Cardinal Health Reports Fourth Quarter and Full Year Results for Fiscal Year 2022 Revenue increased 11% to $47.1 billion in the fourth quarter GAAP 1 operating earnings were $36 million in the fourt

Cardinal Health Reports Fourth Quarter and Full Year Results for Fiscal Year 2022

Revenue increased 11% to $47.1 billion in the fourth quarter

GAAP1 operating earnings were $36 million in the fourth quarter GAAP diluted EPS were $0.50 in the fourth quarter

Non-GAAP operating earnings increased 41% to $450 million in the fourth quarter non-GAAP diluted EPS increased 36% to $1.05 in the fourth quarter

Generated operating cash flow of $3.1 billion in fiscal year 2022

Company provides fiscal year 2023 guidance and reiterates long-term targets

Company introduces Medical Improvement Plan, targeting Medical segment profit of at least $650 million by fiscal year 2025

DUBLIN, Ohio, August 11, 2022 - Cardinal Health (NYSE CAH) today reported fourth quarter fiscal year 2022 revenues of $47.1 billion, an increase of 11% from the fourth quarter of last year. GAAP operating earnings were $36 million, primarily due to a non-cash, pre-tax goodwill impairment charge of $303 million in the Medical segment. GAAP diluted earnings per share (EPS) were $0.50, primarily due to this impairment, net of tax effects. Non-GAAP operating earnings increased 41% to $450 million, primarily due to the increase in Pharmaceutical segment profit, and non-GAAP diluted EPS increased 36% to $1.05 in the quarter.

Fiscal year 2022 revenues were $181.4 billion, a 12% increase from fiscal year 2021. GAAP operating loss was $596 million due to non-cash, pre-tax goodwill impairment charges of $2.1 billion in the Medical segment. GAAP diluted loss per share was $3.35, primarily due to these impairments, net of tax effects. Non-GAAP operating earnings decreased 12% to $2.0 billion, primarily due to net inflationary impacts and global supply chain constraints in the Medical segment. Non-GAAP diluted EPS decreased 9% to $5.06 due to the decline in Medical segment profit, partially offset by an increase in Pharmaceutical segment profit, net of tax effects.

"In fiscal year 2022, Medical segment performance was significantly impacted by inflation and supply chain constraints," said Mike Kaufmann, CEO of Cardinal Health. "In addition, the Pharmaceutical segment grew 5% and we generated strong cash flow, returning $1.6 billion to our shareholders through share repurchases and dividends."

Jason Hollar, CFO of Cardinal Health, said, "Looking forward, we have confidence in our Medical Improvement Plan and our long-term targets for growth. We remain committed to the essential role our company plays in healthcare and to delivering value for our customers, employees, and investors."

Q4 and full year FY22 summary

Pharmaceutical segment

Fourth-quarter revenue for the Pharmaceutical segment increased 13% to $43.3 billion driven by branded pharmaceutical sales growth from existing and net new Pharmaceutical Distribution and Specialty customers.

Pharmaceutical segment profit increased 26% to $451 million in the fourth quarter, driven by generics program performance and a higher contribution from brand sales mix, partially offset by inflationary supply chain costs. Additionally, this reflects a favorable comparison due to prior year inventory adjustments.

Fourth-quarter revenue for the Medical segment decreased 11% to $3.8 billion, due to the divestiture of the Cordis business and lower products and distribution volumes.

Medical segment loss of $16 million in the fourth quarter was primarily due to net inflationary impacts and global supply chain constraints in products and distribution. Additionally, the favorable comparison to the prior year PPE inventory reserve was offset by a lower contribution from PPE and the divestiture of the Cordis business.

Fiscal year 2023 outlook2,3

Long-term financial targets

The company reiterated its long-term targets of low to mid-single digit segment profit growth in the Pharmaceutical segment, mid to high-single digit segment profit growth in the Medical segment, and to average a double-digit combined Non-GAAP EPS growth and dividend yield. Additionally, the company is targeting Medical segment profit of at least $650 million by fiscal year 2025, based on its Medical Improvement Plan.

The company separately announced that its Board of Directors has elected Jason Hollar, the company's current Chief Financial Officer, to serve as its next Chief Executive Officer, effective September 1, 2022. Mr. Hollar will succeed Mike Kaufmann, the company's CEO since January 2018. Mr. Hollar will also join the company's Board of Directors. Additionally, Patricia English, the company's current Chief Accounting Officer, will serve as interim CFO, while the company conducts an external search for a permanent CFO.

Cardinal Health announced that it has acquired the Bendcare group purchasing organization entity, strengthening Specialty Solutions' Cornerstone RheumatologyTM GPO as a leading rheumatology-focused GPO. The company also made a minority investment in the Bendcare management services organization.

Cardinal Health announced the addition of a new 208,144 square foot distribution center in the Columbus, Ohio, area as part of a multi-year warehouse modernization and growth plan. The new distribution center will support the company's at-Home Solutions business, a market-leading medical supplies provider and specialized business focused on providing comfortable care in the home for people with chronic and serious health conditions.

Cardinal Health announced the acquisition of ScalaMed, a smart platform that transfers prescriptions directly to patients via a secure mobile app. The acquisition transfers ScalaMed's technology and assets to Outcomes , a Cardinal Health company.

Cardinal Health hosted its 30th annual Retail Business Conference with more than 4,000 customers in attendance, representing 3,000 unique independent community pharmacies, highlighting the company's innovations and demonstrating its commitment to customers.

Cardinal Health, along with pharmaceutical distribution peers, reached an agreement with the State of Oklahoma to resolve opioid-related claims. If that and the previously announced agreement with the State of Washington are finalized, 48 of 49 eligible states will be subject to the previously disclosed broad settlement agreement. Additionally, the distributors reached an agreement to settle the opioid-related claims of the majority of West Virginia subdivisions.

Cardinal Health Board of Directors approved a quarterly dividend of $0.4957 per share out of the company's capital surplus. The dividend will be payable on October 15, 2022 to shareholders of record at the close of business on October 3, 2022.

Upcoming webcasted investor events

Morgan Stanley 20th Annual Global Healthcare Conference at 10 00am EST, September 13, 2022

Cardinal Health will host a webcast today at 8 30 a.m. Eastern to discuss fourth quarter and full year results. To access the webcast and corresponding slide presentation, go to the Investor Relations page at ir.cardinalhealth.com. No access code is required.

Presentation slides and a webcast replay will be available until August 10, 2023.

About Cardinal Health

Cardinal Health is a distributor of pharmaceuticals, a global manufacturer and distributor of medical and laboratory products, and a provider of performance and data solutions for health care facilities. With 50 years in business, operations in more than 30 countries and approximately 44,000 employees globally, Cardinal Health is essential to care. Information about Cardinal Health is available at cardinalhealth.com.

Media Erich Timmerman, erich.timmerman cardinalhealth.com and 614.757.8231

Investors Kevin Moran, kevin.moran cardinalhealth.com and 614.757.7942

1The GAAP effective tax rate for the fourth quarter of fiscal year 2022 and fiscal year 2022 were impacted by the goodwill impairment charges of $303 million and $2.1 billion, respectively, in the Medical segment. The net tax benefit related to these charges included in the GAAP effective tax rate is $240 million in the fourth quarter and $150 million for the full year.

The GAAP effective tax rates for the fourth quarter of fiscal year 2021 and fiscal year 2021 included net tax benefits related to the treatment of the tax impacts of the opioid litigation charges. Included in the GAAP

effective tax rate for fiscal 2021 was a benefit from the net operating loss carryback primarily related to a self-insurance pre-tax loss.

2GAAP refers to U.S. generally accepted accounting principles. This news release includes GAAP financial measures as well as non-GAAP financial measures, which are financial measures not calculated in accordance with GAAP. See Use of Non-GAAP Measures following the attached schedules for definitions of the non-GAAP financial measures presented in this news release and see the attached schedules for reconciliations of the differences between the non-GAAP financial measures and their most directly comparable GAAP financial measures.

3The company does not provide forward-looking guidance on a GAAP basis as certain financial information, the probable significance of which cannot be determined, is not available and cannot be reasonably estimated. See Use of Non-GAAP Measures following the attached schedules for additional explanation.

Cardinal Health uses its website as a channel of distribution for material company information. Important information, including news releases, financial information, earnings and analyst presentations, and information about upcoming presentations and events is routinely posted and accessible on the Investor Relations page at ir.cardinalhealth.com. In addition, the website allows investors and other interested persons to sign up automatically to receive email alerts when the company posts news releases, SEC filings and certain other information on its website.

Cautions concerning forward-looking statements

This release contains forward-looking statements 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," likely, and similar expressions, and include statements reflecting future results or guidance, statements of outlook and various accruals and estimates. 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 risks arising from ongoing inflationary pressures and supply chain constraints, including the risk that our plans to mitigate such effects may not be as successful as we anticipate and the possibility that costs to source certain personal protective or other equipment, increased costs for transportation, shipping, freight and commodities, reduced price or demand for certain products may result in additional inventory reserves or disruptions and may negatively impact our ability to meet our long-term guidance the possibility that our Medical unit goodwill could be further impaired, the increase in global interest rates or possible unfavorable changes in the U.S. statutory tax rate competitive pressures in Cardinal Health's various lines of business the performance of our generics program, including the amount or rate of generic deflation and our ability to offset generic deflation and maintain other financial and strategic benefits through our generic sourcing venture with CVS Health ongoing risks associated with the distribution of opioids, including the financial impact associated with the settlements with governmental authorities, the risk that challenges to our plans to take tax deductions for opioid-related losses could adversely impact our financial results, risks arising from the Department of Justice investigation which we believe concerns our anti-diversion program and risks associated with the injunctive relief requirements under the national settlement, including the risk that we may incur higher costs or operational challenges in the implementation and maintenance of the required changes risks associated with the manufacture and sourcing of certain products, including risks related to our ability and the ability of third-party manufacturers to import or export certain products or component parts and to comply with applicable regulations risks associated with the competitive labor market and our ability to attract and retain employees in key roles our ability to manage uncertainties associated with the pricing of branded pharmaceuticals and risks associated with our cost savings initiatives or other business initiatives, such as the Medical Improvement Plan, including the possibility that they could fail to achieve the intended results. 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 and exhibits to those reports. This release reflects management's views as of August 11, 2022. Except to the extent required by applicable law, Cardinal Health undertakes no obligation to update or revise any forward-looking statement. Forward-looking statements are aspirational and not guarantees or promises that goals, targets or projections will be met, and no assurance can be given that any commitment, expectation, initiative or plan in this report can or will be achieved or completed. Cardinal Health provides definitions and reconciliations of non-GAAP financial measures and their most directly comparable GAAP financial measures at ir.cardinalhealth.com.

Cardinal Health, Inc. and Subsidiaries

Consolidated Statements of Earnings (Loss) (Unaudited)

1 Impairments and (gain) loss on disposals of assets, net includes pre-tax goodwill impairment charges of $303 million and $2.1 billion related to the Medical segment recorded in the fourth quarter and year-to-date periods of fiscal 2022, respectively.

2 Litigation (recoveries) charges, net includes a one-time contingent attorneys' fee of $18 million recorded during fiscal 2022 related to the finalization of the settlement agreement (the "Settlement Agreement") resulting in the settlement of the vast majority of opioid lawsuits filed by state and local governmental entities. Due to the unique nature and significance of the Settlement Agreement, and the one-time, contingent nature of the fee, this fee was included in litigation (recoveries) charges, net.

3 Litigation (recoveries) charges, net includes a pre-tax charge of $1.17 billion recorded in fiscal 2021 related to the opioid litigation.

4 Provision for (benefit from) income taxes during the fourth quarter and year-to-date periods of fiscal 2022 includes the tax effects relating to the impairment charges. For the fourth quarter and year-to-date periods of fiscal 2022, the net tax benefit related to these impairments is $240 million and $150 million, respectively, and is included in the annual effective tax rate.

5 Provision for (benefit from) from income taxes includes a tax benefit recorded during fiscal 2021 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 opioid litigation. This self-insurance pre-tax loss, which did not impact our pre-tax consolidated results, was deducted on our fiscal 2020 consolidated federal income tax return and contributed to a significant net operating loss for tax purposes. The net operating loss was carried back and adjusted our taxable income for fiscal 2015, 2016, 2017 and 2018 as permitted under the Coronavirus Aid, Relief and Economic Security ("CARES") Act. The total benefit from the net operating loss carryback was $424 million.

In addition, the amount of tax benefit increased by approximately $50 million during the fourth quarter of fiscal 2022 compared to the tax impacts that would have been recognized without the opioid litigation charge. The net tax benefit associated with the opioid litigation charges was $228 million for fiscal 2021.

6 Due to the net loss during fiscal 2022, potentially dilutive common shares have not been included in the denominator due to their anti-dilutive effect.

Cardinal Health, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

Cardinal Health, Inc. and Subsidiaries

Consolidated Statements of Cash Flows (Unaudited)

Cardinal Health, Inc. and Subsidiaries

The sum of the components and certain computations may reflect rounding adjustments.

1 Pharmaceutical segment profit includes opioid-related litigation defense and compliance costs, but does not include a one-time contingent attorneys' fee of $18 million incurred during fiscal 2022 related to the finalization of the Settlement Agreement.

2 Pharmaceutical segment profit during fiscal 2022 was positively impacted by a $16 million judgment for lost profits related to an ordinary course intellectual property rights claim.

3 Medical segment profit (loss) for the fourth quarter and year-to-date periods of fiscal 2021 includes a reserve of $197 million to reduce the carrying value of certain personal protective equipment to its net realizable value.

Cardinal Health, Inc. and Subsidiaries

GAAP Non-GAAP Reconciliation1

1For more information on these measures, refer to the Use of Non-GAAP Measures and Definitions schedules.

2Distribution, selling, general and administrative expenses.

3Attributable to Cardinal Health, Inc.

4Impairments and (gain) loss on disposals of assets, net includes a pre-tax goodwill impairment charge of $303 million related to our Medical segment recorded in the fourth quarter of fiscal 2022. For the fourth quarter of fiscal 2022, the net tax benefit related to year-to-date impairments is $240 million and is included in the annual effective tax rate.

5Litigation (recoveries) charges, net includes a pre-tax charge of $1.17 billion recorded in fiscal 2021 related to the opioid litigation. The amount of tax benefit increased by approximately $50 million during the fourth quarter ended June 30, 2021 compared to the tax impacts that would have been recognized without the opioid litigation charge. The net tax benefit associated with the opioid litigation charges was $228 million for fiscal 2021.

The sum of the components and certain computations may reflect rounding adjustments.

We generally apply varying tax rates depending on the item's nature and tax jurisdiction where it is incurred.

Cardinal Health, Inc. and Subsidiaries

GAAP Non-GAAP Reconciliation1

1For more information on these measures, refer to the Use of Non-GAAP Measures and Definitions schedules.

2Distribution, selling, general and administrative expenses.

3Attributable to Cardinal Health, Inc.

4For fiscal 2022, GAAP diluted loss per share attributable to Cardinal Health, Inc. ( GAAP diluted EPS ) and the EPS impact from the GAAP to non-GAAP per share reconciling items is calculated using a weighted average of 279 million common shares, which excludes potentially dilutive securities from the denominator due to their anti-dilutive effects resulting from our GAAP net loss for the period. For fiscal 2022, non-GAAP diluted EPS is calculated using a weighted average of 280 million common shares, which includes potentially dilutive shares.

5 Impairments and (gain) loss on disposals of assets, net includes pre-tax goodwill impairment charges of $2.1 billion related to our Medical segment recorded in fiscal 2022. For fiscal 2022, the net tax benefit related to these impairments is $150 million and is included in the annual effective tax rate.

6 Litigation (recoveries) charges, net for fiscal 2022 does not include a $16 million judgement for lost profits related to an ordinary course intellectual property claim, which positively impacted Pharmaceutical segment profit.

7 Litigation (recoveries) charges, net includes a one-time contingent attorneys' fee of $18 million recorded during fiscal 2022 related to the finalization of the Settlement Agreement resulting in the settlement of the vast majority of opioid lawsuits filed by state and local governmental entities. Due to the unique nature and significance of the Settlement Agreement, and the one-time, contingent nature of the fee, this fee was included in litigation (recoveries) charges, net.

8 Litigation (recoveries) charges, net includes a pre-tax charge of $1.17 billion recorded in fiscal 2021 related to the opioid litigation. The net tax benefit associated with the opioid litigation charges was $228 million for fiscal 2021.

Litigation(recoveries) charges, net also includes a tax benefit recorded during fiscal 2021 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 opioid litigation. This self-insurance pre-tax loss, which did not impact our pre-tax consolidated results, was deducted on our fiscal 2020 consolidated federal income tax return and contributed to a significant net operating loss for tax purposes. The net operating loss was carried back and adjusted our taxable income for fiscal 2015, 2016, 2017 and 2018 as permitted under the Coronavirus Aid, Relief and Economic Security ("CARES") Act. The total net benefit was $424 million however, for purposes of reconciling Non-GAAP financial measures, we allocated $389 million of the benefit to litigation (recoveries) charges, net, which is excluded from non-GAAP measures, based on the relative amount of the self-insurance pre-tax loss related to opioid litigation claims versus separate tax adjustments. The tax benefit allocated to the separate tax adjustments of $35 million is included in non-GAAP measures.

The sum of the components and certain computations may reflect rounding adjustments.

We generally apply varying tax rates depending on the item's nature and tax jurisdiction where it is incurred.

Cardinal Health, Inc. and Subsidiaries

GAAP Non-GAAP Reconciliation - GAAP Cash Flow to Non-GAAP Adjusted Free Cash Flow

Cardinal Health, Inc. and Subsidiaries

Use of Non-GAAP Measures

This earnings release contains financial measures that are not calculated in accordance with U.S. generally accepted accounting principles ("GAAP ).