2007

January 25, 2007

Second Quarter Earnings

Exhibit 99.01

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; uncertainties related to divesting the

PTS segment, including uncertainties as to the amount of proceeds and timing; 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

Q&A

4

Financial Overview

•

FY 2007 Q2 Results –

Consolidated

•

FY 2007 Q2 Results –

Segments

•

Key Value Drivers

•

FY 2007 Financial Targets and Goals

•

Historical M&A update

•

Other Items

5

Revenue

Operating earnings

Earnings from continuing

operations

Diluted EPS from continuing

operations

Operating cash flow

Return on equity ²

Q2 FY 2007 Recap

$ M

% Change

1

$21,785

13%

$     512

12%

$     316

10%

$    0.77

17%

$     (52)

34.1%

$ M

% Change

1

$     544

16%

$     341

15%

$    0.83

20%

15.2%

GAAP Basis

Note:  1  % change over prior year quarter

2 

See definitions for an explanation of changes in

calculating Return on Equity from prior periods

Non-GAAP Basis

6

Q2 Operating Earnings and EPS

6

Operating Earnings

($M)

Diluted EPS from

Continuing

Operations

Operating Earnings

($M)

Diluted EPS from

Continuing

Operations

GAAP Consolidated

$512

$0.77

$457

$0.66

Special Items

$20

$0.03

$14

$0.03

Impairment Charges

& Other

$13

$0.03

($3)

$0.00

Non-GAAP

Consolidated

$544

$0.83

$469

$0.69

Non-Recurring &

Other Items

($3)

($0.01)

Q2 FY 2007

Q2 FY 2006

7

Cardinal Health Business Analysis

Healthcare Supply Chain Services -

Pharmaceutical

Q2 FY ‘07        Q2 FY ‘06

$ M                  $ M

% change        

Revenue                      

$  19,238

$ 16,977            13%

Operating earnings                        

$       328          $      276            19%

Non-recurring and other items                                      $

(3)

Highlights:

•

Economic profit margin   increased 9 basis points to 0.82% vs. prior year

•

Direct-store-door

(DSD)

pharmaceutical

sales

grew

14%

and

bulk

customer

sales

grew

22%

•

Strong

growth

in

generics

driven

by

recent

new

item

launches

and

strategic

sourcing

•

Earnings

growth

partially

offset

by

lower

pricing

in

the

renewal

of

several

large

customer

agreements

•

Integration of F. Dohmen

Co. and Parmed

progressing well

•

Strong earnings growth from nuclear pharmacy services

•

Q2’

07 equity compensation expense of $13.7 million vs. $15.3 million in prior year

Note: 

Non-GAAP financial measure

1

1

8

Cardinal Health Business Analysis

Healthcare Supply Chain Services -

Medical

Q2 FY ‘07        Q2 FY ‘06

$ M                  $ M

% change        

Revenue                      

$   1,872

$   1,770            6%

Operating earnings                        

$        78          $        70          12%

Highlights:

•

Economic profit margin

declined 6 basis points to 1.12%  vs. prior year

•

Revenue growth driven by strong sales in laboratory business, private brand product portfolio and

continued momentum with surgery center customers and within the Canadian operations

•

SG&A growth moderating due to focused cost controls and One Cardinal Health benefits

•

Customer service transition metrics improving; however, still negatively impacting results

•

Q2 ’07 equity compensation expense of $8.1 million vs. $9.9 million in prior year

Note: 

Non-GAAP financial measure

1

1

9

Cardinal Health Business Analysis

Clinical Technologies and Services

Q2 FY ‘07        Q2 FY ‘06

$ M                  $ M

% change        

Revenue                      

$      662          $      603           10%

Operating earnings                           

$        92          $        79

16%

Highlights:

•

New product release of upgraded Pyxis MedStation 3500

•

Strong demand for both Pyxis and Alaris products as committed contracts were up significantly

over prior year and sequentially

•

Good progress with integrated medication safety and management offering (Alaris, Pyxis and Care

Fusion)

•

Continued

investments

in

international

markets

to

support

future

growth

•

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

service ratings

•

Q2 ’07 equity compensation expense of $10.7 million vs. $12.4 million in prior year

10

Cardinal Health Business Analysis

Medical Products Manufacturing

Q2 FY ‘07        Q2 FY ‘06

$ M                  $ M

% change        

Revenue                      

$      455

$      397           15%

Operating earnings                        

$        51          $        42           21%

Highlights:

•

Solid demand across the segment contributed to revenue growth, including infection prevention

products, medical specialties and in international markets

•

Raw material cost pressures offset by contract and pricing discipline

•

Operating margin improvements driven by manufacturing improvements, facility restructurings and

other One Cardinal initiatives

•

Product

innovation

–

synthetic

gloves,

respiratory

and

interventional

radiology

•

Continued investment in international markets and R&D spending

•

Q2 ’07 equity compensation expense of $7.7 million vs. $9.1 million in prior year

11

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, including declining equity compensation expense

Balance sheet management

–

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

–

Continued portfolio optimization

Disciplined capital deployment

13

Acquisition Scorecard

Acquisition

Date

Results

Care Fusion (CTS)

October ’06

(+)

MedMined (CTS)

July ’06

(+)

Dohmen

(HSCS-P)

June ’06

(+)

Denver Biomedical (MPM)

May ’06

(+)

Parmed

(HSCS-P)

March ’06

(+)

Source Medical (HSCS-M)

November ’05

(+)

Geodax

(HSCS-P)

July ’04

(+)

Alaris (CTS)

June ’04

(+)

Snowden Pencer

(MPM)

March ’04

(–)

14

Other Items

PTS Update

–

Impact on FY 2007 EPS

–

Timing

–

Tax basis

Segment reporting changes

–

Re-class of PTS corporate expense allocation

–

Equity compensation allocation

15

Q&A

CARDINAL HEALTH, INC. AND SUBSIDIARIES

GAAP / NON-GAAP RECONCILIATION

(1)  Tangible

Capital

is

a

quarterly

average

calculated

as

total

assets

allocated

to

the

segment

less

(total

liabilities

allocated

to

the

segment,

goodwill

and

intangibles,

cash and equivalents and short term investments available for sale)

(2)  The sum of the components may not equal due to rounding

(in millions)

HEALTHCARE SUPPLY CHAIN SERVICES

Fiscal 2007

Pharmaceutical

July

August

September

Total

October

November

December

Total

YTD

Economic Profit Margin

Operating earnings

288.7

$         

328.0

$         

616.7

$          

Effective tax rate from continuing operations

36.2%

36.2%

36.2%

Net operating earnings, after-tax (NOPAT)

184.2

$         

209.3

$         

393.5

$          

Total assets

11,549.8

$ 

12,206.9

$ 

11,527.6

$    

11,781.8

$ 

11,624.6

$   

11,663.1

$   

Less:  assets from discontinued operations

107.5

109.4

-

-

-

-

Less:  accounts payable

6,644.9

7,115.6

6,979.1

6,897.3

6,836.3

6,912.9

Less:  other accrued liabilities

1,069.5

1,088.6

942.2

1,092.8

1,100.2

1,036.3

Less:  liabilities from businesses held for sale

-

-

-

-

-

-

Less:  deferred income taxes and other liabilities

82.1

82.1

52.8

89.3

89.7

71.6

Less:  goodwill and other intangibles, net

1,354.5

1,361.8

1,332.4

1,328.7

1,335.0

1,335.7

Less:  cash and equivalents

42.2

57.4

75.0

91.3

102.7

113.6

Less:  short-term investments available for sale

-

-

-

-

-

-

Tangible capital

2,249.1

$   

2,392.0

$   

2,146.1

$      

2,262.4

$      

2,282.4

$   

2,160.7

$     

2,193.0

$     

2,212.0

$      

2,237.2

$       

Multiplied by weighted average cost of capital

2.3%

2.3%

2.3%

Capital charge

52.0

$           

50.9

$           

51.5

$            

Economic profit

132.2

$         

158.4

$         

342.0

$          

Revenue

18,532.8

$    

19,237.6

$    

37,770.4

$     

Economic profit margin

0.71%

0.82%

0.91%

First Quarter Fiscal 2007

Second Quarter Fiscal 2007

CARDINAL HEALTH, INC. AND SUBSIDIARIES

GAAP / NON-GAAP RECONCILIATION

(1)  Tangible

Capital

is

a

quarterly

average

calculated

as

total

assets allocated to the segment less (total liabilities allocated to the segment,  goodwill and intangibles,

cash and equivalents and short term investments available for sale)

(2)  The sum of the components may not equal due to rounding

(in millions)

HEALTHCARE SUPPLY CHAIN SERVICES

Fiscal 2006

Pharmaceutical

July

August

September

Total

October

November

December

Total

YTD

Economic Profit Margin

Operating earnings

225.1

$         

276.0

$         

501.1

$          

Effective tax rate from continuing operations

36.8%

36.8%

36.8%

Net operating earnings, after-tax (NOPAT)

142.3

$         

174.4

$         

316.7

$          

Total assets

10,521.1

$ 

10,384.3

$ 

11,050.2

$    

10,499.1

$ 

10,379.0

$   

10,760.7

$   

Less:  assets from discontinued operations

173.1

188.3

191.0

197.3

190.6

178.1

Less:  accounts payable

5,506.3

5,692.3

6,238.9

5,626.8

5,867.5

6,167.7

Less:  other accrued liabilities

970.8

912.7

890.1

929.7

899.0

847.0

Less:  liabilities from businesses held for sale

222.9

222.9

222.9

186.3

186.3

186.3

Less:  deferred income taxes and other liabilities

109.1

106.4

44.5

107.6

107.7

43.6

Less:  goodwill and other intangibles, net

962.4

958.6

1,168.0

959.5

958.1

1,157.3

Less:  cash and equivalents

59.2

66.6

70.3

80.3

88.9

108.2

Less:  short-term investments available for sale

-

-

-

-

-

-

Tangible capital

2,517.3

$   

2,236.5

$   

2,224.5

$      

2,326.1

$      

2,411.6

$   

2,080.9

$     

2,072.5

$     

2,188.3

$      

2,257.2

$       

Multiplied by weighted average cost of capital

2.3%

2.3%

2.3%

Capital charge

53.5

$           

50.3

$           

51.9

$            

Economic profit

88.8

$           

124.1

$         

264.8

$          

Revenue

16,532.8

$    

16,977.2

$    

33,510.0

$     

Economic profit margin

0.54%

0.73%

0.79%

Second Quarter Fiscal 2006

First Quarter Fiscal 2006

CARDINAL HEALTH, INC. AND SUBSIDIARIES

GAAP / NON-GAAP RECONCILIATION

(1)  Tangible Capital is a quarterly average calculated as total

assets allocated to the segment less (total liabilities allocated to the segment,  goodwill and intangibles,

cash and equivalents and short term investments available for sale)

(2)  The sum of the components may not equal due to rounding

(in millions)

HEALTHCARE SUPPLY CHAIN SERVICES

Fiscal 2006

Medical

July

August

September

Total

October

November

December

Total

YTD

Economic Profit Margin

Operating earnings

62.8

$           

69.6

$           

132.5

$          

Effective tax rate from continuing operations

30.1%

30.1%

30.1%

Net operating earnings, after-tax (NOPAT)

43.9

$           

48.7

$           

92.6

$            

Total assets

2,259.7

$   

2,197.7

$   

2,255.0

$      

2,315.9

$   

2,357.9

$     

2,379.9

$     

Less:  assets from discontinued operations

-

-

-

-

-

-

Less:  accounts payable

496.2

439.0

534.4

530.4

481.4

498.2

Less:  other accrued liabilities

186.0

182.9

143.5

167.9

174.1

138.9

Less:  liabilities from businesses held for sale

-

-

-

-

-

-

Less:  deferred income taxes and other liabilities

74.1

74.9

69.5

75.6

58.5

52.6

Less:  goodwill and other intangibles, net

396.5

397.6

396.8

396.8

415.9

416.2

Less:  cash and equivalents

8.4

8.0

8.5

8.4

9.1

10.0

Less:  short-term investments available for sale

-

-

-

-

-

-

Tangible capital

1,098.5

$   

1,095.3

$   

1,102.3

$      

1,098.7

$      

1,136.8

$   

1,218.9

$     

1,264.0

$     

1,206.6

$      

1,152.6

$       

Multiplied by weighted average cost of capital

2.3%

2.3%

2.3%

Capital charge

25.3

$           

27.8

$           

26.5

$            

Economic profit

18.6

$           

20.9

$           

66.1

$            

Revenue

1,762.6

$      

1,770.2

$      

3,532.8

$       

Economic profit margin

1.06%

1.18%

1.87%

First Quarter Fiscal 2006

Second Quarter Fiscal 2006

(in millions)

2007

2006

Non-GAAP Operating Margin

Operating earnings

512.1

$          

457.1

$          

Special items

19.6

14.3

Impairment charges and other

12.6

(2.6)

  Non-GAAP operating earnings

544.3

$          

468.8

$          

Revenue

21,784.6

$     

19,346.9

$     

Non-GAAP operating margin

2.50%

2.42%

Second Quarter

CARDINAL HEALTH, INC. AND SUBSIDIARIES

GAAP / NON-GAAP RECONCILIATION