1. FINAL TRANSCRIPT CAH - Q2 2007 Cardinal Health, Inc. Earnings Conference Call Event Date/Time: Jan. 25. 2007 / 11:00AM ET www.streetevents.com Contact Us 2007 Thomson Financial. Republished with permission. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Thomson Financial.

2. FINAL TRANSCRIPT Jan. 25. 2007 / 11:00AM, CAH - Q2 2007 Cardinal Health, Inc. Earnings Conference Call CORPORATE PARTICIPANTS Jason Strohm Cardinal Health, Inc. - VP, IR Kerry Clark Cardinal Health, Inc. - President, CEO Jeff Henderson Cardinal Health, Inc. - CFO Mark Parish Cardinal Health, Inc. - CEO, Healthcare Supply Chain Services Dave Schlotterbeck Cardinal Health, Inc. - CEO, Pharmaceutical, Medical Products CONFERENCE CALL PARTICIPANTS Christopher McFadden Goldman Sachs - Analyst Tom Gallucci Merrill Lynch - Analyst Glen Santangelo Credit Suisse - Analyst Ross Muken Deutsche Bank - Analyst Larry Marsh Lehman Brothers - Analyst Ricky Goldwasser UBS - Analyst Lisa Gill JP Morgan - Analyst Sandy Draper JMP Securities - Analyst David Biel Morgan Stanley - Analyst Steven Halper Thomas Weisel Partners - Analyst Charles Bardy Citigroup - Analyst Robert Willoughby Banc of America Securities - Analyst PRESENTATION Operator Good day, Ladies and Gentlemen, and welcome to the Q2 2007 Cardinal Health Incorporated earnings conference call. [OPERATOR INSTRUCTIONS] And I would now like to turn the presentation over to your host for today's call to Mr. Jason Strohm, Vice www.streetevents.com Contact Us 1 2007 Thomson Financial. Republished with permission. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Thomson Financial.

3. FINAL TRANSCRIPT Jan. 25. 2007 / 11:00AM, CAH - Q2 2007 Cardinal Health, Inc. Earnings Conference Call President of Investor Relations. Please proceed. Jason Strohm - Cardinal Health, Inc. - VP, IR Thanks, Michelle. Good morning and welcome to Cardinal Health's fiscal 2007 second quarter earnings conference call. Our remarks today will be focused on the Company's consolidated and business segments results for the quarter which are included in a press release and attached financial tables. If any of you have not received a copy of our earnings release or the financial attachment you may access it over the Internet or at our investor page at www.CardinalHealth.com. Additionally, there are a handful of slides we will be reviewing which can also be found on the website. Speaking on our call today will be Kerry Clark, President and CEO; and Jeff Henderson, CFO. Also participating with us today for Q&A are Mark Parish, CEO of Healthcare Supply Chain Services and David Schlotterbeck, CEO of Pharmaceutical and Medical Products. After our formal remarks we will open up the phone lines for your questions. As always when we get to your questions, we ask that you limit yourself to one. During the course of this call we will make forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Please see our press release and our other SEC filings for a full discussion of the risk factors associated with them. In addition, we will reference non-GAAP financial measures. A reconciliation of GAAP to non-GAAP financial information is included at the end of the slide presentation. At this time I'd like to turn the call over to Kerry Clark, Cardinal Health's President and CEO. Kerry Clark - Cardinal Health, Inc. - President, CEO Thanks, Jason. Welcome, everybody and thanks for joining the call. It's been an exciting week for us. Everyone has worked hard to reach the agreement we announced this morning on the PTS sale agreement and of course we're also pleased to announce strong Q2 results. Let me start with a very brief recap of the PTS sale and then I'll provide you with my thoughts on the quarter. As you saw in this mornings announcement, we've reached an agreement to sell PTS to Blackstone for $3.3 billion. This is a very good deal for Cardinal Health shareholders and we're pleased with the rapid progress in reaching this agreement. We continue to believe it was a good strategic choice to divest PTS because it will allow us to better focus on our core business and will lift our overall return on capital. And as we've said, we intend to use the net proceeds to repurchase shares. Turning to the quarter, I think we performed quite well. Top line growth was solid in each segment, and we had double digit operating earnings growth in all four segments. On a non-GAAP basis, our operating margin expanded 8 basis points versus year ago. Cardinal Health's margin remains the highest in our industry reflecting our diversified portfolio. As you will recall, we are measuring the performance of our supply chain businesses on the basis of economic profit growth, which factors in the use of capital and ensures we are operating in a disciplined fashion. During the quarter, our healthcare Supply Chain services pharmaceutical business expanded economic profit margin both year on year and sequentially and we're making good progress to do the same in our Supply Chain service medical business with strong sequential growth. We're also making good progress on our journey from a holding company to an integrated operating company. Q2 was our first full quarter with our integrated One Cardinal Health sales team fully deployed and calling on our hospital customers. Through this organization, we expect to be able to better leverage our Supply Chain capabilities from manufacturer to bedside to create innovative customer solutions. For example, at the HIMMS conference in late February, we'll be launching a new program that integrates our Pharmaceutical Distribution Services with Pyxis, Alaris, and Care Fusion products. We also continue to progress on our Shared Services Organizations as evidenced by our second straight quarter of good, core, SG&A control. We're on track with our implementation schedules and headcount reductions. www.streetevents.com Contact Us 2 2007 Thomson Financial. Republished with permission. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Thomson Financial.

4. FINAL TRANSCRIPT Jan. 25. 2007 / 11:00AM, CAH - Q2 2007 Cardinal Health, Inc. Earnings Conference Call This quarter, we also reviewed the performance of Cardinal Health acquisitions over the last three years to be sure the firms that we have acquired are on track to deliver positive economic profit growth by year three. We're happy to report that eight of nine are on track with Alaris leading the way. Jeff will provide more detail about our acquisition performance in his remarks. Looking ahead, we believe our current portfolio is well positioned to grow over the medium term by capitalizing on two key needs at the healthcare industry. Productivity and patient safety. In the American College of Healthcare Executives fifth annual poll, financial challenges, personnel shortages, and patient safety were dominant themes. These are challenges we can help solve through our Supply Chain Services and our medical and clinical products. Despite continued pressures on costs, we believe total healthcare spending will outpace population growth, creating opportunities for companies like Cardinal Health that have good value, market leading products, and best-in-class cost structures and innovative customer offerings. That said, I want to update you on three longer term initiatives under way. We expect these initiatives to be future growth engines for Cardinal Health. First, generics. We continue to experience strong sales growth with favorable margins in the core distribution of generics. Our PharMed acquisition which primarily sells generic pharmaceuticals to retail pharmacies is performing above our expectations. Going forward, we have undertaken an extensive sourcing effort with both established and emerging suppliers to further improve margins. The market is extremely competitive on the supply side which creates a favorable buying environment which allows us to deliver very compelling value to our customers. Next is the Specialty Pharmaceutical market. In our news release this morning, we announced plans to acquire Specialty Scripts Pharmacy, a privately held Specialty Pharmaceutical Services Company. While this acquisition is relatively small, it is strategic. Specialty pharmacy is one of the fastest growing segments of the market and is complementary to the specialized nature of our nuclear pharmacy assets as well as our blood and plasma distribution business and our third party logistics unit. Our goal is to provide a higher level of service to Pharmaceutical manufacturers who are asking us to develop this capability. And finally, international. Today, about 2% of our revenue growth comes from the sale of products outside the U.S. But as I've said before, this is a longer term opportunity. In Q2, international revenue grew 12%, with balanced growth between Canada and Western Europe. For perspective, we do no pharmaceutical distribution internationally so these numbers are quite good. We continue to develop a focused and disciplined strategy and an organization structure to capture a larger portion of the hospital supply opportunities in Canada, UK, Germany, and France. Now, before turning over to Jeff, I'd like to step back and summarize where I see Cardinal Health today. I believe we have focused our portfolio and strategies to leverage Cardinal Health's skills and capabilities. We are making progress in leveraging our scale through One Cardinal Health initiatives. Our core business segments are now performing better with potential for the future if we continue to be customer focused and operate with discipline. At the same time, we placed a few small strategic bets for the future. We continue to execute our capital deployment plan through significant share repurchases with plans for more. I'm feeling pleased with the progress we've made, and while much remains to be done, I'm feeling very positive about the future. Now let me turn it over to Jeff for a detailed look at the quarter's financial results. Jeff? Jeff Henderson - Cardinal Health, Inc. - CFO Thanks, Kerry. Good morning, everyone. On today's call I'll discuss second quarter results, review our key value drivers, and summarize our fiscal 2007 financial targets and goals. Additionally, I'm going to spend a minute providing you with our internal assessment for the acquisitions we've done over the past few years, which is something we plan to do on a regular basis going forward. Finally, I'll conclude with some specific details around the PTS divestiture and just a few comments on the changes to our existing segment results. Let's start with the consolidated second quarter results. Please note that my comments will reflect the financial results from continuing operations on a non-GAAP basis. And keep in mind that our PTS business is treated as discontinued operations in www.streetevents.com Contact Us 3 2007 Thomson Financial. Republished with permission. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Thomson Financial.

5. FINAL TRANSCRIPT Jan. 25. 2007 / 11:00AM, CAH - Q2 2007 Cardinal Health, Inc. Earnings Conference Call these financials. The definition is at the end of the slide describing detail how we are calculating these non-GAAP metrics. Overall revenues were up 13% to 21.8 billion, driven by very strong demand across each of our four business segments. Operating earnings were 544 million, an increase of 16% over the same period last year. Earnings from continuing operations for the quarter were 341 million, up 15% from prior year results of 297 million. Diluted EPS for the quarter was $0.83 compared to $0.69 last year, up 20%. A contributing factor to our strong earnings growth was continued focus on expense control. Although total SG&A increased 8% for the quarter compared to the same period last year, I should point out that about 3.5 % of this growth was attributable to recent acquisitions and this growth also reflects a continued investments we are making in product development and other growth initiatives particularly in our CTS and MPM segments. Interest expense in the quarter was about 32 million. Approximately $10 million of interest and other has been allocated to discontinued operations within PTS. I would expect interest and other to be similar in Q3 or about 35 million; however this amount could increase by about $10 million in our fourth quarter assuming that PTS transaction closes in Q4, as this amount will no longer be classified as discontinued operations. Our effective tax rate for the quarter was 34.3%. With PTS results moved to discontinued operations, our recurring effective tax rate, excluding special items and impairment charges increases by approximately 40 basis points. As a result, we expect our effective tax rate for the full fiscal year 2007 to be about 32%, up from the 31.6% I mentioned last quarter. Although as I also mentioned last quarter, we will see some fluctuation in this rate from quarter to quarter throughout fiscal '07. Operating cash flow for the quarter was a negative 52 million and returned equity was 15.2% up 60 basis points over the same period last year. Our operating cash flow in the quarter was negatively impacted by the pay off of the 550 million balance remaining under our AR securitization program. Turning to the next slide, I want to point out to you specific guidance that had an impact on current and prior year operating results and earnings per share, specifically special items, impairment charges and other, and non-recurring and other items. As I mentioned several times in the past, my goal is to simplify our presentation with the elimination of most non- recurring items and we have done so throughout the fiscal year. First, let me quickly review the special items. During the quarter, special items totaled $20 million or 13 million after-tax impacting diluted EPS by $0.03 per share versus the same $0.03 per share in Q2 of last year. Included in this year's amount were costs associated with restructuring operations, charges to integrate acquired companies primarily Doleman and Alaris, SEC investigation costs, and other miscellaneous items. The next slide is impairment charges and other items. During the quarter impairment charges were 13 million, also the same 13 million after-tax, impacting diluted EPS by $0.03 per share, compared to $0.00 the per share in Q2 last year. These impairment charges in the quarter primarily related to an impairment in investment in the global healthcare exchange, an Internet based healthcare exchange formed several years ago by multiple healthcare product manufacturers. Turning to non-recurring charges I want to remind you that in our second quarter last year we incurred a $3.5 million credit taken within our Healthcare Supply Chain Services Pharmaceutical segment, which was an adjustment related to a charge taken in the first quarter of that same year. For clarity, this credit is included in our non-GAAP diluted EPS of $0.69 in Q2 of last year. Again, there were no non-recurring items recorded in the second quarter of this year. Now I'd like to turn to the performance of the individual business segments. As I discuss the results of each of our four segments please note that the beginning of this quarter we have begun to burden our segment results including both current and prior year with equity compensation expense which currently has a positive impact on our segment growth rates as equity expenses declined year on year. For perspective total equity comp expense booked in Q2 this year was 33 million versus $47 million in Q2 of last year. I'll discuss some more details at the end of my presentation but I want to assure you that we fully intend to disclose the impact of equity expense for each of our segments so you can determine the earnings the earnings growth rates excluding this expense. Healthcare Supply Chain Services Pharmaceutical, revenue for the second quarter increased 13% to $19.2 billion. Revenue growth within this segment was driven by strong growth in the core pharmaceutical distribution business across all customer www.streetevents.com Contact Us 4 2007 Thomson Financial. Republished with permission. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Thomson Financial.

6. FINAL TRANSCRIPT Jan. 25. 2007 / 11:00AM, CAH - Q2 2007 Cardinal Health, Inc. Earnings Conference Call segments, which increased revenue 18% over the prior year. This revenue growth was due to both good growth within our core direct store delivery business which grew 14% and continued increases in bulk customer sales. Please recall this segment now includes our Medicine Shoppe business, nuclear pharmacy, Specialty Pharmacy Services including the acquisition of Specialty Scripts going forward and Martindale and Beckloff Associates, formerly part of PTS. Regarding our Specialty Distribution business, you might recall that in 2006, we divested the majority of our oncology focused Specialty Distribution business which negatively impacted our growth rates in this segment over the prior year as we saw revenue decline over $500 million in this business in the second quarter of this year compared to last. Operating earnings were 328 million, an increase of 19% over the prior year period. I'll remind you that our results in the second quarter of fiscal 2006 included a $3.5 million non-recurring credit related to vendor credits in prior periods. There was no LIFO impact to earnings in Q2 of this year. However, last year, we had a $13 million LIFO credit which favorably impacted earnings in the prior year. Strong growth in generics expense controls, and acquisition synergies contributed to margin expansion and solid operating earnings growth, which was partially offset by lower pricing in the renewal of several large customer agreements. I should also point out that the timing of certain generic launches and branded drug price increases benefited our operating results in the second quarter. A portion of which otherwise would have likely occurred in our fiscal third quarter. Strong earnings growth in our nuclear pharmacy business helped offset an earnings decline in Specialty Distribution, again associated with the sale of the majority of this business. Equity compensation expense was $13.7 million in Q2 of this year compared to $15.3 million in the same quarter last year. As you know, specifically within our Healthcare Supply Chain Services business, we also measure economic profit margin. We have begun to use economic profit margin as a metric to combine both the impact to the income statement and the balance sheet as a measure of our performance. Within Supply Chain Pharmaceutical, economic profit margin increased 9 basis points to 82 basis points in the quarter compared to 73 basis points in the prior year. Year-to-date, economic profit margin has increased 12 basis points over the prior year to 91 basis points. The improvement in the second quarter was primarily driven by earnings growth as total tangible capital remained fairly stable. For this segment, days of inventory declined two days compared to the second quarter of last year. Healthcare Supply Chain Services medical segment revenue for the quarter was $1.9 billion, up 6% over the prior year. Revenue growth was due to strong demand in our laboratory business, both in capital equipment sales and consumables as well as our product brand product portfolio and continued momentum with surgery center customers and within our Canadian Medical Products Distribution business. I mentioned last quarter of a negative impact on this business segment from the customer service consolidation. I would say that we're making considerable improvements here; however this transition continues to negatively impact our results. Operating earnings for the quarter were $78 million, up 12% over the same period last year. Earnings growth was primarily due to a strong focus on cost controls and expense leverage due to various One Cardinal Health initiatives, including facility consolidations and back office consolidation efficiencies such as our customer service consolidation. Equity compensation expense was 8.1 million in Q2 of this year compared to 9.9 million in the same quarter last year. For our healthcare Supply Chain Services medical segment, economic profit margin declined 6 basis points over the prior year to 1.12%; however EP margin in the Second quarter increased 56 basis points sequentially over the first quarter. The decline in EP margin compared to the prior year was driven by an increase in total tangible capital, mostly working capital. While we certainly continue to expect earnings growth in the full fiscal year, we also see opportunities to lower our tangible capital in this business, which should result in a stable EP margin trends year-over-year. Clinical Technologies and Services segment revenue for the quarter was 662 million, up 10% over the prior year, and operating earnings were [910] million, up 16% compared to the prior year. You'll recall that our first quarter results were negatively impacted by delays in two new products, MedStation 3500 and the Alaris PCU version 1.5. While the Alaris product was launched at the end of Q1, the Pyxis med station was not fully released until our second quarter. Both products contributed to the improved results as very strong demand for both Pyxis and Alaris products contributed to revenue growth. We expect demand to remain strong as [Inaudible] contracts for Alaris products and Pyxis medication and supply products were up significantly from both the prior year and sequentially. www.streetevents.com Contact Us 5 2007 Thomson Financial. Republished with permission. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Thomson Financial.

7. FINAL TRANSCRIPT Jan. 25. 2007 / 11:00AM, CAH - Q2 2007 Cardinal Health, Inc. Earnings Conference Call I want to specifically point out our Pyxis supply business which is seeing very strong demand and growing quite well. While a relatively small contributor today, we expect these products to contribute more meaningfully in the near future, helping to drive sustainable long term growth. Operating earnings growth was driven by both strong revenue growth and continued synergies from the integration of Alaris. Earnings were also positively impacted by continued improvements within our Pharmacy Management Services business. Equity compensation expense was 10.7 million in Q2 this year compared do 12.4 million in the same quarter last year. I should also point out that no change was made to the SE pump recall reserve of 13.5 million that was established last quarter. Somewhat dampening earnings growth were continued investments we are making in the business to ensure long term value creation, specific examples include the continued investments in product quality and customer service, where we have seen meaningful improvements in customer satisfaction over the past several months. Additionally we continue to invest heavily in R&D, and are making great progress in our all medication strategy which includes Alaris and Pyxis products as well as a recently acquired Care Fusion bedside verification product. Finally, we're investing in international infrastructure to help accelerate our international growth. Medical Product Manufacturing revenue increased 15% to 455 million and operating earnings increased 21% to 51 million. Revenue growth was driven by solid balanced results across all businesses within the segment including infection prevention and medical specialties, both domestically and internationally. Earnings growth was positively impacted by operational excellence initiatives and the impact of facility restructuring. Additionally the business was able to offset continued raw material cost pressures through contract and pricing discipline. Equity compensation expense was 7.7 million in Q2 of this year compared to 9.1 million in the same quarter last year. Similar to CTS, our Medical Products Manufacturing business continues to invest in new product R&D and international infrastructure to drive future growth. Integration of Denver Biomedical is ahead of plan and is contributing better than expected to this segment. Once again let me touch on our key value drivers consisting of what we've been talking about over the past 18 months or so. First is operating growth, which will be led by strong revenue growth in a growing healthcare revenue pool, driven by strong demand for our products and services. Within the Healthcare Supply Chain Services segments, leverage of our scale, capital efficiency, and operational excellence should drive economic profit margin expansion. Within the Pharmaceutical and Medical Products segments, operational excellence, product innovation and international expansion should drive operating margin expansion. Overall, we see SG&A moderation driven largely by our One Cardinal Health program and declining equity compensation. Next is style sheet management. We have an increasing focus on return on capital and economic profit in our investment and operational decisions. Not only is this how we manage the businesses. It is one of the measures by which our management team is compensated going forward. Also mention continued portfolio optimization here which is best evidenced by our announced sale of PTS. One other Balance sheet item of note is accounts receivable. During the quarter we paid off the remaining balance of our A R securitization facility which was was $550 million. The impact of this was increased accounts receivable by the same amount. So year-over-year, while total days sales outstanding increased, much of this increase was due to the pay off of the AR facility. Finally, disciplined capital deployment. Again, nothing new here. Consistent with last year, our plans are for 25% of our operating cash flow to be utilized for internal capital investments, 20% for smaller tuck-in acquisitions and about 50% is expected to be returned to shareholders and I'll remind you we want to maintain the flexibility to selectively make larger acquisitions in the medium term that make strategic sense for the Company but in the short-term here, you should expect us to deploy capital consistent with these parameters. I think our actions in the first half of this fiscal year are right in line here. During the year, in addition to internal capital deployment, we have repurchased more than $925 million of Cardinal stock and we acquired MedMind, Care Fusion, and Specialty Scripts , which are all perfect examples of the a type of acquisitions we're looking at. Relatively small, tuck-in acquisitions that enhance www.streetevents.com Contact Us 6 2007 Thomson Financial. Republished with permission. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Thomson Financial.

8. FINAL TRANSCRIPT Jan. 25. 2007 / 11:00AM, CAH - Q2 2007 Cardinal Health, Inc. Earnings Conference Call our product offerings for customers and manufacturers. In total, our focus, discipline, and focus on return on capital are allowing us to drive organic growth and that we believe optimize shareholder value. Now I'd like to discuss our fiscal financial targets, fiscal 2007 financial targets and goals slide. Targets and goals are exactly the same as I discussed on November 30, when we announced the planned sale of PTS. For 2007, on a consolidated basis we continue to expect revenue to be at or above the high end of our long term range of 8 to 10%. Non-GAAP diluted earnings per share is expected to be $3.25 to $3.40 per share which excludes the impact of the proceeds from the planned sale of PTS. Within the individual segments, fiscal 2007 guidance remains the same. One thing I want to point out here is the impact of allocating equity compensation to the segment results which will have a favorable impact on our segment growth rates. The segment earnings growth rates target on the slide exclude any impact of equity compensation allocation. As Kerry referenced, and I mentioned up front, it is our intention to going forward to provide you with feedback on how we are progressing on the acquisitions we have done over the past several years. We have admittedly had mixed results with some of our acquisitions completed a few years back and based on that we've adopted increasingly rigorous decision-making, integration, and review process for all transactions. For the purpose of this presentation I'll focus on the transactions we have closed over the past three years. This very disciplined internal approach of retrospectively reviewing all transactions, we'll actually really deal with the Board as well is one that we take quite seriously and I want to share with you a summary of our findings. While we look at several factors, our primary measure is the actual economic profit contribution delivered or our current forecast for that economic product contribution in year three compared to expectations at the time of the acquisition for the third year following the date the transaction closed. With the exception of Snow and Pincer, a relatively modest investment made in 2004 by our MPM segment I'd say that our recent acquisitions all receive a positive grade in this regard and in total we are exceeding our economic profit generation goals. A meaningful contributing factor to our success can be attributable to the dedicated focus we place on merger integration which includes synergy tracking and customer integration measurement. We first establish a dedicated team of folks at a corporate level to focus solely on merger integration just after the acquisition of Alaris and I believe the focus has paid off. Two final but important items Ike lie to cover. I want to take a few minutes to share a few semi details around the PTS divestiture and how this impacts our fiscal 2007 guidance as well as briefly discuss some changes to our segment reporting. First, let me discuss the PTS divestiture. We are extremely happy with the way the process has been executed. As I previously mentioned, depending on the specific timing of the deal closing, we will expect the after-tax proceeds from the sale to add materially to our fiscal 2008 EPS but I'm not going to try to quantify that exact amount at this time. Regarding timing, we would expect the transaction to close some time during our fiscal fourth quarter. As it relates to our fourth quarter, to the extent there is a positive impact due the investment of the proceeds, I would anticipate that any such benefit would be offset by our planned modest contribution to the Cardinal Health Foundation, focused on supporting productivity improvements and patient safety within healthcare. Based on the way the transaction is being structured, we now estimate our tax basis at over $3 billion, so a significant amount of the proceeds will be available to acquire shares, which is our current expectation for the use of the proceeds. Including discontinued operations during our second quarter in addition to the net operating results from operations of the entities included in disc ops, we booked a deferred tax asset or benefit of approximately approximately $425 million. I should point out this benefit will be offset by a similar tax expense on any potential book gain when the transaction closes, but into fatality this should be a very tax efficient transaction for Cardinal. Now turning to our segment reporting. Due to the divestiture of Pharmaceutical technology and Services, some of the corporate expenses that were previously absorbed by PTS will now be allocated to our remaining four business segments. These amounts have all been allocated for our prior periods and included in the segment results reported in our press release and my presentation today. During our second quarter approximately $12 million of incremental corporate expenses previously allocated to PTS www.streetevents.com Contact Us 7 2007 Thomson Financial. Republished with permission. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Thomson Financial.

9. FINAL TRANSCRIPT Jan. 25. 2007 / 11:00AM, CAH - Q2 2007 Cardinal Health, Inc. Earnings Conference Call have been allocated to the remaining four segments and $12 million of corporate costs have been allocated to PTS which again is included in discontinued operations. In the same period last year about $10 million of incremental corporate expenses were allocated to the remaining four segments and about 11 million was allocated to PTS. Being as we had to make the change anyway and restate prior periods, we also decided to implement another change, burdening our segments with equity compensation expense and that's giving an even more complete view of the total cost of running the segments after corporate allocations and other costs. As I previously said it is our intention to be extremely transparent as to the amount of equity compensation allocated each segment so you can calculate our earnings growth rates excluding this amount if you so choose. I understand that changes in the way we report results are not preferred by anyone including myself, it was required to do the divestiture of PTS and we determined that including equity compensation at this time made sense as well. As previously stated is our intention of providing historical data by quarter, restated to reflect these changes some time during our third fiscal quarter. Thanks, everyone. Kerry? Kerry Clark - Cardinal Health, Inc. - President, CEO I think we're open for questions. QUESTIONS AND ANSWERS Operator [OPERATOR INSTRUCTIONS] And your first question comes from the line of Christopher McFadden of Goldman Sachs. Please proceed. Christopher McFadden - Goldman Sachs - Analyst Thank you. Good morning, and congratulations on the nice quarterly results to everyone there. Kerry Clark - Cardinal Health, Inc. - President, CEO Thank you. Christopher McFadden - Goldman Sachs - Analyst Two questions, if I might. First, Jeff, do you think you could give us a sense and I know we talked about this in -- following the first fiscal quarter, what contribution on a net basis you think the One Cardinal initiatives made here in the second quarter and do you still feel comfortable that you're on pace for the 2008 overall contribution that you have talked about historically? And then secondly, as you're obviously aware, your customer CVS is in some form of discussions or trying to finalize a transaction with CareMark. If that transaction were to come to fruition, what impact, if any, do you think it would have on the distribution volume that you have as a part of your relationship with CVS? Thanks. Jeff Henderson - Cardinal Health, Inc. - CFO Thanks, Chris, this is Jeff. I'll answer your first question and then I'll let Mark Parish who is joining us today answer the second. Regarding One Cardinal Health, as I said in our prior earnings call, we anticipate in fiscal '07 that we will have achieved about 70% of the fiscal '08 run rate of $500 million of savings. That would equate to about $350 million savings for our full year fiscal www.streetevents.com Contact Us 8 2007 Thomson Financial. Republished with permission. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Thomson Financial.

10. FINAL TRANSCRIPT Jan. 25. 2007 / 11:00AM, CAH - Q2 2007 Cardinal Health, Inc. Earnings Conference Call '07, again, that would be compared to fiscal 05 base period, so if you divide that by four, you could estimate about $90 million of benefit in Q2 versus same period two years ago. I think that's a rough way of looking at it. Christopher McFadden - Goldman Sachs - Analyst And we should think, just to clarify, Jeff, that the trajectory through the quarter of fiscal '07 will be sort of equally distributed or is there a ramping up that we should anticipate? Jeff Henderson - Cardinal Health, Inc. - CFO I would expect some ramping up but again as I said in the Q1 call, Chris, not all of that is flowing to the bottom line because we've made a decision to reinvest some of it back in the business particularly within our MPM and CTS businesses and we're making substantial investments for new products as well as international expansion, but I would say generally, it's an upward ramp over the course of the year. Christopher McFadden - Goldman Sachs - Analyst And do you think net of those investments that was a net contribution to FQ2? Jeff Henderson - Cardinal Health, Inc. - CFO Yes, I do. Okay, thank you. Thanks. Mark you want to answer? Mark Parish - Cardinal Health, Inc. - CEO, Healthcare Supply Chain Services Yes, Chris, relative to the CVS-CareMark announcement, we're actually very positive about that for the CVS business. I think it's going to drive certain amount of organic growth for CVS which we believe we will benefit from, so we think it's a positive if they are able to conclude that transaction successfully which certainly appears that they may be but depends on who you're talking to. Relative to the buying behavior of CVS, CVS is a very efficient buyer today and we have a very efficient contract in place with them that runs through the middle of 2008, so we don't see any immediate changes there. Christopher McFadden - Goldman Sachs - Analyst How about relative to their mail order sites, and the potentially new mail order sites that they would incorporate in this combination? Mark Parish - Cardinal Health, Inc. - CEO, Healthcare Supply Chain Services Yes. The way their business is separated today and the way they manage that business, we actually do not service CVS's mail order facilities today, Chris. Those are serviced by one of our competitors. Christopher McFadden - Goldman Sachs - Analyst Opportunity? www.streetevents.com Contact Us 9 2007 Thomson Financial. Republished with permission. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Thomson Financial.

11. FINAL TRANSCRIPT Jan. 25. 2007 / 11:00AM, CAH - Q2 2007 Cardinal Health, Inc. Earnings Conference Call Mark Parish - Cardinal Health, Inc. - CEO, Healthcare Supply Chain Services Absolutely. Christopher McFadden - Goldman Sachs - Analyst I'll stop there. Thank you. Mark Parish - Cardinal Health, Inc. - CEO, Healthcare Supply Chain Services Thank you. Jason Strohm - Cardinal Health, Inc. - VP, IR Next question? Operator? Operator? Operator Sorry. Your next question comes from the line of Tom Gallucci of Merrill Lynch. Please proceed. Tom Gallucci - Merrill Lynch - Analyst Good morning, thank you. Just wondering about capital deployment, sort of two aspects of it. Buyback, clearly over 3 billion of after-tax proceeds from PTS seems very positive to us. Is there any color you can give on the pace that you might perform those share repurchases, and then I think at your Investor Day, you had suggested you might be ready for acquisition some time this year and then Jeff, I think you mentioned in your prepared remarks possibly larger acquisitions in the medium term, so can you expand on those thoughts as well? Jeff Henderson - Cardinal Health, Inc. - CFO Let me take the first question, Tom, good morning. Regarding the buyback, obviously, we have to close the deal first and get the proceeds and if all goes well we expect that to happen in Q4 of this year and following that, as we said, we're committed to using those proceeds to buyback shares. We expect to do it on a timely basis but I'm not in a position today to say the exact timing, but I would say it will happen and our goal is not to drag it out over an extended period. Kerry Clark - Cardinal Health, Inc. - President, CEO Tom, this is Kerry. Just talking to the future, we mentioned, Jeff mentioned, the medium term and the short-term, we continue to focus on putting together a string of good quarters and operating efficiently and looking at smaller tuck-in acquisitions, so we don't have any immediate plans or programs or anything in hand right now that on a big acquisition that you should expect, so we're going to focus on continuing to do what we've been doing and continuing to do that for a few more quarters. Tom Gallucci - Merrill Lynch - Analyst Okay, if I could ask a follow-up there. Conceptually on bigger deals potentially down the road, would they theoretically be things that you could tuck into the current segments or could you possibly look at new legs to the stool? www.streetevents.com Contact Us 10 2007 Thomson Financial. Republished with permission. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Thomson Financial.

12. FINAL TRANSCRIPT Jan. 25. 2007 / 11:00AM, CAH - Q2 2007 Cardinal Health, Inc. Earnings Conference Call Kerry Clark - Cardinal Health, Inc. - President, CEO Well, I think at the moment, we're really focusing on building up our current portfolio of products and services that are in healthcare, productivity, and safety, so I would think we're going to be more comfortable in the general areas in which we have a lot of expertise. Tom Gallucci - Merrill Lynch - Analyst Okay, thank you. Jason Strohm - Cardinal Health, Inc. - VP, IR Operator, next question, please? Operator Your next question comes from the line of Glen Santangelo of Credit Suisse. Please proceed. Glen Santangelo - Credit Suisse - Analyst Yes, Kerry, just one more follow-up question on the acquisition stuff. It seems like you've done a pretty thorough review here of all of the acquisitions over the past few years and it seems like you've only identified one which may be under performing your targets. Is it fair to say that almost a year in now you've done a complete review of the business and you pretty much feel comfortable with what you have at this point? Would it be reasonable to think that there could be possible divestitures down the road or are we good for now? Kerry Clark - Cardinal Health, Inc. - President, CEO Tom, I would say we're substantially complete in the portfolio management area. There may be some other things but we're substantially complete. Glen Santangelo - Credit Suisse - Analyst Okay, thanks for the comments. Jeff Henderson - Cardinal Health, Inc. - CFO I would also add to that as qe've said many times before that the process of portfolio optimization is an ongoing one. We review all of our business units on a regular basis and we continue to assess them based on strategic fit, growth potential, and return on capital, so, I don't think the process of portfolio optimization ever really ends. Jason Strohm - Cardinal Health, Inc. - VP, IR Operator, next question, please? www.streetevents.com Contact Us 11 2007 Thomson Financial. Republished with permission. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Thomson Financial.

13. FINAL TRANSCRIPT Jan. 25. 2007 / 11:00AM, CAH - Q2 2007 Cardinal Health, Inc. Earnings Conference Call Operator Your next question comes from the line of Ross Muken of Deutsche Bank. Please proceed. Ross Muken - Deutsche Bank - Analyst Hello, gentlemen. Kerry Clark - Cardinal Health, Inc. - President, CEO Hello. Ross Muken - Deutsche Bank - Analyst Your clinical business, you showed a very nice turnaround in the quarter and certainly, it seems as if there's some exciting new product developments undergoing in that division. Could you talk a bit about the new system you're debuting there and sort of the unique nature of that and should we continue to expect R&D in that division to focus on similar-type platforms for patient safety, similar to what you're going to be debuting shortly? Kerry Clark - Cardinal Health, Inc. - President, CEO Dave, do you want to take that question? Dave Schlotterbeck - Cardinal Health, Inc. - CEO, Pharmaceutical, Medical Products I will, thank you. We plan to demonstrate next month a fully integrated medication administration delivery system that I believe will be the most complete and the most integrated offering available from any company worldwide, and not only will this validate the administration of medication to the patient but it will also allow populating the hospitals, electronic medication administration record, and if they do not have electronic administration medication records available, we will be able to provide that, so I'm very excited about this new product offering. It will also provide significant insight into the infusion delivery for all the patients in the institution, so, and then the answer to your second question or second part of your question is yes, you can expect to see ongoing levels of significant investment in R&D because Clinical Technologies and Services really is a technology business. Ross Muken - Deutsche Bank - Analyst Great, thank you very much. Operator Your next question comes from the line of Larry Marsh of Lehman Brothers. Please proceed. Larry Marsh - Lehman Brothers - Analyst Thanks. First of all I think it's great to see how quickly you guys are moving to completion of the PTS sale. It's a big positive. I have a clarification and a quick question. The clarification for Jeff, just if you add up the four equity comp expenses by division in your presentation, I'm getting 40 million. Is there some sort of net out account that I'm missing in that in the quarter? www.streetevents.com Contact Us 12 2007 Thomson Financial. Republished with permission. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Thomson Financial.

14. FINAL TRANSCRIPT Jan. 25. 2007 / 11:00AM, CAH - Q2 2007 Cardinal Health, Inc. Earnings Conference Call Jeff Henderson - Cardinal Health, Inc. - CFO First of all, they've been allocated based on budget, Larry but if you're of trying to get them to add up to--. Larry Marsh - Lehman Brothers - Analyst 33? Jeff Henderson - Cardinal Health, Inc. - CFO Yes, the PTS piece, obviously isn't there so that would get you to the -- probably the total that you were expecting to see. Larry Marsh - Lehman Brothers - Analyst So, okay. I just, so you're allocating the former PTS corporate expenses to the other three divisions this quarter; is that right? Jeff Henderson - Cardinal Health, Inc. - CFO No. Maybe I didn't understand your question, Larry. If you could repeat it. Larry Marsh - Lehman Brothers - Analyst Okay, I'm sorry. Just if you take -- you're allocating corporate expense by division this quarter and in your presentation the four divisions you highlight, I add up to $40 million, and I know your net equity comp expenses you suggest was 33 million, so I'm just looking for a reconciliation and I can do that off line if that's easier. Jeff Henderson - Cardinal Health, Inc. - CFO Oh, okay. Because there is an offset at the Corporate level because we allocate based on budget and then to the extent there are fluctuations and actuals in at any given quarter there is a trueup at the Corporate level, Larry, so in this particular case it was a negative trueup. Larry Marsh - Lehman Brothers - Analyst Okay, and then the question is for Kerry, maybe elaboration on your Specialty acquisition. You're suggesting a bigger opportunity, really want to compare and contrast that opportunity from your scale in the distribution business of Specialty products where you've sold that business to OT and what's the big difference, and then who's running that set of divisions under Mark and is that going to be changing? Kerry Clark - Cardinal Health, Inc. - President, CEO Well, if you don't mind, Larry, I'll have Mark talk to those two questions. www.streetevents.com Contact Us 13 2007 Thomson Financial. Republished with permission. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Thomson Financial.

15. FINAL TRANSCRIPT Jan. 25. 2007 / 11:00AM, CAH - Q2 2007 Cardinal Health, Inc. Earnings Conference Call Larry Marsh - Lehman Brothers - Analyst Sure. Mark Parish - Cardinal Health, Inc. - CEO, Healthcare Supply Chain Services Thanks, Kerry. Larry, the Specialty Scripts business is very specifically focused on the Pharmacy Services to the patient, and represents an extension of services that we think is critical to our ability to be able to compete for some of the exclusive and semi exclusive distribution networks that manufacturers are creating for these products. It contrasts somewhat, but -- with the Specialty distribution business but I would add that there is a blurring in this marketplace now between Specialty distribution and Specialty pharmacy. The old Specialty distribution business that we have that is now integrated into the OTN business is specifically focused on the oncology clinics and delivering product directly to the physicians in the oncology space, so they're two different businesses but relative to the capacity that we have -- or the capabilities I should say that we need to have, we feel in order to be able to serve the manufacturers the way we would like to, Specialty Scripts gives us that capability, and the Specialty distribution business to oncology is not as critical. Larry Marsh - Lehman Brothers - Analyst And just who joining those sets of businesses for you, Mark? Mark Parish - Cardinal Health, Inc. - CEO, Healthcare Supply Chain Services We haven't made that announcement yet, Larry, but we do have an internal individual who will head up that unit for us and we are also very excited that the management team from Specialty Scripts will continue to be involved and they are excellent individuals that are very knowledgeable in this business. Larry Marsh - Lehman Brothers - Analyst Okay. And that's a time when you hope to get ahead of your drug business, Mark? Or is that yet to be determined? Mark Parish - Cardinal Health, Inc. - CEO, Healthcare Supply Chain Services That, we are still in the process of talking to candidates about that particular position. That Specialty business will report into that position, Larry. Larry Marsh - Lehman Brothers - Analyst Okay, great. I'll stop there. Thank you. Operator Your next question comes from the line of Ricky Goldwasser of UBS. Please proceed. Ricky Goldwasser - UBS - Analyst Yes, hi. A couple of questions. First of all, with AMP preliminary guidance out there, can you share with us kind of what's your initial take away on how this could impact your business and your customers, and then on the Specialty Script business, should www.streetevents.com Contact Us 14 2007 Thomson Financial. Republished with permission. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Thomson Financial.

16. FINAL TRANSCRIPT Jan. 25. 2007 / 11:00AM, CAH - Q2 2007 Cardinal Health, Inc. Earnings Conference Call we look at it as kind of just you initially testing the water and then potentially looking to further expand in this area or is this kind of like where you want to be? Kerry Clark - Cardinal Health, Inc. - President, CEO Ricky, I'll take the first -- the questions in order here. Relative to AMP, certainly there's been a lot of discussion about that and we're in a period right now where comments are being made to CMS regarding the final definition. We are working closely with our customers and in particular through our trade associations with work with CMS but also directly with CMS in certain situations to be able to help clarify our concerns relative to the definition that is out there today, and that process is going to be ongoing for a few more weeks, so it's early to tell what the specific impact is going to be but we certainly do anticipate that we'll be working closely with our customers in trying to help them improve their situation by getting the rule right first and foremost, because we believe that the language and the rule right now is probably flawed in terms of reflecting the actual prices that retail pharmacy can achieve in business. Second question, relative to Specialty, again, this is a very important capability we think is critical to being able to participate to the level that we need to participate in the Specialty sector. When you look at that part of the business, the Pharmaceutical business in the United States overall, it is the fastest growing segment of the portfolios of manufacturers. If you look up the R&D pipeline, products coming out that you would call Specialty products are the lion's share of the sales that are expected out of the new products coming out over the next few years so this is an important move for us to make sure that we can continue to participate in a very important space in the industry. Ricky Goldwasser - UBS - Analyst Okay, and will you work with -- some of your clients have Specialty pharmacy capabilities of their own, so do you envision a day where you can work with them there or are you going to compete with them for that business? Kerry Clark - Cardinal Health, Inc. - President, CEO We actually envision the opportunity to work with them. The niche that Specialty Scripts plays in the marketplace is very high touch Services extended to patients through the Specialty pharmacy with very intensive needs for data collection and clinical intervention, and we believe that that is a niche in the marketplace that is a highly specialized one and one that is complementary to some of the things that our major customers are doing and I would point out that amongst the three major wholesalers, each of the three major wholesalers are participating in different ways in the Specialty business. Jason Strohm - Cardinal Health, Inc. - VP, IR Operator, next question, please? Operator Your next question comes from the line of Lisa Gill of JP Morgan. Please proceed. Lisa Gill - JP Morgan - Analyst Thanks very much and good morning. Kerry, I think in your prepared remarks you talked about the fact that international now is 12% of your revenue. Can you talk about what specific divisions that's coming from and where you see the growth opportunities? www.streetevents.com Contact Us 15 2007 Thomson Financial. Republished with permission. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Thomson Financial.

17. FINAL TRANSCRIPT Jan. 25. 2007 / 11:00AM, CAH - Q2 2007 Cardinal Health, Inc. Earnings Conference Call And then secondly, Dave, I was wondering if you maybe you could talk about the Alaris recall of the SE pump and where we stand on that? Kerry Clark - Cardinal Health, Inc. - President, CEO Lisa, hi. The revenue grew 12% but it's only 2% of our total, and where we are really focusing on is establishing what I'll call, One Cardinal Health organizations in Canada, the UK, France, and Germany, with a view to bring and integrate our offerings mostly on CTS, MPM, and surgical pre-kits, presourcing products into offerings that are tailored and work within the health systems in each of these countries, so last summer, we announced our Canadian country manager. We just announced our UK country manager and we're getting ready to announce our German country manager and we're pulling together these integrated programs and even in Canada, where we're starting to get some additional business because we're showing up as One Cardinal Health. So that's what we're primarily focused on in the international area. Dave Schlotterbeck - Cardinal Health, Inc. - CEO, Pharmaceutical, Medical Products And to your question, Lisa, on the Alaris recall, we continue to work closely with the FDA in making sure that we will meet their requirements. We have submitted and obtained approval on a technical change to the majority of the products that are positioned in the field. We now need to submit the recall, the detailed recall plan and so I feel like we're in a position of having made very good progress in dealing with this issue. Lisa Gill - JP Morgan - Analyst And what do you think the timeline is? Dave Schlotterbeck - Cardinal Health, Inc. - CEO, Pharmaceutical, Medical Products It's a little hard to say. I'm hopeful that we may be in a position to give a lot more information relatively soon. Kerry Clark - Cardinal Health, Inc. - President, CEO Lisa, I would just add that we have not made any assumptions on the returned sale of SE and the balance of the year. Lisa Gill - JP Morgan - Analyst Okay, great. Thank you. Jason Strohm - Cardinal Health, Inc. - VP, IR Operator, next question? Operator Your next question comes from the line of Sandy Draper of JMP Securities. Please proceed. www.streetevents.com Contact Us 16 2007 Thomson Financial. Republished with permission. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Thomson Financial.

18. FINAL TRANSCRIPT Jan. 25. 2007 / 11:00AM, CAH - Q2 2007 Cardinal Health, Inc. Earnings Conference Call Sandy Draper - JMP Securities - Analyst Thanks. Most of my questions were asked, but just a quick one, Jeff. I'm trying to understand the accounting side of pulling some interest expense and pushing it down into discontinued ops but then pulling it back up into continuing ops with the sale of PTS. Is it because there are bonds that are specifically backed by PTS assets or revenue, if you could just help me out there, that would be great. Jeff Henderson - Cardinal Health, Inc. - CFO No, it's more because of a quirk in the way accounting for discontinued operations works, Sandy, in that once you declare something discontinued ops, as long as you have it, you allocate a certain portion of your expenses, including interest expense to that segment while it's still part of the overall entity, but recorded in discontinued ops, and then once you sell the entity, obviously it's no longer recorded in discontinued ops so unless that interest expense goes away, it then comes back on the books of the continuing operations. So we don't have any intentions of reducing our debt level once the PTS divestiture happens, so it just comes back on our books, so it's more just moving back and fourth between disc ops and continuing ops. Sandy Draper - JMP Securities - Analyst So that makes sense. So there's no connection to the actual revenue business and no debt is going to go with PTS? Jeff Henderson - Cardinal Health, Inc. - CFO Correct. Sandy Draper - JMP Securities - Analyst Okay, great. Operator You're next question comes from the line of [David Biel] of Morgan Stanley. Please proceed. David Biel - Morgan Stanley - Analyst Thanks good morning. Just a question on the guidance and I'm sorry if I missed any of this in your prepared remarks but if we assume $1.57 is the right apples-to-apples first half comparison for guidance, the current range would imply anywhere from no sequential growth in earnings to fairly robust growth in the next couple of quarters. Could you walk us through what the key swing factors are between the high end and low end and then call out the unique items we should anticipate for the balance of the year? Jeff Henderson - Cardinal Health, Inc. - CFO I'm not sure I want to get into that level of detail, David. Let me say that as a general policy, we don't change our guidance over the course of the year, so for those of you who are expecting us to tighten it, et cetera, again, as a general policy, we set it once at the beginning of the year, unless there's an extraordinary reason to change it we maintain it, but we've left the guidance as it is. We're comfortable with that range. As Kerry said in his opening remarks we've had good momentum in the first half. We're www.streetevents.com Contact Us 17 2007 Thomson Financial. Republished with permission. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Thomson Financial.

19. FINAL TRANSCRIPT Jan. 25. 2007 / 11:00AM, CAH - Q2 2007 Cardinal Health, Inc. Earnings Conference Call hopeful we can continue that momentum in the second half and I can't really point to any specific ups or downs of any note other than the general business challenges that we face on a day-to-day. David Biel - Morgan Stanley - Analyst Okay, great. Operator Your next question comes from the line of Steven Harper of Thomas Weisel Partners. Please proceed. Steven Halper - Thomas Weisel Partners - Analyst Yes, hi. On the integrated strategy that you're going to be rolling out in February, is that going to be focused, is that sales orientation, is that going to go to hospital CEOs, CIOs, pharmacy directors, if you could just give us some color on who the initiatives going to be focused at? Dave Schlotterbeck - Cardinal Health, Inc. - CEO, Pharmaceutical, Medical Products Yes, Steven. The decision makers involved here will be the senior executives of the hospital. They will include the Chief Information Officers and the Directors of Pharmacy. One of the things that we have focused on is making this as easy an adoption as possible for the CIO because they do have a pretty significant say in what gets purchased as in terms of information related products, and our whole strategy here has been to make this essentially effortless for the CIO, so we're very optimistic about the reception that we expect to see in the marketplace. Steven Halper - Thomas Weisel Partners - Analyst Great. Thanks. Dave Schlotterbeck - Cardinal Health, Inc. - CEO, Pharmaceutical, Medical Products Yes. Jeff Henderson - Cardinal Health, Inc. - CFO Before we move on, Operator, we'll take a few more questions. Think was one thing I did want to clarify for everyone because it will probably save you countless hours of pain trying to figure it out later and that is that the tax gain that was reflected in our discontinued operations related to PTS, and let me just give you a one minute background on this. That particular income item was generated really due to the fact that we have a difference between our tax basis for PTS which is about 3.1 billion and our net book value which is 2 billion, and that difference creates a deferred tax asset and the fact that we treated PTS's discontinued operations really triggered the need to recognize that asset and flow it through the income statement within discontinued operations so that was a $425 million tax gain that is reflected in discontinued ops. Now, what will actually happen in the quarter that we close the sale, assuming we have estimated net proceeds around 3.1 billion, a net book value of 2 billion, we'll recognize a gross gain of 1.1 billion, recognize a tax expense of 0.4 billion which is effectively offsetting the asset we just recognized for an after-tax gain of approximately 0.7 billion, so you could say cumulatively, if you include the gain we took this quarter and the after-tax gain we expect to take in the quarter that we close the sale, we'll www.streetevents.com Contact Us 18 2007 Thomson Financial. Republished with permission. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Thomson Financial.

20. FINAL TRANSCRIPT Jan. 25. 2007 / 11:00AM, CAH - Q2 2007 Cardinal Health, Inc. Earnings Conference Call have recognized a cumulative net book gain in '07 of 1.1 billion. And hopefully that clears it up a little bit but I suspect we'll still have a few more questions. With that, Operator? Maybe we'll take two more questions and call it a day. Operator Your next question comes from the line of [Charles Bardy] of Citigroup. Please proceed. Charles Bardy - Citigroup - Analyst Hi, thanks. On the Pyxis demand growth, can you characterize how much was new customers versus customers upgrading to the 3,500 and what was domestic versus -- are you seeing any successes on the international front with the Pyxis machine? Dave Schlotterbeck - Cardinal Health, Inc. - CEO, Pharmaceutical, Medical Products Yes. Well, since the market is pretty well penetrated, the majority of the Pyxis growth in the last quarter or bookings in the last quarter really comes from existing customers that are upgrading to new product. Internationally, we are beginning to see significant growth by Pyxis and are very optimistic about where that will take us. Charles Bardy - Citigroup - Analyst Can you venture any estimates on size in terms of how big that European market may be in relation to the U.S. market and whether the competition there is as difficult and if it's as penetrated as the U.S. market? Dave Schlotterbeck - Cardinal Health, Inc. - CEO, Pharmaceutical, Medical Products Well, it is under penetrated at the moment and that means that it's a significant opportunity and we are using the existing infrastructure to begin that penetration. We do find that there are different needs in European hospitals than in U.S. hospitals and so we do have to tailor products to meet the needs of the customer. The overall market, I would put at several 100 million dollars that is when it is fully matured, but at this point in time, it's a long way from being mature. Kerry Clark - Cardinal Health, Inc. - President, CEO And I think the only thing that I would add to that is the Pyxis supply stations may very well be over developed, may over develop in Europe relative to the MedStations compared to -- there's a lot of consumer interest, customer interest in the supply station in Europe as well, and so I think that will become a significant part of our offering in that market. Charles Bardy - Citigroup - Analyst Are you suggesting the supply stations will help pull in the Pyxis station or vice versa? Kerry Clark - Cardinal Health, Inc. - President, CEO I think what we're seeing, that hospital customers have a lot of interest in controlling their Medical Products cost in Europe and I think the U.S. is slightly more advanced on the safety aspects in medication in hospital than their European counterparts are. www.streetevents.com Contact Us 19 2007 Thomson Financial. Republished with permission. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Thomson Financial.

21. FINAL TRANSCRIPT Jan. 25. 2007 / 11:00AM, CAH - Q2 2007 Cardinal Health, Inc. Earnings Conference Call Charles Bardy - Citigroup - Analyst Thank you. Jeff Henderson - Cardinal Health, Inc. - CFO Okay, Operator, last question, please? Operator Your final question comes from the line of Robert Willoughby of Banc of America Securities. Please proceed. Robert Willoughby - Banc of America Securities - Analyst Hi, Kerry or Jeff, with the businesses rebounding along the lines that you've guided, maybe slightly ahead from a profit standpoint, and the check coming in from PTS here in a couple quarters, why not do the big buyback today rather than two quarters down when the stock may be higher? Jeff Henderson - Cardinal Health, Inc. - CFO Bob, it's Jeff. I don't want to comment on the specific timing of the buyback. Obviously, the timing will depend on market conditions and other factors and we'll continue to assess those as time goes on. Robert Willoughby - Banc of America Securities - Analyst Thanks very much. Operator And I'll now turn it back to the speakers for closing remarks. Kerry Clark - Cardinal Health, Inc. - President, CEO I just want to say thanks everybody for joining us today and thank you for your questions. As I said earlier on, we're feeling very positive about the progress we've made in this last quarter and are feeling very good about the second half. So thank you very much. Jeff Henderson - Cardinal Health, Inc. - CFO Thank you. Operator Ladies and gentlemen, thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Have a good day. www.streetevents.com Contact Us 20 2007 Thomson Financial. Republished with permission. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Thomson Financial.

22. FINAL TRANSCRIPT Jan. 25. 2007 / 11:00AM, CAH - Q2 2007 Cardinal Health, Inc. Earnings Conference Call DISCLAIMER Thomson Financial reserves the right to make changes to documents, content, or other information on this web site without obligation to notify any person of such changes. In the conference calls upon which Event Transcripts are based, companies may make projections or other forward-looking statements regarding a variety of items. Such forward-looking statements are based upon current expectations and involve risks and uncertainties. Actual results may differ materially from those stated in any forward-looking statement based on a number of important factors and risks, which are more specifically identified in the companies' most recent SEC filings. Although the companies may indicate and believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate or incorrect and, therefore, there can be no assurance that the results contemplated in the forward-looking statements will be realized. THE INFORMATION CONTAINED IN EVENT TRANSCRIPTS IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE CONFERENCE CALLS. IN NO WAY DOES THOMSON FINANCIAL OR THE APPLICABLE COMPANY ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY EVENT TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S CONFERENCE CALL ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS. 2007, Thomson Financial. All Rights Reserved. 1453165-2007-01-26T10:52:24.060 www.streetevents.com Contact Us 21 2007 Thomson Financial. Republished with permission. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of Thomson Financial.