8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): October 27, 2006

Cardinal Health, Inc.

(Exact Name of Registrant as Specified in its Charter)

Ohio

(State or Other Jurisdiction of Incorporation)

1-11373	31-0958666
(Commission File Number)	(IRS Employer Identification Number)

7000 Cardinal Place, Dublin, Ohio 43017

(Address of Principal Executive Offices, Including Zip Code)

(614) 757-5000

(Registrant’s Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

On October 27, 2006, Cardinal Health, Inc. (the “Company”) issued a press release announcing its results for the quarter ended September 30, 2006. A copy of the press release is furnished under this report as Exhibit 99.01.

Furnished under this report as Exhibit 99.02 is a discussion of the reasons why management believes that the presentation of non-GAAP financial measures provides useful information to investors regarding the Company’s financial condition and results of operations.

Item 7.01 Regulation FD Disclosure

During a conference call scheduled to be held at 11:00 a.m. EDT on October 27, 2006, the Company’s Chief Financial Officer, Jeffrey W. Henderson, will discuss the Company’s results for the quarter ended September 30, 2006. The Company is furnishing Mr. Henderson’s slide presentation for the conference call as Exhibit 99.03 to this report.

Item 9.01 Financial Statements and Exhibits

(c) Exhibits

99.01	Press release issued by the Company on October 27, 2006, and furnished under this report.
99.02	Information disclosed by the Company on October 27, 2006, and furnished under this report.
99.03	Slide presentation furnished under this report.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Cardinal Health, Inc.
	(Registrant)
Date: October 27, 2006	By:	/s/ Jeffrey W. Henderson
	Name:	Jeffrey W. Henderson
	Title:	Chief Financial Officer

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EXHIBIT INDEX

99.01	Press release issued by the Company on October 27, 2006, and furnished under this report.
99.02	Information disclosed by the Company on October 27, 2006, and furnished under this report.
99.03	Slide presentation furnished under this report.

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EX-99.01

Exhibit 99.01

7000 Cardinal Place

Dublin, OH 43017

www.cardinalhealth.com

FOR IMMEDIATE RELEASE

Contacts:

Media: Jim Mazzola (614) 757-3690 jim.mazzola@cardinal.com Investors: Jason Strohm (614) 757-7542 jason.strohm@cardinal.com

CARDINAL HEALTH REPORTS FIRST-QUARTER RESULTS

• Revenue increases 11 percent to $21.4 billion

• Earnings from continuing operations rise 26 percent to $300 million, $0.73 per share

• Non-GAAP earnings from continuing operations reach $320 million, $0.78 per share

• Generic mix and expense controls drive strong increase in operating earnings for Healthcare Supply Chain Services-Pharmaceutical segment

DUBLIN, Ohio, Oct. 27, 2006 — Cardinal Health, the leading provider of products and services supporting the health-care industry, today announced first-quarter results, with revenue growth of 11 percent to $21.4 billion and earnings growth of 26 percent led by a strong quarter for its Healthcare Supply Chain Services-Pharmaceutical segment.

For the first quarter ended Sept. 30, earnings from continuing operations reached $300 million, resulting in a 33-percent increase in diluted earnings per share (EPS) from continuing operations to $0.73.

“We executed well in our Healthcare Supply Chain Services-Pharmaceutical segment, which drove strong revenue and earnings growth for the company during the quarter,” said R. Kerry Clark, president and chief executive officer of Cardinal Health. “Our other segments contributed more than 40 percent of total operating earnings, reflecting the diversity of our health-care products and services, and highlighting a key differentiator Cardinal Health brings to both customers and shareholders. In particular, our Medical Products Manufacturing segment had an excellent quarter, its first as a standalone segment for Cardinal Health.”

Non-GAAP earnings from continuing operations¹ increased 27 percent to $320 million and non-GAAP diluted EPS from continuing operations² rose 32 percent to $0.78. A $16.7 million tax reserve adjustment added $0.04 to EPS in the period. Cardinal Health also reserved $13.5 million, or $0.02 per share, for a previously disclosed recall of its Alaris SE products.

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Cardinal Health Reports First-Quarter Results

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Q1 FY07 Summary

	Q1 FY07		Q1 FY06		Y/Y
Revenue	$	21.4 billion	$	19.2 billion	11	%
Operating Earnings	$	464 million	$	377 million	23	%
Non-GAAP Operating Earnings3	$	492 million	$	400 million	23	%
Earnings from Continuing Operations	$	300 million	$	238 million	26	%
Non-GAAP Earnings from Continuing Operations	$	320 million	$	253 million	27	%
Diluted EPS from Continuing Operations	$	0.73	$	0.55	33	%
Non-GAAP Diluted EPS from Continuing Operations	$	0.78	$	0.59	32	%

First quarter segment results:

• Revenue for the Healthcare Supply Chain Services-Pharmaceutical segment grew 12 percent to $18.5 billion, with direct-store-door (DSD) pharmaceutical sales growing 14 percent to $10.1 billion and bulk customer sales growing 19 percent to $8.1 billion. A strong generic sales mix, combined with expense controls during the quarter drove a 24-percent increase in operating earnings to $301 million, partially offset by continued sell-margin pressure. Operating earnings in the first quarter of last year were affected by a $32-million charge related to vendor credits in prior periods.

• Revenue for the Healthcare Supply Chain Services-Medical segment increased 2 percent to $1.8 billion due to moderate sales growth to hospitals and ambulatory care centers. Sales of laboratory supplies and from Canadian operations continued to grow at a faster rate than the overall segment. Operating earnings declined 10 percent to $74 million as the segment continued to transition to new customer service centers and a new sales model, and address competitive pricing within its Presource® surgical kitting business.

• Revenue for the Clinical Technologies and Services segment increased 3 percent to $594 million, below company expectations due to the delayed introduction of two new products and the recall of its Alaris SE pump. Of the delayed products, the Alaris PCU version 1.5 has now been released, and the Pyxis MedStation 3500 is in the final stages of limited release. Operating earnings declined 14 percent from the prior year to $68 million due to these factors and planned investments in product development and quality and service improvements.

• Revenue for the Pharmaceutical Technologies and Services segment increased 10 percent to $451 million and operating earnings increased 13 percent to $22 million. Strong earnings growth in the segment’s softgel and Zydis® fast-dissolve pharmaceutical manufacturing operations and in its pharmaceutical packaging businesses were partially offset by declines in sterile manufacturing. SG&A expenses as a percent of sales declined due to expense controls and ongoing operational excellence initiatives.

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Cardinal Health Reports First-Quarter Results

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• Revenue for the Medical Products Manufacturing segment increased 11 percent to $424 million and operating earnings grew 15 percent to $61 million. Balanced results across the segment contributed to the strong quarter, including competitive wins in respiratory products, new contracts for Convertors® infection prevention products, contributions from recently acquired Denver Biomedical and overall volume growth. Operating margins improved from the prior-year period because of recently completed facility restructurings, further progress in sourcing and SG&A expense control.

Additional first-quarter and recent highlights include:

• Repurchase of $495 million of Cardinal Health stock as part of a two-year, $2 billion share repurchase program announced in August.

• Acquiring MedMined, Inc., a medical analytics firm that will extend Cardinal Health’s patient-safety and clinical offerings. MedMined serves 185 hospitals in the U.S. with technology and services that identify and prevent hospital-acquired infections. The acquisition closed on July 18.

• An agreement to acquire Care Fusion, Inc., an industry leader in wireless, barcode-enabled patient identification systems used by hospitals in 20 states. Care Fusion was recently awarded a contract to implement its hand-held devices at the Veteran Health Administration’s 171 medical centers and 500 outpatient clinics.

• Signing a seven-year contract with Triad, a HealthTrust Purchasing Group member, for Alaris hardware, software and disposable products. The deal, which is one of the largest Alaris contracts ever awarded, will provide infusion technology to protect patients from medication errors at 52 facilities nationwide.

• Beginning commercial production at its new, sterile manufacturing facility in Raleigh, N.C. Cardinal Health began manufacturing Panhematin^®, a biologic therapy used to treat a rare genetic disorder, for Ovation Pharmaceuticals, Inc.

Outlook

For fiscal 2007, Cardinal Health reiterated that it expects non-GAAP diluted EPS from continuing operations to be $3.50 to $3.70.

Conference Call

Cardinal Health will host a conference call and webcast at 11 a.m. Eastern Daylight Time (EDT) to discuss its 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 617-597-5313, conference passcode 71416649. An audio replay is expected to be available until 11 p.m. on Nov. 3 at 617-801-6888, passcode 85650472. 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 an $81 billion, global company serving the health-care industry with a broad portfolio of products and services. Through its diverse offerings, Cardinal Health delivers health-care solutions that help customers reduce their costs, improve safety and productivity, and deliver better care to patients. The company manufactures, packages and distributes pharmaceuticals and medical supplies, offers a range of clinical services and develops automation products that improve the management and delivery of supplies and medication for hospitals, physician offices and pharmacies. Ranked No. 19 on the Fortune 500, Cardinal Health employs more than 55,000 people on six continents. More information about the company may be found at www.cardinalhealth.com.

¹ Non-GAAP earnings from continuing operations: Earnings from continuing operations excluding special items and impairment charges and other, both net of tax.

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Cardinal Health Reports First-Quarter Results

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² Non-GAAP diluted EPS from continuing operations: Non-GAAP earnings from continuing operations divided by diluted weighted average shares outstanding.

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.

Except for historical information, all other information in this news release consists of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements 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: competitive pressures in its various lines of business; the loss of one or more key customer or supplier relationships or changes to the terms of those relationships; 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 or settlement discussions with any regulatory authority or any legal and administrative proceedings, including shareholder litigation; difficulties in opening new facilities or fully utilizing existing capacity; the costs, difficulties and uncertainties related the integration of acquired businesses; and general economic and market conditions. Except to the extent required by applicable law, Cardinal Health undertakes no obligation to update or revise any forward-looking statement.

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CARDINAL HEALTH, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)

	First Quarter Fiscal
(in millions, except per Common Share amounts)	2007			2006			% Change
Revenue	$	21,356.7		$	19,237.2		11	%
Cost of products sold		20,057.8			18,043.0		11	%
Gross margin		1,298.9			1,194.2		9	%
Selling, general and administrative expenses		807.3			793.7		2	%
Impairment charges and other		3.6			2.5		N.M.
Special items:
Restructuring charges		13.4			8.5		N.M.
Merger charges		2.5			7.0		N.M.
Other		8.4			5.8		N.M.
Operating earnings		463.7			376.7		23	%
Interest expense and other		47.7			31.0		54	%
Earnings before income taxes and discontinued operations		416.0			345.7		20	%
Provision for income taxes		115.7			108.2		7	%
Earnings from continuing operations		300.3			237.5		26	%
Loss from discontinued operations (net of tax $13.5 and $2.2 for the first quarter of fiscal 2007 and 2006, respectively)		(29.6	)		(9.2	)	N.M.
Net earnings	$	270.7		$	228.3		19	%
Basic Earnings per Common Share:
Continuing operations	$	0.74		$	0.56		32	%
Discontinued operations		(0.07	)		(0.02	)	N.M.
Net basic earnings per Common Share	$	0.67		$	0.54		24	%
Diluted Earnings per Common Share:
Continuing operations	$	0.73		$	0.55		33	%
Discontinued operations		(0.07	)		(0.02	)	N.M.
Net diluted earnings per Common Share	$	0.66		$	0.53		25	%
Weighted Average Number of Shares Outstanding:
Basic		404.5			426.3
Diluted		413.0			431.4

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CARDINAL HEALTH, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in millions)	September 30, 2006		June 30, 2006
Assets
Cash and equivalents	$	1,609.6	$	1,320.9
Short-term investments available for sale		456.5		498.4
Trade receivables, net		3,986.6		4,111.6
Current portion of net investment in sales-type leases		309.3		290.1
Inventories		7,585.3		7,714.2
Prepaid expenses and other		710.5		628.9
Assets held for sale and discontinued operations		63.4		212.6
Total current assets		14,721.2		14,776.7
Property and equipment, net		2,574.1		2,584.0
Net investment in sales-type leases, less current portion		756.3		754.7
Goodwill and other intangibles, net		5,054.5		4,992.4
Other assets		325.1		266.3
Total assets	$	23,431.2	$	23,374.1
Liabilities and Shareholders’ Equity
Current portion of long-term obligations and other short-term borrowings	$	315.3	$	229.2
Accounts payable		8,878.3		9,009.3
Other accrued liabilities		2,373.8		2,053.9
Liabilities from businesses held for sale and discontinued operations		10.9		80.4
Total current liabilities		11,578.3		11,372.8
Long-term obligations, less current portion and other short-term borrowings		2,627.4		2,599.7
Deferred income taxes and other liabilities		804.4		910.9
Total shareholders’ equity		8,421.1		8,490.7
Total liabilities and shareholders’ equity	$	23,431.2	$	23,374.1

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CARDINAL HEALTH, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	First Quarter Fiscal
(in millions)	2007			2006
Cash Flows From Operating Activities:
Net earnings	$	270.7		$	228.3
Loss from discontinued operations		29.6			9.2
Earnings from continuing operations		300.3			237.5
Adjustments to reconcile earnings from continuing operations to net cash provided by operating activities:
Depreciation and amortization		104.2			101.0
Asset impairments		3.6			1.8
Equity compensation		45.0			81.8
Provision for bad debts		5.1			9.2
Change in operating assets and liabilities, net of effects from acquisitions:
(Increase) / decrease in trade receivables		121.0			(265.5	)
Decrease in inventories		117.8			10.7
Increase in net investment in sales-type leases		(20.9	)		(38.8	)
Increase / (decrease) in accounts payable		(131.1	)		468.1
Other accrued liabilities and operating items, net		177.1			122.6
Net cash provided by operating activities - continuing operations		722.1			728.4
Net cash used in operating activities - discontinued operations		(3.8	)		(3.8	)
Net cash provided by operating activities		718.3			724.6
Cash Flows From Investing Activities:
Acquisition of subsidiaries, net of divestitures and cash acquired		(44.4	)		3.3
Proceeds from sale of property and equipment		3.8			0.5
Additions to property and equipment		(85.3	)		(75.5	)
Sale / (purchase) of investment securities available for sale, net		41.9			(100.0	)
Net cash used in investing activities - continuing operations		(84.0	)		(171.7	)
Net cash provided by / (used in) investing activities - discontinued operations		0.1			(0.5	)
Net cash used in investing activities		(83.9	)		(172.2	)
Cash Flows From Financing Activities:
Net change in commercial paper and short-term borrowings		101.4			3.0
Reduction of long-term obligations		(29.5	)		(3.7	)
Proceeds from long-term obligations, net of issuance costs		11.2			5.9
Proceeds from issuance of Common Shares		57.3			34.8
Tax benefits from exercises of stock options		14.0			9.4
Dividends on Common Shares		(37.0	)		(25.5	)
Purchase of treasury shares		(445.3	)		—
Net cash provided by / (used in) financing activities - continuing operations		(327.9	)		23.9
Net cash used in financing activities - discontinued operations		(17.8	)		—
Net cash provided by / (used in) financing activities		(345.7	)		23.9
Net increase in cash and equivalents		288.7			576.3
Cash and equivalents at beginning of period		1,320.9			1,400.0
Cash and equivalents at end of period	$	1,609.6		$	1,976.3

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CARDINAL HEALTH, INC. AND SUBSIDIARIES

BUSINESS ANALYSIS

HEALTHCARE SUPPLY CHAIN SERVICES

Pharmaceutical

	First Quarter Fiscal
(in millions)	2007			2006
Revenue
Amount	$	18,505		$	16,509
Growth Rate		12	%		9	%
Mix		85	%		84	%
Operating Earnings
Amount	$	301		$	243
Growth Rate		24	%		18	%
Mix		57	%		51	%
Operating Margin		1.63	%		1.47	%
Medical
	First Quarter Fiscal
(in millions)	2007			2006
Revenue
Amount	$	1,806		$	1,763
Growth Rate		2	%		6	%
Mix		8	%		9	%
Operating Earnings
Amount	$	74		$	82
Growth Rate		(10	)%		3	%
Mix		14	%		17	%
Operating Margin		4.10	%		4.65	%

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CARDINAL HEALTH, INC. AND SUBSIDIARIES

BUSINESS ANALYSIS

PHARMACEUTICAL AND MEDICAL PRODUCTS

Clinical Technologies and Services

	First Quarter Fiscal
(in millions)	2007			2006
Revenue
Amount	$	594		$	576
Growth Rate		3	%		10	%
Mix		3	%		3	%
Operating Earnings
Amount	$	68		$	78
Growth Rate		(14	)%		88	%
Mix		13	%		17	%
Operating Margin		11.37	%		13.57	%
Pharmaceutical Technologies and Services
	First Quarter Fiscal
(in millions)	2007			2006
Revenue
Amount	$	451		$	411
Growth Rate		10	%		5	%
Mix		2	%		2	%
Operating Earnings
Amount	$	22		$	20
Growth Rate		13	%		(54	)%
Mix		4	%		4	%
Operating Margin		4.93	%		4.78	%
Medical Products Manufacturing
	First Quarter Fiscal
(in millions)	2007			2006
Revenue
Amount	$	424		$	383
Growth Rate		11	%		8	%
Mix		2	%		2	%
Operating Earnings
Amount	$	61		$	53
Growth Rate		15	%		78	%
Mix		12	%		11	%
Operating Margin		14.36	%		13.80	%

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CARDINAL HEALTH, INC. AND SUBSIDIARIES

BUSINESS ANALYSIS

TOTAL COMPANY

	First Quarter Fiscal						Non-GAAP First Quarter Fiscal
(in millions)	2007			2006			2007			2006
Revenue
Amount	$	21,357		$	19,237
Growth Rate		11	%		9	%
Operating Earnings
Amount	$	464		$	377		$	492		$	400
Growth Rate		23	%		4	%		23	%		2	%
Earnings from Continuing Operations
Amount	$	300		$	238		$	320		$	253
Growth Rate		26	%		6	%		27	%		4	%

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

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CARDINAL HEALTH, INC. AND SUBSIDIARIES

ASSET MANAGEMENT ANALYSIS

	First Quarter Fiscal
(in millions)	2007		2006
Receivable Days	17.8		16.2
Days Inventory on Hand	30		33
Debt to Total Capital	26	%	23	%
Net Debt to Capital	9	%	5	%
Return on Equity	14.5	%	10.9	%
Non-GAAP Return on Equity	15.3	%	11.5	%
Return on Invested Capital	6.35	%	4.92	%
Non-GAAP Return on Invested Capital	6.69	%	5.17	%
Effective Tax Rate from Continuing Operations	27.8	%	31.3	%
Non-GAAP Effective Tax Rate from Continuing Operations	27.8	%	31.6	%

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

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CARDINAL HEALTH, INC. AND SUBSIDIARIES

SCHEDULE OF NOTABLE ITEMS

	First Quarter Fiscal
(in millions, except per Common Share amounts)	2007			2006
Special Items
Restructuring charges	$	(13.4	)	$	(8.5	)
Merger charges		(2.5	)		(7.0	)
Other		(8.4	)		(5.8	)
Total special items		(24.3	)		(21.3	)
Tax benefit		6.6			7.8
Special items, net of tax	$	(17.7	)	$	(13.5	)
Decrease to diluted EPS from continuing operations	$	(0.04	)	$	(0.03	)
Impairment Charges and Other
Impairment charges and other	$	(3.6	)	$	(2.5	)
Tax benefit		1.1			0.8
Net impairment charges and other, net of tax	$	(2.5	)	$	(1.7	)
Decrease to diluted EPS from continuing operations	$	(0.01	)	$	(0.01	)
Non-Recurring and Other Items
Total non-recurring	$	—		$	—
Vendor credit adjustment		—			(31.8	)
Total non-recurring and other items		—			(31.8	)
Tax benefit of non-recurring and other items		—			10.3
Total non-recurring and other items, net of tax	$	—		$	(21.5	)
Decrease to diluted EPS from continuing operations	$	—		$	(0.05	)
Weighted Average Number of Diluted Shares Outstanding		413.0			431.4

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CARDINAL HEALTH, INC. AND SUBSIDIARIES

GAAP / NON-GAAP RECONCILIATION

	First Quarter Fiscal 2007
(in millions)	GAAP			Special Items		Impairment Charges and Other		Non-GAAP
Operating Earnings
Amount	$	464		$	24	$	4	$	492
Growth Rate		23	%						23	%
Provision for Income Taxes	$	116		$	6	$	2	$	124
Earnings from Continuing Operations
Amount	$	300		$	18	$	2	$	320
Growth Rate		26	%						27	%
Diluted EPS from Continuing Operations
Amount	$	0.73		$	0.04	$	0.01	$	0.78
Growth Rate		33	%						32	%
	First Quarter Fiscal 2006
	GAAP			Special Items		Impairment Charges and Other		Non-GAAP
Operating Earnings
Amount	$	377		$	21	$	3	$	400
Growth Rate		4	%						2	%
Provision for Income Taxes	$	108		$	8	$	1	$	117
Earnings from Continuing Operations
Amount	$	238		$	13	$	2	$	253
Growth Rate		6	%						4	%
Diluted EPS from Continuing Operations
Amount	$	0.55		$	0.03	$	0.01	$	0.59

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

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CARDINAL HEALTH, INC. AND SUBSIDIARIES

GAAP / NON-GAAP RECONCILIATION

	First Quarter Fiscal
(in millions)	2007			2006
Return on Equity		14.5	%		10.9	%
Non-GAAP Return on Equity
Earnings from continuing operations	$	300.3		$	237.5
Special items, net of tax		17.7			13.5
Earnings from continuing operations, excluding special items	$	318.0		$	251.0
Annualized		1,272.0			1,004.0
Divided by average shareholders’ equity 1	$	8,302.9		$	8,732.0
Non-GAAP return on equity		15.3	%		11.5	%
	First Quarter Fiscal
(in millions)	2007			2006
Return on Invested Capital		6.35	%		4.92	%
Non-GAAP Return on Invested Capital
Operating earnings	$	463.7		$	376.7
Special items		24.3			21.3
Operating earnings, excluding special items	$	488.0		$	398.0
Non-GAAP effective tax rate from continuing operations		27.8	%		31.6	%
Operating earnings, excluding special items multiplied by (1 minus the non-GAAP effective tax rate from continuing operations)	$	352.4		$	272.2
Annualized	$	1,409.6		$	1,088.8
Divided by average total invested capital 2	$	21,075.2		$	21,052.9
Non-GAAP return on invested capital		6.69	%		5.17	%

¹ The average shareholders’ equity shown above is calculated using the average balances at the end of each month during the quarter.

² The average total invested capital shown above is calculated using the average of the balances at the end of each month during the quarter. Total invested capital is calculated as the sum of the current portion of long-term obligations and other short-term borrowings, long-term obligations, total shareholders’ equity and unrecorded goodwill. Unrecorded goodwill is $9,700.3 for all periods presented.

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CARDINAL HEALTH, INC. AND SUBSIDIARIES

GAAP / NON-GAAP RECONCILIATION

	First Quarter Fiscal
(in millions)	2007			2006
Effective Tax Rate from Continuing Operations		27.8	%		31.3	%
Non-GAAP Effective Tax Rate from Continuing Operations
Earnings before income taxes and discontinued operations	$	416.0		$	345.7
Special items		24.3			21.3
Adjusted earnings before income taxes and discontinued operations	$	440.3		$	367.0
Provision for income taxes	$	115.7		$	108.2
Special items tax benefit		6.6			7.8
Adjusted provision for income taxes	$	122.3		$	116.0
Non-GAAP effective tax rate from continuing operations		27.8	%		31.6	%
Debt to Total Capital		26	%		23	%
Net Debt to Capital
Current portion of long-term obligations and other short-term borrowings	$	315.3		$	405.3
Long-term obligations, less current portion and other short-term borrowings		2,627.4			2,204.0
Debt		2,942.7			2,609.3
Cash and equivalents		(1,609.6	)		(1,976.3	)
Short-term investments available for sale		(456.5	)		(199.8	)
Net debt	$	876.6		$	433.2
Total shareholders’ equity		8,421.1			8,878.9
Capital	$	9,297.7		$	9,312.1
Net debt to capital		9	%		5	%

Forward-Looking Non-GAAP Financial Measures

The Company presents non-GAAP financial measures on a forward-looking basis. These measures include non-GAAP diluted EPS from continuing operations and growth rate, non-GAAP return on equity and non-GAAP 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 earnings.

- more -

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 operating activities from continuing operations

Operating Earnings Mix: segment operating earnings divided by total operating earnings for all segments

Return on Equity: annualized earnings from continuing operations divided by average shareholders’ equity

Return on Invested Capital: [annualized operating earnings multiplied by (one minus effective tax rate from continuing operations)] divided by (average total shareholders’ equity plus debt plus unrecorded goodwill)

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

NON-GAAP

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 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)

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 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 earnings from continuing operations plus special items minus special items tax benefit) divided by average shareholders’ equity

Non-GAAP Return on Invested Capital: [(annualized operating earnings excluding special items) multiplied by (one minus non-GAAP effective tax rate from continuing operations)] divided by (average total shareholders’ equity plus debt plus unrecorded goodwill)

###

EX-99.02

Exhibit 99.02

Use of Non-GAAP Financial Measures

In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles (“GAAP”), Cardinal Health, Inc.’s (the “Company’s”) earnings release contains non-GAAP financial measures. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. The Company has provided reconciliations of the historical non-GAAP financial measures to the most directly comparable historical GAAP financial measures. Management encourages readers to rely upon the GAAP numbers, but includes the amounts that have been adjusted as a supplemental metric to assist readers. Definitions of the non-GAAP financial measures are included in the earnings release.

Non-GAAP operating earnings and non-GAAP operating earnings growth rate. The Company presents the non-GAAP financial measures “non-GAAP operating earnings” and “non-GAAP operating earnings growth rate.” These non-GAAP financial measures exclude special items and impairment charges and other. The Company’s “special items” primarily consist of costs relating to the integration of previously-acquired companies, which may include employee-related costs, asset impairments and other exit costs and integration costs, or costs of restructuring operations, which may include employee-related costs, asset impairments and facility exit costs. The Company also records as special items settlements of significant lawsuits that are infrequent or unusual in nature. The Company records as special items legal fees and document preservation and production costs incurred in connection with the Securities and Exchange Commission investigation and Audit Committee internal review and related matters. The Company also records, from time to time, material charges that are one-time, unusual or infrequent in nature as special items. For further discussion of items classified as special items, see the notes to the financial statements contained in the Company’s Annual and Quarterly Reports on Form 10-K and Form 10-Q.

As discussed above, the Company classifies certain asset impairments related to restructurings in special items, which are included in operating earnings within the consolidated statements of earnings. Asset impairments and gains and losses from the sale of assets not eligible to be classified as special items or discontinued operations are classified within “impairment charges and other” within the consolidated statements of earnings. For further discussion of items classified as impairment charges and other, see the notes to the financial statements contained in the Company’s Annual and Quarterly Reports on Form 10-K and Form 10-Q.

Management uses these non-GAAP measures to evaluate the Company’s performance. As the Company’s core business is providing health care products and services to the healthcare industry, management finds it useful to use financial measures that do not include charges and gains associated with restructuring, merger-related activity and litigation and other asset impairments and gains and losses from the sale of assets. While these special items and impairment charges and other may be recurring, management believes that these items and charges are not reflective of the day-to-day offering of its products and services and relate more to strategic, multi-year corporate actions, without predictable trends, that may obscure the trends and financial performance of the Company’s core business.

The limitation associated with using these non-GAAP measures is that the measures exclude items that impact the Company’s current period operating results. In most cases, the excluded items include transactions that reflect cash costs to the Company. This limitation is best addressed by using these non-GAAP measures in combination with operating earnings and operating earnings growth rate (the most comparable GAAP measures) because the non-GAAP measures do not reflect items that impact current period operating results and may be higher than the most comparable GAAP measures. Management believes that investors may find it useful to evaluate the components of special items and impairment charges and other separately and in the aggregate when reviewing the Company’s performance.

Non-GAAP earnings from continuing operations and non-GAAP earnings from continuing operations growth rate. The Company presents the non-GAAP financial measures “non-GAAP earnings from continuing operations,” and “non-GAAP earnings from continuing operations growth rate.” These non-GAAP financial measures exclude special items and impairment charges and other. See the discussion of special items and impairment charges and other above under the heading “non-GAAP operating earnings and non-GAAP operating earnings growth rate” for information regarding the components of the Company’s special items and impairment charges and other classifications. Management uses these non-GAAP measures to evaluate the Company’s performance. As the Company’s core business is providing health care products and services to the healthcare industry, management finds it useful to use financial measures that do not include charges and gains associated with restructuring, merger-related activity and litigation and other asset impairments and gains and losses from the sale of assets. While these special items and impairment charges and other may be recurring, management believes that these items and charges are not reflective of the day-to-day offering of its products and services and relate more to strategic, multi-year corporate actions, without predictable trends, that may obscure the trends and financial performance of the Company’s core business.

The limitation associated with using these non-GAAP measures is that these measures exclude items that impact the Company’s current period operating results. In most cases, the excluded items include transactions that reflect cash costs to the Company. This limitation is best addressed by using these non-GAAP measures in combination with earnings from continuing operations and earnings from continuing operations growth rate (the most comparable GAAP measures) because the non-GAAP measures do not reflect items that impact current period operating results and may be higher than the most comparable GAAP measures. Management believes that investors may find it useful to evaluate the components of special items and impairment charges and other separately and in the aggregate when reviewing the Company’s performance.

Non-GAAP diluted earnings per share from continuing operations. The Company presents the non-GAAP financial measure “non-GAAP diluted earnings per share from continuing operations.” This non-GAAP financial measure excludes special items and impairment charges and other. See the discussion of special items and impairment charges and other above under the heading “non-GAAP operating earnings and non-GAAP operating earnings growth rate” for information regarding the components of the Company’s special items and impairment charges and other classifications. Management uses this non-GAAP measure to evaluate the Company’s performance. As the Company’s core business is providing health care products and services to the healthcare industry, management finds it useful to use financial measures that do not include charges and gains associated with restructuring, merger-related activity and litigation and other asset impairments and gains and losses from the sale of assets. While these special items and impairment charges and other may be recurring, management believes that these items and charges are not reflective of the day-to-day offering of its products and services and relate more to strategic, multi-year corporate actions, without predictable trends, that may obscure the trends and financial performance of the Company’s core business.

The limitation associated with using this non-GAAP measure is that this measure excludes items that impact the Company’s current period operating results. In most cases, the excluded items include transactions that reflect cash costs to the Company. This limitation is best addressed by using this non-GAAP measure in combination with diluted earnings per share from continuing operations (the most comparable GAAP measure) because the non-GAAP measure does not reflect items that impact current period operating results and may be higher than the most comparable GAAP measure. Management believes that investors may find it useful to evaluate the components of special items and impairment charges and other separately and in the aggregate when reviewing the Company’s performance.

Non-GAAP return on equity. The Company presents the non-GAAP financial measure “non-GAAP return on equity.” This non-GAAP financial measure excludes special items. See the discussion of special items above under the heading “non-GAAP operating earnings and non-GAAP operating earnings

2

growth rate” for information regarding the components of the Company’s special items classification. Management uses this non-GAAP measure to evaluate the Company’s performance. As the Company’s core business is providing health care products and services to the healthcare industry, management finds it useful to use a financial measure that does not include charges and gains associated with restructuring, merger-related activity and litigation. While these special items may be recurring, management believes that these items are not reflective of the day-to-day offering of its products and services and relate more to strategic, multi-year corporate actions, without predictable trends, that may obscure the trends and financial performance of the Company’s core business.

The limitation associated with using this non-GAAP measure is that this measure excludes items that impact the Company’s current period operating results. In most cases, the excluded special items include transactions that reflect cash costs to the Company. This limitation is best addressed by using this non-GAAP measure in combination with return on equity (the most comparable GAAP measure) because the non-GAAP measure does not reflect items that impact current period operating results and may be higher than most comparable GAAP measure. Management believes that investors may find it useful to evaluate the components of special items separately and in the aggregate when reviewing the Company’s performance.

Non-GAAP return on invested capital. The Company presents the non-GAAP financial measure “non-GAAP return on invested capital.” This non-GAAP financial measure excludes special items. See the discussion of special items above under the heading “non-GAAP operating earnings and non-GAAP operating earnings growth rate” for information regarding the components of the Company’s special items classification. Management uses this non-GAAP measure to evaluate the Company’s performance. As the Company’s core business is providing health care products and services to the healthcare industry, management finds it useful to use a financial measure that does not include charges and gains associated with restructuring, merger-related activity and litigation. While these special items may be recurring, management believes that these items are not reflective of the day-to-day offering of its products and services and relate more to strategic, multi-year corporate actions, without predictable trends, that may obscure the trends and financial performance of the Company’s core business.

The limitation associated with using this non-GAAP measure is that this measure excludes items that impact the Company’s current period operating results. In most cases, the excluded special items include transactions that reflect cash costs to the Company. This limitation is best addressed by using this non-GAAP measure in combination with return on invested capital (the most comparable GAAP measure) because the non-GAAP measure does not reflect items that impact current period operating results and may be higher than most comparable GAAP measure. Management believes that investors may find it useful to evaluate the components of special items separately and in the aggregate when reviewing the Company’s performance.

Non-GAAP effective tax rate from continuing operations. The Company presents the non-GAAP financial measure “non-GAAP effective tax rate from continuing operations.” This non-GAAP financial measure excludes special items. See the discussion of special items above under the heading “non-GAAP operating earnings and non-GAAP operating earnings growth rate” for information regarding the components of the Company’s special items classification. Management uses this non-GAAP measure to evaluate the Company’s performance because special items may be taxed differently than other items.

The limitation associated with using this non-GAAP measure is that this measure excludes items that impact the Company’s current period operating results. In most cases, the excluded special items include transactions that reflect cash costs to the Company. This limitation is best addressed by using this non-GAAP measure in combination with effective tax rate from continuing operations (the most comparable GAAP measure) because the non-GAAP measure does not reflect items that impact current period operating results and may be lower or lower than most comparable GAAP measure. Management believes that investors may find this non-GAAP measure useful to evaluate the Company’s future performance because special items may have a different tax impact than other items.

Net debt to capital. The Company also presents the non-GAAP financial measure “net debt to

3

capital,” which is net debt divided by capital (net debt plus total shareholders’ equity). “Net debt,” also a non-GAAP financial measure, is debt (the most comparable GAAP measure, calculated as long-term obligations plus short-term borrowings) minus cash and equivalents and short-term investments available for sale. Management believes that net debt to capital is an important measure to monitor leverage and evaluate the balance sheet. With respect to net debt, cash and equivalents and short-term investments available for sale are subtracted from the GAAP measure because they could be used to reduce the Company’s debt obligations.

The limitation associated with using net debt is that it subtracts cash and equivalents and short-term investments available for sale and therefore may imply that there is less Company debt than the most comparable GAAP measure indicates. This limitation is best addressed by using net debt in combination with debt because net debt may be significantly lower than the GAAP measure. Management believes that investors may find it useful to monitor leverage and evaluate the balance sheet.

4

EX-99.03

2007

October 27, 2006

First Quarter Earnings

Exhibit 99.03

2

Forward-Looking Statements and GAAP Reconciliation

Except

for

historical

information,

all

other

information

in

this

presentation

consists

of

forward-looking

statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. 

These forward-looking statements 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: competitive pressures in its various lines of businesses; the loss of one or

more key customer or supplier relationships or changes to the terms of those relationships; 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 or settlement discussions

with any regulatory authority or any legal and administrative proceedings, including shareholder

litigation; difficulties in opening new facilities or fully utilizing existing capacity; the costs, difficulties

and uncertainties related the integration of acquired businesses; with respect to future dividends, the

decision by the board of directors to declare such dividends, which is expected to consider Cardinal

Health’s surplus, earnings, cash flows, financial condition and prospects at the time any such action

is considered; with respect to future share repurchases, the approval of the board of directors, which

is expected to consider Cardinal Health’s then-current stock price, earnings, cash flows, financial

condition and prospects as well as alternatives available to Cardinal Health at the time any such

action is considered; and general economic and market conditions.  Except to the extent required by

applicable law, Cardinal Health undertakes no obligation to update or revise any forward-looking

statement.  In addition, this presentation includes non-GAAP financial measures.  Cardinal Health

provides definitions and a reconciliation between GAAP and non-GAAP financial information at the

end of this presentation and on its investor relations page at www.cardinalhealth.com.

3

Today’s Agenda

Opening remarks

Kerry Clark

President & Chief

Executive Officer

Financial overview

Jeff Henderson

Chief Financial

Officer

PTS update

David Schlotterbeck

CEO, Pharmaceutical

and Medical Products

Q&A

4

Financial Overview

•

FY 2007 Q1 Results –

Consolidated

•

FY 2007 Q1 Results –

Segments

•

Key Value Drivers

•

FY 2007 Financial Targets and Goals

•

Other Items

5

Revenue

Operating earnings

Earnings from continuing

operations

Diluted EPS

Operating cash flow

Return on equity

Q1 FY 2007 Recap

$ M

% Change

1

$21,357

11%

$     464

23%

$     300

26%

$    0.73

33%

$    722

14.5%

$ M

% Change

1

$     492

23%

$     320

27%

$    0.78

32%

15.3%

GAAP Basis

Note: 

% change over prior year quarter

Non-GAAP Basis

1

6

Q1 Operating Earnings and EPS

6

Operating Earnings

($MM)

Diluted EPS from

Continuing

Operations

Operating Earnings

($MM)

Diluted EPS from

Continuing

Operations

GAAP Consolidated

$464

$0.73

$377

$0.55

Special Items

$24

$0.04

$21

$0.03

Impairment Charges

& Other

$4

$0.01

$3

$0.01

Non-GAAP

Consolidated

$492

$0.78

$400

$0.59

Non-Recurring &

Other Items

$32

$0.05

Q1 FY 2007

Q1 FY 2006

7

Cardinal Health Business Analysis

Healthcare Supply Chain Services -

Pharmaceutical

Q1 FY ‘07        Q1 FY ‘06

$ M                  $ M

% change        

Revenue                      

$  18,505

$ 16,509            12%

Operating earnings                        

$       301          $      243            24%

Non-recurring and other items                                      $

32

Highlights:

•

Economic Profit margin   increased 15 basis points to 0.76% vs. prior year

•

Strong

growth

in

generics

driven

by

recent

new

item

launches

and

strategic

sourcing

•

Integration

of

F.

Dohmen

Co.

and

Parmed

progressing

well

•

Efficient inventory management, as days inventory on hand declined 2 days vs. prior year

•

Strong earnings growth from nuclear pharmacy services

•

$32 million non-recurring and other items charge related to vendor credits from prior periods

recorded in Q1 FY’06

Note: 

Non-GAAP financial measure

1

1

8

Cardinal Health Business Analysis

Healthcare

Supply

Chain

Services

-

Medical

Q1 FY ‘07        Q1 FY ‘06

$ M                  $ M

% change        

Revenue                      

$   1,806

$   1,763            2%

Operating earnings                        

$        74          $        82         (10%)

Highlights:

•

Economic Profit margin declined 64 basis points to 1.17% due to earnings decline and increased

capital deployed

•

Customer service consolidation and new sales organization (IPS) impacting revenue growth during

transition period

•

Competitive

pricing

pressure

within

Presource

surgical

kitting

business

•

Strong growth from Canadian medical distribution and lab distribution businesses

9

Cardinal Health Business Analysis

Clinical Technologies and Services

Q1 FY ‘07        Q1 FY ‘06

$ M                  $ M

% change        

Revenue                      

$       594         $     

576

3%

Operating earnings                           

$        68          $        78

(14%)

Highlights:

•

New product launch delays in medication technologies (Pyxis and Alaris) impacted revenue and

earnings during the quarter

•

Earnings negatively impacted by Alaris SE recall, including a $13.5 million charge in Q1 related

to the current estimate of the cost to resolve the key bounce issue

•

Good earnings growth in Pyxis supply technologies

•

Earnings dampened by continued investment in R&D

•

Continued investments in product quality and customer service resulting in improved customer

service ratings

10

Cardinal Health Business Analysis

Pharmaceutical Technologies and Services

Q1 FY ‘07        Q1 FY ‘06

$ M                  $ M

% change        

Revenue                      

$      451

$      411           10%

Operating earnings                        

$        22          $        20           13%

Highlights:

•

Good earnings growth from oral technologies and packaging services

•

Strong demand for proprietary technologies, led by Zydis

•

Continued progress made N. Raleigh manufacturing site

–

expect to be profitable by end of fiscal year

•

Continued operational and equipment issues at Albuquerque sterile manufacturing facility

•

Major customer volume reduction in Woodstock sterile manufacturing facility

11

Cardinal Health Business Analysis

Medical Products Manufacturing

Q1 FY ‘07        Q1 FY ‘06

$ M                  $ M

% change        

Revenue                      

$      424

$      383           11%

Operating earnings                        

$        61          $        53           15%

Highlights:

•

Revenue

growth

driven

by

strong

demand

for

respiratory

products,

convertors

and

gloves

•

Integration of Denver Biomedical ahead of plan

•

Operating margin improvements driven by manufacturing improvements and previous

facility restructurings

•

Product

innovation

–

new

latex

free,

coated

surgeons

gloves

•

Earnings growth dampened by increased investment in R&D spending

12

FY 2007 –

Key Value Drivers

Operating Growth

–

Strong demand for products and services drive revenue growth

–

Within Healthcare Supply Chain Services, leverage of scale, capital

efficiency and operational excellence should drive Economic Profit

margin expansion

–

Within Pharmaceutical and Medical Products, operational excellence,

product innovation and international expansion should drive operating

margin expansion

–

SG&A moderation

–

Declining equity compensation expense

Balance sheet management

–

Focus on return on capital, economic profit margin and economic profit

–

Continued portfolio optimization

Disciplined capital deployment

FY 2007 Financial Targets & Goals

13

Over FY'07 - FY'09 3 Year Period:

Fiscal Year 2007

Revenue:

+ 8 - 10%

At or above the high end of long-term goal

EPS ¹:

+ 12 - 15%

$3.50 - $3.70 per share (includes equity compensation expense)

Operating

FY07 OE ²

growth

Segment

Revenue

Earnings ²

vs. long-term target

Drivers

HSCS - Pharma

+ 7 - 10%

+ 7 - 10%

In range

*

Strong bulk growth; generic launches; cost control; stable to increasing

EP margins driven by efficient capital usage; impact of Dohmen acquisition

*

Sell margin pressure; stable to declining operating margins due to sales

mix (driven by lower-margin bulk revenue growth)

HSCS - Medical

+ 4 - 7%

+ 6 - 9%

In range

*

Strong corporate brand sales growth; cost control; stable to increasing

operating margins; stable EP margins

*

Launch of IPS and customer service consolidations

MPM

+ 6 - 8%

+ 10 - 12%

Above range

*

New contracts; product innovation; international growth; impact of

restructuring and sourcing initiatives; impact of DBI acquisition

PTS

+ 6 - 9%

+ 8 - 15%

Low end of range

*

Packaging growth; value pricing; increasing operating margins due to

operational improvements

*

Opening of N. Raleigh and Brussels facilities; stable Oral

CTS

+ 10 - 15%

+ 15 - 20%

Below range

*

Strong product demand for Alaris and Pyxis products; new product

launches; continued impact of operational improvements; international

expansion; impact of MedMined acquisition

*

Increased investment in innovation, quality and service

*

Current estimate of SE pump fix; impact of Care Fusion acquisition

Return on Equity ³

:

15% - 20%

In line with long-term goal

Operating Cash Flow:

> 100% of net earnings

In line with long-term goal

Cash Returned

up to 50% of OCF, via share

- Quarterly dividend increased 50% to $0.09 per share

to Shareholders:

     repurchase and dividends

- Announced $2 billion multi-year repurchase in August 2006

Credit Rating:

Strong investment grade

Continued progress from BBB

1 

Non-GAAP diluted EPS from continuing operations.

2

  Segment operating earnings growth rates represent organic growth only (except as noted).

3

  Non-GAAP return on equity.

One Year Targets

Long-Term Financial Goals

14

Other Items

Generics

–

Global focus / leveraging scale across all of Cardinal

–

Strategic initiatives

•

Worldwide sourcing capabilities

•

Strategic product ownership

–

Growth

•

Proprietary Source program

•

Customer contract compliance

•

New customers

One Cardinal Health update

15

Q&A