2019 Annual Report Essential to care ™ Corporate Offices Cardinal Health 7000 Cardinal Place Dublin, Ohio 43017 614.757.5000 www.cardinalhealth.com © 2019 Cardinal Health. All Rights Reserved. CARDINAL HEALTH, the Cardinal Health LOGO and ESSENTIAL TO CARE are trademarks of Cardinal Health and may be registered in the US and/or in other countries. All other marks are the property of their respective owners. Lit. No. 5CR19-971925 (08/2019) DearDear fellow fellow shareholders: shareholders: CorporateCorporate and and In myIn my letter letter to toyou you last last year, year, I acknowledged I acknowledged investorinvestor information information thethe trust trust you you place place in usin usto torun run the the business business CorporateCorporate offices offices FinancialFinancial information information effectivelyeffectively and, and, in inturn, turn, be beresponsible responsible CardinalCardinal Health Health ComprehensiveComprehensive financial financial and andother other information information about about stewardsstewards of ofyour your capital. capital. I’d I’dlike like to toshare share with with 70007000 Cardinal Cardinal Place Place CardinalCardinal Health Health can can be obtainedbe obtained by visiting by visiting the theInvestor Investor Dublin,Dublin, Ohio Ohio 43017 43017 RelationsRelations page page at ir.cardinalhealth.com. at ir.cardinalhealth.com. youyou some some of ofour our accomplishments accomplishments over over 614.757.5000614.757.5000 thethe past past year year and and where where we we are are going going in in www.cardinalhealth.comwww.cardinalhealth.com AvailableAvailable information information includes includes historical historical stock stock information, information, fiscalfiscal 2020 2020 as aswe webuild build upon upon this this foundation. foundation. LinkedIn:LinkedIn: linkedin.com/ linkedin.com/ company/cardinal-health company/cardinal-health researchresearch analyst analyst coverage, coverage, past past and and present present financial financial Twitter:Twitter: @CardinalHealth @CardinalHealth statements,statements, recent recent company company presentations, presentations, SEC SEC filings, filings, Facebook:Facebook: @cardinalhealthwings @cardinalhealthwings corporatecorporate governance governance guidelines guidelines and and board board committee committee charters.charters. This This information information — including — including the theCardinal Cardinal Health Health WhatWhat we we accomplished accomplished CommonCommon shares shares FormsForms 10-K, 10-K, 10-Q, 10-Q, 8-K 8-Kand and other other published published corporate corporate CardinalCardinal Health Health common common shares shares are arelisted listed on theon the literatureliterature — is — also is also available available without without charge charge upon upon written written WhileWhile we werecognize recognize there there is much is much work work to be to done,be done, fiscal fiscal NewNew York York Stock Stock Exchange Exchange under under the theticker ticker symbol symbol “CAH” “CAH” requestrequest to the to theInvestor Investor Relations Relations department department at the at thecorporate corporate 20192019 was was a solid a solid year year in which in which we wemade made significant significant progress. progress. andand are area component a component of the of theStandard Standard & Poor’s & Poor’s 500 500 Index. Index. office,office, by callingby calling Investor Investor Relations Relations at 614.757.1607, at 614.757.1607, or by or by emailingemailing [email protected]. [email protected]. Importantly,Importantly, we wedelivered delivered on theon the overall overall commitments commitments AnnualAnnual meeting meeting thatthat we wemade made at the at the beginning beginning of the of the year year and and made made TheThe 2019 2019 Annual Annual Meeting Meeting of Shareholders of Shareholders will willbe be CardinalCardinal Health Health uses uses its website its website as a as channel a channel of distribution of distribution significantsignificant strides strides executing executing on theon thesix strategicsix strategic priorities priorities heldheld at 8 at a.m. 8 a.m. Eastern Eastern on Novemberon November 6, 2019, 6, 2019, at at for importantfor important company company information. information. Important Important information, information, CardinalCardinal Health Health headquarters headquarters in Dublin, in Dublin, Ohio. Ohio. includingincluding news news releases, releases, financial financial information, information, earnings earnings and and thatthat we wehad had outlined. outlined. ShareholdersShareholders are arecordially cordially invited invited to attend. to attend. analystanalyst presentations, presentations, and and information information about about upcoming upcoming AcrossAcross the thecompany, company, we wesolidified solidified our foundationour foundation for for presentationspresentations and and events events is routinely is routinely posted posted and and accessible accessible AuditorsAuditors on theon theInvestor Investor Relations Relations page page at ir.cardinalhealth.com. at ir.cardinalhealth.com. In In the thefuture. future. Specifically, Specifically, in bothin both the thePharmaceutical Pharmaceutical and and ErnstErnst & Young & Young LLP LLP addition,addition, the theCardinal Cardinal Health Health website website allows allows investors investors and and MedicalMedical segments, segments, we weaddressed addressed business business challenges challenges otherother interested interested persons persons to sign to sign up toup automatically to automatically receive receive andand put put near- near- and and long-term long-term plans plans in place in place to grow to grow and and TransferTransfer agent agent and and registrar registrar emailemail alerts alerts when when the thecompany company posts posts news news releases, releases, SEC SEC furtherfurther enhance enhance value value for ourfor our shareholders shareholders. ShareholdersShareholders with with inquiries inquiries regarding regarding address address filingsfilings and andcertain certain other other information information on itson itswebsite. website. corrections,corrections, dividend dividend payments, payments, lost lost certificates certificates or or FiscalFiscal 2019 2019 financial financial performance performance changeschanges in registered in registered ownership ownership should should contact contact For Fornon-investor non-investor related related inquiries, inquiries, please please call callthe thecompany’s company’s In fiscalIn fiscal 2019, 2019, we recordedwe recorded revenue revenue of $145.5of $145.5 billion, billion, an an the theCardinal Cardinal Health Health stock stock transfer transfer agent: agent: mainmain telephone telephone number number at 614.757.5000. at 614.757.5000. increaseincrease of 6% of 6%from from fiscal fiscal 2018. 2018. GAAP GAAP operating operating earnings earnings werewere $2.1 $2.1 billion billion and and non-GAAP non-GAAP1 operating1 operating earnings earnings were were ComputershareComputershare Trust Trust Company, Company, N.A. N.A. $2.4$2.4 billion. billion. GAAP GAAP diluted diluted earnings earnings per per share share attributable attributable P.O.P.O. Box Box 505000 505000 to Cardinalto Cardinal Health, Health, Inc. Inc. (EPS) (EPS) for forfiscal fiscal year year 2019 2019 were were $4.53, $4.53, Louisville,Louisville, KY 40233KY 40233 whilewhile non-GAAP non-GAAP EPS EPS were were $5.28. $5.28. Moreover, Moreover, we wegenerated generated 877.498.8861877.498.8861 www.computershare.com/investorwww.computershare.com/investor $2.7$2.7 billion billion in operating in operating cash cash flow, flow, returned returned $1.2 $1.2 billion billion to shareholdersto shareholders in dividends in dividends and and stock stock repurchases repurchases and and paidpaid down down $1.1 $1.1 billion billion of long-term of long-term debt. debt. Additionally, Additionally, we weengaged engaged in a in cost a cost optimization optimization program program and and FiscalFiscal 2019 2019 cash cash dividend dividend declarations declarations exceededexceeded our our savings savings target target for forfiscal fiscal 2019. 2019. FiscalFiscal quarter quarter RecordRecord date date PaymentPayment date date PerPer common common share share amount amount 1st 1st OctoberOctober 1, 2018 1, 2018 OctoberOctober 15, 201815, 2018 $0.4763$0.4763 2nd2nd JanuaryJanuary 2, 2019 2, 2019 JanuaryJanuary 15, 201915, 2019 $0.4763$0.4763 3rd3rd AprilApril 1, 2019 1, 2019 AprilApril 15, 201915, 2019 $0.4763$0.4763 4th4th JulyJuly 1, 2019 1, 2019 JulyJuly 15, 201915, 2019 $0.4811$0.4811 1 See 1“Explanation See “Explanation and Reconciliation and Reconciliation of non-GAAP of non-GAAP Financial Financial Measures” Measures” in our in Fiscal our Fiscal Year 2019Year 2019 Form Form10-K for10-K definitions for definitions of the ofnon-GAAP the non-GAAP Measures Measures used inused this in Reportthis Report and for and reconciliations for reconciliations to theirto mosttheir mostdirectly directly comparable comparable GAAP GAAP measures. measures. Pharmaceutical segment In fiscal 2019, the Pharmaceutical segment reported FY19 Highlights strong revenue of $129.9 billion, up 7% from the Operational performance $121.2 billion reported in fiscal 2018. Importantly, we renewed our contracts with CVS Health and • Exceeded non-GAAP EPS guidance for the year Kroger, which means we now have contracts with • Delivered double digit revenue and profit