Cardinal Health Reports Fiscal 2010 Results, Raises Fiscal 2011 Outlook
- Full-year revenue increases 3 percent to $99 billion
- Fiscal 2010 diluted earnings per share from continuing operations of $1.62, or $2.22 on a non-GAAP basis
- Fiscal 2011 non-GAAP diluted EPS outlook raised to $2.38 to $2.48
DUBLIN, Ohio, Aug. 5 /PRNewswire-FirstCall/ -- Cardinal Health today reported fiscal 2010 revenue of $98.5 billion and non-GAAP diluted earnings per share (EPS) from continuing operations(1) of $2.22. Revenue for the fourth quarter was $24.5 billion and diluted EPS from continuing operations for the quarter was $0.54, or $0.50 on a non-GAAP basis. The company also raised its non-GAAP diluted EPS outlook for fiscal 2011 to a range of $2.38 to $2.48 from its preliminary outlook of $2.35 to $2.45.
"I am extremely proud of the progress we made in FY2010 and the actions we took to shift our growth trajectory and position us for the coming years," said George Barrett, chairman and CEO of Cardinal Health. "Our Medical segment grew profits by 11 percent for the year, while continuing to make key strategic investments. The Pharmaceutical segment declined by 3 percent, but performed considerably better than we anticipated for the full year as a result of execution on major initiatives, disciplined cost controls and some unplanned generic launches. These items largely offset the dampening effect of the actions we took to improve our strategic positioning, the negative impact from the year-over-year comparison of generic launches and the severe supply shortages in nuclear pharmacy."
Operating cash flow for fiscal 2010 increased to $2.1 billion, driven by strong working capital management.
Q4 and FY10 SUMMARY
Q4 FY10 | Q4 FY09 | Y/Y | FY10 | Y/Y | |||
Revenue | $24.5 billion | $24.3 billion | 0.5% | $98.5 billion | 3% | ||
Operating Earnings | $334 million | $307 million | 9% | $1.3 billion | 1% | ||
Non-GAAP Operating Earnings (2) | $317 million | $356 million | (11%) | $1.4 billion | (2%) | ||
Earnings from Continuing Operations | $194 million | $202 million | (4%) | $587 million | (23%) | ||
Non-GAAP Earnings from Continuing Operations (3) | $181 million | $228 million | (21%) | $804 million | (2%) | ||
Diluted EPS from Continuing Operations | $0.54 | $0.56 | (4%) | $1.62 | (23%) | ||
Non-GAAP Diluted EPS from Continuing Operations | $0.50 | $0.63 | (21%) | $2.22 | (2%) | ||
For the quarter, GAAP results included items that had a positive $0.04 per share net after-tax contribution, primarily from a previously disclosed litigation recovery. For the full year, GAAP results included items that had an aggregate net negative effect of $0.60 per share after-tax, primarily driven by tax charges in the first-quarter related to the portion of non-U.S. earnings that will no longer be indefinitely invested offshore following the spinoff of CareFusion Corp., and restructuring and severance. These charges were partially offset by gains on the sale of CareFusion stock and litigation recoveries.
SEGMENT RESULTS
Pharmaceutical Segment
Fourth-quarter revenue for the Pharmaceutical segment was $22.3 billion, with sales to non-bulk customers increasing 3 percent to $11.5 billion and sales to bulk customers decreasing 3 percent to $10.8 billion. Generic pharmaceutical sales grew 10 percent for the quarter. Segment profit declined 17 percent to $227 million, primarily driven by lower branded inflation income, the year-over-year impact from customer pricing changes and supply disruptions in nuclear pharmacy, partially offset by the positive margin contribution from the company's generic programs and other business initiatives.
For the full year, Pharmaceutical segment revenue grew 2 percent to $89.8 billion, with sales to non-bulk customers increasing 4 percent to $45.8 billion and sales to bulk customers increasing 1 percent to $44 billion. Annual segment profit declined 3 percent to $1 billion, due to customer pricing changes, supply shortages in nuclear pharmacy, fewer significant generic launches than the prior year and the Medicine Shoppe International transition. The decline in segment profit was partially offset by contributions from the company's generic programs, disciplined cost controls and solid performance from its branded manufacturer agreements.
"We made great strides in fiscal 2010 with key strategic priorities including our generic sales and sourcing initiatives, working capital optimization and customer-facing information technology improvements – all of which are starting to have a positive impact on the bottom line," Barrett said. "With the recent renewals of key customers, we have stabilized our base for the next several years. In addition, our recent acquisition of Healthcare Solutions Holding will help accelerate our strategy for specialty pharmaceuticals and contribute to long-term growth for the segment."
Q4 FY10 | Q4 FY09 | Y/Y | FY10 | Y/Y | |||
Revenue | $22.3 billion | $22.3 billion | 0.2% | $89.8 billion | 2% | ||
Segment Profit | $227 million | $273 million | (17%) | $1 billion | (3%) | ||
Medical Segment
Fourth-quarter revenue for the Medical segment increased 3 percent to $2.2 billion, primarily from sales growth with existing customers. Segment profit increased 22 percent to $102 million, primarily driven by growth in the Hospital Supply business and disciplined cost controls, partially offset by higher commodity prices.
For the full year, Medical segment revenue increased 7 percent to $8.8 billion, driven by growth from existing customers, new products and foreign exchange. Annual segment profit increased 11 percent to $428 million, aided by the decreased cost of raw materials associated with commodity price movements. Segment profit growth was partially dampened from investment expense associated with the Medical Business Transformation program.
"While our Medical segment reported solid top- and bottom-line growth for the year, we continued to make investments to further improve our customers' experience and position the business for sustainable growth," Barrett said. "By combining our extensive channel reach with our growing expertise in category management, we will enable the growth of our preferred products and service offerings to create even more value across the entire supply chain."
Q4 FY10 | Q4 FY09 | Y/Y | FY10 | Y/Y | |||
Revenue | $2.2 billion | $2.1 billion | 3% | $8.8 billion | 7% | ||
Segment Profit | $102 million | $84 million | 22% | $428 million | 11% | ||
FISCAL 2011 OUTLOOK
"We have gained additional clarity regarding key inputs to our planning process since offering our preliminary 2011 outlook in April," Barrett said. "Based on our current information, we are raising our fiscal 2011 guidance for non-GAAP diluted EPS from continuing operations to a range of $2.38 to $2.48."
ADDITIONAL FOURTH-QUARTER AND RECENT HIGHLIGHTS INCLUDE:
- Increased the regular quarterly dividend by 11 percent to $0.195 per share;
- Completed the acquisition of Healthcare Solutions Holding (P4 Healthcare and P4 Pathways) to bolster company offerings to specialty pharmaceutical customers; and
- Record-breaking attendance at the company's annual Retail Business Conference, where the company launched new products and services that were well received by its retail independent customers.
CONFERENCE CALL
Cardinal Health will host a conference call and webcast today at 8:30 a.m. EDT to discuss fourth-quarter and full-year results and its future outlook. To access the call and corresponding slide presentation, go to the Investor page at cardinalhealth.com/investors or dial 617.213.4855, passcode 86433823. Presentation slides and an audio replay will be archived on the website after the conclusion of the meeting. The audio replay will also be available until 11 p.m. on Aug. 8 by dialing 617.801.6888, passcode 37905680.
UPCOMING EVENTS
- Morgan Stanley Global Healthcare Conference on Sept. 13 at 1 p.m. EDT at the Grand Hyatt in New York;
- Baird's 2010 Health Care Conference on Sept. 14 at 9:30 a.m. EDT at the St. Regis Hotel in New York;
- Stifel Nicolaus Healthcare Conference on Sept. 15 at 10:55 a.m. EDT at the Four Seasons Hotel in Boston.
At these events, Cardinal Health CFO Jeff Henderson will discuss the company's diverse products and services, company performance and strategies for continued growth. To access more details and live webcasts of these events, including remarks, go to the Investors page at cardinalhealth.com.
About Cardinal Health
Headquartered in Dublin, Ohio, Cardinal Health, Inc. (NYSE: CAH) is a $99 billion health care services company that improves the cost-effectiveness of health care. As the business behind health care, Cardinal Health helps pharmacies, hospitals, ambulatory surgery centers and physician offices focus on patient care while reducing costs, improving efficiency and quality, and increasing profitability. Cardinal Health is an essential link in the health care supply chain, providing pharmaceuticals and medical products to more than 60,000 locations each day. The company is also a leading manufacturer of medical and surgical products, including gloves, surgical apparel and fluid management products. In addition, the company supports the growing diagnostic industry by supplying medical products to clinical laboratories and operating the nation's largest network of radiopharmacies that dispense products to aid in the early diagnosis and treatment of disease. Ranked #17 on the Fortune 500, Cardinal Health employs more than 30,000 people worldwide. More information about the company may be found at cardinalhealth.com.
(1) Non-GAAP diluted EPS from continuing operations: Non-GAAP earnings from continuing operations divided by diluted weighted average shares outstanding.
(2) Non-GAAP operating earnings: Operating earnings excluding (1) restructuring and employee severance, (2) acquisition related costs, (3) impairments and loss on sale of assets, (4) litigation (credits)/charges, net, and (5) Other Spinoff Costs (as defined at the end of the attached tables) included within distribution, selling, general and administrative expenses.
(3) Non-GAAP earnings from continuing operations: Earnings from continuing operations excluding (1) restructuring and employee severance, (2) acquisition related costs, (3) impairments and loss on sale of assets, (4) litigation (credits)/charges, net, (5) Other Spinoff Costs, and (6) gain on sale of CareFusion stock, each net of tax.
A reconciliation of the differences between these non-GAAP financial measures and their most directly comparable GAAP financial measures is provided in the attached tables and at cardinalhealth.com.
Cardinal Health uses its website as a channel of distribution for material company information. Important information, including news releases, analyst presentations and financial information regarding Cardinal Health is routinely posted and accessible on the Investors page at cardinalhealth.com.
Cautions Concerning Forward-Looking Statements
This news release contains forward-looking statements, which are not based on historical facts, addressing expectations, prospects, estimates and other matters that are dependent upon future events or developments. These statements may be identified by words such as "expect," "anticipate," "intend," "plan," "believe," "will," "should," "could," "would," "project," "continue," and similar expressions, and include statements reflecting future results or guidance, statements of outlook and tax accruals. These matters are subject to risks and uncertainties that could cause actual results to differ materially from those projected, anticipated or implied. These risks and uncertainties include (but are not limited to) the ability to achieve the expected benefits from the acquisition of Healthcare Solutions Holding and to grow our specialty distribution business; uncertainties and risks regarding the effect of the CareFusion spinoff on Cardinal Health; the performance of CareFusion and the proceeds realized from future sales of CareFusion stock; uncertainties due to government health care reform including the recently enacted federal health care reform legislation; competitive pressures in Cardinal Health's various lines of business; the loss of one or more key customer or supplier relationships or changes to the terms of those relationships; the timing of generic and branded pharmaceutical introductions and the frequency or rate of branded pharmaceutical price appreciation or generic pharmaceutical price deflation; changes in the distribution patterns or reimbursement rates for health care products and/or services; the results, consequences, effects or timing of any inquiry or investigation by any regulatory authority or any legal or administrative proceedings; the effects of disruptions in the financial markets, including uncertainties related to the availability and/or cost of credit on Cardinal Health's customers and vendors; and uncertainties related to demand for Cardinal Health's products and services. In addition, Cardinal Health is subject to additional risks and uncertainties described in Cardinal Health's Form 10-K, Form 10-Q and Form 8-K reports (including all amendments to those reports) and exhibits to those reports. This news release reflects management's views as of August 5, 2010. Except to the extent required by applicable law, Cardinal Health undertakes no obligation to update or revise any forward-looking statement.
CARDINAL HEALTH, INC. AND SUBSIDIARIES | ||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) | ||||||||||
Fourth Quarter | ||||||||||
(in millions, except per Common Share amounts) | 2010 | 2009 | % Change | |||||||
Revenue | $ 24,459.6 | $ 24,347.3 | 0.5 % | |||||||
Cost of products sold | 23,555.5 | 23,403.0 | 1 % | |||||||
Gross margin | 904.1 | 944.3 | (4)% | |||||||
Operating expenses | ||||||||||
Distribution, selling, general and administrative expenses | 588.2 | 591.7 | (1)% | |||||||
Restructuring and employee severance (1) | 6.4 | 37.5 | N.M. | |||||||
Acquisition related costs (1) | 8.3 | 0.7 | N.M. | |||||||
Impairments and loss on sale of assets | 0.9 | 2.7 | N.M. | |||||||
Litigation (credits)/charges, net | (33.6) | 4.9 | N.M. | |||||||
Operating earnings | 333.9 | 306.8 | 9 % | |||||||
Other (income)/expense, net | 2.3 | (15.5) | N.M. | |||||||
Interest expense, net | 24.5 | 32.6 | (25)% | |||||||
Gain on sale of CareFusion common stock | (1.3) | - | N.M. | |||||||
Earnings before income taxes and discontinued operations | 308.4 | 289.7 | 6 % | |||||||
Provision for income taxes | 114.6 | 87.7 | 31 % | |||||||
Earnings from continuing operations | 193.8 | 202.0 | (4)% | |||||||
Earnings from discontinued operations (net of tax expense | 29.7 | 71.2 | N.M. | |||||||
Net earnings | $ 223.5 | $ 273.2 | (18)% | |||||||
Basic earnings per Common Share: | ||||||||||
Continuing operations | $ 0.54 | $ 0.56 | (4)% | |||||||
Discontinued operations | 0.08 | 0.20 | N.M. | |||||||
Net basic earnings per Common Share | $ 0.62 | $ 0.76 | (18)% | |||||||
Diluted earnings per Common Share: | ||||||||||
Continuing operations | $ 0.54 | $ 0.56 | (4)% | |||||||
Discontinued operations | 0.08 | 0.19 | N.M. | |||||||
Net diluted earnings per Common Share | $ 0.62 | $ 0.75 | (17)% | |||||||
Weighted average number of Common Shares outstanding: | ||||||||||
Basic | 358.3 | 358.2 | ||||||||
Diluted | 361.8 | 361.1 | ||||||||
(1) During the fourth quarter of fiscal 2010, the Company began presenting acquisition related costs separately on its | ||||||||||
CARDINAL HEALTH, INC. AND SUBSIDIARIES | |||||||||
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) | |||||||||
Fiscal Year | |||||||||
(in millions, except per Common Share amounts) | 2010 | 2009 | % Change | ||||||
Revenue | $ 98,502.8 | $ 95,991.5 | 3 % | ||||||
Cost of products sold | 94,722.1 | 92,244.0 | 3 % | ||||||
Gross margin | 3,780.7 | 3,747.5 | 1 % | ||||||
Operating expenses | |||||||||
Distribution, selling, general and administrative expenses | 2,408.0 | 2,333.5 | 3 % | ||||||
Restructuring and employee severance (1) | 90.7 | 104.7 | N.M. | ||||||
Acquisition related costs (1) | 8.4 | 2.8 | N.M. | ||||||
Impairments and loss on sale of assets | 29.1 | 13.9 | N.M. | ||||||
Litigation (credits)/charges, net | (62.4) | 5.2 | N.M. | ||||||
Operating earnings | 1,306.9 | 1,287.4 | 1 % | ||||||
Other (income)/expense, net | (13.5) | 13.2 | N.M. | ||||||
Interest expense, net | 113.5 | 114.4 | (1)% | ||||||
Loss on extinguishment of debt | 39.9 | - | N.M. | ||||||
Gain on sale of CareFusion common stock | (44.6) | - | N.M. | ||||||
Earnings before income taxes and discontinued operations | 1,211.6 | 1,159.8 | 4 % | ||||||
Provision for income taxes | 624.6 | 401.6 | N.M. | ||||||
Earnings from continuing operations | 587.0 | 758.2 | (23)% | ||||||
Earnings from discontinued operations (net of tax expense of $35.5 million | 55.2 | 393.4 | N.M. | ||||||
Net earnings | $ 642.2 | $ 1,151.6 | (44)% | ||||||
Basic earnings per Common Share: | |||||||||
Continuing operations | $ 1.64 | $ 2.12 | (23)% | ||||||
Discontinued operations | 0.15 | 1.10 | N.M. | ||||||
Net basic earnings per Common Share | $ 1.79 | $ 3.22 | (43)% | ||||||
Diluted earnings per Common Share: | |||||||||
Continuing operations | $ 1.62 | $ 2.10 | (23)% | ||||||
Discontinued operations | 0.15 | 1.08 | N.M. | ||||||
Net diluted earnings per Common Share | $ 1.77 | $ 3.18 | (44)% | ||||||
Weighted average number of Common Shares outstanding: | |||||||||
Basic | 358.8 | 357.6 | |||||||
Diluted | 361.4 | 361.5 | |||||||
(1) During the fourth quarter of fiscal 2010, the Company began presenting acquisition related costs separately on its condensed | |||||||||
CARDINAL HEALTH, INC. AND SUBSIDIARIES | ||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
June 30, | June 30, | |||||
(in millions) | 2010 | 2009 | ||||
Assets | ||||||
Cash and equivalents | $ 2,755.3 | $ 1,221.6 | ||||
Trade receivables, net | 5,170.6 | 5,214.9 | ||||
Inventories | 6,355.9 | 6,832.8 | ||||
Prepaid expenses and other | 637.1 | 523.0 | ||||
Assets from businesses held for sale and discontinued operations | - | 7,189.4 | ||||
Total current assets | 14,918.9 | 20,981.7 | ||||
Property and equipment, net | 1,468.8 | 1,464.5 | ||||
Investment in CareFusion | 691.5 | - | ||||
Goodwill and other intangibles, net | 2,253.2 | 2,266.9 | ||||
Other assets | 657.8 | 405.7 | ||||
Total assets | $ 19,990.2 | $ 25,118.8 | ||||
Liabilities and Shareholders' Equity | ||||||
Current portion of long-term obligations and other short-term borrowings | $ 233.2 | $ 366.2 | ||||
Accounts payable | 9,494.9 | 9,041.9 | ||||
Other accrued liabilities | 1,809.5 | 1,496.2 | ||||
Liabilities from businesses held for sale and discontinued operations | - | 1,370.9 | ||||
Total current liabilities | 11,537.6 | 12,275.2 | ||||
Long-term obligations, less current portion | 1,896.1 | 3,271.6 | ||||
Deferred income taxes and other liabilities | 1,280.4 | 847.3 | ||||
Total shareholders' equity | 5,276.1 | 8,724.7 | ||||
Total liabilities and shareholders' equity | $ 19,990.2 | $ 25,118.8 | ||||
CARDINAL HEALTH, INC. AND SUBSIDIARIES | |||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | |||||||||||
Fourth Quarter | Fiscal Year | ||||||||||
(in millions) | 2010 | 2009 | 2010 | 2009 | |||||||
Cash Flows From Operating Activities: | |||||||||||
Net earnings | $ 223.5 | $ 273.2 | $ 642.2 | $ 1,151.6 | |||||||
Earnings from discontinued operations | (29.7) | (71.2) | (55.2) | (393.4) | |||||||
Earnings from continuing operations | 193.8 | 202.0 | 587.0 | 758.2 | |||||||
Adjustments to reconcile earnings from continuing operations | |||||||||||
to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 60.0 | 57.0 | 254.4 | 225.8 | |||||||
Loss on debt extinguishment | - | - | 39.9 | - | |||||||
Gain on sale of CareFusion common stock | (1.3) | - | (44.6) | - | |||||||
Impairments and loss on sale of assets | 0.9 | 2.7 | 29.1 | 13.9 | |||||||
Share-based payment compensation | 20.6 | 27.1 | 99.5 | 109.9 | |||||||
Provision for deferred income taxes | 120.2 | 149.4 | 120.2 | 149.4 | |||||||
Provision for bad debts | (6.4) | 6.2 | 26.8 | 51.4 | |||||||
Change in operating assets and liabilities, net of | |||||||||||
effects from acquisitions: | |||||||||||
Decrease/(increase) in trade receivables | 386.0 | 268.8 | 20.6 | (713.6) | |||||||
Decrease/(increase) in inventories | 858.5 | 912.5 | 477.4 | (431.2) | |||||||
Increase/(decrease) in accounts payable | (1,271.7) | (866.5) | 451.0 | 768.1 | |||||||
Other accrued liabilities and operating items, net | (35.9) | 0.7 | (74.6) | 19.3 | |||||||
Net cash provided by operating activities - continuing operations | 324.7 | 759.9 | 1,986.7 | 951.2 | |||||||
Net cash provided by/(used in) operating activities - discontinued operations | (0.4) | (151.8) | 147.4 | 472.7 | |||||||
Net cash provided by operating activities | 324.3 | 608.1 | 2,134.1 | 1,423.9 | |||||||
Cash Flows From Investing Activities: | |||||||||||
Proceeds from divestitures | 141.3 | - | 154.1 | 123.3 | |||||||
Acquisition of subsidiaries, net of cash acquired | - | - | (32.0) | (128.6) | |||||||
Net additions to property and equipment | (119.8) | (229.1) | (255.8) | (408.3) | |||||||
Proceeds from sale of CareFusion common stock | - | - | 270.7 | - | |||||||
Net cash provided by/(used in) investing activities - continuing operations | 21.5 | (229.1) | 137.0 | (413.6) | |||||||
Net cash used in investing activities - discontinued operations | - | (57.8) | (9.9) | (129.3) | |||||||
Net cash provided by/(used in) investing activities | 21.5 | (286.9) | 127.1 | (542.9) | |||||||
Cash Flows From Financing Activities: | |||||||||||
Reduction of long-term obligations | (0.4) | (18.9) | (1,485.5) | (301.4) | |||||||
Issuance of Common Shares | 15.5 | 0.6 | 40.0 | 39.2 | |||||||
Tax expense from stock options | (1.3) | (2.7) | (16.1) | (2.9) | |||||||
Payment of premiums for debt extinguishment | - | - | (66.4) | - | |||||||
Dividends on Common Shares | (62.9) | (50.3) | (253.1) | (200.4) | |||||||
Purchase of treasury shares | (180.2) | - | (230.2) | - | |||||||
Net cash used in financing activities - continuing operations | (229.3) | (71.3) | (2,011.3) | (465.5) | |||||||
Net cash provided by/(used in) financing activities - discontinued operations | - | (0.1) | 1,283.8 | (2.7) | |||||||
Net cash used in financing activities | (229.3) | (71.4) | (727.5) | (468.2) | |||||||
Net increase in cash and equivalents | 116.5 | 249.8 | 1,533.7 | 412.8 | |||||||
Cash and equivalents at beginning of period | 2,638.8 | 971.8 | 1,221.6 | 808.8 | |||||||
Cash and equivalents at end of period | $ 2,755.3 | $ 1,221.6 | $ 2,755.3 | $ 1,221.6 | |||||||
CARDINAL HEALTH, INC. AND SUBSIDIARIES | |||||||||
BUSINESS ANALYSIS | |||||||||
TOTAL COMPANY | |||||||||
Non-GAAP | |||||||||
Fourth Quarter | Fourth Quarter | ||||||||
(in millions) | 2010 | 2009 | 2010 | 2009 | |||||
Revenue | |||||||||
Amount | $24,460 | $24,347 | |||||||
Growth Rate | 0.5 % | 11 % | |||||||
Operating Earnings | |||||||||
Amount | $334 | $307 | $317 | $356 | |||||
Growth Rate | 9 % | (9)% | (11)% | 6 % | |||||
Earnings from Continuing Operations | |||||||||
Amount | $194 | $202 | $181 | $228 | |||||
Growth Rate | (4)% | 10 % | (21)% | 14 % | |||||
Non-GAAP | |||||||||
Fiscal Year | Fiscal Year | ||||||||
2010 | 2009 | 2010 | 2009 | ||||||
Revenue | |||||||||
Amount | $98,503 | $95,992 | |||||||
Growth Rate | 3 % | 10 % | |||||||
Operating Earnings | |||||||||
Amount | $1,307 | $1,287 | $1,383 | $1,419 | |||||
Growth Rate | 1 % | (8)% | (2)% | (1)% | |||||
Earnings from Continuing Operations | |||||||||
Amount | $587 | $758 | $804 | $816 | |||||
Growth Rate | (23)% | (11)% | (2)% | (8)% | |||||
| |||||||||
CARDINAL HEALTH, INC. AND SUBSIDIARIES | ||||||||||
SEGMENT BUSINESS ANALYSIS | ||||||||||
Fourth Quarter | Fourth Quarter | |||||||||
(in millions) | 2010 | 2009 | (in millions) | 2010 | 2009 | |||||
PHARMACEUTICAL | MEDICAL | |||||||||
Revenue | Revenue | |||||||||
Amount | $22,307 | $22,263 | Amount | $2,158 | $2,090 | |||||
Growth Rate | 0.2 % | 12 % | Growth Rate | 3 % | 3 % | |||||
Mix | 91 % | 91 % | Mix | 9 % | 9 % | |||||
Segment Profit | Segment Profit | |||||||||
Amount | $227 | $273 | Amount | $102 | $84 | |||||
Growth Rate | (17)% | 22 % | Growth Rate | 22 % | (23)% | |||||
Mix | 69 % | 76 % | Mix | 31 % | 24 % | |||||
Segment Profit Margin | 1.02 % | 1.23 % | Segment Profit Margin | 4.75 % | 4.03 % | |||||
| ||||||||||
Total consolidated revenue for the three months ended June 30, 2010 was $24,460 million, which included total segment revenue | ||||||||||
Total consolidated operating earnings for the three months ended June 30, 2010 were $334 million, which included total segment | ||||||||||
CARDINAL HEALTH, INC. AND SUBSIDIARIES | |||||||||||
SEGMENT BUSINESS ANALYSIS | |||||||||||
Fiscal Year | Fiscal Year | ||||||||||
(in millions) | 2010 | 2009 | (in millions) | 2010 | 2009 | ||||||
PHARMACEUTICAL | MEDICAL | ||||||||||
Revenue | Revenue | ||||||||||
Amount | $89,790 | $87,863 | Amount | $8,750 | $8,159 | ||||||
Growth Rate | 2 % | 11 % | Growth Rate | 7 % | 3 % | ||||||
Mix | 91 % | 92 % | Mix | 9 % | 8 % | ||||||
Segment Profit | Segment Profit | ||||||||||
Amount | $1,002 | $1,036 | Amount | $428 | $385 | ||||||
Growth Rate | (3)% | 1 % | Growth Rate | 11 % | (6)% | ||||||
Mix | 70 % | 73 % | Mix | 30 % | 27 % | ||||||
Segment Profit Margin | 1.12 % | 1.18 % | Segment Profit Margin | 4.89 % | 4.72 % | ||||||
| |||||||||||
Total consolidated revenue for the fiscal year ended June 30, 2010 was $98,503 million, which included total segment | |||||||||||
Total consolidated operating earnings for the fiscal year ended June 30, 2010 were $1,307 million, which included | |||||||||||
CARDINAL HEALTH, INC. AND SUBSIDIARIES | |||||||||
SCHEDULE OF NOTABLE ITEMS | |||||||||
Fourth Quarter | Fiscal Year | ||||||||
(in millions, except per Common Share amounts) | 2010 | 2009 | 2010 | 2009 | |||||
Restructuring and Employee Severance | |||||||||
Restructuring and employee severance | $ (6.4) | $ (37.5) | $ (90.7) | $ (104.7) | |||||
Tax benefit | 1.7 | 11.1 | 31.7 | 29.3 | |||||
Restructuring and employee severance, net of tax | $ (4.7) | $ (26.4) | $ (59.0) | $ (75.4) | |||||
Decrease to diluted EPS from continuing operations | $ (0.01) | $ (0.07) | $ (0.16) | $ (0.21) | |||||
Acquisition related costs | |||||||||
Acquisition related costs | $ (8.3) | $ (0.7) | $ (8.4) | $ (2.8) | |||||
Tax benefit | 2.7 | 0.3 | 2.7 | 1.1 | |||||
Acquisition related costs, net of tax | $ (5.6) | $ (0.4) | $ (5.7) | $ (1.7) | |||||
Decrease to diluted EPS from continuing operations | $ (0.02) | $ - | $ (0.02) | $ - | |||||
Impairments and Loss on Sale of Assets | |||||||||
Impairments and loss on sale of assets | $ (0.9) | $ (2.7) | $ (29.1) | $ (13.9) | |||||
Tax benefit/(expense) | (1.9) | 8.5 | (5.1) | 39.4 | |||||
Impairments and loss on sale of asset, net of tax | $ (2.8) | $ 5.8 | $ (34.2) | $ 25.5 | |||||
Increase/(decrease) to diluted EPS from continuing operations | $ (0.01) | $ 0.02 | $ (0.09) | $ 0.07 | |||||
Litigation Credits/(Charges), Net | |||||||||
Litigation credits/(charges), net | $ 33.6 | $ (4.9) | $ 62.4 | $ (5.2) | |||||
Tax benefit/(expense) | (12.3) | 1.8 | (23.2) | 1.9 | |||||
Litigation credits/(charges), net, net of tax | $ 21.3 | $ (3.1) | $ 39.2 | $ (3.3) | |||||
Increase/(decrease) to diluted EPS from continuing operations | $ 0.06 | $ (0.01) | $ 0.11 | $ (0.01) | |||||
Other Spin-Off Costs | |||||||||
Other spin-off costs (1) | $ (1.6) | $ (3.8) | $ (53.1) | $ (4.5) | |||||
Tax benefit/(expense) (2) | 4.7 | 1.4 | (148.5) | 1.7 | |||||
Other spin-off costs, net of tax | $ 3.1 | $ (2.4) | $ (201.6) | $ (2.8) | |||||
Increase/(decrease) to diluted EPS from continuing operations | $ 0.01 | $ (0.01) | $ (0.56) | $ (0.01) | |||||
Gain on Sale of CareFusion Stock | |||||||||
Gain on sale of CareFusion stock | $ 1.3 | $ - | $ 44.6 | $ - | |||||
Tax expense | - | - | - | - | |||||
Gain on sale of CareFusion stock, net of tax | $ 1.3 | $ - | $ 44.6 | $ - | |||||
Increase to diluted EPS from continuing operations | $ - | $ - | $ 0.12 | $ - | |||||
Weighted Average Number of Diluted Shares Outstanding | 361.8 | 361.1 | 361.4 | 361.5 | |||||
(1) Other spin-off costs included in other (income)/expense, net for the fiscal year ended June 30, 2010 were $2.4 million. Other spin-off costs also | |||||||||
(2) The fiscal 2010 year-to-date tax expense associated with the other spin-off costs includes $168.3 million related to the anticipated repatriation of a | |||||||||
CARDINAL HEALTH, INC. AND SUBSIDIARIES | |||||||||
ASSET MANAGEMENT ANALYSIS | |||||||||
Fourth Quarter | Fiscal Year | ||||||||
2010 | 2009 | 2010 | 2009 | ||||||
Receivable Days | 18.6 | 19.1 | |||||||
Days Inventory on Hand | 21 | 23 | |||||||
Debt to Total Capital | 29 % | 29 % | |||||||
Net Debt to Capital | (13)% | 22 % | |||||||
Return on Equity | 16.8% | 12.7% | 10.9% | 14.1% | |||||
Non-GAAP Return on Equity | 15.8% | 19.3% | 16.4% | 18.5% | |||||
Effective Tax Rate from Continuing Operations | 37.2% | 30.3 % | 51.6% | 34.6% | |||||
Non-GAAP Effective Tax Rate from Continuing Operations | 37.7% | 32.6 % | 37.5% | 36.8% | |||||
| |||||||||
CARDINAL HEALTH, INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||
GAAP / NON-GAAP RECONCILIATION | |||||||||||||||||||||||||||||||||
Fourth Quarter 2010 | Fiscal Year 2010 | ||||||||||||||||||||||||||||||||
(in millions, except per Common Share amounts) | GAAP | Restructuring | Acquisition | Impairments | Litigation | Other | Gain on | Non-GAAP | GAAP | Restructuring | Acquisition | Impairments | Litigation | Other | Gain on | Non-GAAP | |||||||||||||||||
Operating Earnings | |||||||||||||||||||||||||||||||||
Amount | $334 | $6 | $8 | $1 | ($34) | $2 | - | $317 | $1,307 | $91 | $8 | $29 | ($62) | $11 | - | $1,383 | |||||||||||||||||
Growth Rate | 9 % | (11)% | 1 % | (2)% | |||||||||||||||||||||||||||||
Earnings Before Income Taxes and Discontinued Operations | $308 | $6 | $8 | $1 | ($34) | $2 | ($1) | $291 | $1,212 | $91 | $8 | $29 | ($62) | $53 | ($45) | $1,286 | |||||||||||||||||
Provision for Income Taxes (1) | $115 | $2 | $3 | ($2) | ($12) | $5 | - | $110 | $625 | $32 | $3 | ($5) | ($23) | ($149) | - | $482 | |||||||||||||||||
Earnings from Continuing Operations | |||||||||||||||||||||||||||||||||
Amount | $194 | $5 | $6 | $3 | ($21) | ($3) | ($1) | $181 | $587 | $59 | $6 | $34 | ($39) | $202 | ($45) | $804 | |||||||||||||||||
Growth Rate | (4)% | (21)% | (23)% | (2)% | |||||||||||||||||||||||||||||
Diluted EPS from Continuing Operations | |||||||||||||||||||||||||||||||||
Amount | $0.54 | $0.01 | $0.02 | $0.01 | ($0.06) | ($0.01) | - | $0.50 | $1.62 | $0.16 | $0.02 | $0.09 | ($0.11) | $0.56 | ($0.12) | $2.22 | |||||||||||||||||
Growth Rate | (4)% | (21)% | (23)% | (2)% | |||||||||||||||||||||||||||||
Fourth Quarter 2009 | Fiscal Year 2009 | ||||||||||||||||||||||||||||||||
GAAP | Restructuring | Acquisition | Impairments | Litigation | Other | Gain on | Non-GAAP | GAAP | Restructuring | Acquisition | Impairments | Litigation | Other | Gain on | Non-GAAP | ||||||||||||||||||
Operating Earnings | |||||||||||||||||||||||||||||||||
Amount | $307 | $38 | $1 | $3 | $5 | $4 | - | $356 | $1,287 | $105 | $3 | $14 | $5 | $5 | - | $1,419 | |||||||||||||||||
Growth Rate | (9)% | 6 % | (8)% | (1)% | |||||||||||||||||||||||||||||
Earnings Before Income Taxes and Discontinued Operations | $290 | $38 | $1 | $3 | $5 | $4 | - | $339 | $1,160 | $105 | $3 | $14 | $5 | $5 | - | $1,291 | |||||||||||||||||
Provision for Income Taxes (1) | $88 | $11 | - | $9 | $2 | $1 | - | $111 | $402 | $29 | $1 | $39 | $2 | $2 | - | $475 | |||||||||||||||||
Earnings from Continuing Operations | |||||||||||||||||||||||||||||||||
Amount | $202 | $26 | $1 | ($6) | $3 | $2 | - | $228 | $758 | $75 | $2 | ($26) | $3 | $3 | - | $816 | |||||||||||||||||
Growth Rate | 10 % | 14 % | (11)% | (8)% | |||||||||||||||||||||||||||||
Diluted EPS from Continuing Operations | |||||||||||||||||||||||||||||||||
Amount | $0.56 | $0.07 | - | ($0.02) | $0.01 | $0.01 | - | $0.63 | $2.10 | $0.21 | - | ($0.07) | $0.01 | $0.01 | - | $2.26 | |||||||||||||||||
Growth Rate | 10 % | 13 % | (10)% | (8)% | |||||||||||||||||||||||||||||
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(1) The Company applies varying tax rates depending upon the tax jurisdiction where the items are incurred. | |||||||||||||||||||||||||||||||||
CARDINAL HEALTH, INC. AND SUBSIDIARIES | ||||||||||
GAAP / NON-GAAP RECONCILIATION | ||||||||||
Fourth Quarter | Fourth Quarter | |||||||||
(in millions) | 2010 | 2009 | ||||||||
GAAP Return on Equity | 16.8 % | 12.7% | ||||||||
Non-GAAP Return on Equity | ||||||||||
Net earnings | $ 223.5 | $ 273.2 | ||||||||
Restructuring and employee severance, net of tax, in continuing operations (1) | 4.7 | 26.4 | ||||||||
Acquisition related costs, net of tax, in continuing operations (1) | 5.6 | 0.4 | ||||||||
Impairments and loss on sale of assets, net of tax, in continuing operations (1) | 2.8 | (5.8) | ||||||||
Litigation (credits)/charges, net, net of tax, in continuing operations (1) | (21.3) | 3.1 | ||||||||
Other spin-off costs, net of tax (1) | (3.1) | 2.4 | ||||||||
Gain on sale of CareFusion stock, net of tax (1) | (1.3) | - | ||||||||
CareFusion net earnings in discontinued operations (1, 2) | (0.4) | (65.5) | ||||||||
Adjusted net earnings | $ 210.5 | $ 234.2 | ||||||||
Annualized | $ 842.0 | $ 937.2 | ||||||||
Fourth Quarter | Third Quarter | Fourth Quarter | Third Quarter | |||||||
2010 | 2010 | 2009 | 2009 | |||||||
Non-GAAP Shareholders' Equity | ||||||||||
Total shareholders' equity | $ 5,276.1 | $ 5,360.9 | $ 8,724.7 | $ 8,434.5 | ||||||
Non-cash dividend related to CareFusion spin-off | - | - | (3,723.8) | (3,723.8) | ||||||
Non-GAAP shareholders' equity | $ 5,276.1 | $ 5,360.9 | $ 5,000.9 | $ 4,710.7 | ||||||
Divided by average shareholders' equity | 5,318.5 | 4,855.8 | ||||||||
Non-GAAP return on equity | 15.8% | 19.3% | ||||||||
| ||||||||||
(2) To properly reflect the impact of the spin-off, on a non-GAAP basis, CareFusion net earnings included in discontinued operations are excluded from adjusted net earnings for all periods presented. | ||||||||||
CARDINAL HEALTH, INC. AND SUBSIDIARIES | ||||||||||||||||||||||
GAAP / NON-GAAP RECONCILIATION | ||||||||||||||||||||||
Fiscal Year | Fiscal Year | |||||||||||||||||||||
(in millions) | 2010 | 2009 | ||||||||||||||||||||
GAAP Return on Equity | 10.9 % | 14.1% | ||||||||||||||||||||
Non-GAAP Return on Equity | ||||||||||||||||||||||
Net earnings | $ 642.2 | $ 1,151.6 | ||||||||||||||||||||
Restructuring and employee severance, net of tax, in continuing operations (1) | 59.0 | 75.4 | ||||||||||||||||||||
Acquisition related costs, net of tax, in continuing operations (1) | 5.7 | 1.7 | ||||||||||||||||||||
Impairments and loss on sale of assets, net of tax, in continuing operations (1) | 34.2 | (25.5) | ||||||||||||||||||||
Litigation (credits)/charges, net, net of tax, in continuing operations (1) | (39.2) | 3.3 | ||||||||||||||||||||
Other spin-off costs, net of tax (1) | 201.6 | 2.8 | ||||||||||||||||||||
Gain on sale of CareFusion stock, net of tax (1) | (44.6) | - | ||||||||||||||||||||
CareFusion net earnings in discontinued operations (1, 2) | (15.0) | (384.6) | ||||||||||||||||||||
Adjusted net earnings | $ 843.9 | $ 824.7 | ||||||||||||||||||||
Fourth Quarter | Third Quarter | Second Quarter | First Quarter | Fourth Quarter | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | Fourth Quarter | |||||||||||||
2010 | 2010 | 2010 | 2010 | 2009 | 2009 | 2009 | 2009 | 2009 | 2008 | |||||||||||||
Non-GAAP Shareholders' Equity | ||||||||||||||||||||||
Total shareholders' equity | $ 5,276.1 | $ 5,360.9 | $ 5,226.1 | $ 4,941.2 | $ 8,724.7 | $ 8,724.7 | $ 8,434.5 | $ 8,127.9 | $ 7,918.1 | $ 7,747.5 | ||||||||||||
Non-cash dividend related to CareFusion spin-off | - | - | - | - | (3,723.8) | (3,723.8) | (3,723.8) | (3,723.8) | (3,723.8) | (3,723.8) | ||||||||||||
Non-GAAP shareholders' equity | $ 5,276.1 | $ 5,360.9 | $ 5,226.1 | $ 4,941.2 | $ 5,000.9 | $ 5,000.9 | $ 4,710.7 | $ 4,404.1 | $ 4,194.3 | $ 4,023.7 | ||||||||||||
Divided by average shareholders' equity | 5,161.0 | 4,466.7 | ||||||||||||||||||||
Non-GAAP return on equity | 16.4% | 18.5% | ||||||||||||||||||||
| ||||||||||||||||||||||
(2) To properly reflect the impact of the spin-off, on a non-GAAP basis, CareFusion net earnings included in discontinued operations are excluded from adjusted net earnings for all periods presented. | ||||||||||||||||||||||
CARDINAL HEALTH, INC. AND SUBSIDIARIES | ||||||||||
GAAP / NON-GAAP RECONCILIATION | ||||||||||
Fourth Quarter | Fiscal Year | |||||||||
(in millions) | 2010 | 2009 | 2010 | 2009 | ||||||
GAAP Effective Tax Rate from Continuing Operations | 37.2 % | 30.3 % | 51.6 % | 34.6 % | ||||||
Non-GAAP Effective Tax Rate from Continuing Operations | ||||||||||
Earnings before income taxes and discontinued operations | $ 308.4 | $ 289.7 | $ 1,211.6 | $ 1,159.8 | ||||||
Restructuring and employee severance | 6.4 | 37.5 | 90.7 | 104.7 | ||||||
Acquisition related costs | 8.3 | 0.7 | 8.4 | 2.8 | ||||||
Impairments and loss on sale of assets | 0.9 | 2.7 | 29.1 | 13.9 | ||||||
Litigation (credits)/charges, net | (33.6) | 4.9 | (62.4) | 5.2 | ||||||
Other spin-off costs | 1.6 | 3.8 | 53.1 | 4.5 | ||||||
Gain on sale of CareFusion stock | (1.3) | - | (44.6) | - | ||||||
Adjusted earnings before income taxes and discontinued operations | $ 290.7 | $ 339.3 | $ 1,285.9 | $ 1,290.9 | ||||||
Provision for income taxes (1) | $ 114.6 | $ 87.7 | $ 624.6 | $ 401.6 | ||||||
Restructuring and employee severance tax benefit (1) | 1.7 | 11.1 | 31.7 | 29.3 | ||||||
Acquisition related costs tax benefit (1) | 2.7 | 0.3 | 2.7 | 1.1 | ||||||
Impairments and loss on sale of assets tax benefit/(expense) (1) | (1.9) | 8.5 | (5.1) | 39.4 | ||||||
Litigation (credits)/charges, net tax benefit/(expense) (1) | (12.3) | 1.8 | (23.2) | 1.9 | ||||||
Other spin-off costs tax benefit/(expense) (1) | 4.7 | 1.4 | (148.5) | 1.7 | ||||||
Gain on sale of CareFusion stock tax expense (1) | - | - | - | - | ||||||
Adjusted provision for income taxes | $ 109.5 | $ 110.8 | $ 482.2 | $ 475.0 | ||||||
Non-GAAP effective tax rate from continuing operations | 37.7% | 32.6% | 37.5% | 36.8% | ||||||
Fourth Quarter | ||||||||||
2010 | 2009 | |||||||||
Debt to Total Capital | 29% | 29% | ||||||||
Net Debt to Capital | ||||||||||
Current portion of long-term obligations and other short-term borrowings | $ 233.2 | $ 366.2 | ||||||||
Long-term obligations, less current portion | 1,896.1 | 3,271.6 | ||||||||
Debt | $ 2,129.3 | $ 3,637.8 | ||||||||
Cash and equivalents | (2,755.3) | (1,221.6) | ||||||||
Net debt | $ (626.0) | $ 2,416.2 | ||||||||
Total shareholders' equity | $ 5,276.1 | $ 8,724.7 | ||||||||
Capital | $ 4,650.1 | $ 11,140.9 | ||||||||
Net Debt to Capital | (13)% | 22% | ||||||||
(1) The Company applies varying tax rates depending upon the tax jurisdiction where the items are incurred. | ||||||||||
Forward-Looking Non-GAAP Financial Measures | ||||||||||
The Company presents non-GAAP earnings from continuing operations and non-GAAP effective tax rate from continuing operations (and presentations The most directly comparable forward-looking GAAP measures are earnings from continuing operations and effective tax rate from continuing operations. | ||||||||||
CARDINAL HEALTH, INC. AND SUBSIDIARIES | |||||||
Fourth Quarter | |||||||
(in millions) | 2010 | 2009 | |||||
Days Inventory on Hand | |||||||
Inventories | $ 6,355.9 | $ 6,832.8 | |||||
Cost of products sold | $ 23,555.5 | $ 23,403.0 | |||||
Chargeback billings | 3,066.0 | 3,271.2 | |||||
Adjusted cost of products sold | $ 26,621.5 | $ 26,674.2 | |||||
Adjusted cost of products sold divided by 90 days | $ 295.8 | $ 296.4 | |||||
Days inventory on hand | 21 | 23 | |||||
Days Inventory on Hand: inventory divided by ((quarterly costs of products sold plus chargeback billings) divided by 90 days). | |||||||
CARDINAL HEALTH, INC. AND SUBSIDIARIES | ||
DEFINITIONS | ||
GAAP | ||
Debt: long-term obligations plus short-term borrowings | ||
Debt to Total Capital: debt divided by (debt plus total shareholders' equity) | ||
Diluted EPS from Continuing Operations: earnings from continuing operations divided by diluted weighted average shares outstanding | ||
Effective Tax Rate from Continuing Operations: provision for income taxes divided by earnings before income taxes and discontinued operations | ||
Gain on Sale of CareFusion Stock: realized gains and losses from the sale of the Company's ownership of CareFusion common stock retained in connection with the spin-off | ||
Other Spin-Off Costs: costs and tax charges incurred in connection with the Company's spin-off of CareFusion that are not included in restructuring and employee severance, acquisition related costs, impairments and loss on sale of assets and litigation (credits)/charges, net. Other spin-off costs include, among other things, the loss on extinguishment of debt and the income tax charge related to the anticipated repatriation of a portion of cash loaned to the Company's entities within the United States | ||
Receivable Days: trade receivables, net divided by (monthly revenue divided by 30 days) | ||
Segment Profit: segment revenue minus (segment cost of products sold and segment distribution, selling, general and administrative expenses) | ||
Segment Profit Margin: segment profit divided by segment revenue | ||
Segment Profit Mix: segment profit divided by total segment profit for all segments | ||
Return on Equity: annualized net earnings divided by average shareholders' equity | ||
Revenue Mix: segment revenue divided by total segment revenue for all segments | ||
NON-GAAP | ||
Net Debt to Capital: net debt divided by (net debt plus total shareholders' equity) | ||
Net Debt: debt minus (cash and equivalents) | ||
Non-GAAP Diluted EPS from Continuing Operations: non-GAAP earnings from continuing operations divided by diluted weighted average shares outstanding | ||
Non-GAAP Diluted EPS from Continuing Operations Growth Rate: (current period non-GAAP diluted EPS from continuing operations minus prior period non-GAAP diluted EPS from continuing operations) divided by prior period non-GAAP diluted EPS from continuing operations | ||
Non-GAAP Earnings from Continuing Operations: earnings from continuing operations excluding (1) restructuring and employee severance, (2) acquisition related costs, (3) impairments and loss on sale of assets, (4) litigation (credits)/charges, net, (5) Other Spin-Off Costs and (6) gain on sale of CareFusion stock, each net of tax | ||
Non-GAAP Earnings from Continuing Operations Growth Rate: (current period non-GAAP earnings from continuing operations minus prior period non-GAAP earnings from continuing operations) divided by prior period non-GAAP earnings from continuing operations | ||
Non-GAAP Effective Tax Rate from Continuing Operations: (provision for income taxes adjusted for (1) restructuring and employee severance, (2) acquisition related costs, (3) impairments and loss on sale of assets, (4) litigation (credits)/charges, net, (5) Other Spin-Off Costs and (6) gain on sale of CareFusion stock) divided by (earnings before income taxes and discontinued operations adjusted for (1) restructuring and employee severance, (2) acquisition related costs, (3) impairments and loss on sale of assets, (4) litigation (credits)/charges, net, (5) Other Spin-Off Costs and (6) gain on sale of CareFusion stock) | ||
Non-GAAP Operating Earnings: operating earnings excluding (1) restructuring and employee severance, (2) acquisition related costs, (3) impairments and loss on sale of assets, (4) litigation credits/(charges), net and (5) Other Spin-Off Costs included within distribution, selling, general and administrative expenses | ||
Non-GAAP Operating Earnings Growth Rate: (current period non-GAAP operating earnings minus prior period non-GAAP operating earnings) divided by prior period non-GAAP operating earnings | ||
Non-GAAP Return on Equity: (annualized current period net earnings excluding (1) restructuring and employee severance, (2) acquisition related costs, (3) impairments and loss on sale of assets, (4) litigation (credits)/charges, net, (5) Other Spin-Off Costs, (6) CareFusion net earnings in discontinued operations and (7) gain on sale of CareFusion stock, each net of tax) divided by average shareholders' equity adjusted for the $3.7 billion non-cash dividend issued in connection with the spin-off | ||
SOURCE Cardinal Health
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