EX-99.1 2 dex991.htm FINANCIAL TABLES Financial Tables

Exhibit 99.1

CARDINAL HEALTH, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)

 

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

Revenue

    $ 22,925.6     $ 22,262.8     3 %

Cost of products sold

      21,456.2       20,905.4     3 %
                  

Gross margin

      1,469.4       1,357.4     8 %

Selling, general and administrative expenses

      901.3       819.3     10 %

Impairment charges and other

      (10.0 )     (0.6 )   N.M.  

Special items:

       

Restructuring charges

      10.9       11.7     N.M.  

Acquisition integration charges

      25.1       87.5     N.M.  

Litigation and other

      6.4       19.0     N.M.  
                  

Operating earnings

      535.7       420.5     27 %

Interest expense and other

      47.4       19.1     148 %
                  

Earnings before income taxes and discontinued operations

      488.3       401.4     22 %

Provision for income taxes

      166.7       163.7     2 %
                  

Earnings from continuing operations

      321.6       237.7     35 %

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

      (3.6 )     664.5     N.M.  
                  

Net earnings

    $ 318.0     $ 902.2     (65 )%
                  

Basic earnings / (loss) per Common Share:

       

Continuing operations

    $ 0.90     $ 0.63     44 %

Discontinued operations

      (0.01 )     1.76     N.M.  
                  

Net basic earnings per Common Share

    $ 0.89     $ 2.39     (63 )%
                  

Diluted earnings / (loss) per Common Share:

       

Continuing operations

    $ 0.89     $ 0.61     46 %

Discontinued operations

      (0.01 )     1.72     N.M.  
                  

Net diluted earnings per Common Share

    $ 0.88     $ 2.33     (62 )%
                  

Weighted average number of Common Shares outstanding:

       

Basic

      355.5       378.2    

Diluted

      359.8       387.4    

 

The results above reflect changes described in the Company’s August 13, 2008 Form 8-K.

 

- 1 -

CARDINAL HEALTH, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)

 

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

Revenue

    $ 91,091.4     $ 86,852.0    5 %

Cost of products sold

      85,457.3       81,606.7    5 %
                 

Gross margin

      5,634.1       5,245.3    7 %

Selling, general and administrative expenses

      3,414.8       3,082.3    11 %

Impairment charges and other

      (32.0 )     17.3    N.M.  

Special items:

        

Restructuring charges

      65.7       40.1    N.M.  

Acquisition integration charges

      44.9       101.5    N.M.  

Litigation and other

      19.5       630.4    N.M.  
                 

Operating earnings

      2,121.2       1,373.7    54 %

Interest expense and other

      171.4       121.4    41 %
                 

Earnings before income taxes and discontinued operations

      1,949.8       1,252.3    56 %

Provision for income taxes

      633.9       412.6    54 %
                 

Earnings from continuing operations

      1,315.9       839.7    57 %

Earnings / (loss) from discontinued operations (net of tax expense of $31.9 and $20.4 for fiscal 2008 and 2007, respectively)

      (15.3 )     1,091.4    N.M.  
                 

Net earnings

    $ 1,300.6     $ 1,931.1    (33 )%
                 

Basic earnings / (loss) per Common Share:

        

Continuing operations

    $ 3.67     $ 2.13    73 %

Discontinued operations

      (0.04 )     2.76    N.M.  
                 

Net basic earnings per Common Share

    $ 3.63     $ 4.89    (26 )%
                 

Diluted earnings / (loss) per Common Share:

        

Continuing operations

    $ 3.61     $ 2.07    74 %

Discontinued operations

      (0.04 )     2.70    N.M.  
                 

Net diluted earnings per Common Share

    $ 3.57     $ 4.77    (25 )%
                 

Weighted average number of Common Shares outstanding:

        

Basic

      358.2       394.9   

Diluted

      364.0       404.7   

 

The results above reflect changes described in the Company’s August 13, 2008 Form 8-K.

 

- 2 -

CARDINAL HEALTH, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 

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

Assets

      

Cash and equivalents

    $ 1,291.3    $ 1,308.8

Short-term investments available for sale

      —        132.0

Trade receivables, net

      5,006.9      4,714.4

Current portion of net investment in sales-type leases

      383.7      354.8

Inventories

      6,768.8      7,383.2

Prepaid expenses and other

      593.1      651.3

Assets held for sale

      140.4      —  
             

Total current assets

      14,184.2      14,544.5
             

Property and equipment, net

      1,737.2      1,647.0

Net investment in sales-type leases, less current portion

      916.8      820.7

Goodwill and other intangibles, net

      6,225.9      5,860.9

Other assets

      384.1      280.7
             

Total assets

    $ 23,448.2    $ 23,153.8
             

Liabilities and Shareholders’ Equity

      

Current portion of long-term obligations and other short-term borrowings

    $ 159.0    $ 16.0

Accounts payable

      8,311.8      9,162.2

Other accrued liabilities

      1,889.7      2,247.3

Liabilities from businesses held for sale and discontinued operations

      15.4      34.2
             

Total current liabilities

      10,375.9      11,459.7
             

Long-term obligations, less current portion and other short-term borrowings

      3,687.4      3,457.3

Deferred income taxes and other liabilities

      1,637.4      859.9

Total shareholders’ equity

      7,747.5      7,376.9
             

Total liabilities and shareholders’ equity

    $ 23,448.2    $ 23,153.8
             

 

The results above reflect changes described in the Company’s August 13, 2008 Form 8-K.

 

- 3 -

CARDINAL HEALTH, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

 

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

Cash Flows From Operating Activities:

         

Net earnings

    $ 318.0     $ 902.2     $ 1,300.6     $ 1,931.1  

(Earnings) / loss from discontinued operations

      3.6       (664.5 )     15.3       (1,091.4 )
                                

Earnings from continuing operations

      321.6       237.7       1,315.9       839.7  

Adjustments to reconcile earnings from continuing operations to net cash provided by / (used in) operating activities:

         

Depreciation and amortization

      96.3       85.0       381.3       322.1  

Asset impairments and other

      (10.6 )     1.2       (31.4 )     19.2  

Purchased in-process research and development

      18.0       84.5       18.0       84.5  

Equity compensation

      35.6       28.8       122.3       138.1  

Provision for deferred income taxes

      26.9       11.7       26.9       11.7  

Provision for bad debts

      3.8       7.0       26.1       24.0  

Change in operating assets and liabilities, net of effects from acquisitions:

         

(Increase) / decrease in trade receivables

      (17.8 )     36.6       (312.7 )     (783.1 )

Decrease in inventories

      499.3       205.9       613.1       217.4  

Increase in net investment in sales-type leases

      (41.1 )     (53.8 )     (124.9 )     (130.8 )

Increase / (decrease) in accounts payable

      (595.9 )     (268.6 )     (813.1 )     224.4  

Increase / (decrease) in other accrued liabilities and operating items, net

      (89.4 )     (667.6 )     337.6       35.8  
                                

Net cash provided by / (used in) operating activities - continuing operations

      246.7       (291.6 )     1,559.1       1,003.0  

Net cash provided by / (used in) operating activities - discontinued operations

      (4.4 )     104.9       (47.0 )     220.1  
                                

Net cash provided by / (used in) operating activities

      242.3       (186.7 )     1,512.1       1,223.1  
                                

Cash Flows From Investing Activities:

         

Acquisition of subsidiaries, net of divestitures and cash acquired

      (475.9 )     (1,480.9 )     (514.9 )     (1,629.8 )

Proceeds from sale of property and equipment

      22.4       5.6       32.6       9.2  

Additions to property and equipment

      (124.5 )     (114.3 )     (376.1 )     (357.4 )

Sale of investment securities available for sale, net

      —         168.0       132.0       366.5  
                                

Net cash used in investing activities - continuing operations

      (578.0 )     (1,421.6 )     (726.4 )     (1,611.5 )

Net cash provided by investing activities - discontinued operations

      —         3,228.9       —         3,148.7  
                                

Net cash provided by / (used in) investing activities

      (578.0 )     1,807.3       (726.4 )     1,537.2  
                                

Cash Flows From Financing Activities:

         

Net change in commercial paper and short-term borrowings

      (202.7 )     (293.3 )     (0.5 )     (38.9 )

Reduction of long-term obligations

      (4.6 )     (51.1 )     (21.5 )     (784.0 )

Proceeds from long-term obligations, net of issuance costs

      302.5       601.7       303.5       1,453.4  

Proceeds from issuance of Common Shares

      18.6       233.7       227.9       552.6  

Tax benefits from exercises of stock options

      26.8       1.1       42.1       29.9  

Dividends on Common Shares

      (42.6 )     (34.9 )     (173.1 )     (144.4 )

Purchase of Common Shares in treasury

      —         (1,636.7 )     (1,181.6 )     (3,662.0 )
                                

Net cash provided by / (used in) financing activities - continuing operations

      98.0       (1,179.5 )     (803.2 )     (2,593.4 )

Net cash provided by / (used in) financing activities - discontinued operations

      —         1.2       —         (45.4 )
                                

Net cash provided by / (used) in financing activities

      98.0       (1,178.3 )     (803.2 )     (2,638.8 )
                                

Net increase / (decrease) in cash and equivalents

      (237.7 )     442.3       (17.5 )     121.5  

Cash and equivalents at beginning of period

      1,529.0       866.5       1,308.8       1,187.3  
                                

Cash and equivalents at end of period

    $ 1,291.3     $ 1,308.8     $ 1,291.3     $ 1,308.8  
                                

 

The results above reflect changes described in the Company’s August 13, 2008 Form 8-K.

 

- 4 -

CARDINAL HEALTH, INC. AND SUBSIDIARIES

BUSINESS ANALYSIS

TOTAL COMPANY

 

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

Revenue

         

Amount

    $ 22,926     $ 22,263      

Growth Rate

      3 %     5 %    

Operating Earnings

         

Amount

    $ 536     $ 421     $ 568     $ 538  

Growth Rate

      27 %     (14 )%     6 %     3 %

Earnings from Continuing Operations

         

Amount

    $ 322     $ 238     $ 348     $ 345  

Growth Rate

      35 %     (22 )%     1 %     5 %
     Fiscal Year     Non-GAAP
Fiscal Year		  
(in millions)    2008     2007     2008     2007  

Revenue

         

Amount

    $ 91,091     $ 86,852      

Growth Rate

      5 %     9 %    

Operating Earnings

         

Amount

    $ 2,121     $ 1,374     $ 2,219     $ 2,163  

Growth Rate

      54 %     (26 )%     3 %     12 %

Earnings from Continuing Operations

         

Amount

    $ 1,316     $ 840     $ 1,385     $ 1,384  

Growth Rate

      57 %     (28 )%     —         13 %

 

The results above reflect changes described in the Company’s August 13, 2008 Form 8-K.

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

 

- 5 -

CARDINAL HEALTH, INC. AND SUBSIDIARIES

SEGMENT BUSINESS ANALYSIS

HEALTHCARE SUPPLY CHAIN SERVICES

 

     Fourth Quarter  
(in millions)    2008     2007  

PHARMACEUTICAL

     

Revenue

     

Amount

    $ 19,819     $ 19,556  

Growth Rate

      1 %     4 %

Mix

      85 %     86 %

Segment Profit

     

Amount

    $ 258     $ 303  

Growth Rate

      (15 )%     (3 )%

Mix

      44 %     52 %

Segment Profit Margin

      1.30 %     1.55 %

MEDICAL

     

Revenue

     

Amount

    $ 2,082     $ 1,929  

Growth Rate

      8 %     5 %

Mix

      9 %     9 %

Segment Profit

     

Amount

    $ 81     $ 83  

Growth Rate

      (3 )%     (2 )%

Mix

      14 %     14 %

Segment Profit Margin

      3.89 %     4.32 %
CLINICAL AND MEDICAL PRODUCTS  
     Fourth Quarter  
(in millions)    2008     2007  

CLINICAL TECHNOLOGIES AND SERVICES

     

Revenue

     

Amount

    $ 780     $ 756  

Growth Rate

      3 %     17 %

Mix

      3 %     3 %

Segment Profit

     

Amount

    $ 156     $ 144  

Growth Rate

      8 %     50 %

Mix

      26 %     24 %

Segment Profit Margin

      20.01 %     19.06 %

MEDICAL PRODUCTS AND TECHNOLOGIES

     

Revenue

     

Amount

    $ 727     $ 500  

Growth Rate

      46 %     14 %

Mix

      3 %     2 %

Segment Profit

     

Amount

    $ 95     $ 58  

Growth Rate

      63 %     27 %

Mix

      16 %     10 %

Segment Profit Margin

      13.01 %     11.60 %

 

Refer to definitions for an explanation of calculations.

 

- 6 -

CARDINAL HEALTH, INC. AND SUBSIDIARIES

SEGMENT BUSINESS ANALYSIS

HEALTHCARE SUPPLY CHAIN SERVICES

 

     Fiscal Year  
(in millions)    2008     2007  

PHARMACEUTICAL

     

Revenue

     

Amount

    $ 79,284     $ 76,573  

Growth Rate

      4 %     9 %

Mix

      85 %     86 %

Segment Profit

     

Amount

    $ 1,122     $ 1,300  

Growth Rate

      (14 )%     14 %

Mix

      50 %     59 %

Segment Profit Margin

      1.41 %     1.70 %

MEDICAL

     

Revenue

     

Amount

    $ 8,084     $ 7,514  

Growth Rate

      8 %     4 %

Mix

      9 %     9 %

Segment Profit

     

Amount

    $ 303     $ 318  

Growth Rate

      (5 )%     1 %

Mix

      14 %     14 %

Segment Profit Margin

      3.75 %     4.23 %
CLINICAL AND MEDICAL PRODUCTS  
     Fiscal Year  
(in millions)    2008     2007  

CLINICAL TECHNOLOGIES AND SERVICES

     

Revenue

     

Amount

    $ 2,890     $ 2,687  

Growth Rate

      8 %     11 %

Mix

      3 %     3 %

Segment Profit

     

Amount

    $ 497     $ 386  

Growth Rate

      29 %     20 %

Mix

      22 %     18 %

Segment Profit Margin

      17.18 %     14.35 %

MEDICAL PRODUCTS AND TECHNOLOGIES

     

Revenue

     

Amount

    $ 2,696     $ 1,836  

Growth Rate

      47 %     12 %

Mix

      3 %     2 %

Segment Profit

     

Amount

    $ 300     $ 198  

Growth Rate

      52 %     20 %

Mix

      14 %     9 %

Segment Profit Margin

      11.14 %     10.76 %

 

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

 

- 7 -

CARDINAL HEALTH, INC. AND SUBSIDIARIES

ASSET MANAGEMENT ANALYSIS

 

     Fourth Quarter     Fiscal Year  
     2008     2007     2008     2007  

Receivable Days

    20.9     20.5      

Days Inventory on Hand

    25     28      

Debt to Total Capital

    33 %   32 %    

Net Debt to Capital

    25 %   22 %    

Return on Equity

    16.8 %   47.3 %   17.7 %   23.5 %

Non-GAAP Return on Equity

    18.4 %   17.3 %   19.0 %   16.9 %

Return on Invested Capital

    6.72 %   18.43 %   6.97 %   9.38 %

Non-GAAP Return on Invested Capital

    8.00 %   7.00 %   8.06 %   7.14 %

Effective Tax Rate from Continuing Operations

   34.1 %   40.8 %   32.5 %   33.0 %

Non-GAAP Effective Tax Rate from Continuing Operations

    33.7 %   33.5 %   32.6 %   32.4 %

 

The results above reflect changes described in the Company’s August 13, 2008 Form 8-K.

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

 

- 8 -

CARDINAL HEALTH, INC. AND SUBSIDIARIES

SCHEDULE OF NOTABLE ITEMS

 

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

Special Items

         

Restructuring charges

    $ (10.9 )   $ (11.7 )   $ (65.7 )   $ (40.1 )

Acquisition integration charges

      (25.1 )     (87.5 )     (44.9 )     (101.5 )

Litigation and other

      (6.4 )     (19.0 )     (19.5 )     (630.4 )
                                

Total special items

      (42.4 )     (118.2 )     (130.1 )     (772.0 )

Tax benefit

      12.0       10.4       43.8       243.1  
                                

Special items, net of tax

    $ (30.4 )   $ (107.8 )   $ (86.3 )   $ (528.9 )
                                

Decrease to diluted EPS from continuing operations

    $ (0.09 )   $ (0.28 )   $ (0.24 )   $ (1.31 )
                                

Impairment Charges and Other

         

Impairment charges and other

    $ 10.0     $ 0.6     $ 32.0     $ (17.3 )

Tax benefit / (expense)

      (6.0 )     (0.2 )     (14.4 )     1.6  
                                

Impairment charges and other, net of tax

    $ 4.0     $ 0.4     $ 17.6     $ (15.7 )
                                

Increase / (decrease) to diluted EPS from continuing operations

    $ 0.01     $ —     $ 0.05     $ (0.04 )
                                

Weighted Average Number of Diluted Shares Outstanding

      359.8       387.4       364.0       404.7  

 

The results above reflect changes described in the Company’s August 13, 2008 Form 8-K.

 

- 9 -

CARDINAL HEALTH, INC. AND SUBSIDIARIES

GAAP / NON-GAAP RECONCILIATION

 

     Fourth Quarter 2008     Fiscal Year 2008  
(in millions, except per Common Share
amounts)		    GAAP     Special Items    Impairment
Charges and
Other		     Non-GAAP     GAAP     Special Items    Impairment
Charges and
Other		     Non-GAAP  

Operating Earnings

                   

Amount

    $ 536     $ 42    $ (10 )   $ 568     $ 2,121     $ 130    $ (32 )   $ 2,219  

Growth Rate

      27 %          6 %     54 %          3 %

Provision for Income Taxes

    $ 167     $ 12    $ (6 )   $ 173     $ 634     $ 44    $ (14 )   $ 663  

Earnings from Continuing Operations

                   

Amount

    $ 322     $ 30    $ (4 )   $ 348     $ 1,316     $ 86    $ (18 )   $ 1,385  

Growth Rate

      35 %          1 %     57 %          —    

Diluted EPS from Continuing Operations

                   

Amount

    $ 0.89     $ 0.09    $ (0.01 )   $ 0.97     $ 3.61     $ 0.24    $ (0.05 )   $ 3.80  

Growth Rate

      46 %          9 %     74 %          11 %
     Fourth Quarter 2007     Fiscal Year 2007  
     GAAP     Special Items    Impairment
Charges and
Other		     Non-GAAP     GAAP     Special Items    Impairment
Charges
and Other		     Non-GAAP  

Operating Earnings

                   

Amount

    $ 421     $ 118    $ (1 )   $ 538     $ 1,374     $ 772    $ 17     $ 2,163  

Growth Rate

      (14 )%          3 %     (26 )%          12 %

Provision for Income Taxes

    $ 164     $ 10      —       $ 174     $ 413     $ 243    $ 2     $ 657  

Earnings from Continuing Operations

                   

Amount

    $ 238     $ 108      —       $ 345     $ 840     $ 529    $ 16     $ 1,384  

Growth Rate

      (22 )%          5 %     (28 )%          13 %

Diluted EPS from Continuing Operations

                   

Amount

    $ 0.61     $ 0.28      —       $ 0.89     $ 2.07     $ 1.31    $ 0.04     $ 3.42  

Growth Rate

      (15 )%          14 %     (24 )%          20 %

 

The results above reflect changes described in the Company’s August 13, 2008 Form 8-K.

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

 

- 10 -

CARDINAL HEALTH, INC. AND SUBSIDIARIES

GAAP / NON-GAAP RECONCILIATION

 

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

GAAP Return on Equity

      16.8 %     47.3 %     17.7 %     23.5 %

Non-GAAP Return on Equity

         

Net earnings

    $ 318.0     $ 902.2     $ 1,300.6     $ 1,931.1  

Special items, net of tax, in continuing operations

      30.4       107.8       86.3       528.9  

Special items, net of tax, in discontinued operations

      —         —         —         4.4  

(Gain)/loss on sale of PTS, net of tax, in discontinued operations

      —         (679.5 )     7.6       (1,072.4 )
                                

Adjusted net earnings

    $ 348.4     $ 330.5     $ 1,394.5     $ 1,392.0  

Annualized

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

Divided by average shareholders’ equity 1

    $ 7570.4     $ 7,623.2     $ 7,338.8     $ 8,213.2  

Non-GAAP return on equity

      18.4 %     17.3 %     19.0 %     16.9 %
     Fourth Quarter     Fiscal Year  
(in millions)    2008     2007     2008     2007  

GAAP Return on Invested Capital

      6.72 %     18.43 %     6.97 %     9.38 %

Non-GAAP Return on Invested Capital

         

Net earnings

    $ 318.0     $ 902.2     $ 1,300.6     $ 1,931.1  

Special items, net of tax, in continuing operations

      30.4       107.8       86.3       528.9  

Special items, net of tax, in discontinued operations

      —         —         —         4.4  

Interest expense and other, net of tax

      30.4       12.2       109.7       77.7  

(Gain)/loss on sale of PTS, net of tax, in discontinued operations

      —         (679.5 )     7.6       (1,072.4 )
                                

Adjusted net earnings

    $ 378.8     $ 342.7     $ 1,504.2     $ 1,469.7  

Annualized

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

Divided by average total invested capital 2

    $ 18,935.7     $ 19,583.8     $ 18,664.2     $ 20,580.7  

Non-GAAP return on invested capital

      8.00 %     7.00 %     8.06 %     7.14 %

 

The results above reflect changes described in the Company’s August 13, 2008 Form 8-K.

 

1

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

2

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

 

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CARDINAL HEALTH, INC. AND SUBSIDIARIES

GAAP / NON-GAAP RECONCILIATION

 

     Fiscal Year  
(in millions)    2008     2007  

Revenue

     

Clinical Technologies and Services

    $ 2,890     $ 2,687  

Medical Products and Technologies

      2,696       1,836  
                

Combined Revenue

    $ 5,586     $ 4,523  

Combined Growth Rate

      24 %  

Segment Profit

     

Clinical Technologies and Services

    $ 497     $ 386  

Medical Products and Technologies

      300       198  
                

Combined Profit

    $ 797     $ 584  

Combined Growth Rate

      36 %  
     Fourth Quarter  
(in millions)    2008     2007  

Clinical Technologies and Services revenue growth

      3 %  

Clinical Technologies and Services revenue

    $ 779.8     $ 755.8  

Less: Pharmacy Services business unit revenue

      (194.8 )     (218.7 )
                

Clinical Technologies and Services revenue excluding Pharmacy Services business unit revenue

    $ 585.0     $ 537.1  

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

      9 %  

 

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CARDINAL HEALTH, INC. AND SUBSIDIARIES

GAAP / NON-GAAP RECONCILIATION

 

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

GAAP Effective Tax Rate from Continuing Operations

      34.1 %     40.8 %     32.5 %     33.0 %

Non-GAAP Effective Tax Rate from Continuing Operations

         

Earnings before income taxes and discontinued operations

    $ 488.3     $ 401.4     $ 1949.8     $ 1,252.3  

Special items

      42.4       118.2       130.1       772.0  
                                

Adjusted earnings before income taxes and discontinued operations

    $ 530.7     $ 519.6     $ 2,079.9     $ 2,024.3  

Provision for income taxes

    $ 166.7     $ 163.7     $ 633.9     $ 412.6  

Special items tax benefit

      12.0       10.4       43.8       243.1  
                                

Adjusted provision for income taxes

    $ 178.7     $ 174.1     $ 677.7     $ 655.7  

Non-GAAP effective tax rate from continuing operations

      33.7 %     33.5 %     32.6 %     32.4 %
     Fourth Quarter              
     2008     2007              

Debt to Total Capital

      33 %     32 %    

Net Debt to Capital

         

Current portion of long-term obligations and other short-term borrowings

    $ 159.0     $ 16.0      

Long-term obligations, less current portion and other short-term borrowings

      3,687.4       3,457.3      
                    

Debt

    $ 3,846.4     $ 3,473.3      

Cash and equivalents

      (1,291.3 )     (1,308.8 )    

Short-term investments available for sale

      —         (132.0 )    
                    

Net debt

    $ 2,555.1     $ 2,032.5      

Total shareholders’ equity

    $ 7747.5     $ 7,376.9      

Capital

    $ 10,302.6     $ 9,409.4      

Net debt to capital

      25 %     22 %    

 

The results above reflect changes described in the Company’s August 13, 2008 Form 8-K.

Forward-Looking Non-GAAP Financial Measures

The Company presents non-GAAP earnings from continuing operations and non-GAAP effective tax rate from continuing operations (and presentations derived from these financial measures) on a forward-looking basis. The most directly comparable forward-looking GAAP measures are earnings from continuing operations and effective tax rate from continuing operations. The Company is unable to provide a quantitative reconciliation of these forward-looking non-GAAP measures to the most comparable forward-looking GAAP measures because the Company cannot reliably forecast special items and impairment charges and other, which are difficult to predict and estimate and are primarily dependent on future events. Please note that the unavailable reconciling items could significantly impact the Company’s future financial results.

 

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CARDINAL HEALTH, INC. AND SUBSIDIARIES

DEFINITIONS

GAAP

Debt: long-term obligations plus short-term borrowings

Debt to Total Capital: debt divided by (debt plus total shareholders’ equity)

Diluted EPS from Continuing Operations: earnings from continuing operations divided by diluted weighted average shares outstanding

Effective Tax Rate from Continuing Operations: provision for income taxes divided by earnings before income taxes and discontinued operations

Operating Cash Flow: net cash provided by / (used in) operating activities from continuing operations

Segment Profit: segment revenue minus (segment cost of products sold and segment selling, general and administrative expenses)

Segment Profit Margin: segment profit divided by segment revenue

Segment Profit Mix: segment profit divided by total segment profit for all segments

Return on Equity: annualized net earnings divided by average shareholders’ equity

Return on Invested Capital: annualized net earnings divided by (average total shareholders’ equity plus debt plus unrecorded goodwill)

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

NON-GAAP

Net Debt to Capital: net debt divided by (net debt plus total shareholders’ equity)

Net Debt: debt minus (cash and equivalents and short-term investments available for sale)

Non-GAAP Diluted EPS from Continuing Operations: non-GAAP earnings from continuing operations divided by diluted weighted average shares outstanding

Non-GAAP Diluted EPS from Continuing Operations Growth Rate: (current period non-GAAP diluted EPS from continuing operations minus prior period non-GAAP diluted EPS from continuing operations) divided by prior period non-GAAP diluted EPS from continuing operations

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

Non-GAAP Earnings from Continuing Operations Growth Rate: (current period non-GAAP earnings from continuing operations minus prior period non-GAAP earnings from continuing operations) divided by prior period non-GAAP earnings from continuing operations

Non-GAAP Effective Tax Rate from Continuing Operations: (provision for income taxes adjusted for special items) divided by (earnings before income taxes and discontinued operations adjusted for special items)

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

Non-GAAP Operating Earnings Growth Rate: (current period non-GAAP operating earnings minus prior period non-GAAP operating earnings) divided by prior period non-GAAP operating earnings

Non-GAAP Return on Equity: (annualized current period net earnings plus special items minus special items tax benefit) divided by average shareholders’ equity 1

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

 

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

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