished; 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; difficulties, delays or additional costs in implementing the restructuring program announced on July 8, 2008; the costs, difficulties and uncertainties related to the integration of acquired businesses; and conditions in the pharmaceutical market and general economic and market conditions. This news release reflects management's views as of Aug. 7, 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
               CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)


                                                   Fourth Quarter
    (in millions, except per Common Share
     amounts)                                    2008         2007  % Change

    Revenue                                 $22,925.6    $22,262.8      3 %
    Cost of products sold                    21,456.2     20,905.4      3 %
    Gross margin                              1,469.4      1,357.4      8 %

    Selling, general and administrative
     expenses                                   901.3        819.3     10 %
    Impairment charges and other                (10.0)        (0.6)    N.M.

    Special items:
     Restructuring charges                       10.9         11.7     N.M.
     Acquisition integration charges             25.1         87.5     N.M.
     Litigation and other                        (1.1)        19.0     N.M.
    Operating earnings                          543.2        420.5     29 %

    Interest expense and other                   47.4         19.1    148 %
    Earnings before income taxes and
     discontinued operations                    495.8        401.4     24 %

    Provision for income taxes                  165.6        163.7      1 %
    Earnings from continuing operations         330.2        237.7     39 %

    Earnings / (loss) from discontinued
     operations (net of tax expense
     of $2.8 and $448.3 for the fourth
     quarter of fiscal 2008 and 2007,
     respectively)                               (3.6)       664.5     N.M.

    Net earnings                               $326.6       $902.2    (64)%


    Basic earnings / (loss) per Common Share:
    Continuing operations                       $0.93        $0.63     48 %
    Discontinued operations                     (0.01)        1.76     N.M.
     Net basic earnings per Common Share        $0.92        $2.39    (62)%

    Diluted earnings / (loss) per Common Share:
    Continuing operations                       $0.92        $0.61     51 %
    Discontinued operations                     (0.01)        1.72     N.M.
     Net diluted earnings per Common Share      $0.91        $2.33    (61)%

    Weighted average number of Common
     Shares outstanding:
    Basic                                       355.5        378.2
    Diluted                                     359.8        387.4



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


                                                    Fiscal Year
    (in millions, except per Common Share
     amounts)                                    2008         2007  % Change

    Revenue                                 $91,091.4    $86,852.0      5 %
    Cost of products sold                    85,457.3     81,606.7      5 %
    Gross margin                              5,634.1      5,245.3      7 %

    Selling, general and administrative
     expenses                                 3,414.8      3,082.3     11 %
    Impairment charges and other                (32.0)        17.3     N.M.

    Special items:
     Restructuring charges                       65.7         40.1     N.M.
     Acquisition integration charges             44.9        101.5     N.M.
     Litigation and other                        12.0        630.4     N.M.
    Operating earnings                        2,128.7      1,373.7     55 %

    Interest expense and other                  171.4        121.4     41 %
    Earnings before income taxes and
     discontinued operations                  1,957.3      1,252.3     56 %

    Provision for income taxes                  632.8        412.6     53 %
    Earnings from continuing operations       1,324.5        839.7     58 %

    Earnings / (loss) from discontinued
     operations (net of tax expense
     of $31.9 and $20.4 for fiscal 2008
     and 2007, respectively)                    (15.3)     1,091.4     N.M.

    Net earnings                             $1,309.2     $1,931.1    (32)%


    Basic earnings / (loss) per Common Share:
    Continuing operations                       $3.70        $2.13     74 %
    Discontinued operations                     (0.04)        2.76     N.M.
     Net basic earnings per Common Share        $3.66        $4.89    (25)%

    Diluted earnings / (loss) per Common Share:
    Continuing operations                       $3.64        $2.07     76 %
    Discontinued operations                     (0.04)        2.70     N.M.
     Net diluted earnings per Common Share      $3.60        $4.77    (25)%

    Weighted average number of Common
     Shares outstanding:
    Basic                                       358.2        394.9
    Diluted                                     364.0        404.7



                    CARDINAL HEALTH, INC. AND SUBSIDIARIES
                   CONSOLIDATED BALANCE SHEETS (UNAUDITED)


                                                   June 30,          June 30,
    (in millions)                                    2008              2007

    Assets
    Cash and equivalents                          $1,291.3          $1,308.8
    Short-term investments available for sale           -              132.0
    Trade receivables, net                         5,006.9           4,714.4
    Current portion of net investment in
     sales-type leases                               383.7             354.8
    Inventories                                    6,768.8           7,383.2
    Prepaid expenses and other                       593.1             651.3
    Assets held for sale                             140.4                -
      Total current assets                        14,184.2          14,544.5

    Property and equipment, net                    1,737.2           1,647.0
    Net investment in sales-type leases,
     less current portion                            916.8             820.7
    Goodwill and other intangibles, net            6,225.9           5,860.9
    Other assets                                     384.1             280.7
      Total assets                               $23,448.2         $23,153.8


    Liabilities and Shareholders' Equity
    Current portion of long-term
     obligations and other short-term borrowings    $159.0             $16.0
    Accounts payable                               8,311.8           9,162.2
    Other accrued liabilities                      1,881.1           2,247.3
    Liabilities from businesses held for
     sale and discontinued operations                 15.4              34.2
      Total current liabilities                   10,367.3          11,459.7

    Long-term obligations, less current
     portion and other short-term borrowings       3,687.4           3,457.3
    Deferred income taxes and other liabilities    1,637.4             859.9
      Total shareholders' equity                   7,756.1           7,376.9
      Total liabilities and shareholders' equity $23,448.2         $23,153.8



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


                                        Fourth Quarter       Fiscal Year
     (in millions)                     2008      2007      2008      2007

     Cash Flows From Operating
      Activities:
     Net earnings                     $326.6    $902.2  $1,309.2  $1,931.1
     (Earnings) / loss from
      discontinued operations            3.6    (664.5)     15.3  (1,091.4)
      Earnings from continuing
       operations                      330.2     237.7   1,324.5     839.7
     Adjustments to reconcile
      earnings from continuing
      operations to net cash
      provided by / (used in)
      operating activities:
        Depreciation and
         amortization                   96.3      85.0     381.3     322.1
        Asset impairments and other    (10.6)      1.2     (31.4)     19.2
        Purchased in-process
         research and development       18.0      84.5      18.0      84.5
        Equity compensation             35.6      28.8     122.3     138.1
        Provision for deferred
         income taxes                   26.9      11.7      26.9      11.7
        Provision for bad debts          3.8       7.0      26.1      24.0
     Change in operating assets
      and liabilities, net of
      effects from acquisitions:
      (Increase) / decrease in
      trade receivables                (17.8)     36.6    (312.7)   (783.1)
        Decrease in inventories        499.3     205.9     613.1     217.4
        Increase in net investment
         in sales-type leases          (41.1)    (53.8)   (124.9)   (130.8)
        Increase / (decrease) in
         accounts payable             (595.9)   (268.6)   (813.1)    224.4
        Increase / (decrease) in
         other accrued liabilities
         and operating items, net      (98.0)   (667.6)    329.0      35.8
           Net cash provided by /
            (used in) operating
            activities - continuing
            operations                 246.7    (291.6)  1,559.1   1,003.0
           Net cash provided by /
            (used in) operating
            activities - discontinued
            operations                  (4.4)    104.9     (47.0)    220.1
     Net cash provided by / (used
      in) operating activities         242.3    (186.7)  1,512.1   1,223.1

     Cash Flows From Investing
      Activities:
     Acquisition of subsidiaries,
      net of divestitures and
      cash acquired                   (475.9) (1,480.9)   (514.9) (1,629.8)
     Proceeds from sale of
      property and equipment            22.4       5.6      32.6       9.2
     Additions to property and
      equipment                       (124.5)   (114.3)   (376.1)   (357.4)
     Sale of investment
      securities available for
      sale, net                           -      168.0     132.0     366.5
       Net cash used in investing
        activities - continuing
        operations                    (578.0) (1,421.6)   (726.4) (1,611.5)
       Net cash provided by
        investing activities -
        discontinued operations           -    3,228.9        -    3,148.7
     Net cash provided by / (used
      in) investing activities        (578.0)  1,807.3    (726.4)  1,537.2

     Cash Flows From Financing
      Activities:
     Net change in commercial
      paper and short-term
      borrowings                      (202.7)   (293.3)     (0.5)    (38.9)
     Reduction of long-term
      obligations                       (4.6)    (51.1)    (21.5)   (784.0)
     Proceeds from long-term
      obligations, net of
      issuance costs                   302.5     601.7     303.5   1,453.4
     Proceeds from issuance of
      Common Shares                     18.6     233.7     227.9     552.6
     Tax benefits from exercises
      of stock options                  26.8       1.1      42.1      29.9
     Dividends on Common Shares        (42.6)    (34.9)   (173.1)   (144.4)
     Purchase of Common Shares in
      treasury                            -   (1,636.7) (1,181.6) (3,662.0)
       Net cash provided by /
        (used in) financing
        activities - continuing
        operations                      98.0  (1,179.5)   (803.2) (2,593.4)
       Net cash provided by /
        (used in) financing
        activities - discontinued
        operations                        -        1.2        -      (45.4)
     Net cash provided by /
      (used) in financing
      activities                        98.0  (1,178.3)   (803.2) (2,638.8)

     Net increase / (decrease) in
      cash and equivalents            (237.7)    442.3     (17.5)    121.5

     Cash and equivalents at
      beginning of period            1,529.0     866.5   1,308.8   1,187.3

     Cash and equivalents at end
      of period                     $1,291.3  $1,308.8  $1,291.3  $1,308.8



                    CARDINAL HEALTH, INC. AND SUBSIDIARIES
                              BUSINESS ANALYSIS

                                TOTAL COMPANY

                                                                   Non-GAAP
                                             Fourth Quarter     Fourth Quarter
     (in millions)                           2008      2007     2008     2007

     Revenue
     Amount                               $22,926   $22,263
     Growth Rate                              3 %       5 %

     Operating Earnings
     Amount                                  $543      $421     $568     $538
     Growth Rate                             29 %     (14)%      6 %      3 %

     Earnings from Continuing Operations
     Amount                                  $330      $238     $348     $345
     Growth Rate                             39 %     (22)%      1 %      5 %

                                                                  Non-GAAP
                                               Fiscal Year       Fiscal Year
     (in millions)                           2008      2007     2008     2007

     Revenue
     Amount                               $91,091   $86,852
     Growth Rate                              5 %       9 %

     Operating Earnings
     Amount                                $2,129    $1,374   $2,219   $2,163
     Growth Rate                             55 %     (26)%      3 %     12 %

     Earnings from Continuing Operations
     Amount                                $1,325      $840   $1,385   $1,384
     Growth Rate                             58 %     (28)%     -        13 %


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



                    CARDINAL HEALTH, INC. AND SUBSIDIARIES
                          SEGMENT BUSINESS ANALYSIS


      HEALTHCARE SUPPLY CHAIN SERVICES      CLINICAL AND MEDICAL PRODUCTS


                          Fourth Quarter                       Fourth Quarter
     (in millions)        2008     2007  (in millions)          2008     2007

     PHARMACEUTICAL                      CLINICAL TECHNOLOGIES AND SERVICES

     Revenue                             Revenue
     Amount            $19,819  $19,556  Amount                 $780     $756
     Growth Rate           1 %      4 %  Growth Rate             3 %     17 %
     Mix                  85 %     86 %  Mix                     3 %      3 %

     Segment Profit                      Segment Profit
     Amount               $258     $303  Amount                 $156     $144
     Growth Rate         (15)%     (3)%  Growth Rate             8 %     50 %
     Mix                  44 %     52 %  Mix                    26 %     24 %
     Segment Profit                      Segment Profit
      Margin            1.30 %   1.55 %  Margin              20.01 %  19.06 %



     MEDICAL                             MEDICAL PRODUCTS AND TECHNOLOGIES

     Revenue                             Revenue
     Amount             $2,082   $1,929  Amount                 $727     $500
     Growth Rate           8 %      5 %  Growth Rate            46 %     14 %
     Mix                   9 %      9 %  Mix                     3 %      2 %

     Segment Profit                      Segment Profit
     Amount                $81      $83  Amount                  $95      $58
     Growth Rate          (3)%     (2)%  Growth Rate            63 %     27 %
     Mix                  14 %     14 %  Mix                    16 %     10 %
     Segment Profit                      Segment Profit
      Margin            3.89 %   4.32 %  Margin              13.01 %  11.60 %


     Refer to definitions for an explanation of calculations.



                    CARDINAL HEALTH, INC. AND SUBSIDIARIES
                          SEGMENT BUSINESS ANALYSIS


      HEALTHCARE SUPPLY CHAIN SERVICES      CLINICAL AND MEDICAL PRODUCTS


                          Fiscal Year                             Fiscal Year
     (in millions)       2008     2007  (in millions)            2008     2007

     PHARMACEUTICAL                     CLINICAL TECHNOLOGIES AND SERVICES

     Revenue                            Revenue
     Amount           $79,284  $76,573  Amount                 $2,890   $2,687
     Growth Rate          4 %      9 %  Growth Rate               8 %     11 %
     Mix                 85 %     86 %  Mix                       3 %      3 %

     Segment Profit                     Segment Profit
     Amount            $1,122   $1,300  Amount                   $497     $386
     Growth Rate        (14)%     14 %  Growth Rate              29 %     20 %
     Mix                 50 %     59 %  Mix                      22 %     18 %
     Segment Profit                     Segment Profit
      Margin           1.41 %   1.70 %   Margin               17.18 %  14.35 %



     MEDICAL                            MEDICAL PRODUCTS AND TECHNOLOGIES

     Revenue                            Revenue
     Amount            $8,084   $7,514  Amount                 $2,696   $1,836
     Growth Rate          8 %      4 %  Growth Rate              47 %     12 %
     Mix                  9 %      9 %  Mix                       3 %      2 %

     Segment Profit                     Segment Profit
     Amount              $303     $318  Amount                   $300     $198
     Growth Rate         (5)%      1 %  Growth Rate              52 %     20 %
     Mix                 14 %     14 %  Mix                      14 %      9 %
     Segment Profit                     Segment Profit
      Margin           3.75 %   4.23 %  Margin                11.14 %  10.76 %


     Refer to the definitions for an explanation of how the Company calculates
     segment profit.



                    CARDINAL HEALTH, INC. AND SUBSIDIARIES
                          SCHEDULE OF NOTABLE ITEMS


                                           Fourth Quarter       Fiscal Year
     (in millions, except per Common
      Share amounts)                       2008     2007       2008     2007


     Special Items
     Restructuring charges               $(10.9)  $(11.7)    $(65.7)  $(40.1)
     Acquisition integration charges      (25.1)   (87.5)     (44.9)  (101.5)
     Litigation and other                   1.1    (19.0)     (12.0)  (630.4)
       Total special items                (34.9)  (118.2)    (122.6)  (772.0)
       Tax benefit                         13.1     10.4       44.9    243.1
     Special items, net of tax           $(21.8) $(107.8)    $(77.7) $(528.9)

     Decrease to diluted EPS from
      continuing operations              $(0.06)  $(0.28)    $(0.21)  $(1.31)


     Impairment Charges and Other
     Impairment charges and other         $10.0     $0.6      $32.0   $(17.3)
       Tax benefit / (expense)             (6.0)    (0.2)     (14.4)     1.6
     Impairment charges and other, net
      of tax                               $4.0     $0.4      $17.6   $(15.7)

     Increase / (decrease) to diluted
      EPS from continuing operations      $0.01     -         $0.05   $(0.04)


     Weighted Average Number of Diluted
      Shares Outstanding                  359.8    387.4      364.0    404.7



                    CARDINAL HEALTH, INC. AND SUBSIDIARIES
                          ASSET MANAGEMENT ANALYSIS


                                           Fourth Quarter      Fiscal Year
                                           2008      2007     2008     2007


     Receivable Days                        20.9      20.5
     Days Inventory on Hand                   25        28


     Debt to Total Capital                  33 %      32 %
     Net Debt to Capital                    25 %      22 %


     Return on Equity                      17.3%     47.3%    17.8%    23.5%
     Non-GAAP Return on Equity             18.4%     17.3%    19.0%    16.9%


     Return on Invested Capital            6.90%    18.43%    7.01%    9.38%
     Non-GAAP Return on Invested Capital   8.00%     7.00%    8.06%    7.14%


     Effective Tax Rate from Continuing
      Operations                           33.4%     40.8%    32.3%    33.0%
     Non-GAAP Effective Tax Rate from
      Continuing Operations                33.7%     33.5%    32.6%    32.4%


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



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

                                                     Fourth Quarter 2008

                                                           Impairment
      (in millions, except per Common              Special  Charges
      Share amounts)                          GAAP  Items  and Other Non-GAAP

      Operating Earnings
      Amount                                  $543    $35      ($10)    $568
      Growth Rate                             29 %                       6 %

      Provision for Income Taxes              $166    $13       ($6)    $173

      Earnings from Continuing Operations
      Amount                                  $330    $22       ($4)    $348
      Growth Rate                             39 %                       1 %

      Diluted EPS from Continuing Operations
      Amount                                 $0.92  $0.06    ($0.01)   $0.97
      Growth Rate                             51 %                        9%


                                                       Fiscal Year 2008

                                                          Impairment
     (in millions, except per Common              Special  Charges
     Share amounts)                          GAAP  Items  and Other  Non-GAAP


     Operating Earnings
     Amount                                $2,129    $123     ($32)   $2,219
     Growth Rate                             55 %                        3 %

     Provision for Income Taxes              $633     $45     ($14)     $663

     Earnings from Continuing Operations
     Amount                                $1,324     $78     ($18)   $1,385
     Growth Rate                             58 %                      -

     Diluted EPS from Continuing Operations
     Amount                                 $3.64   $0.21   ($0.05)    $3.80
     Growth Rate                             76 %                       11 %



                                                    Fourth Quarter 2007
                                                          Impairment
                                                   Special Charges
                                              GAAP  Items and Other Non-GAAP

      Operating Earnings
      Amount                                  $421   $118       ($1)    $538
      Growth Rate                            (14)%                       3 %

      Provision for Income Taxes              $164    $10     -         $174

      Earnings from Continuing Operations
      Amount                                  $238   $108     -         $345
      Growth Rate                            (22)%                       5 %

      Diluted EPS from Continuing Operations
      Amount                                 $0.61  $0.28     -        $0.89
      Growth Rate                            (15)%                       14%



                                                     Fiscal Year 2007
                                                          Impairment
                                                   Special  Charges
                                             GAAP   Items  and Other Non-GAAP


     Operating Earnings
     Amount                                $1,374    $772      $17    $2,163
     Growth Rate                            (26)%                       12 %

     Provision for Income Taxes              $413    $243       $2      $657

     Earnings from Continuing Operations
     Amount                                  $840    $529      $16    $1,384
     Growth Rate                            (28)%                       13 %

     Diluted EPS from Continuing Operations
     Amount                                 $2.07   $1.31    $0.04     $3.42
     Growth Rate                            (24)%                        20%


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



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


                                         Fourth Quarter         Fiscal Year
    (in millions)                       2008       2007       2008       2007

    GAAP Return on Equity              17.3%      47.3%      17.8%      23.5%

    Non-GAAP Return on Equity
    Net earnings                      $326.6     $902.2   $1,309.2   $1,931.1
    Special items, net of tax, in
     continuing operations              21.8      107.8       77.7      528.9
    Special items, net of tax, in
     discontinued operations              -          -          -         4.4
    (Gain)/loss on sale of PTS,
     net of tax, in discontinued
     operations                           -      (679.5)       7.6   (1,072.4)
      Adjusted net earnings           $348.4     $330.5   $1,394.5   $1,392.0

      Annualized                    $1,393.6   $1,322.0   $1,394.5   $1,392.0

      Divided by average
       shareholders' equity(1)      $7,574.7   $7,623.2   $7,340.5   $8,213.2

    Non-GAAP return on equity          18.4%      17.3%      19.0%      16.9%


                                         Fourth Quarter         Fiscal Year
    (in millions)                       2008       2007       2008       2007

    GAAP Return on Invested Capital    6.90%     18.43%      7.01%      9.38%

    Non-GAAP Return on Invested
     Capital
    Net earnings                      $326.6     $902.2   $1,309.2   $1,931.1
    Special items, net of tax, in
     continuing operations              21.8      107.8       77.7      528.9
    Special items, net of tax, in
     discontinued operations              -          -          -         4.4
    Interest expense and other,
     net of tax                         30.4       12.2      109.7       77.7
    (Gain)/loss on sale of PTS,
     net of tax, in discontinued
     operations                           -      (679.5)       7.6   (1,072.4)
      Adjusted net earnings           $378.8     $342.7   $1,504.2   $1,469.7

    Annualized                      $1,515.2   $1,370.8   $1,504.2   $1,469.7

    Divided by average total
     invested capital(2)           $18,940.1  $19,583.8  $18,665.9  $20,580.7

    Non-GAAP return on invested
     capital                           8.00%      7.00%      8.06%      7.14%


    (1)  The average shareholders' equity shown above is calculated using
         the average of the prior and current quarters except for fiscal
         year  which is calculated as the average of shareholders' equity
         at the end of  the prior years' fourth quarter plus each of the
         current year quarters.

    (2)  Total invested capital is calculated as the sum of the current
         portion of long-term obligations and other short-term borrowings,
         long-term obligations, current portion of long-term obligations and
         other short-term borrowings in discontinued operations, long-term
         obligations in discontinued operations, 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 and current quarters except for year-to-date which is
         calculated as the average of the prior years' fourth quarter plus
         each of the current year quarters. Unrecorded goodwill is
         $7.5 billion for all periods presented. Current portion of long-term
         obligations and other short-term borrowings in discontinued
         operations, and long-term obligations in discontinued operations were
         $59.2 million, $46.6 million, $41.3 million and $12.3 million at June
         30, 2006, September 30, 2006, December 31, 2006 and March 31, 2007,
         respectively.



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


                                                           Fiscal Year
     (in millions)                                    2008              2007


     Revenue
     Clinical Technologies and Services             $2,890            $2,687
     Medical Products and Technologies               2,696             1,836
        Combined Revenue                            $5,586            $4,523

     Combined Growth Rate                             24 %

     Segment Profit
     Clinical Technologies and Services               $497              $386
     Medical Products and Technologies                 300               198
        Combined Profit                               $797              $584

     Combined Growth Rate                             36 %


                                                          Fourth Quarter
     (in millions)                                    2008              2007

     Clinical Technologies and Services
      revenue growth                                    3%

     Clinical Technologies and Services
      revenue                                       $779.8            $755.8
     Less:  Pharmacy Services business
      unit revenue                                  (194.8)           (218.7)
     Clinical Technologies and Services
      revenue excluding Pharmacy Services
      business unit revenue                         $585.0            $537.1

     Clinical Technologies and Services
      revenue growth excluding Pharmacy
      Services business unit revenue                    9%



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


                                           Fourth Quarter        Fiscal Year
     (in millions)                         2008      2007      2008      2007


     GAAP Effective Tax Rate from
      Continuing Operations               33.4%     40.8%     32.3%     33.0%

     Non-GAAP Effective Tax Rate from
      Continuing Operations
     Earnings before income taxes and
      discontinued operations            $495.8    $401.4  $1,957.3  $1,252.3
     Special items                         34.9     118.2     122.6     772.0
       Adjusted earnings before
        income taxes and discontinued
        operations                       $530.7    $519.6  $2,079.9  $2,024.3

     Provision for income taxes          $165.6    $163.7    $632.8    $412.6
     Special items tax benefit             13.1      10.4      44.9     243.1
       Adjusted provision for income
        taxes                            $178.7    $174.1    $677.7    $655.7

     Non-GAAP effective tax rate from
      continuing operations               33.7%     33.5%     32.6%     32.4%


                                           Fourth Quarter
                                           2008      2007

     Debt to Total Capital                  33%       32%

     Net Debt to Capital
     Current portion of long-term
      obligations and other short-
      term borrowings                    $159.0     $16.0
     Long-term obligations, less
      current portion and other
      short-term borrowings             3,687.4   3,457.3
       Debt                            $3,846.4  $3,473.3
     Cash and equivalents              (1,291.3) (1,308.8)
     Short-term investments available
      for sale                               -     (132.0)
       Net debt                        $2,555.1  $2,032.5
     Total shareholders' equity        $7,756.1  $7,376.9
     Capital                          $10,311.2  $9,409.4
       Net debt to capital                  25%       22%


     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 impairment charges and other, which are difficult to predict and
     estimate and are primarily dependent on future events.  Please note that
     the unavailable reconciling items could significantly impact the
     Company's future financial results.



                    CARDINAL HEALTH, INC. AND SUBSIDIARIES
                                 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 divided by (average total shareholders' equity plus debt plus unrecorded goodwill)

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 impairment charges and other, 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) divided by (earnings before income taxes and discontinued operations adjusted for special items)

Non-GAAP Operating Earnings: operating earnings excluding special items and impairment charges and other

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 plus special items minus special items tax benefit) divided by average shareholders' equity (1)

Non-GAAP Return on Invested Capital: (annualized net earnings plus special items minus special items tax benefit plus interest expense and other) divided by (average total shareholders' equity plus debt plus unrecorded goodwill) (1)

    (1) For the three months ended June 30, 2007, the numerator in calculating
        this non-GAAP financial measure also excludes the $679.5 million gain,
        net of tax, on the sale of PTS recorded in discontinued operations in
        the fourth quarter of fiscal 2007. For the fiscal year ended June
        30, 2008 and 2007 the numerator in calculating this non-GAAP financial
        measure also excludes the respective $7.6 million and $(1,072.4)
        million (gain) / loss, net of tax, on the sale of PTS recorded in
        discontinued operations.

SOURCE Cardinal Health, Inc.

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