Cardinal Health 2009 Annual Report Download - page 9

We will continue to rationalize our infrastructure to o set
any ongoing costs associated with the CareFusion spino .
We will maintain disciplined cost management, making
sure our cost structure is lean and appropriately sized for
our businesses going forward. And we further optimized
our portfolio with the decision to divest our U.K.-based
Martindale generic injectable manufacturing business and
our SpecialtyScripts Pharmacy business, though we remain
committed to serving the specialty pharmaceutical segment.
In addition to business execution, we are focused on creating a
predictable and disciplined use of cash to drive shareholder returns.
We recently increased the regular quarterly dividend by 25% to
$0.175 per share, resulting in a signi cantly increased payout ratio.
Resetting for the future
I feel very good about our overall performance in  scal 2009
and what the businesses that comprise the ‘new’ Cardinal Health
accomplished last year. And while I fully expect the progress we
made to continue,  scal 2010 is a transition year for the ‘new’
Cardinal Health, which will result in a decline in earnings per share
from  scal 2009. We do expect the transition to be felt more in
our Pharmaceutical segment, with a partial o set by our Medical
segment that we believe will show strong pro t growth —
this group of businesses already accounts for nearly a third of
our bottom line.
We are resetting for the future. We are making important
investments and tackling the issues we need to tackle in
order to set ourselves on a more positive and sustainable
growth trajectory coming out of  scal 2010. While some of
these strategic choices will have a negative impact on our
 nancial results in  scal 2010, we have increased con dence
in the path going forward and are excited about the work
we are doing to transform Cardinal Health for the future.
We believe our Pharmaceutical businesses are well positioned
for long-term growth, with improvements being made in
our retail independent segment, generic launches beginning
to pick up in  scal 2011 and 2012, and the momentum from
our sourcing and Medicine Shoppe model changes that are
expected to begin to bear fruit as we exit  scal 2010. And our
Medical businesses are also poised for good growth, with
a di erentiated portfolio of self-manufactured products,
unmatched channel breadth, a broad range of compelling
o erings in supply chain services and specialized sales capabilities
dedicated to the unique needs of our diverse set of customers.
As one of the largest healthcare products and services companies,
we recognize that these are extraordinary times for our industry.
While the  nal outcome of the debate in Washington over
healthcare reform is not yet clear, the need to improve the access,
a ordability and quality of our healthcare system is abundantly
clear. We will continue to be actively engaged in the reform
debate as we work every day to support our customers’ needs.
In summary, we are well positioned to compete and create
value in the largest segment of the U.S. economy. We believe
the demand for our products and services is likely to increase,
given the aging demographics and the focus on providing all
Americans access to healthcare. We are making progress and
course-correcting for the long term, and we have the right
team in place to help our customers make their businesses,
and the healthcare system, more cost-e ective. As the ‘new’
Cardinal Health, we are intently focused on the business of
healthcare, so our customers can focus on their patients.
Sincerely,
George S. Barrett
Chairman and Chief Executive O cer