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Press Release: Cardinal Health Reports -3-

· 02/05/2021 06:55
Change in operating assets and liabilities, net of effects from acquisitions and divestitures: (Increase)/decrease in trade receivables (111) (108) (499) 121 Increase in inventories (1,011) (1,347) (1,256) (991) Increase/(decrease) in accounts payable 1,548 1,735 1,861 (77) Other accrued liabilities and operating items, net (81) (83) 504 5,128 Net cash provided by operating activities 1,217 697 1,487 44 Cash flows from investing activities: Acquisition of subsidiaries, net of cash acquired (3) -- (3) -- Additions to property and equipment (96) (77) (174) (149) Purchases of investments (1) (3) (18) (6) Proceeds from sale of investments 3 -- 4 2 Proceeds from divestitures, net of cash sold, and disposal of property and equipment -- 2 -- 2 Net cash used in investing activities (97) (78) (191) (151) Cash flows from financing activities: Net change in short-term borrowings -- 683 -- 681 Reduction of long-term obligations (9) (719) (49) (793) Net tax proceeds/(withholdings) from share-based compensation 6 2 (6) (11) Dividends on common shares (143) (141) (289) (287) Purchase of treasury shares -- -- -- (350) Net cash used in financing activities (146) (175) (344) (760) Effect of exchange rates changes on cash and equivalents 17 3 14 (5) Net increase/(decrease) in cash and equivalents 991 447 966 (872) Cash and equivalents at beginning of period 2,746 1,212 2,771 2,531 Cash and equivalents at end of period $ 3,737 $ 1,659 $ 3,737 $1,659 Schedule 4 -------------------------------------------------------------------------------- Cardinal Health, Inc. and Subsidiaries Segment Information Second Quarter (in millions) 2021 2020 (in millions) 2021 2020 --------------- ------------- Pharmaceutical Medical Revenue Revenue Amount $37,236 $35,714 Amount $4,310 $4,023 Growth rate 4 % 6 % Growth rate 7 % -- % Segment Segment profit profit Amount $413 $462 Amount $236 $195 Growth rate (11) % 4 % Growth rate 21 % 4 % Segment Segment profit profit margin 1.11 % 1.29 % margin 5.48 % 4.86 % Year-to-Date (in millions) 2021 2020 (in millions) 2021 2020 --------------- ------------- Pharmaceutical Medical Revenue Revenue Amount $72,348 $69,142 Amount $8,267 $7,940 Growth rate 5 % 6 % Growth rate 4 % 2 % Segment Segment profit profit Amount $815 $860 Amount $466 $365 Growth rate (5) % 1 % Growth rate 28 % 13 % Segment Segment profit profit margin 1.13 % 1.24 % margin 5.64 % 4.60 % The sum of the components and certain computations may reflect rounding adjustments. Schedule 5 --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation(1) Gross Operating Earnings Provision for/ Net Diluted Margin SG&A(2) Earnings Before (Benefit from) Earnings(3) Effective EPS(3) Gross Growth Growth Operating Growth Income Income Net Growth Tax Diluted Growth (in millions, except per common share amounts) Margin Rate SG&A(2) Rate Earnings Rate Taxes Taxes Earnings(3) Rate Rate EPS(3) Rate ---------------------- Second Quarter 2021 ---------------------- GAAP $1,776 4 % $ 1,147 (1) % $ 461 38 % $ 427 $ (203) $ 629 N.M. (47.6) % $ 2.13 N.M. Surgical gown recall costs (1) -- (1) (1) -- (1) -- Restructuring and employee severance -- -- 20 20 5 15 0.05 Amortization and other acquisition-related costs -- -- 116 116 29 87 0.29 Litigation (recoveries)/charges, net(4) -- -- 32 32 248 (216) (0.73) Non-GAAP $1,775 -- % $ 1,147 2 % $ 628 (3) % $ 594 $ 79 $ 514 15 % 13.2 % $ 1.74 14 % Second Quarter 2020 GAAP $1,714 (1) % $ 1,163 9 % $ 334 (34) % $ 279 $ 59 $ 220 (21) % 21.0 % $ 0.75 (19) % Surgical gown recall costs 56 (40) 96 96 25 71 0.24 State opioid assessment related to prior fiscal years -- 1 (1) (1) -- (1) -- Restructuring and employee severance -- -- 56 56 14 42 0.14 Amortization and other acquisition-related costs -- -- 133 133 33 100 0.34 Impairments and (gain)/loss on disposal of assets, net -- -- 7 7 2 5 0.02 Litigation (recoveries)/charges, net -- -- 21 21 3 18 0.06 Loss on extinguishment of debt -- -- -- 4 1 3 0.01 Transitional tax benefit, net -- -- -- -- 11 (11) (0.04) Non-GAAP $1,770 2 % $ 1,124 3 % $ 646 1 % $ 596 $ 148 $ 448 16 % 24.8 % $ 1.52 18 % (1) For more information on these measures, refer to the Use of Non-GAAP Measures and Definitions schedules. (2) Distribution, selling, general and administrative expenses. (3) Attributable to Cardinal Health, Inc. (4) Litigation (recoveries)/charges, net includes pre-tax charges of $1.02 billion and $5.63 billion recorded in the first quarter of fiscal 2021 and 2020, respectively, related to the opioid litigation. For fiscal 2021, the amount of tax expense increased by approximately $150 million during the three months ended December 31, 2020 while the amount of tax benefit increased by approximately $300 million during the six months ended December 31, 2020 compared to the tax impacts that would have been recognized without the opioid litigation charge. The treatment of the tax impacts of opioid litigation charges is expected to significantly increase the provision for income taxes during the remainder of the fiscal year. The net tax benefits associated with the opioid litigation charges are $35 million and $488 million for fiscal 2021 and 2020, respectively. Litigation(recoveries)/charges, net also includes a tax benefit recorded during the three months ended December 31, 2020 related to a net operating loss carryback. Our wholly-owned insurance subsidiary recorded a self-insurance pre-tax loss in its fiscal 2020 statutory financial statements primarily related to the opioid litigation charges previously accrued in our consolidated financial statements. This self-insurance pre-tax loss, which did not impact our pre-tax consolidated results, is currently deductible on our fiscal 2020 consolidated

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February 05, 2021 06:55 ET (11:55 GMT)