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## How we will grow our Pharmaceutical Technologies and Services business: 

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• We broadened our service portfolio with several important acquisitions; 

• We expanded capacity at 10 plants, including a major expansion of Scherer’s softgel operation in Tampa, a high-rise packaging warehouse in Philadelphia, and a new label and insert facility in New Jersey; 

• We helped manufacturers develop and launch impor- tant new or reformulated drugs, including Abbott’s Norvir ® , Glaxo Wellcome’s Agenerase ® and Lilly’s Zyprexa ® in Zydis ® form; 

• We strengthened our pipeline of new dr ugs under development; 

• We increased cross-selling among our companies. 

While fiscal 2000 was a ver y successful year, it was also a building year for this gr oup of companies. I believe we are just beginning to realize the enormous potential opportunities we have to serve this important customer base. Here’s why: 

Increased Outsourcing – Pharmaceutical and biotech companies increasingly view external part- nerships as a means to r educe costs, accelerate speed to market, improve a drug’s therapeutic effective- ness and broaden a drug’s appeal. # 1 

Unique, Integrated Services – We provide the most comprehensive offering for pharmaceutical manu- facturers available anywhere, and we excel at what we do. We offer proprietary technologies, a proven reputa- tion, a well-established infrastructure maintained to the highest pharmaceutical standard, global reach with a presence in all of the world’s major pharmaceutical mar- kets and an experienced management team. In fact, the group’s senior managers average more than 20 years of experience in the pharmaceutical industry. # 2 

Investing for Growth – We are making strategic investments to capitalize on future market growth, enhance our proprietary positions and further integrate our offering to customers. # 3 

In fiscal 2000, our investments began to pay real dividends: 

• We achieved record revenues (up 15%) and operating earnings (up 25%); 

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In June, we broke ground on our biggest investment ever – the $80 million Car dinal Health Product Develop- ment Center. I am very excited about the prospects for this new initiative, which will pr ovide access to the technologies and integrated services Cardinal offers and address a clear need for speed, quality and cost manage - ment in the drug-development process. The center will employ more than 250 scientists on 58 acr es in New Jersey, near some of the world’s largest pharmaceutical operations. It will be capable of delivering all of the pr od- uct development, laboratory services, product quality, and regulatory and technology transfer support necessary to bring a drug from laboratory to commercialization. 

We invested in new packaging r esources with the recent purchase of a folding carton operation in Puerto Rico and a pharmaceutical-packaging printer on the West Coast of the United States. In December, we will assume the operations of a new state-of-the-ar t manufacturing facility in Puerto Rico from the Alcon group, further strengthening our contract manufacturing capabilities. We also recently invested in new drug delivery systems with R.P. Scherer’s acquisition of topical delivery technologies from Advanced Polymer Systems. This acquisition included a manufacturing center and proven commercialized tech- nologies with strong prospects for growth worldwide. 

In the coming year, we will focus on expanding the number of drugs in our pipeline. We will accelerate initia- tives to integrate our services and broaden relationships with our customers by demonstrating our speed, quality and cost-effectiveness. And we will continue to seek acquisitions that complement our services and enhance our proprietary technologies. 

