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Press Releases
- Full-year revenue increases 3 percent to $99 billion
- Fiscal 2010 diluted earnings per share from continuing operations of $1.62, or $2.22 on a non-GAAP basis
- Fiscal 2011 non-GAAP diluted EPS outlook raised to $2.38 to $2.48
DUBLIN, Ohio, Aug. 5, 2010 /PRNewswire-FirstCall/ — Cardinal Health today reported fiscal 2010 revenue of $98.5 billion and non-GAAP diluted earnings per share (EPS) from continuing operations(1) of $2.22. Revenue for the fourth quarter was $24.5 billion and diluted EPS from continuing operations for the quarter was $0.54, or $0.50 on a non-GAAP basis. The company also raised its non-GAAP diluted EPS outlook for fiscal 2011 to a range of $2.38 to $2.48 from its preliminary outlook of $2.35 to $2.45.
"I am extremely proud of the progress we made in FY2010 and the actions we took to shift our growth trajectory and position us for the coming years," said George Barrett, chairman and CEO of Cardinal Health. "Our Medical segment grew profits by 11 percent for the year, while continuing to make key strategic investments. The Pharmaceutical segment declined by 3 percent, but performed considerably better than we anticipated for the full year as a result of execution on major initiatives, disciplined cost controls and some unplanned generic launches. These items largely offset the dampening effect of the actions we took to improve our strategic positioning, the negative impact from the year-over-year comparison of generic launches and the severe supply shortages in nuclear pharmacy."
Operating cash flow for fiscal 2010 increased to $2.1 billion, driven by strong working capital management.
Q4 and FY10 SUMMARY
Q4 FY10 Q4 FY09 Y/Y FY10 Y/Y
------- ------- --- ---- ---
Revenue $24.5 billion $24.3 billion 0.5% $98.5 billion 3%
------- ------------- ------------- --- ------------- ---
Operating
Earnings $334 million $307 million 9% $1.3 billion 1%
--------- ------------ ------------ --- ------------ ---
Non-GAAP
Operating
Earnings (2) $317 million $356 million (11%) $1.4 billion (2%)
------------- ------------ ------------ ----- ------------ ----
Earnings from
Continuing
Operations $194 million $202 million (4%) $587 million (23%)
------------- ------------ ------------ ---- ------------ -----
Non-GAAP
Earnings
from
Continuing
Operations
(3) $181 million $228 million (21%) $804 million (2%)
----------- ------------ ------------ ----- ------------ ----
Diluted EPS
from
Continuing
Operations $0.54 $0.56 (4%) $1.62 (23%)
----------- ----- ----- ---- ----- -----
Non-GAAP
Diluted EPS
from
Continuing
Operations $0.50 $0.63 (21%) $2.22 (2%)
------------ ----- ----- ----- ----- ----
For the quarter, GAAP results included items that had a positive $0.04 per share net after-tax contribution, primarily from a previously disclosed litigation recovery. For the full year, GAAP results included items that had an aggregate net negative effect of $0.60 per share after-tax, primarily driven by tax charges in the first-quarter related to the portion of non-U.S. earnings that will no longer be indefinitely invested offshore following the spinoff of CareFusion Corp., and restructuring and severance. These charges were partially offset by gains on the sale of CareFusion stock and litigation recoveries.
SEGMENT RESULTS
Pharmaceutical Segment
Fourth-quarter revenue for the Pharmaceutical segment was $22.3 billion, with sales to non-bulk customers increasing 3 percent to $11.5 billion and sales to bulk customers decreasing 3 percent to $10.8 billion. Generic pharmaceutical sales grew 10 percent for the quarter. Segment profit declined 17 percent to $227 million, primarily driven by lower branded inflation income, the year-over-year impact from customer pricing changes and supply disruptions in nuclear pharmacy, partially offset by the positive margin contribution from the company's generic programs and other business initiatives.
For the full year, Pharmaceutical segment revenue grew 2 percent to $89.8 billion, with sales to non-bulk customers increasing 4 percent to $45.8 billion and sales to bulk customers increasing 1 percent to $44 billion. Annual segment profit declined 3 percent to $1 billion, due to customer pricing changes, supply shortages in nuclear pharmacy, fewer significant generic launches than the prior year and the Medicine Shoppe International transition. The decline in segment profit was partially offset by contributions from the company's generic programs, disciplined cost controls and solid performance from its branded manufacturer agreements.
"We made great strides in fiscal 2010 with key strategic priorities including our generic sales and sourcing initiatives, working capital optimization and customer-facing information technology improvements - all of which are starting to have a positive impact on the bottom line," Barrett said. "With the recent renewals of key customers, we have stabilized our base for the next several years. In addition, our recent acquisition of Healthcare Solutions Holding will help accelerate our strategy for specialty pharmaceuticals and contribute to long-term growth for the segment."
Q4 FY10 Q4 FY09 Y/Y FY10 Y/Y
------- ------- --- ---- ---
Revenue $22.3 billion $22.3 billion 0.2% $89.8 billion 2%
------- ------------- ------------- --- ------------- ---
Segment Profit $227 million $273 million (17%) $1 billion (3%)
-------------- ------------ ------------ ----- ---------- ----
Medical Segment
Fourth-quarter revenue for the Medical segment increased 3 percent to $2.2 billion, primarily from sales growth with existing customers. Segment profit increased 22 percent to $102 million, primarily driven by growth in the Hospital Supply business and disciplined cost controls, partially offset by higher commodity prices.
For the full year, Medical segment revenue increased 7 percent to $8.8 billion, driven by growth from existing customers, new products and foreign exchange. Annual segment profit increased 11 percent to $428 million, aided by the decreased cost of raw materials associated with commodity price movements. Segment profit growth was partially dampened from investment expense associated with the Medical Business Transformation program.
"While our Medical segment reported solid top- and bottom-line growth for the year, we continued to make investments to further improve our customers' experience and position the business for sustainable growth," Barrett said. "By combining our extensive channel reach with our growing expertise in category management, we will enable the growth of our preferred products and service offerings to create even more value across the entire supply chain."
Q4 FY10 Q4 FY09 Y/Y FY10 Y/Y
------- ------- --- ---- ---
Revenue $2.2 billion $2.1 billion 3% $8.8 billion 7%
------- ------------ ------------ --- ------------ ---
Segment Profit $102 million $84 million 22% $428 million 11%
-------------- ------------ ----------- --- ------------ ---
FISCAL 2011 OUTLOOK
"We have gained additional clarity regarding key inputs to our planning process since offering our preliminary 2011 outlook in April," Barrett said. "Based on our current information, we are raising our fiscal 2011 guidance for non-GAAP diluted EPS from continuing operations to a range of $2.38 to $2.48."
ADDITIONAL FOURTH-QUARTER AND RECENT HIGHLIGHTS INCLUDE:
- Increased the regular quarterly dividend by 11 percent to $0.195 per share;
- Completed the acquisition of Healthcare Solutions Holding (P4 Healthcare and P4 Pathways) to bolster company offerings to specialty pharmaceutical customers; and
- Record-breaking attendance at the company's annual Retail Business Conference, where the company launched new products and services that were well received by its retail independent customers.
CONFERENCE CALL
Cardinal Health will host a conference call and webcast today at 8:30 a.m. EDT to discuss fourth-quarter and full-year results and its future outlook. To access the call and corresponding slide presentation, go to the Investor page at cardinalhealth.com/investors or dial 617.213.4855, passcode 86433823. Presentation slides and an audio replay will be archived on the website after the conclusion of the meeting. The audio replay will also be available until 11 p.m. on Aug. 8 by dialing 617.801.6888, passcode 37905680.
UPCOMING EVENTS
- Morgan Stanley Global Healthcare Conference on Sept. 13 at 1 p.m. EDT at the Grand Hyatt in New York;
- Baird's 2010 Health Care Conference on Sept. 14 at 9:30 a.m. EDT at the St. Regis Hotel in New York;
- Stifel Nicolaus Healthcare Conference on Sept. 15 at 10:55 a.m. EDT at the Four Seasons Hotel in Boston.
At these events, Cardinal Health CFO Jeff Henderson will discuss the company's diverse products and services, company performance and strategies for continued growth. To access more details and live webcasts of these events, including remarks, go to the Investors page at cardinalhealth.com.
About Cardinal Health
Headquartered in Dublin, Ohio, Cardinal Health, Inc. (NYSE:CAH) is a $99 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, improving efficiency and quality, and increasing profitability. 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 #17 on the Fortune 500, Cardinal Health employs more than 30,000 people worldwide. More information about the company may be found at 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 (1) restructuring and employee severance, (2) acquisition related costs, (3) impairments and loss on sale of assets, (4) litigation (credits)/charges, net, and (5) Other Spinoff Costs (as defined at the end of the attached tables) included within distribution, selling, general and administrative expenses.
(3) Non-GAAP earnings from continuing operations: Earnings from continuing operations excluding (1) restructuring and employee severance, (2) acquisition related costs, (3) impairments and loss on sale of assets, (4) litigation (credits)/charges, net, (5) Other Spinoff Costs, and (6) gain on sale of CareFusion stock, each net of tax.
A reconciliation of the differences between these non-GAAP financial measures and their most directly comparable GAAP financial measures is provided in the attached tables and at cardinalhealth.com.
Cardinal Health uses its website as a channel of distribution for material company information. Important information, including news releases, analyst presentations and financial information regarding Cardinal Health is routinely posted and accessible on the Investors page at cardinalhealth.com.
Cautions Concerning Forward-Looking Statements
This news release contains forward-looking statements, which are not based on historical facts, addressing expectations, prospects, estimates and other matters that are dependent upon future events or developments. These statements may be identified by words such as "expect," "anticipate," "intend," "plan," "believe," "will," "should," "could," "would," "project," "continue," and similar expressions, and include statements reflecting future results or guidance, statements of outlook and tax accruals. These matters are subject to risks and uncertainties that could cause actual results to differ materially from those projected, anticipated or implied. These risks and uncertainties include (but are not limited to) the ability to achieve the expected benefits from the acquisition of Healthcare Solutions Holding and to grow our specialty distribution business; uncertainties and risks regarding the effect of the CareFusion spinoff on Cardinal Health; the performance of CareFusion and the proceeds realized from future sales of CareFusion stock; uncertainties due to government health care reform including the recently enacted federal health care reform legislation; competitive pressures in Cardinal Health's various lines of business; the loss of one or more key customer or supplier relationships or changes to the terms of those relationships; the timing of generic and branded pharmaceutical introductions and the frequency or rate of branded pharmaceutical price appreciation or generic pharmaceutical price deflation; changes in the distribution patterns or reimbursement rates for health care products and/or services; the results, consequences, effects or timing of any inquiry or investigation by any regulatory authority or any legal or administrative proceedings; the effects of disruptions in the financial markets, including uncertainties related to the availability and/or cost of credit on Cardinal Health's customers and vendors; and uncertainties related to demand for Cardinal Health's products and services. In addition, Cardinal Health is subject to additional risks and uncertainties described in Cardinal Health's Form 10-K, Form 10-Q and Form 8-K reports (including all amendments to those reports) and exhibits to those reports. This news release reflects management's views as of August 5, 2010. 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)
Fourth Quarter
--------------
(in millions, except per
Common Share amounts) 2010 2009 % Change
---- ----
Revenue $24,459.6 $24,347.3 0.5 %
Cost of products sold 23,555.5 23,403.0 1 %
-------- --------
Gross margin 904.1 944.3 (4)%
Operating expenses
Distribution, selling, general
and administrative expenses 588.2 591.7 (1)%
Restructuring and employee
severance (1) 6.4 37.5 N.M.
Acquisition related costs (1) 8.3 0.7 N.M.
Impairments and loss on sale
of assets 0.9 2.7 N.M.
Litigation (credits)/charges,
net (33.6) 4.9 N.M.
----- ---
Operating earnings 333.9 306.8 9 %
Other (income)/expense, net 2.3 (15.5) N.M.
Interest expense, net 24.5 32.6 (25)%
Gain on sale of CareFusion
common stock (1.3) - N.M.
---- ---
Earnings before income taxes
and discontinued operations 308.4 289.7 6 %
Provision for income taxes 114.6 87.7 31 %
----- ----
Earnings from continuing
operations 193.8 202.0 (4)%
Earnings from discontinued
operations (net of tax
expense 29.7 71.2 N.M.
of $0.0 million and $48.5
million for the fourth
quarter of ---- ----
fiscal 2010 and 2009,
respectively)
Net earnings $223.5 $273.2 (18)%
------ ------
Basic earnings per Common
Share:
Continuing operations $0.54 $0.56 (4)%
Discontinued operations 0.08 0.20 N.M.
---- ----
Net basic earnings per Common
Share $0.62 $0.76 (18)%
===== =====
Diluted earnings per Common
Share:
Continuing operations $0.54 $0.56 (4)%
Discontinued operations 0.08 0.19 N.M.
---- ----
Net diluted earnings per
Common Share $0.62 $0.75 (17)%
===== =====
Weighted average number of
Common Shares outstanding:
Basic 358.3 358.2
Diluted 361.8 361.1
(1) During the fourth quarter of fiscal 2010, the Company began
presenting acquisition related costs separately on its
condensed consolidated statements of earnings. This amount had
previously been included in restructuring and
employee severance. Prior periods have been changed to conform with
this new presentation.
CARDINAL HEALTH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
Fiscal Year
-----------
(in millions, except per Common
Share amounts) 2010 2009 % Change
---- ----
Revenue $98,502.8 $95,991.5 3 %
Cost of products sold 94,722.1 92,244.0 3 %
-------- --------
Gross margin 3,780.7 3,747.5 1 %
Operating expenses
Distribution, selling, general and
administrative expenses 2,408.0 2,333.5 3 %
Restructuring and employee
severance (1) 90.7 104.7 N.M.
Acquisition related costs (1) 8.4 2.8 N.M.
Impairments and loss on sale of
assets 29.1 13.9 N.M.
Litigation (credits)/charges, net (62.4) 5.2 N.M.
----- ---
Operating earnings 1,306.9 1,287.4 1 %
Other (income)/expense, net (13.5) 13.2 N.M.
Interest expense, net 113.5 114.4 (1)%
Loss on extinguishment of debt 39.9 - N.M.
Gain on sale of CareFusion common
stock (44.6) - N.M.
----- ---
Earnings before income taxes and
discontinued operations 1,211.6 1,159.8 4 %
Provision for income taxes 624.6 401.6 N.M.
----- -----
Earnings from continuing operations 587.0 758.2 (23)%
Earnings from discontinued
operations (net of tax expense of
$35.5 million 55.2 393.4 N.M.
and $131.2 million for fiscal 2010
and 2009, respectively) ---- -----
Net earnings $642.2 $1,151.6 (44)%
------ --------
Basic earnings per Common Share:
Continuing operations $1.64 $2.12 (23)%
Discontinued operations 0.15 1.10 N.M.
---- ----
Net basic earnings per Common Share $1.79 $3.22 (43)%
===== =====
Diluted earnings per Common Share:
Continuing operations $1.62 $2.10 (23)%
Discontinued operations 0.15 1.08 N.M.
---- ----
Net diluted earnings per Common
Share $1.77 $3.18 (44)%
===== =====
Weighted average number of Common
Shares outstanding:
Basic 358.8 357.6
Diluted 361.4 361.5
(1) During the fourth quarter of fiscal 2010, the Company began
presenting acquisition related costs separately on its condensed
consolidated statements of earnings. This amount had previously been
included in restructuring and employee severance. Prior
periods have been changed to conform with this new presentation.
CARDINAL HEALTH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, June 30,
(in millions) 2010 2009
---- ----
Assets
Cash and equivalents $2,755.3 $1,221.6
Trade receivables, net 5,170.6 5,214.9
Inventories 6,355.9 6,832.8
Prepaid expenses and other 637.1 523.0
Assets from businesses held for sale and
discontinued operations - 7,189.4
--- -------
Total current assets 14,918.9 20,981.7
-------- --------
Property and equipment, net 1,468.8 1,464.5
Investment in CareFusion 691.5 -
Goodwill and other intangibles, net 2,253.2 2,266.9
Other assets 657.8 405.7
----- -----
Total assets $19,990.2 $25,118.8
========= =========
Liabilities and Shareholders' Equity
Current portion of long-term obligations and
other short-term borrowings $233.2 $366.2
Accounts payable 9,494.9 9,041.9
Other accrued liabilities 1,809.5 1,496.2
Liabilities from businesses held for sale and
discontinued operations - 1,370.9
--- -------
Total current liabilities 11,537.6 12,275.2
-------- --------
Long-term obligations, less current portion 1,896.1 3,271.6
Deferred income taxes and other liabilities 1,280.4 847.3
Total shareholders' equity 5,276.1 8,724.7
Total liabilities and shareholders' equity $19,990.2 $25,118.8
========= =========
CARDINAL HEALTH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Fourth Quarter
--------------
(in millions) 2010 2009
---- ----
Cash Flows From Operating Activities:
Net earnings $223.5 $273.2
Earnings from discontinued operations (29.7) (71.2)
----- -----
Earnings from continuing operations 193.8 202.0
Adjustments to reconcile earnings from
continuing operations
to net cash provided by operating
activities:
Depreciation and amortization 60.0 57.0
Loss on debt extinguishment - -
Gain on sale of CareFusion common stock (1.3) -
Impairments and loss on sale of assets 0.9 2.7
Share-based payment compensation 20.6 27.1
Provision for deferred income taxes 120.2 149.4
Provision for bad debts (6.4) 6.2
Change in operating assets and
liabilities, net of
effects from acquisitions:
Decrease/(increase) in trade receivables 386.0 268.8
Decrease/(increase) in inventories 858.5 912.5
Increase/(decrease) in accounts payable (1,271.7) (866.5)
Other accrued liabilities and operating
items, net (35.9) 0.7
----- ---
Net cash provided by operating activities
-continuing operations 324.7 759.9
Net cash provided by/(used in) operating
activities -discontinued operations (0.4) (151.8)
---- ------
Net cash provided by operating activities 324.3 608.1
----- -----
Cash Flows From Investing Activities:
Proceeds from divestitures 141.3 -
Acquisition of subsidiaries, net of cash
acquired - -
Net additions to property and equipment (119.8) (229.1)
Proceeds from sale of CareFusion common
stock - -
--- ---
Net cash provided by/(used in) investing
activities -continuing operations 21.5 (229.1)
Net cash used in investing activities -
discontinued operations - (57.8)
--- -----
Net cash provided by/(used in) investing
activities 21.5 (286.9)
---- ------
Cash Flows From Financing Activities:
Reduction of long-term obligations (0.4) (18.9)
Issuance of Common Shares 15.5 0.6
Tax expense from stock options (1.3) (2.7)
Payment of premiums for debt
extinguishment - -
Dividends on Common Shares (62.9) (50.3)
Purchase of treasury shares (180.2) -
------ ---
Net cash used in financing activities -
continuing operations (229.3) (71.3)
Net cash provided by/(used in) financing
activities -discontinued operations - (0.1)
--- ----
Net cash used in financing activities (229.3) (71.4)
------ -----
Net increase in cash and equivalents 116.5 249.8
Cash and equivalents at beginning of
period 2,638.8 971.8
------- -----
Cash and equivalents at end of period $2,755.3 $1,221.6
======== ========
Fiscal Year
-----------
(in millions) 2010 2009
---- ----
Cash Flows From Operating Activities:
Net earnings $642.2 $1,151.6
Earnings from discontinued operations (55.2) (393.4)
----- ------
Earnings from continuing operations 587.0 758.2
Adjustments to reconcile earnings from
continuing operations
to net cash provided by operating
activities:
Depreciation and amortization 254.4 225.8
Loss on debt extinguishment 39.9 -
Gain on sale of CareFusion common stock (44.6) -
Impairments and loss on sale of assets 29.1 13.9
Share-based payment compensation 99.5 109.9
Provision for deferred income taxes 120.2 149.4
Provision for bad debts 26.8 51.4
Change in operating assets and
liabilities, net of
effects from acquisitions:
Decrease/(increase) in trade receivables 20.6 (713.6)
Decrease/(increase) in inventories 477.4 (431.2)
Increase/(decrease) in accounts payable 451.0 768.1
Other accrued liabilities and operating
items, net (74.6) 19.3
----- ----
Net cash provided by operating activities
-continuing operations 1,986.7 951.2
Net cash provided by/(used in) operating
activities -discontinued operations 147.4 472.7
----- -----
Net cash provided by operating activities 2,134.1 1,423.9
------- -------
Cash Flows From Investing Activities:
Proceeds from divestitures 154.1 123.3
Acquisition of subsidiaries, net of cash
acquired (32.0) (128.6)
Net additions to property and equipment (255.8) (408.3)
Proceeds from sale of CareFusion common
stock 270.7 -
----- ---
Net cash provided by/(used in) investing
activities -continuing operations 137.0 (413.6)
Net cash used in investing activities -
discontinued operations (9.9) (129.3)
---- ------
Net cash provided by/(used in) investing
activities 127.1 (542.9)
----- ------
Cash Flows From Financing Activities:
Reduction of long-term obligations (1,485.5) (301.4)
Issuance of Common Shares 40.0 39.2
Tax expense from stock options (16.1) (2.9)
Payment of premiums for debt
extinguishment (66.4) -
Dividends on Common Shares (253.1) (200.4)
Purchase of treasury shares (230.2) -
------ ---
Net cash used in financing activities -
continuing operations (2,011.3) (465.5)
Net cash provided by/(used in) financing
activities -discontinued operations 1,283.8 (2.7)
------- ----
Net cash used in financing activities (727.5) (468.2)
------ ------
Net increase in cash and equivalents 1,533.7 412.8
Cash and equivalents at beginning of
period 1,221.6 808.8
------- -----
Cash and equivalents at end of period $2,755.3 $1,221.6
======== ========
CARDINAL HEALTH, INC. AND SUBSIDIARIES
BUSINESS ANALYSIS
TOTAL COMPANY
Non-GAAP
Fourth Quarter Fourth Quarter
-------------- --------------
(in millions) 2010 2009 2010 2009
---- ---- ---- ----
Revenue
Amount $24,460 $24,347
Growth Rate 0.5 % 11 %
Operating Earnings
Amount $334 $307 $317 $356
Growth Rate 9 % (9)% (11)% 6 %
Earnings from
Continuing Operations
Amount $194 $202 $181 $228
Growth Rate (4)% 10 % (21)% 14 %
---- ---
Non-GAAP
Fiscal Year Fiscal Year
----------- -----------
2010 2009 2010 2009
---- ---- ---- ----
Revenue
Amount $98,503 $95,992
Growth Rate 3 % 10 %
Operating Earnings
Amount $1,307 $1,287 $1,383 $1,419
Growth Rate 1 % (8)% (2)% (1)%
Earnings from
Continuing Operations
Amount $587 $758 $804 $816
Growth Rate (23)% (11)% (2)% (8)%
--- ---
Refer to the GAAP /Non-GAAP Reconciliation for definitions and
calculations supporting the non-GAAP balances.
CARDINAL HEALTH, INC. AND SUBSIDIARIES
SEGMENT BUSINESS ANALYSIS
Fourth Quarter Fourth Quarter
-------------- --------------
(in millions) 2010 2009 (in millions) 2010 2009
---- ---- ---- ----
PHARMACEUTICAL MEDICAL
Revenue Revenue
Amount $22,307 $22,263 Amount $2,158 $2,090
Growth Rate 0.2 % 12 % Growth Rate 3 % 3 %
Mix 91 % 91 % Mix 9 % 9 %
Segment Profit Segment Profit
Amount $227 $273 Amount $102 $84
Growth Rate (17)% 22 % Growth Rate 22 % (23)%
Mix 69 % 76 % Mix 31 % 24 %
Segment Profit Segment Profit
Margin 1.02 % 1.23 % Margin 4.75 % 4.03 %
-------------- ----- ----- -------------- ----- -----
Refer to definitions for an explanation of calculations.
Total consolidated revenue for the three months ended June 30, 2010
was $24,460 million, which included total segment revenue
of $24,465 million and Corporate revenue of $(5) million. Total
consolidated revenue for the three months ended June 30, 2009
was $24,347 million, which included total segment revenue of $24,353
million and Corporate revenue of $(6) million. Corporate
revenue consists primarily of elimination of inter-segment revenue.
Total consolidated operating earnings for the three months ended June
30, 2010 were $334 million, which included total segment
profit of $329 million and Corporate gain of $5 million. Total
consolidated operating earnings for the three months ended June 30,
2009 were $307 million, which included total segment profit of $357
million and Corporate loss of $(50) million. Corporate includes,
among other things, restructuring and employee severance, acquisition
related costs, impairments and loss on sale of assets,
litigation (credits)/charges, net and certain investment spending
that are not allocated to the segments.
CARDINAL HEALTH, INC. AND SUBSIDIARIES
SEGMENT BUSINESS ANALYSIS
Fiscal Year Fiscal Year
----------- -----------
(in millions) 2010 2009 (in millions) 2010 2009
---- ---- ---- ----
PHARMACEUTICAL MEDICAL
Revenue Revenue
Amount $89,790 $87,863 Amount $8,750 $8,159
Growth Rate 2 % 11 % Growth Rate 7 % 3 %
Mix 91 % 92 % Mix 9 % 8 %
Segment Profit Segment Profit
Amount $1,002 $1,036 Amount $428 $385
Growth Rate (3)% 1 % Growth Rate 11 % (6)%
Mix 70 % 73 % Mix 30 % 27 %
Segment Profit Segment Profit
Margin 1.12 % 1.18 % Margin 4.89 % 4.72 %
-------------- ----- ----- -------------- ----- -----
Refer to definitions for an explanation of calculations.
Total consolidated revenue for the fiscal year ended June 30, 2010
was $98,503 million, which included total segment
revenue of $98,540 million and Corporate revenue of $(37) million.
Total consolidated revenue for the fiscal year
ended June 30, 2009 was $95,992 million, which included total segment
revenue of $96,022 million and Corporate
revenue of $(30) million. Corporate revenue consists primarily of
elimination of inter-segment revenue.
Total consolidated operating earnings for the fiscal year ended June
30, 2010 were $1,307 million, which included
total segment profit of $1,430 million and Corporate loss of $(123)
million. Total consolidated operating earnings for
the fiscal year ended June 30, 2009 were $1,287 million, which
included total segment profit of $1,421 million and
Corporate loss of $(134) million. Corporate includes, among other
things, restructuring and employee severance,
acquisition related costs, impairments and loss on sale of assets,
litigation (credits)/charges, net and certain
investment spending that are not allocated to the segments.
CARDINAL HEALTH, INC. AND SUBSIDIARIES
SCHEDULE OF NOTABLE ITEMS
Fourth Quarter Fiscal Year
-------------- -----------
(in millions, except
per Common Share
amounts) 2010 2009 2010 2009
---- ---- ---- ----
Restructuring and
Employee Severance
Restructuring and
employee severance $(6.4) $(37.5) $(90.7) $(104.7)
Tax benefit 1.7 11.1 31.7 29.3
--- ---- ---- ----
Restructuring and
employee severance,
net of tax $(4.7) $(26.4) $(59.0) $(75.4)
===== ====== ====== ======
Decrease to diluted EPS
from continuing
operations $(0.01) $(0.07) $(0.16) $(0.21)
====== ====== ====== ======
Acquisition related
costs
Acquisition related
costs $(8.3) $(0.7) $(8.4) $(2.8)
Tax benefit 2.7 0.3 2.7 1.1
--- --- --- ---
Acquisition related
costs, net of tax $(5.6) $(0.4) $(5.7) $(1.7)
===== ===== ===== =====
Decrease to diluted EPS
from continuing
operations $(0.02) $- $(0.02) $-
====== === ====== ===
Impairments and Loss on
Sale of Assets
Impairments and loss on
sale of assets $(0.9) $(2.7) $(29.1) $(13.9)
Tax benefit/(expense) (1.9) 8.5 (5.1) 39.4
---- --- ---- ----
Impairments and loss on
sale of asset, net of
tax $(2.8) $5.8 $(34.2) $25.5
===== ==== ====== =====
Increase/(decrease) to
diluted EPS from
continuing operations $(0.01) $0.02 $(0.09) $0.07
====== ===== ====== =====
Litigation Credits/
(Charges), Net
Litigation credits/
(charges), net $33.6 $(4.9) $62.4 $(5.2)
Tax benefit/(expense) (12.3) 1.8 (23.2) 1.9
----- --- ----- ---
Litigation credits/
(charges), net, net of
tax $21.3 $(3.1) $39.2 $(3.3)
===== ===== ===== =====
Increase/(decrease) to
diluted EPS from
continuing operations $0.06 $(0.01) $0.11 $(0.01)
===== ====== ===== ======
Other Spin-Off Costs
Other spin-off costs
(1) $(1.6) $(3.8) $(53.1) $(4.5)
Tax benefit/(expense)
(2) 4.7 1.4 (148.5) 1.7
--- --- ------ ---
Other spin-off costs,
net of tax $3.1 $(2.4) $(201.6) $(2.8)
==== ===== ======= =====
Increase/(decrease) to
diluted EPS from
continuing operations $0.01 $(0.01) $(0.56) $(0.01)
===== ====== ====== ======
Gain on Sale of
CareFusion Stock
Gain on sale of
CareFusion stock $1.3 $- $44.6 $-
Tax expense - - - -
--- ---
Gain on sale of
CareFusion stock, net
of tax $1.3 $- $44.6 $-
==== === ===== ===
Increase to diluted EPS
from continuing
operations $- $- $0.12 $-
=== === ===== ===
Weighted Average Number
of Diluted Shares
Outstanding 361.8 361.1 361.4 361.5
(1) Other spin-off costs included in other (income)/expense, net
for the fiscal year ended June 30, 2010 were $2.4 million. Other
spin-off costs also
include the $39.9 million loss on extinguishment of debt for the
fiscal year ended June 30, 2010. The remaining other spin-off
costs are included
within distribution, selling, general and administrative expenses for
all periods presented.
(2) The fiscal 2010 year-to-date tax expense associated with the
other spin-off costs includes $168.3 million related to the
anticipated repatriation of a
portion of cash loaned to the Company's entities within the United States.
CARDINAL HEALTH, INC. AND SUBSIDIARIES
ASSET MANAGEMENT ANALYSIS
Fourth Quarter Fiscal Year
-------------- -----------
2010 2009 2010 2009
---- ---- ---- ----
Receivable Days 18.6 19.1
Days Inventory on Hand 21 23
Debt to Total Capital 29 % 29 %
Net Debt to Capital (13)% 22 %
Return on Equity 16.8% 12.7% 10.9% 14.1%
Non-GAAP Return on Equity 15.8% 19.3% 16.4% 18.5%
Effective Tax Rate from Continuing
Operations 37.2% 30.3 % 51.6% 34.6%
Non-GAAP Effective Tax Rate from
Continuing Operations 37.7% 32.6 % 37.5% 36.8%
Refer to the GAAP / Non-GAAP Reconciliation for non-GAAP calculations.
CARDINAL HEALTH, INC. AND SUBSIDIARIES
GAAP / NON-GAAP RECONCILIATION
Fourth Quarter 2010
-------------------
(in millions,
except per
Common Share
amounts) GAAP Restructuring Acquisition Impairments
and Related and Loss
on Sale
Employee Costs of
Severance Assets
Operating
Earnings
Amount $334 $6 $8 $1
Growth Rate 9 %
Earnings Before
Income Taxes and
Discontinued
Operations $308 $6 $8 $1
Provision for
Income Taxes (1) $115 $2 $3 ($2)
Earnings from
Continuing
Operations
Amount $194 $5 $6 $3
Growth Rate (4)%
Diluted EPS from
Continuing
Operations
Amount $0.54 $0.01 $0.02 $0.01
Growth Rate (4)%
Fourth Quarter 2010
-------------------
(in millions, except
per Common Share Non-
amounts) Litigation Other Gain on GAAP
Spin-
(Credits)/ Off Sale of
Charges, Costs CareFusion
Net Stock
Operating Earnings
Amount ($34) $2 - $317
Growth Rate (11)%
Earnings Before
Income Taxes and
Discontinued
Operations ($34) $2 ($1) $291
Provision for Income
Taxes (1) ($12) $5 - $110
Earnings from
Continuing
Operations
Amount ($21) ($3) ($1) $181
Growth Rate (21)%
Diluted EPS from
Continuing
Operations
Amount ($0.06) ($0.01) - $0.50
Growth Rate (21)%
Fiscal Year 2010
----------------
(in millions,
except per
Common Share
amounts) GAAP Restructuring Acquisition Impairments
and Related and Loss
on Sale
Employee Costs of
Severance Assets
Operating
Earnings
Amount $1,307 $91 $8 $29
Growth Rate 1 %
Earnings Before
Income Taxes
and
Discontinued
Operations $1,212 $91 $8 $29
Provision for
Income Taxes
(1) $625 $32 $3 ($5)
Earnings from
Continuing
Operations
Amount $587 $59 $6 $34
Growth Rate (23)%
Diluted EPS from
Continuing
Operations
Amount $1.62 $0.16 $0.02 $0.09
Growth Rate (23)%
Fiscal Year 2010
----------------
(in millions,
except per
Common Share
amounts) Litigation Other Gain on Non-GAAP
Spin-
(Credits)/ Off Sale of
Charges, Costs CareFusion
Net Stock
Operating
Earnings
Amount ($62) $11 - $1,383
Growth Rate (2)%
Earnings Before
Income Taxes
and
Discontinued
Operations ($62) $53 ($45) $1,286
Provision for
Income Taxes
(1) ($23) ($149) - $482
Earnings from
Continuing
Operations
Amount ($39) $202 ($45) $804
Growth Rate (2)%
Diluted EPS from
Continuing
Operations
Amount ($0.11) $0.56 ($0.12) $2.22
Growth Rate (2)%
Fourth Quarter 2009
-------------------
GAAP Restructuring Acquisition Impairments
and Related and Loss
on Sale
Employee Costs of
Severance Assets
Operating Earnings
Amount $307 $38 $1 $3
Growth Rate (9)%
Earnings Before Income Taxes
and Discontinued Operations $290 $38 $1 $3
Provision for Income Taxes (1) $88 $11 - $9
Earnings from Continuing
Operations
Amount $202 $26 $1 ($6)
Growth Rate 10 %
Diluted EPS from Continuing
Operations
Amount $0.56 $0.07 - ($0.02)
Growth Rate 10 %
Fourth Quarter 2009
-------------------
Non-
Litigation Other Gain on GAAP
Spin-
(Credits)/ Off Sale of
Charges, Costs CareFusion
Net Stock
Operating Earnings
Amount $5 $4 - $356
Growth Rate 6 %
Earnings Before Income Taxes
and Discontinued Operations $5 $4 - $339
Provision for Income Taxes (1) $2 $1 - $111
Earnings from Continuing
Operations
Amount $3 $2 - $228
Growth Rate 14 %
Diluted EPS from Continuing
Operations
Amount $0.01 $0.01 - $0.63
Growth Rate 13 %
Fiscal Year 2009
----------------
GAAP Restructuring Acquisition Impairments
and Related and Loss
on Sale
Employee Costs of
Severance Assets
Operating Earnings
Amount $1,287 $105 $3 $14
Growth Rate (8)%
Earnings Before Income Taxes
and Discontinued Operations $1,160 $105 $3 $14
Provision for Income Taxes (1) $402 $29 $1 $39
Earnings from Continuing
Operations
Amount $758 $75 $2 ($26)
Growth Rate (11)%
Diluted EPS from Continuing
Operations
Amount $2.10 $0.21 - ($0.07)
Growth Rate (10)%
Fiscal Year 2009
----------------
Litigation Other Gain on Non-GAAP
Spin-
(Credits)/ Off Sale of
Charges, Costs CareFusion
Net Stock
Operating Earnings
Amount $5 $5 - $1,419
Growth Rate (1)%
Earnings Before Income Taxes
and Discontinued Operations $5 $5 - $1,291
Provision for Income Taxes (1) $2 $2 - $475
Earnings from Continuing
Operations
Amount $3 $3 - $816
Growth Rate (8)%
Diluted EPS from Continuing
Operations
Amount $0.01 $0.01 - $2.26
Growth Rate (8)%
The sum of the components may not equal the total due to rounding.
(1) The Company applies varying tax rates depending upon the tax
jurisdiction where the items are incurred.
CARDINAL HEALTH, INC. AND SUBSIDIARIES
GAAP / NON-GAAP RECONCILIATION
Fourth Quarter
--------------
(in millions) 2010
----
GAAP Return on Equity 16.8 %
Non-GAAP Return on Equity
Net earnings $223.5
Restructuring and employee
severance, net of tax, in
continuing operations (1) 4.7
Acquisition related costs, net of
tax, in continuing operations (1) 5.6
Impairments and loss on sale of
assets, net of tax, in continuing
operations (1) 2.8
Litigation (credits)/charges, net,
net of tax, in continuing
operations (1) (21.3)
Other spin-off costs, net of tax
(1) (3.1)
Gain on sale of CareFusion stock,
net of tax (1) (1.3)
CareFusion net earnings in
discontinued operations (1, 2) (0.4)
----
Adjusted net earnings $210.5
Annualized $842.0
Fourth Quarter Third Quarter
2010 2010
---- ----
Non-GAAP Shareholders' Equity
Total shareholders' equity $5,276.1 $5,360.9
Non-cash dividend related to
CareFusion spin-off - -
Non-GAAP shareholders' equity $5,276.1 $5,360.9
-------- --------
Divided by average shareholders'
equity 5,318.5
Non-GAAP return on equity 15.8%
Fourth Quarter
--------------
(in millions) 2009
----
GAAP Return on Equity 12.7%
Non-GAAP Return on Equity
Net earnings $273.2
Restructuring and employee
severance, net of tax, in
continuing operations (1) 26.4
Acquisition related costs, net of
tax, in continuing operations
(1) 0.4
Impairments and loss on sale of
assets, net of tax, in
continuing operations (1) (5.8)
Litigation (credits)/charges,
net, net of tax, in continuing
operations (1) 3.1
Other spin-off costs, net of tax
(1) 2.4
Gain on sale of CareFusion stock,
net of tax (1) -
CareFusion net earnings in
discontinued operations (1, 2) (65.5)
-----
Adjusted net earnings $234.2
Annualized $937.2
Fourth Quarter Third Quarter
-------------- -------------
2009 2009
---- ----
Non-GAAP Shareholders' Equity
Total shareholders' equity $8,724.7 $8,434.5
Non-cash dividend related to
CareFusion spin-off (3,723.8) (3,723.8)
Non-GAAP shareholders' equity $5,000.9 $4,710.7
-------- --------
Divided by average shareholders'
equity 4,855.8
Non-GAAP return on equity 19.3%
(1) The Company applies varying tax rates depending upon the tax
jurisdiction where the items are incurred.
(2) To properly reflect the impact of the spin-off, on a non-GAAP
basis, CareFusion net earnings included in discontinued operations
are excluded from adjusted net earnings for all periods presented.
CARDINAL HEALTH, INC. AND SUBSIDIARIES
GAAP / NON-GAAP RECONCILIATION
Fiscal Year
-----------
(in millions) 2010
----
GAAP Return on Equity 10.9 %
Non-GAAP Return on Equity
Net earnings $642.2
Restructuring and
employee severance, net
of tax, in continuing
operations (1) 59.0
Acquisition related
costs, net of tax, in
continuing operations
(1) 5.7
Impairments and loss on
sale of assets, net of
tax, in continuing
operations (1) 34.2
Litigation
(credits)/charges, net,
net of tax, in
continuing operations
(1) (39.2)
Other spin-off costs,
net of tax (1) 201.6
Gain on sale of
CareFusion stock, net of
tax (1) (44.6)
CareFusion net earnings
in discontinued
operations (1, 2) (15.0)
-----
Adjusted net earnings $843.9
Fourth Quarter Third Quarter Second Quarter
-------------- ------------- --------------
2010 2010 2010
---- ---- ----
Non-GAAP Shareholders'
Equity
Total shareholders'
equity $5,276.1 $5,360.9 $5,226.1
Non-cash dividend
related to CareFusion
spin-off - - -
--- --- ---
Non-GAAP shareholders'
equity $5,276.1 $5,360.9 $5,226.1
-------- -------- --------
Divided by average
shareholders' equity 5,161.0
Non-GAAP return on equity 16.4%
(in millions)
GAAP Return on Equity
Non-GAAP Return on Equity
Net earnings
Restructuring and employee severance, net of
tax, in continuing operations (1)
Acquisition related costs, net of tax, in
continuing operations (1)
Impairments and loss on sale of assets, net of
tax, in continuing operations (1)
Litigation (credits)/charges, net, net of tax,
in continuing operations (1)
Other spin-off costs, net of tax (1)
Gain on sale of CareFusion stock, net of tax
(1)
CareFusion net earnings in discontinued
operations (1, 2)
Adjusted net earnings
Fourth
First Quarter Quarter
------------- -------
2010 2009
---- ----
Non-GAAP Shareholders' Equity
Total shareholders' equity $4,941.2 $8,724.7
Non-cash dividend related to CareFusion spin-
off - (3,723.8)
--- --------
Non-GAAP shareholders' equity $4,941.2 $5,000.9
-------- --------
Divided by average shareholders' equity
Non-GAAP return on equity
Fiscal Year
-----------
(in millions) 2009
----
GAAP Return on Equity 14.1%
Non-GAAP Return on Equity
Net earnings $1,151.6
Restructuring and
employee severance, net
of tax, in continuing
operations (1) 75.4
Acquisition related
costs, net of tax, in
continuing operations
(1) 1.7
Impairments and loss on
sale of assets, net of
tax, in continuing
operations (1) (25.5)
Litigation
(credits)/charges, net,
net of tax, in
continuing operations
(1) 3.3
Other spin-off costs,
net of tax (1) 2.8
Gain on sale of
CareFusion stock, net of
tax (1) -
CareFusion net earnings
in discontinued
operations (1, 2) (384.6)
------
Adjusted net earnings $824.7
Fourth
Quarter Third Quarter Second Quarter
------- ------------- --------------
2009 2009 2009
---- ---- ----
Non-GAAP Shareholders'
Equity
Total shareholders'
equity $8,724.7 $8,434.5 $8,127.9
Non-cash dividend
related to CareFusion
spin-off (3,723.8) (3,723.8) (3,723.8)
-------- -------- --------
Non-GAAP shareholders'
equity $5,000.9 $4,710.7 $4,404.1
-------- -------- --------
Divided by average
shareholders' equity 4,466.7
Non-GAAP return on equity 18.5%
(in millions)
GAAP Return on Equity
Non-GAAP Return on Equity
Net earnings
Restructuring and employee severance, net of
tax, in continuing operations (1)
Acquisition related costs, net of tax, in
continuing operations (1)
Impairments and loss on sale of assets, net of
tax, in continuing operations (1)
Litigation (credits)/charges, net, net of tax,
in continuing operations (1)
Other spin-off costs, net of tax (1)
Gain on sale of CareFusion stock, net of tax
(1)
CareFusion net earnings in discontinued
operations (1, 2)
Adjusted net earnings
Fourth
First Quarter Quarter
------------- -------
2009 2008
---- ----
Non-GAAP Shareholders' Equity
Total shareholders' equity $7,918.1 $7,747.5
Non-cash dividend related to CareFusion spin-
off (3,723.8) (3,723.8)
-------- --------
Non-GAAP shareholders' equity $4,194.3 $4,023.7
-------- --------
Divided by average shareholders' equity
Non-GAAP return on equity
(1) The Company applies varying tax rates depending upon the tax
jurisdiction where the items are incurred.
(2) To properly reflect the impact of the spin-off, on a non-GAAP
basis, CareFusion net earnings included in discontinued operations
are excluded from adjusted net earnings for all periods presented.
CARDINAL HEALTH, INC. AND SUBSIDIARIES
GAAP / NON-GAAP RECONCILIATION
Fourth Quarter Fiscal Year
-------------- -----------
(in millions) 2010 2009 2010 2009
---- ---- ---- ----
GAAP Effective Tax
Rate from
Continuing
Operations 37.2 % 30.3 % 51.6 % 34.6 %
Non-GAAP Effective
Tax Rate from
Continuing
Operations
Earnings before
income taxes and
discontinued
operations $308.4 $289.7 $1,211.6 $1,159.8
Restructuring and
employee severance 6.4 37.5 90.7 104.7
Acquisition related
costs 8.3 0.7 8.4 2.8
Impairments and loss
on sale of assets 0.9 2.7 29.1 13.9
Litigation
(credits)/charges,
net (33.6) 4.9 (62.4) 5.2
Other spin-off costs 1.6 3.8 53.1 4.5
Gain on sale of
CareFusion stock (1.3) - (44.6) -
---- --- ----- ---
Adjusted earnings
before income taxes
and discontinued
operations $290.7 $339.3 $1,285.9 $1,290.9
Provision for income
taxes (1) $114.6 $87.7 $624.6 $401.6
Restructuring and
employee severance
tax benefit (1) 1.7 11.1 31.7 29.3
Acquisition related
costs tax benefit
(1) 2.7 0.3 2.7 1.1
Impairments and loss
on sale of assets
tax benefit/
(expense) (1) (1.9) 8.5 (5.1) 39.4
Litigation
(credits)/charges,
net tax benefit/
(expense) (1) (12.3) 1.8 (23.2) 1.9
Other spin-off
costs tax benefit/
(expense) (1) 4.7 1.4 (148.5) 1.7
Gain on sale of
CareFusion stock
tax expense (1) - - - -
--- --- --- ---
Adjusted provision
for income taxes $109.5 $110.8 $482.2 $475.0
Non-GAAP effective
tax rate from
continuing
operations 37.7% 32.6% 37.5% 36.8%
Fourth Quarter
--------------
2010 2009
---- ----
Debt to Total
Capital 29% 29%
Net Debt to Capital
Current portion of
long-term
obligations and
other short-term
borrowings $233.2 $366.2
Long-term
obligations, less
current portion 1,896.1 3,271.6
------- -------
Debt $2,129.3 $3,637.8
Cash and equivalents (2,755.3) (1,221.6)
-------- --------
Net debt $(626.0) $2,416.2
Total shareholders'
equity $5,276.1 $8,724.7
Capital $4,650.1 $11,140.9
Net Debt to Capital (13)% 22%
(1) The Company applies varying tax rates depending upon the tax
jurisdiction where the items are incurred.
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, 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.
The Company is unable to provide a quantitative reconciliation of
these forward-looking non-GAAP measures to the most directly
comparable forward-
looking GAAP measures because the Company cannot reliably forecast
restructuring and employee severance, acquisition related costs,
impairments and
loss on sale of assets, litigation (credits)/charges, net, other
spin-off costs and gains or losses on sale of CareFusion stock,
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
Fourth Quarter
--------------
(in millions) 2010 2009
---- ----
Days Inventory on Hand
Inventories $6,355.9 $6,832.8
Cost of products sold $23,555.5 $23,403.0
Chargeback billings 3,066.0 3,271.2
------- -------
Adjusted cost of products sold $26,621.5 $26,674.2
Adjusted cost of products sold divided by 90 days $295.8 $296.4
Days inventory on hand 21 23
Days Inventory on Hand: inventory divided by ((quarterly costs of
products sold plus chargeback billings) divided by 90 days).
Chargeback billings are the difference between a product's wholesale
acquisition cost and the contract price established between
pharmaceutical manufacturers and the end customer.
CARDINAL HEALTH, INC. AND SUBSIDIARIES
DEFINITIONS
GAAP
Debt: long-term obligations plus short-term borrowings
Debt to Total Capital: debt divided by (debt plus total
shareholders' equity)
Diluted EPS from Continuing Operations: earnings from continuing
operations divided by diluted weighted average shares outstanding
Effective Tax Rate from Continuing Operations: provision for income
taxes divided by earnings before income taxes and discontinued
operations
Gain on Sale of CareFusion Stock: realized gains and losses from the
sale of the Company's ownership of CareFusion common stock retained
in connection with the spin-off
Other Spin-Off Costs: costs and tax charges incurred in connection
with the Company's spin-off of CareFusion that are not included in
restructuring and employee severance, acquisition related costs,
impairments and loss on sale of assets and litigation
(credits)/charges, net. Other spin-off costs include, among other
things, the loss on extinguishment of debt and the income tax
charge related to the anticipated repatriation of a portion of cash
loaned to the Company's entities within the United States
Receivable Days: trade receivables, net divided by (monthly revenue
divided by 30 days)
Segment Profit: segment revenue minus (segment cost of products
sold and segment distribution, selling, general and administrative
expenses)
Segment Profit Margin: segment profit divided by segment revenue
Segment Profit Mix: segment profit divided by total segment profit
for all segments
Return on Equity: annualized net earnings divided by average
shareholders' equity
Revenue Mix: segment revenue divided by total segment revenue for
all segments
NON-GAAP
Net Debt to Capital: net debt divided by (net debt plus total
shareholders' equity)
Net Debt: debt minus (cash and equivalents)
Non-GAAP Diluted EPS from Continuing Operations: non-GAAP
earnings from continuing operations divided by diluted weighted
average shares outstanding
Non-GAAP Diluted EPS from Continuing Operations Growth Rate:
(current period non-GAAP diluted EPS from continuing operations
minus prior period non-GAAP diluted EPS from continuing
operations) divided by prior period non-GAAP diluted EPS from
continuing operations
Non-GAAP Earnings from Continuing Operations: earnings from
continuing operations excluding (1) restructuring and employee
severance, (2) acquisition related costs, (3) impairments and loss
on sale of assets, (4) litigation (credits)/charges, net, (5) Other
Spin-Off Costs and (6) gain on sale of CareFusion stock, each net
of tax
Non-GAAP Earnings from Continuing Operations Growth Rate: (current
period non-GAAP earnings from continuing operations minus prior
period non-GAAP earnings from continuing operations) divided by
prior period non-GAAP earnings from continuing operations
Non-GAAP Effective Tax Rate from Continuing Operations: (provision
for income taxes adjusted for (1) restructuring and employee
severance, (2) acquisition related costs, (3) impairments and loss
on sale of assets, (4) litigation (credits)/charges, net, (5) Other
Spin-Off Costs and (6) gain on sale of CareFusion stock) divided
by (earnings before income taxes and discontinued operations
adjusted for (1) restructuring and employee severance, (2)
acquisition related costs, (3) impairments and loss on sale of
assets, (4) litigation (credits)/charges, net, (5) Other Spin-Off
Costs and (6) gain on sale of CareFusion stock)
Non-GAAP Operating Earnings: operating earnings excluding (1)
restructuring and employee severance, (2) acquisition related
costs, (3) impairments and loss on sale of assets, (4) litigation
credits/(charges), net and (5) Other Spin-Off Costs included
within distribution, selling, general and administrative expenses
Non-GAAP Operating Earnings Growth Rate: (current period non-GAAP
operating earnings minus prior period non-GAAP operating earnings)
divided by prior period non-GAAP operating earnings
Non-GAAP Return on Equity: (annualized current period net
earnings excluding (1) restructuring and employee severance, (2)
acquisition related costs, (3) impairments and loss on sale of
assets, (4) litigation (credits)/charges, net, (5) Other Spin-Off
Costs, (6) CareFusion net earnings in discontinued operations and
(7) gain on sale of CareFusion stock, each net of tax) divided by
average shareholders' equity adjusted for the $3.7 billion non-
cash dividend issued in connection with the spin-off
Source: Cardinal Health, Inc.
CONTACT: Media: Troy Kirkpatrick, +1-614-757-6225,
troy.kirkpatrick@cardinalhealth.com; Investors: Sally Curley, +1-614-757-7115,
sally.curley@cardinalhealth.com
Web Site: http://www.cardinalhealth.com/
