Ensuring a healthy value chain: former P & G Vice Chairman Kerry Clark runs the largest company no one's heard of

Chief Executive, The, March, 2007 by J.P. Donlon

RELATED ARTICLE: CARDINAL HEALTH Board of Directors

Robert D. Walter

Chairman and Founder

Cardinal Health

[ILLUSTRATION OMITTED]

R. Kerry Clark

President and CEO

Cardinal Health

[ILLUSTRATION OMITTED]

Robert L. Gerbig

Retired chairman and CEO

Gerbig, Snell/Weisheimer & Assoc.

[ILLUSTRATION OMITTED]

John F. Finn

Chairman and CEO

Gardner

[ILLUSTRATION OMITTED]

Philip L. Francis

Chairman and CEO

PetSmart

[ILLUSTRATION OMITTED]

J. Michael Losh

Former Interim CEO, Cardinal Health retired chairman, Metaldyne, former CFO, GM

[ILLUSTRATION OMITTED]

John B. McCoy

Retired chairman and CEO

Bank One

[ILLUSTRATION OMITTED]

George H. Conrades

Executive chairman

Akamai Technologies, Partner, Polaris Venture Partners

[ILLUSTRATION OMITTED]

Richard C. Notebaert

Chairman and CEO

Qwest Communications International, former president and CEO, Tellabs

[ILLUSTRATION OMITTED]

Michael D. O'Halleran

Senior Vice President

Aon

[ILLUSTRATION OMITTED]

David W. Raisbeck

Vice Chairman

Cargill

[ILLUSTRATION OMITTED]

Jean G. Spaulding, M.D.

Trustee

The Duke Endowment

[ILLUSTRATION OMITTED]

Matthew D. Walter

CEO

BoundTree Medical Products

[ILLUSTRATION OMITTED]

Calvin Darden

Retired SVP

U.S. Operations, UPS

[ILLUSTRATION OMITTED]

Cardinal Health: Summary Financials

                   2006      2007e    2008e    2009e

Total revenue $bn     81.4      89.7     97.3    105.4
Pretax profit $mn  1,975.8   2,267    2,601    2,990
Revenue growth %       9.5      10.3      8.4      8.4
EPS growth %          (4.5)     20.8     16.9     15.9
Gross margin %         6.5       6.5      6.5      6.5
EBITDA margin %        3.1       3.2      3.3      3.4

Source: Goldman Sachs

Valuation Analysis

                      CY P/E     5 Yr.      5 Yr.
                   2006   2007   Aver. P/E  EPS CAGR

Cardinal Health    18.6x  15.8x  18.3x      15.0%
McKesson           20.5   17.5   16.9       12.0
AmerisourceBergen  20.8   18.3   17.2       10.0

Source: FactSet, Goldman Sachs