Cardinal Health (CAH) 8-K Cardinal Health Reports First Quarter Results

Essential to care

Q1

FY

2008

Earnings

Call

FY 2008

November 5, 2007

Exhibit 99.3

2

Forward-looking statements and

GAAP

reconciliation

This

presentation

contains

forward-looking

statements

addressing

expectations,

prospects,

estimates

and

other

matters

that

are

dependent

upon

future

events

or

developments.

These

matters

are

subject

to

risks

and

uncertainties

that

could

cause

actual

results

to

differ

materially

from

those

projected,

anticipated

or

implied.

The

most

significant

of

these

uncertainties

are

described

in

Cardinal

Health's

Form

10-K,

Form

10-Q

and

Form

8-K

reports

(including

all

amendments

to

those

reports)

and

exhibits

to

those

reports,

and

include

(but

are

not

limited

to)

the

following:

competitive

pressures

in

its

various

lines

of

business;

the

loss

of

one

or

more

key

customer

or

supplier

relationships

or

changes

to

the

terms

of

those

relationships;

uncertainties

relating

to

the

timing

of

generic

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

healthcare

products

and/or

services;

the

results,

consequences,

effects

or

timing

of

any

inquiry

or

investigation

by

any

regulatory

authority

or

any

legal

and

administrative

proceedings;

successful

integration

of

Cardinal

Health

and

VIASYS

Healthcare

and

the

ability

to

achieve

synergies

from

the

acquisition;

uncertainties

relating

to

the

amount

of

future

share

repurchases

by

Cardinal

Health,

which

can

be

affected

by

Cardinal

Health's

then

current

stock

price,

regulatory

restraints

on

share

repurchases,

cash

flows,

financial

condition

and

alternative

uses

of

cash

available

to

Cardinal

Health

at

the

time,

as

well

as

by

the

amount

of

any

additional

share

repurchases

authorized

by the

board

of

directors;

and

general

economic

and

market

conditions.

This

presentation

reflects

management’s

views

as

of

November

5,

2007.

Except

to

the

extent

required

by

applicable

law,

Cardinal

Health

undertakes

no

obligation

to

update

or

revise

any

forward-looking

statement.

In

addition,

this

presentation

includes

non-GAAP

financial

measures.

Cardinal

Health

provides

definitions

and

reconciling

information

at

the

end

of

this

presentation

and

on

its

investor

relations

page

at

www.cardinalhealth.com.

3

Agenda

Opening remarks

Kerry Clark

Chief Executive

Officer

Financial overview

Jeff Henderson

Chief Financial

Officer

Q&A

4

Financial Overview

•

FY 2008 Q1 Results –

Consolidated

•

FY 2008 Q1 Results –

Business Segments

•

Key

Financial

Value

Drivers

•

FY 2008 Financial Targets and Goals

•

HSCS

Priorities

5

Q1 FY 2008 Recap

$21,973

$490

$303

$0.82

$409

16.7%

($M)

5%

9%

4%

15%

%

Change¹

GAAP Basis

$512

$318

$0.86

17.5%

($M)

8%

3%

15%

%

Change¹

Non-GAAP Basis

1

% change over prior year quarter

Revenue

Operating Earnings

Earnings from continuing ops

Diluted EPS from continuing ops

Operating cash flow

Return on equity

6

Operating

Earnings/(Loss)

($M)

Diluted EPS from

Continuing

Operations

Operating

Earnings/(Loss)

($M)

Diluted EPS from

Continuing

Operations

GAAP Consolidated

$490

$0.82

$451

$0.71

Special Items

($23)

($0.04)

($22)

($0.04)

Impairment Charges

& Other

$0

$0.00

($2)

$0.00

Non-GAAP

Consolidated

$512

$0.86

$475

$0.75

Q1 FY 2008

Q1 FY 2007

Q1 Operating Earnings and EPS

7

Healthcare Supply Chain Services –

Pharmaceutical

Business Analysis

Highlights:

•

Q1

revenue

up

4%

on

new

bulk

revenue

from

existing

customers

and

branded

price

inflation,

partially

offset

by

pharma

market

growth

moderation,

FY07

customer

losses

and

soft

nuclear

market

•

Segment

profit

growth

positively

impacted

by

brand

price

inflation,

improved

operating

leverage,

and a

$14M vendor related reserve reduction

•

Q1

segment

profit

negatively

impacted

by

revenue

growth/mix,

fewer

generic

launches

vs.

last

year

and generic deflation

•

Corporate

allocation

change

positively

impacted

segment

profit

growth

by

~2

pps

•

Economic profit margin¹

increased 3 basis points vs. prior year to 0.88%

Revenue

Segment Profit

19,221

305

Q1 FY08

($M)

18,553

289

Q1 FY07

($M)

4%

6%

% Change

1

Non-GAAP financial measure

8

Healthcare

Supply

Chain

Services

–

Medical

Business Analysis

Highlights:

•

Q1

revenue

up

6%

on

new

customer

sales

and

improving

demand

from

hospital,

laboratory,

and

ambulatory customers, somewhat offset by demand in kitting products

•

Segment

profit

down

10%,

driven

by

refined

corporate

allocation,

operational

investments

(e.g.,

customer service), and higher costs within kitting

•

McGaw

Park transition is on track with minimal business interruption

•

Corporate allocation change negatively impacted segment profits by ~9 pps

Revenue

Segment Profit

1,921

58

Q1 FY08

($M)

1,806

64

Q1 FY07

($M)

6%

(10%)

% Change

9

Medical Products and Technologies

Business Analysis

Highlights:

•

Q1

revenue

up

47%

driven

by

the

VIASYS

acquisition,

new

product

launches,

increased

penetration

of

existing customers, and foreign exchange

•

Segment profit up 24%, with margin dampened by purchase accounting impact from VIASYS

acquisition

•

Overall VIASYS integration on-track; FY08 synergy capture ahead of schedule

Revenue

Segment Profit

623

57

Q1 FY08

($M)

424

46

Q1 FY07

($M)

47%

24%

% Change

10

Clinical Technologies and Services

Business Analysis

Highlights:

•

Q1 revenue up 9% on continued strong demand for infusion and dispensing products

•

Segment profit up 91%, driven by favorable product mix driving higher gross margins and improved

operating leverage

•

Favorable

compare

vs.

Q1

FY07

due

to

SE

recall

related

charge

of

$13.5M

in

prior

year

•

Segment profit margin up 640 bps vs. Q1 FY07

Revenue

Segment Profit

649

98

Q1 FY08

($M)

594

51

Q1 FY07

($M)

9%

91%

% Change

11

Key Financial Value Drivers

Balance sheet management

–

Days of inventory on hand declined from 30 to 28 days Q1 FY08 vs. Q1 FY07

–

Portfolio optimization process ongoing

–

Non-GAAP ROIC up 157 bps vs. Q1 last year

Capital deployment

–

$592M

in

share

buyback

completed

in

Q1,

$720M

since

July

1st

Capital structure

–

Debt to total capital increased from 26% in Q1 FY07 to 35% in Q1

FY08

–

Net

debt

to

capital¹

increased

to

26%

vs.

11%

in

Q1

last

year

–

Non-GAAP effective tax rate for the quarter was 32.25% vs. 29.4% last year

Non-GAAP

Return

on

Equity

increased

390

bps

to

17.5%

1

Non-GAAP financial measure

12

Outlook

•

Reconfirming overall Non-GAAP EPS guidance of $3.95 to $4.15

•

3

of

4

segments

on-track

—

no

change

•

Lowering guidance

on

Supply

Chain

Pharma

to

“Below

range”

•

Profit

growth

significantly

weighted

toward

latter

part

of

2

nd

half

–

Difficult Q2 compare in Pharma

November 5, 2007

Financial targets and goals

In-line

Strong investment grade

Credit Rating:

Completed $3.1B PTS-related share repurchase in

July 2007; Announced new 2-year, $2B authorization

-

Quarterly dividend $0.12 per share

-

up to 50% of OCF, via share

repurchase and dividends

Cash Returned to

Shareholders:

In line with long-term goal

> 100% of net earnings

Operating Cash Flow:

In line with long-term goal

15% -

20%

Return

on

Equity

4

:

In range

+ 20 -

25%

+ 10 -

15%

CTS

Above range

+ 25 -

30%

+ 8 -

12%

MPT

Below range³

+ 6 -

9%

+ 4 -

7%

HSCS -

Medical

Below range³

+ 7 -

10%

+ 7 -

10%

HSCS -

Pharma

FY08 profit growth vs. long-term goal

Segment

Profit

Revenue

Segment

$3.95 -

$4.15 per share

+ 12 -

16%

EPS²:

In range

+ 10 -

13%

Op Earnings¹:

In range

+ 8 -

10%

Revenue:

Fiscal Year 2008

Over FY'08 -

FY'10 3 Year Period:

One Year Targets

Long-Term Financial Goals

1

Non-GAAP operating earnings

2

Non-GAAP diluted EPS from continuing operations

3

Refined methodology for allocation of corporate costs within HSCS in FY08 positively impacts HSCS-P profit growth by 1.8 percentage points, and negatively impacts

HSCS-M profit growth by 7.3 percentage points

4

Non-GAAP return on equity

14

HSCS Priorities

HSCS –

Medical:

•

Focus on acute care revenue growth and profitability

•

Leverage scale to lower product costs; expand off-shore sourcing

•

Continuing

focusing

on

operational

improvements

in

Presource

®

kitting

business

•

Complete McGaw Park transition

HSCS –

Pharmaceutical:

•

Drive initiatives in place to improve operational performance within core pharma distribution

–

Deliver on planned cost reductions

–

Revitalize retail selling organization and product capabilities

–

Execute strategy to enhance customer profitability through contract/generic compliance

–

Continue to drive generic sourcing and customer offering strategies

•

Within nuclear pharmacy services, adjust operating model to offset short-term market volatility

–

Longer-term, leverage Cardiolite generic event

•

Accelerate restructuring to improve operating leverage and to better align resources

Q&A

*

*

*

CARDINAL HEALTH, INC. AND SUBSIDIARIES

GAAP / NON-GAAP RECONCILIATION

(in millions)

HEALTHCARE SUPPLY CHAIN SERVICES

Pharmaceutical

	First Quarter Fiscal 2008									First Quarter Fiscal 2007
	July		August		September		Total			July		August		September		Total
Economic Profit Margin
Segment profit							$	305.4								$	288.7
Effective tax rate from continuing operations								35.9	%								35.1	%
Net operating earnings, after-tax (NOPAT)							$	195.6								$	187.5
Total assets	$	11,591.6	$	11,719.5	$	11,574.7				$	11,549.8	$	12,206.9	$	11,620.0
Less: assets from discontinued operations		—		—		—					107.5		109.4		—
Less: accounts payable		7,350.3		7,948.1		8,344.0					7,488.3		8,027.1		8,101.0
Less: other accrued liabilities		1,211.8		1,173.2		1,130.7					1,069.5		1,088.6		1,016.3
Less: liabilities from businesses held for sale		—		—		—					—		—		—
Less: deferred income taxes and other liabilities		88.8		86.7		35.0					82.1		82.1		71.0
Less: goodwill and other intangibles, net		1,351.2		1,344.9		1,345.2					1,354.5		1,361.8		1,332.4
Less: cash and equivalents		65.4		51.4		38.3					42.2		57.4		75.0
Less: short-term investments available for sale		—		—		—					—		—		—
Tangible capital	$	1,524.1	$	1,115.2	$	681.5	$	1,106.9		$	1,405.7	$	1,480.5	$	1,024.3	$	1,303.5
Multiplied by weighted average cost of capital								2.3	%								2.3	%
Capital charge							$	25.5								$	30.0
Economic profit							$	170.1								$	157.5
Revenue							$	19,220.8								$	18,532.8
Economic profit margin								0.88	%								0.85	%

⁽¹⁾ Tangible Capital is a quarterly average calculated as total assets allocated to the segment less (total liabilities allocated to the segment, goodwill and intangibles, cash and equivalents and short term investments available for sale)

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

⁽³⁾ Healthcare Supply Chain Services—Pharmaceutical Tangible Capital calculated for both current and prior fiscal year includes an allocation of payables previously held at Corporate to more accurately reflect the payable balance of the segment.

CARDINAL HEALTH, INC. AND SUBSIDIARIES

GAAP / NON-GAAP RECONCILIATION

(in millions)

HEALTHCARE SUPPLY CHAIN SERVICES

Medical

	First Quarter Fiscal 2008									First Quarter Fiscal 2007
	July		August		September		Total			July		August		September		Total
Economic Profit Margin
Segment profit							$	57.5								$	64.1
Effective tax rate from continuing operations								29.3	%								29.8	%
Net operating earnings, after-tax (NOPAT)							$	40.6								$	45.0
Total assets	$	2,481.8	$	2,515.4	$	2,552.6				$	2,442.1	$	2,437.6	$	2,456.6
Less: assets from discontinued operations		—		—		—					—		—		—
Less: accounts payable		539.0		581.0		615.0					534.8		478.7		510.4
Less: other accrued liabilities		67.0		71.7		53.5					71.1		78.1		49.4
Less: liabilities from businesses held for sale		—		—		—					—		—		—
Less: deferred income taxes and other liabilities		54.6		55.4		61.3					58.2		58.1		53.0
Less: goodwill and other intangibles, net		386.0		385.9		388.2					378.8		377.8		377.7
Less: cash and equivalents		24.4		25.7		21.6					2.9		3.0		4.1
Less: short-term investments available for sale		—		—		—					—		—		—
Tangible capital	$	1,410.8	$	1,395.7	$	1,413.0	$	1,406.5		$	1,396.3	$	1,441.9	$	1,462.0	$	1,433.4
Multiplied by weighted average cost of capital								2.3	%								2.3	%
Capital charge							$	32.3								$	33.0
Economic profit							$	8.3								$	12.0
Revenue							$	1,920.7								$	1,806.1
Economic profit margin								0.43	%								0.66	%

⁽¹⁾ Tangible Capital is a quarterly average calculated as total assets allocated to the segment less (total liabilities allocated to the segment, goodwill and intangibles, cash and equivalents and short term investments available for sale)

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

CARDINAL HEALTH, INC. AND SUBSIDIARIES

GAAP / NON-GAAP RECONCILIATION

(in millions)

CLINICAL AND MEDICAL PRODUCTS

Clinical Technologies and Services

	First Quarter Fiscal 2008									First Quarter Fiscal 2007
	July		August		September		Total			July		August		September		Total
Economic Profit Margin
Segment profit							$	98.3								$	51.5
Effective tax rate from continuing operations								24.2	%								29.2	%
Net operating earnings, after-tax (NOPAT)							$	74.5								$	36.5
Total assets	$	4,375.8	$	4,301.6	$	4,262.2				$	3,916.6	$	4,012.1	$	3,880.1
Less: assets from discontinued operations		—		—		—					—		—		—
Less: accounts payable		82.0		63.3		62.3					91.2		84.7		79.4
Less: other accrued liabilities		575.9		592.2		250.3					277.2		287.9		223.4
Less: liabilities from businesses held for sale		—		—		—					—		—		—
Less: deferred income taxes and other liabilities		238.4		238.9		474.5					577.6		577.0		475.1
Less: goodwill and other intangibles, net		2,171.8		2,206.2		2,180.4					2,085.9		2,083.4		2,174.3
Less: cash and equivalents		217.3		195.5		175.4					66.2		60.1		82.6
Less: short-term investments available for sale		—		—		—					—		—		0.3
Tangible capital	$	1,090.4	$	1,005.5	$	1,119.3	$	1,071.7		$	818.5	$	919.0	$	845.0	$	860.8
Multiplied by weighted average cost of capital								2.3	%								2.3	%
Capital charge							$	24.6								$	19.8
Economic profit							$	49.9								$	16.7
Revenue							$	648.9								$	594.5
Economic profit margin								7.69	%								2.81	%

⁽¹⁾ Tangible Capital is a quarterly average calculated as total assets allocated to the segment less (total liabilities allocated to the segment, goodwill and intangibles, cash and equivalents and short term investments available for sale)

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

CARDINAL HEALTH, INC. AND SUBSIDIARIES

GAAP / NON-GAAP RECONCILIATION

(in millions)

CLINICAL AND MEDICAL PRODUCTS

Medical Products and Technologies

	First Quarter Fiscal 2008									First Quarter Fiscal 2007
	July		August		September		Total			July		August		September		Total
Economic Profit Margin
Segment profit							$	56.9								$	46.0
Effective tax rate from continuing operations								13.1	%								7.0	%
Net operating earnings, after-tax (NOPAT)							$	49.4								$	42.8
Total assets	$	3,645.8	$	3,661.3	$	3,601.6				$	1,455.5	$	1,453.1	$	1,506.0
Less: assets from discontinued operations		—		—		—					—		—		—
Less: accounts payable		123.8		127.9		123.1					107.3		88.5		118.3
Less: other accrued liabilities		270.7		266.5		207.0					119.3		124.7		89.1
Less: liabilities from businesses held for sale		—		—		—					—		—		—
Less: deferred income taxes and other liabilities		203.5		203.9		180.0					46.2		46.6		44.4
Less: goodwill and other intangibles, net		1,945.4		1,952.2		1,910.5					454.8		453.7		453.4
Less: cash and equivalents		445.7		469.5		503.0					136.9		144.9		197.8
Less: short-term investments available for sale		—		—		—					—		—		—
Tangible capital	$	656.7	$	641.3	$	678.0	$	658.7		$	591.0	$	594.7	$	603.0	$	596.2
Multiplied by weighted average cost of capital								2.3	%								2.3	%
Capital charge							$	15.2								$	13.7
Economic profit							$	34.2								$	29.1
Revenue							$	623.2								$	423.6
Economic profit margin								5.49	%								6.87	%

⁽¹⁾ Tangible Capital is a quarterly average calculated as total assets allocated to the segment less (total liabilities allocated to the segment, goodwill and intangibles, cash and equivalents and short term investments available for sale)

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

CARDINAL HEALTH, INC. AND SUBSIDIARIES

GAAP / NON-GAAP RECONCILIATION

	First Quarter 2008
(in millions, except per Common Share amounts)	GAAP			Special Items		Impairment Charges and Other		Non-GAAP
Operating Earnings
Amount	$	490		$	23		—	$	512
Growth Rate		9	%						8	%
Provision for Income Taxes	$	144		$	8		—	$	151
Earnings from Continuing Operations
Amount	$	303		$	15		—	$	318
Growth Rate		4	%						3	%
Diluted EPS from Continuing Operations
Amount	$	0.82		$	0.04		—	$	0.86
Growth Rate		15	%						15	%
	First Quarter 2007
	GAAP			Special Items		Impairment Charges and Other		Non-GAAP
Operating Earnings
Amount	$	451		$	22	$	2	$	475
Growth Rate		23	%						23	%
Provision for Income Taxes	$	122		$	6	$	1	$	128
Earnings from Continuing Operations
Amount	$	291		$	16	$	1	$	309
Growth Rate		24	%						24	%
Diluted EPS from Continuing Operations
Amount	$	0.71		$	0.04		—	$	0.75

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

- more -

CARDINAL HEALTH, INC. AND SUBSIDIARIES

GAAP / NON-GAAP RECONCILIATION

	First Quarter
(in millions)	2008			2007
GAAP Return on Equity		16.7	%		12.8	%
Non-GAAP Return on Equity
Net earnings	$	301.8		$	270.7
Special items, net of tax, in continuing operations		14.8			16.3
Special items, net of tax, in discontinued operations		—			1.4
Adjusted net earnings	$	316.6		$	288.4
Annualized	$	1,266.4		$	1,153.6
Divided by average shareholders’ equity1	$	7,222.6		$	8,455.9
Non-GAAP return on equity		17.5	%		13.6	%
	First Quarter
(in millions)	2008			2007
GAAP Return on Invested Capital		6.57	%		5.14	%
Non-GAAP Return on Invested Capital
Net earnings	$	301.8		$	270.7
Special items, net of tax, in continuing operations		14.8			16.3
Special items, net of tax, in discontinued operations		—			1.4
Interest expense and other, net of tax		27.5			23.6
Adjusted net earnings	$	344.1		$	312.0
Annualized	$	1,376.4		$	1,248.0
Divided by average total invested capital2	$	18,365.9		$	21,050.9
Non-GAAP return on invested capital		7.50	%		5.93	%

¹ The average shareholders’ equity shown above is calculated using the average of the prior years’ fourth quarter and the current quarter.

² The average total invested capital shown above is calculated using the average of the prior years’ quarter and the current quarter. 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. Unrecorded goodwill is $7.5 billion and $9.7 billion, respectively, for the September 30, 2007 and 2006 calculations. 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 and $46.6 million at June 30, 2006 and September 30, 2006, respectively.

- more -

CARDINAL HEALTH, INC. AND SUBSIDIARIES

GAAP / NON-GAAP RECONCILIATION

	First Quarter
(in millions)	2008			2007
GAAP Effective Tax Rate from Continuing Operations		32.2	%		29.5	%
Non-GAAP Effective Tax Rate from Continuing Operations
Earnings before income taxes and discontinued operations	$	446.9		$	413.4
Special items		22.5			22.1
Adjusted earnings before income taxes and discontinued operations	$	469.4		$	435.5
Provision for income taxes	$	143.7		$	122.0
Special items tax benefit		7.7			5.8
Adjusted provision for income taxes	$	151.4		$	127.8
Non-GAAP effective tax rate from continuing operations		32.3	%		29.4	%
	First Quarter
	2008			2007
Debt to Total Capital		35	%		26	%
Net Debt to Capital
Current portion of long-term obligations and other short-term borrowings	$	386.8		$	280.1
Long-term obligations, less current portion and other short-term borrowings		3,347.5			2,616.0
Debt	$	3,734.3		$	2,896.1
Cash and equivalents		(1,289.6	)		(1,444.1	)
Short-term investments available for sale		—			(456.5	)
Net debt	$	2,444.7		$	995.5
Total shareholders’ equity	$	7,068.2		$	8,421.1
Capital	$	9,512.9		$	9,416.6
Net debt to capital		26	%		11	%

Forward-Looking Non-GAAP Financial Measures

The Company presents non-GAAP operating earnings, non-GAAP earnings from continuing operations, non-GAAP return on equity 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 operating earnings, earnings from continuing operations, return on equity 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.

- more -

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 revenue

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

NON-GAAP

Economic Profit:segment net operating earnings, after-tax minus (tangible capital multiplied by weighted average cost of capital);Tangible Capital is the quarterly average calculated as total assets allocated to the segment less (total liabilities allocated to the segment, goodwill and intangibles, cash and equivalents and short term investments available for sale)

Economic Profit Margin:economic profit divided by revenue

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

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

###