CareFusion unaudited pro forma condensed consolidated statements of earnings

EX-99.5 6 dex995.htm CAREFUSION UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS CareFusion unaudited pro forma condensed consolidated statements of earnings

Exhibit 99.5

CAREFUSION CORPORATION

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

AND

GAAP / NON-GAAP RECONCILIATIONS

The CareFusion Corporation (“CareFusion”) unaudited pro forma condensed combined financial statements included below consist of unaudited pro forma condensed combined statements of earnings for the quarters ended September 30, December 31, March 31 and June 30, 2009 and 2008 and for the fiscal years ended June 30, 2009 and 2008. The unaudited pro forma condensed combined financial statements included below have been derived from the historical consolidated financial statements and accounting records of Cardinal Health and have been adjusted to present the estimated impact of removing certain businesses that manufacture and sell surgical and exam gloves, surgical drapes and apparel and fluid management products in the U.S. market that are currently part of the Clinical and Medical Products segment of Cardinal Health, and will be retained by Cardinal Health following the spin-off.

The unaudited pro forma condensed combined financial statements do not necessarily reflect the financial position and results of operations that will be presented within CareFusion’s condensed combined financial statements subsequent to the completion of the planned spin-off from Cardinal Health. In addition, they do not reflect what the financial position and results of operations would have been if CareFusion had actually operated as a stand-alone publicly traded company. The assumptions and estimates used and pro forma adjustments derived from such assumptions are based on currently available information, and management believes such assumptions and estimates are reasonable under the circumstances.

CAREFUSION CORPORATION

PRO FORMA¹ CONDENSED COMBINED STATEMENTS OF EARNINGS (UNAUDITED)

FISCAL YEAR 2009


(in millions, except per common share amounts)	First Quarter 2009		Second Quarter 2009		Third Quarter 2009			Fourth Quarter 2009			Total Year 2009
Revenue	$	943	$	997	$	872		$	895		$	3,707
Cost of products sold		500		519		450			488			1,957

Gross margin		443		478		422			407			1,750
Selling, general and administrative expenses		283		259		266			261			1,069
Research and development expenses		37		41		39			44			161
Restructuring and acquisition integration charges		30		5		20			17			72

Operating earnings		93		173		97			85			448
Interest expense and other, net		29		25		24			25			103

Earnings before income taxes and discontinued operations		64		148		73			60			345
Provision for income taxes		29		39		(17	)		(4	)		47

Earnings from continuing operations		35		109		90			64			298
Earnings from discontinued operations, net of tax		82		80		83			31			276

Net earnings	$	117	$	189	$	173		$	95		$	574

Diluted earnings per common share:
Continuing operations	$	0.15	$	0.48	$	0.40		$	0.28		$	1.32
Discontinued operations		0.36		0.35		0.37			0.14			1.22

Net diluted earnings per common share ²	$	0.52	$	0.84	$	0.77		$	0.42		$	2.54

Weighted average pro forma number of diluted common shares outstanding³:		226.0		226.0		226.0			226.0			226.0
Adjusted diluted earnings per common share:
Continuing operations ² ⁴	$	0.25	$	0.50	$	0.46		$	0.34		$	1.54

CareFusion unaudited pro forma financial results have been derived from the historical consolidated financial statements of Cardinal Health, Inc. and reflect CareFusion’s results as if the spinoff and certain related transactions had occurred as of the beginning of the fiscal year. See page 1 of this exhibit for further explanation of the pro forma presentation.

²	Earnings per share calculations are performed separately for each period presented. Therefore, the sum of the per share components from the table may not equal the per share amount presented.

³	Reflects a distribution ratio of 0.5 shares of CareFusion common stock for every 1 common share of Cardinal Health outstanding on the record date, plus potential dilutive shares of common stock under equity plans in which our employees participate, based on the distribution ratio.

⁴	Earnings from continuing operations have been adjusted to exclude restructuring and acquisition integration charges (including one-time spinoff related costs).

CAREFUSION CORPORATION

PRO FORMA¹ CONDENSED COMBINED STATEMENTS OF EARNINGS (UNAUDITED)

FISCAL YEAR 2008


(in millions, except per common share amounts)	First Quarter 2008		Second Quarter 2008		Third Quarter 2008		Fourth Quarter 2008		Total Year 2008
Revenue	$	835	$	921	$	957	$	1,058	$	3,771
Cost of products sold		445		487		497		553		1,982

Gross margin		390		434		460		505		1,789
Selling, general and administrative expenses		246		255		267		274		1,042
Research and development expenses		36		37		35		49		157
Restructuring and acquisition integration charges		6		10		6		13		35
Acquired in-process research and development		—		—		—		18		18

Operating earnings		102		132		152		151		537
Interest expense and other, net		3		29		6		42		80

Earnings before income taxes and discontinued operations		99		103		146		109		457
Provision for income taxes		28		28		39		19		114

Earnings from continuing operations		71		75		107		90		343
Earnings from discontinued operations, net of tax		72		88		79		87		326

Net earnings	$	143	$	163	$	186	$	177	$	669

Diluted earnings per common share:
Continuing operations	$	0.31	$	0.33	$	0.47	$	0.40	$	1.52
Discontinued operations		0.32		0.39		0.35		0.38		1.44

Net diluted earnings per common share ²	$	0.63	$	0.72	$	0.82	$	0.78	$	2.96

Weighted average pro forma number of diluted common shares outstanding³:		226.0		226.0		226.0		226.0		226.0
Adjusted diluted earnings per common share:
Continuing operations ^2 4	$	0.33	$	0.36	$	0.50	$	0.44	$	1.63

²	Earnings per share calculations are performed separately for each period presented. Therefore, the sum of the per share components from the table may not equal the per share amount presented.

³	Reflects a distribution ratio of 0.5 shares of CareFusion common stock for every 1 common share of Cardinal Health outstanding on the record date, plus potential dilutive shares of common stock under equity plans in which our employees participate, based on the distribution ratio.

⁴	Earnings from continuing operations have been adjusted to exclude restructuring and acquisition integration charges (including one-time spinoff related costs), and acquired in-process research and development charges.

CAREFUSION CORPORATION

RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION

FISCAL YEAR 2009


(in millions, except per common share amounts)	Historical			Discontinued Operations			Financing Adjustments			Separation Adjustments			Pro Forma¹		One-Time Items			Adjusted Pro Forma²
FIRST QUARTER
Revenue	$	1,141		$	(221	)	$	—		$	23		$	943	$	—		$	943
Cost of products sold		626			(146	)		—			20			500		—			500

Gross margin		515			(75	)		—			3			443		—			443
Selling, general and administrative expenses		304			(24	)		—			3			283		—			283
Research and development expenses		38			(1	)		—			—			37		—			37
Restructuring charges and acquisition integration charges		31			(1	)		—			—			30		(30	)		—

Operating earnings		142			(49	)		—			—			93		30			123
Interest expense and other		27			6			(4	)		—			29		—			29
Royalty (income) and other, net received from parent		(48	)		48			—			—			—		—			—

Earnings before income taxes and discontinued operations		163			(103	)		4			—			64		30			94
Provision for income taxes		50			(21	)		1			(1	)		29		9			38

Earnings from continuing operations		113			(82	)		3			1			35		21			56
Earnings from discontinued operations, net of tax		—			82			—			—			82		—			82

Net earnings	$	113		$	—		$	3		$	1		$	117	$	21		$	138

Weighted average pro forma number of diluted common shares outstanding³:		226.0			226.0			226.0			226.0			226.0		226.0			226.0
Diluted Earnings from continuing operations per common share⁴:	$	0.50		$	(0.36	)	$	0.01		$	—		$	0.15	$	0.09		$	0.25

²	Adjusted pro forma financial information reflects pro forma results adjusted on a non-GAAP basis to exclude one-time items related to restructuring charges and acquisition integration charges (including one-time spinoff related costs).

³	Reflects a distribution ratio of 0.5 shares of CareFusion common stock for every 1 common share of Cardinal Health outstanding on the record date, plus potential shares of common stock under equity plans in which our employees participate, based on the distribution ratio.

⁴	Earnings per share calculations are performed separately for each adjustment presented. Therefore, the sum of the per share adjustments from the table above may not equal the pro forma or adjusted pro forma per share totals presented.

CAREFUSION CORPORATION

RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION

FISCAL YEAR 2009


(in millions, except per Common Share amounts)	Historical			Discontinued Operations			Financing Adjustments			Separation Adjustments			Pro Forma¹		One-Time Items			Adjusted Pro Forma²
SECOND QUARTER
Revenue	$	1,193		$	(219	)	$	—		$	23		$	997	$	—		$	997
Cost of products sold		665			(166	)		—			20			519		—			519

Gross margin		528			(53	)		—			3			478		—			478
Selling, general and administrative expenses		282			(26	)		—			3			259		—			259
Research and development expenses		42			(1	)		—			—			41		—			41
Restructuring charges and acquisition integration charges		5			—			—			—			5		(5	)		—

Operating earnings		199			(26	)		—			—			173		5			178
Interest expense and other		30			(7	)		2			—			25		—			25
Royalty (income) and other, net received from parent		(66	)		66			—			—			—		—			—

Earnings before income taxes and discontinued operations		235			(85	)		(2	)		—			148		5			153
Provision for income taxes		47			(5	)		(1	)		(2	)		39		2			41

Earnings from continuing operations		188			(80	)		(1	)		2			109		3			112
Earnings from discontinued operations, net of tax expense		—			80			—			—			80		—			80

Net earnings	$	188		$	—		$	(1	)	$	2		$	189	$	3		$	192

Weighted average pro forma number of diluted common shares outstanding³:		226.0			226.0			226.0			226.0			226.0		226.0			226.0
Diluted Earnings from continuing operations per common share⁴:	$	0.83		$	(0.35	)	$	—		$	0.01		$	0.48	$	0.01		$	0.50

²	Adjusted pro forma financial information reflects pro forma results adjusted on a non-GAAP basis to exclude one-time items related to restructuring charges and acquisition integration charges (including one-time spinoff related costs).

³	Reflects a distribution ratio of 0.5 shares of CareFusion common stock for every 1 common share of Cardinal Health outstanding on the record date, plus potential shares of common stock under equity plans in which our employees participate, based on the distribution ratio.

⁴	Earnings per share calculations are performed separately for each adjustment presented. Therefore, the sum of the per share adjustments from the table above may not equal the pro forma or adjusted pro forma per share totals presented.

CAREFUSION CORPORATION

RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION

FISCAL YEAR 2009


(in millions, except per Common Share amounts)	Historical			Discontinued Operations			Financing Adjustments		Separation Adjustments			Pro Forma¹			One-Time Items			Adjusted Pro Forma²
THIRD QUARTER
Revenue	$	1,076		$	(227	)	$	—	$	23		$	872		$	—		$	872
Cost of products sold		612			(183	)		—		21			450			—			450

Gross margin		464			(44	)		—		2			422			—			422
Selling, general and administrative expenses		285			(21	)		—		2			266			—			266
Research and development expenses		40			(1	)		—		—			39			—			39
Restructuring charges and acquisition integration charges		20			—			—		—			20			(20	)		—

Operating earnings		119			(22	)		—		—			97			20			117
Interest expense and other		26			(2	)		—		—			24			—			24
Royalty (income) and other, net received from parent		(80	)		80			—		—			—			—			—

Earnings before income taxes and discontinued operations		173			(100	)		—		—			73			20			93
Provision for income taxes		2			(17	)		—		(2	)		(17	)		6			(11	)

Earnings from continuing operations		171			(83	)		—		2			90			14			104
Earnings from discontinued operations, net of tax expense		—			83			—		—			83			—			83

Net earnings	$	171		$	—		$	—	$	2		$	173		$	14		$	187

Weighted average pro forma number of diluted common shares outstanding³:		226.0			226.0			226.0		226.0			226.0			226.0			226.0
Diluted Earnings from continuing operations per common share⁴:	$	0.76		$	(0.37	)	$	—	$	0.01		$	0.40		$	0.06		$	0.46

²	Adjusted pro forma financial information reflects pro forma results adjusted on a non-GAAP basis to exclude one-time items related to restructuring charges and acquisition integration charges (including one-time spinoff related costs).

³	Reflects a distribution ratio of 0.5 shares of CareFusion common stock for every 1 common share of Cardinal Health outstanding on the record date, plus potential shares of common stock under equity plans in which our employees participate, based on the distribution ratio.

⁴	Earnings per share calculations are performed separately for each adjustment presented. Therefore, the sum of the per share adjustments from the table above may not equal the pro forma or adjusted pro forma per share totals presented.

CAREFUSION CORPORATION

RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION

FISCAL YEAR 2009


(in millions, except per common share amounts)	Historical			Discontinued Operations			Financing Adjustments			Separation Adjustments			Pro Forma¹			One-Time Items			Adjusted Pro Forma²
FOURTH QUARTER
Revenue	$	1,091		$	(219	)	$	—		$	23		$	895		$	—		$	895
Cost of products sold		616			(148	)		—			20			488			—			488

Gross margin		475			(71	)		—			3			407			—			407
Selling, general and administrative expenses		284			(26	)		—			3			261			—			261
Research and development expenses		45			(1	)		—			—			44			—			44
Restructuring charges and acquisition integration charges		17			—			—			—			17			(17	)		—

Operating earnings		129			(44	)		—			—			85			17			102
Interest expense and other		20			1			4			—			25			—			25
Royalty (income) and other, net received from parent		(39	)		39			—			—			—			—			—

Earnings before income taxes and discontinued operations		148			(84	)		(4	)		—			60			17			77
Provision for income taxes		52			(53	)		(1	)		(2	)		(4	)		5			1

Earnings from continuing operations		96			(31	)		(3	)		2			64			12			76
Earnings from discontinued operations, net of tax expense		—			31			—			—			31			—			31

Net earnings	$	96		$	—		$	(3	)	$	2		$	95		$	12		$	107

Weighted average pro forma number of diluted common shares outstanding³:		226.0			226.0			226.0			226.0			226.0			226.0			226.0
Diluted Earnings from continuing operations per common share⁴:	$	0.42		$	(0.14	)	$	(0.01	)	$	0.01		$	0.28		$	0.05		$	0.34

²	Adjusted pro forma financial information reflects pro forma results adjusted on a non-GAAP basis to exclude one-time items related to restructuring charges and acquisition integration charges (including one-time spinoff related costs).

³	Reflects a distribution ratio of 0.5 shares of CareFusion common stock for every 1 common share of Cardinal Health outstanding on the record date, plus potential shares of common stock under equity plans in which our employees participate, based on the distribution ratio.

⁴	Earnings per share calculations are performed separately for each adjustment presented. Therefore, the sum of the per share adjustments from the table above may not equal the pro forma or adjusted pro forma per share totals presented.

CAREFUSION CORPORATION

RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION

FISCAL YEAR 2009


(in millions, except per Common Share amounts)	Historical			Discontinued Operations			Financing Adjustments			Separation Adjustments			Pro Forma¹		One-Time Items			Adjusted Pro Forma²
FISCAL YEAR 2009
Revenue	$	4,501		$	(886	)	$	—		$	92		$	3,707	$	—		$	3,707
Cost of products sold		2,519			(643	)		—			81			1,957		—			1,957

Gross margin		1,982			(243	)		—			11			1,750		—			1,750
Selling, general and administrative expenses		1,155			(97	)		—			11			1,069		—			1,069
Research and development expenses		165			(4	)		—			—			161		—			161
Restructuring charges and acquisition integration charges		73			(1	)		—			—			72		(72	)		—

Operating earnings		589			(141	)		—			—			448		72			520
Interest expense and other		103			(2	)		2			—			103		—			103
Royalty (income) and other, net received from parent		(233	)		233			—			—			—		—			—

Earnings before income taxes and discontinued operations		719			(372	)		(2	)		—			345		72			417
Provision for income taxes		151			(96	)		(1	)		(7	)		47		22			69

Earnings from continuing operations		568			(276	)		(1	)		7			298		50			348
Earnings from discontinued operations, net of tax expense		—			276			—			—			276		—			276

Net earnings	$	568		$	—		$	(1	)	$	7		$	574	$	50		$	624

Weighted average pro forma number of diluted common shares outstanding³:		226.0			226.0			226.0			226.0			226.0		226.0			226.0
Diluted Earnings from continuing operations per common share⁴:	$	2.51		$	(1.22	)	$	—		$	0.03		$	1.32	$	0.22		$	1.54

²	Adjusted pro forma financial information reflects pro forma results adjusted on a non-GAAP basis to exclude one-time items related to restructuring charges and acquisition integration charges (including one-time spinoff related costs).

³	Reflects a distribution ratio of 0.5 shares of CareFusion common stock for every 1 common share of Cardinal Health outstanding on the record date, plus potential shares of common stock under equity plans in which our employees participate, based on the distribution ratio.

⁴	Earnings per share calculations are performed separately for each adjustment presented. Therefore, the sum of the per share adjustments from the table above may not equal the pro forma or adjusted pro forma per share totals presented.

CAREFUSION CORPORATION

RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION (UNAUDITED)

FISCAL YEAR 2008


(in millions, except per Common Share amounts)	Historical			Discontinued Operations			Financing Adjustments			Separation Adjustments		Pro Forma¹		One-Time Items			Adjusted Pro Forma²
FIRST QUARTER
Revenue	$	1,015		$	(202	)	$	—		$	22	$	835	$	—		$	835
Cost of products sold		561			(135	)		—			19		445		—			445

Gross margin		454			(67	)		—			3		390		—			390
Selling, general and administrative expenses		264			(21	)		—			3		246		—			246
Research and development expenses		37			(1	)		—			—		36		—			36
Restructuring charges and acquisition integration charges		6			—			—			—		6		(6	)		—

Operating earnings		147			(45	)		—			—		102		6			108
Interest expense and other		9			(4	)		(2	)		—		3		—			3
Royalty (income) and other, net received from parent		(47	)		47			—			—		—		—			—

Earnings before income taxes and discontinued operations		185			(88	)		2			—		99		6			105
Provision for income taxes		43			(16	)		1			—		28		2			30

Earnings from continuing operations		142			(72	)		1			—		71		4			75
Earnings from discontinued operations, net of tax		—			72			—			—		72		—			72

Net earnings	$	142		$	—		$	1		$	—	$	143	$	4		$	147

Weighted average pro forma number of diluted common shares outstanding³:		226.0			226.0			226.0			226.0		226.0		226.0			226.0
Diluted Earnings from continuing operations per common share⁴:	$	0.63		$	(0.32	)	$	—		$	—	$	0.31	$	0.02		$	0.33

²	Adjusted pro forma financial information reflects pro forma results adjusted on a non-GAAP basis to exclude one-time items related to restructuring charges and acquisition integration charges (including one-time spinoff related costs).

³	Reflects a distribution ratio of 0.5 shares of CareFusion common stock for every 1 common share of Cardinal Health outstanding on the record date, plus potential shares of common stock under equity plans in which our employees participate, based on the distribution ratio.

⁴	Earnings per share calculations are performed separately for each adjustment presented. Therefore, the sum of the per share adjustments from the table above may not equal the pro forma or adjusted pro forma per share totals presented.

CAREFUSION CORPORATION

RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION (UNAUDITED)

FISCAL YEAR 2008


(in millions, except per Common Share amounts)	Historical			Discontinued Operations			Financing Adjustments			Separation Adjustments		Pro Forma¹		One-Time Items			Adjusted Pro Forma²
SECOND QUARTER
Revenue	$	1,105		$	(206	)	$	—		$	22	$	921	$	—		$	921
Cost of products sold		611			(142	)		—			18		487		—			487

Gross margin		494			(64	)		—			4		434		—			434
Selling, general and administrative expenses		267			(16	)		—			4		255		—			255
Research and development expenses		38			(1	)		—			—		37		—			37
Restructuring charges and acquisition integration charges		10			—			—			—		10		(10	)		—

Operating earnings		179			(47	)		—			—		132		10			142
Interest expense and other		19			13			(3	)		—		29		—			29
Royalty (income) and other, net received from parent		(49	)		49			—			—		—		—			—

Earnings before income taxes and discontinued operations		209			(109	)		3			—		103		10			113
Provision for income taxes		48			(21	)		1			—		28		4			32

Earnings from continuing operations		161			(88	)		2			—		75		6			81
Earnings from discontinued operations, net of tax expense		—			88			—			—		88		—			88

Net earnings	$	161		$	—		$	2		$	—	$	163	$	6		$	169

Weighted average pro forma number of diluted common shares outstanding³:		226.0			226.0			226.0			226.0		226.0		226.0			226.0
Diluted Earnings from continuing operations per common share⁴:	$	0.71		$	(0.39	)	$	0.01		$	—	$	0.33	$	0.03		$	0.36

²	Adjusted pro forma financial information reflects pro forma results adjusted on a non-GAAP basis to exclude one-time items related to restructuring charges and acquisition integration charges (including one-time spinoff related costs).

³	Reflects a distribution ratio of 0.5 shares of CareFusion common stock for every 1 common share of Cardinal Health outstanding on the record date, plus potential shares of common stock under equity plans in which our employees participate, based on the distribution ratio.

⁴	Earnings per share calculations are performed separately for each adjustment presented. Therefore, the sum of the per share adjustments from the table above may not equal the pro forma or adjusted pro forma per share totals presented.

CAREFUSION CORPORATION

RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION (UNAUDITED)

FISCAL YEAR 2008


(in millions, except per Common Share amounts)	Historical			Discontinued Operations			Financing Adjustments			Separation Adjustments			Pro Forma¹		One-Time Items			Adjusted Pro Forma²
THIRD QUARTER
Revenue	$	1,150		$	(214	)	$	—		$	21		$	957	$	—		$	957
Cost of products sold		618			(140	)		—			19			497		—			497

Gross margin		532			(74	)		—			2			460		—			460
Selling, general and administrative expenses		285			(21	)		—			3			267		—			267
Research and development expenses		37			(2	)		—			—			35		—			35
Restructuring charges and acquisition integration charges		6			—			—			—			6		(6	)		—

Operating earnings		204			(51	)		—			(1	)		152		6			158
Interest expense and other		5			2			(1	)		—			6		—			6
Royalty (income) and other, net received from parent		(41	)		41			—			—			—		—			—

Earnings before income taxes and discontinued operations		240			(94	)		1			(1	)		146		6			152
Provision for income taxes		55			(15	)		—			(1	)		39		1			40

Earnings from continuing operations		185			(79	)		1			—			107		5			112
Earnings from discontinued operations, net of tax expense		—			79			—			—			79		—			79

Net earnings	$	185		$	—		$	1		$	—		$	186	$	5		$	191

Weighted average pro forma number of diluted common shares outstanding³:		226.0			226.0			226.0			226.0			226.0		226.0			226.0
Diluted Earnings from continuing operations per common share⁴:	$	0.82		$	(0.35	)	$	—		$	—		$	0.47	$	0.02		$	0.50

²	Adjusted pro forma financial information reflects pro forma results adjusted on a non-GAAP basis to exclude one-time items related to restructuring charges and acquisition integration charges (including one-time spinoff related costs).

³	Reflects a distribution ratio of 0.5 shares of CareFusion common stock for every 1 common share of Cardinal Health outstanding on the record date, plus potential shares of common stock under equity plans in which our employees participate, based on the distribution ratio.

⁴	Earnings per share calculations are performed separately for each adjustment presented. Therefore, the sum of the per share adjustments from the table above may not equal the pro forma or adjusted pro forma per share totals presented.

CAREFUSION CORPORATION

RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION (UNAUDITED)

FISCAL YEAR 2008


(in millions, except per Common Share amounts)	Historical			Discontinued Operations			Financing Adjustments			Separation Adjustments		Pro Forma¹		One-Time Items			Adjusted Pro Forma²
FOURTH QUARTER
Revenue	$	1,248		$	(212	)	$	—		$	22	$	1,058	$	—		$	1,058
Cost of products sold		682			(147	)		—			18		553		—			553

Gross margin		566			(65	)		—			4		505		—			505
Selling, general and administrative expenses		288			(17	)		—			3		274		—			274
Research and development expenses		50			(1	)		—			—		49		—			49
Restructuring charges and acquisition integration charges		15			(2	)		—			—		13		(13	)		—
Acquired in-process research and development		18			—			—			—		18		(18	)		—

Operating earnings		195			(45	)		—			1		151		31			182
Interest expense and other		34			9			(1	)		—		42		—			42
Royalty (income) and other, net received from parent		(52	)		52			—			—		—		—			—

Earnings before income taxes and discontinued operations		213			(106	)		1			1		109		31			140
Provision for income taxes		38			(19	)		—			—		19		21			40

Earnings from continuing operations		175			(87	)		1			1		90		10			100
Earnings from discontinued operations, net of tax expense		—			87			—			—		87		—			87

Net earnings	$	175		$	—		$	1		$	1	$	177	$	10		$	187

Weighted average pro forma number of diluted Common Shares outstanding³:		226.0			226.0			226.0			226.0		226.0		226.0			226.0
Diluted Earnings from continuing operations per Common Share⁴:	$	0.77		$	(0.38	)	$	—		$	—	$	0.40	$	0.04		$	0.44

²	Adjusted pro forma financial information reflects pro forma results adjusted on a non-GAAP basis to exclude one-time items related to restructuring charges and acquisition integration charges (including one-time spinoff related costs), and acquired in-process research and development charges.

³	Reflects a distribution ratio of 0.5 shares of CareFusion common stock for every 1 common share of Cardinal Health outstanding on the record date, plus potential shares of common stock under equity plans in which our employees participate, based on the distribution ratio.

⁴	Earnings per share calculations are performed separately for each adjustment presented. Therefore, the sum of the per share adjustments from the table above may not equal the pro forma or adjusted pro forma per share totals presented.

CAREFUSION CORPORATION

RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION (UNAUDITED)

FISCAL YEAR 2008


(in millions, except per Common Share amounts)	Historical			Discontinued Operations			Financing Adjustments			Separation Adjustments			Pro Forma¹		One-Time Items			Adjusted Pro Forma²
FISCAL YEAR 2008
Revenue	$	4,518		$	(834	)	$	—		$	87		$	3,771	$	—		$	3,771
Cost of products sold		2,472			(564	)		—			74			1,982		—			1,982

Gross margin		2,046			(270	)		—			13			1,789		—			1,789
Selling, general and administrative expenses		1,104			(75	)		—			13			1,042		—			1,042
Research and development expenses		162			(5	)		—			—			157		—			157
Restructuring charges and acquisition integration charges		37			(2	)		—			—			35		(35	)		—
Acquired in-process research and development		18			—			—			—			18		(18	)		—

Operating earnings		725			(188	)		—			—			537		53			590
Interest expense and other		67			20			(7	)		—			80		—			80
Royalty (income) and other, net received from parent		(189	)		189			—			—			—		—			—

Earnings before income taxes and discontinued operations		847			(397	)		7			—			457		53			510
Provision for income taxes		184			(71	)		2			(1	)		114		28			142

Earnings from continuing operations		663			(326	)		5			1			343		25			368
Earnings from discontinued operations, net of tax expense		—			326			—			—			326		—			326

Net earnings	$	663		$	—		$	5		$	1		$	669	$	25		$	694

Weighted average pro forma number of diluted common shares outstanding³:		226.0			226.0			226.0			226.0			226.0		226.0			226.0
Diluted Earnings from continuing operations per common share⁴:	$	2.93		$	(1.44	)	$	0.02		$	—		$	1.52	$	0.11		$	1.63

²	Adjusted pro forma financial information reflects pro forma results adjusted on a non-GAAP basis to exclude one-time items related to restructuring charges and acquisition integration charges (including one-time spinoff related costs), and acquired in-process research and development charges.

³	Reflects a distribution ratio of 0.5 shares of CareFusion common stock for every 1 common share of Cardinal Health outstanding on the record date, plus potential shares of common stock under equity plans in which our employees participate, based on the distribution ratio.

⁴	Earnings per share calculations are performed separately for each adjustment presented. Therefore, the sum of the per share adjustments from the table above may not equal the pro forma or adjusted pro forma per share totals presented.