CARDINAL HEALTH INC Annual Report, Year Ended Jun 30, 2013

Cardinal Health Inc. reported a challenging fiscal year 2013, marked by a significant 6% revenue decline to $101.1 billion, largely attributed to the expiration of its pharmaceutical distribution contract with Express Scripts and ongoing brand-to-generic pharmaceutical conversions. Despite this revenue decrease, the company saw an 8% increase in gross margin to $4.9 billion, driven by strong performance in its pharmaceutical segment's generic programs. However, operating earnings were substantially impacted, falling 44% to $1.0 billion, primarily due to an $829 million non-cash goodwill impairment charge related to its Nuclear Pharmacy Services division. The company also completed a major acquisition of AssuraMed for $2.07 billion, which is expected to expand its reach in serving homecare providers and patients. A significant event impacting the upcoming fiscal year is the non-renewal of the pharmaceutical distribution contract with Walgreens, which represented approximately 20% of fiscal 2013 revenue. Management anticipates an adverse impact from this contract expiration but is implementing cost reduction measures to mitigate it. The company expects a positive net after-tax benefit to cash flow from operating activities exceeding $500 million in fiscal 2014 as a result of the expected working capital changes following the Walgreens contract expiration.