How we will grow our Medical-Surgical Products and Services business: Having completed our first full year as part of Cardinal Health,  I am happy to say that the bene - fits from this combination have exceeded our expectations. Cardinal now offers customers the most comprehensive portfolio of healthcare resources available anywhere, and our associates are focused on  utilizing these resources to help our customers addr ess the challenges they face. The most significant accom - plishments for our group in fiscal 2000 included: Allegiance’s innovative NetQuote SM system, accessed through cardinal.com, enables healthcare providers to design custom-sterile kits for surgical procedures. product line acquisitions and additional capacity. In 2000, we built new, state-of-the-art plants in South Carolina for the assembly of custom-sterile kits, in Thailand for sur gi- cal gloves and in the Dominican Republic for sur gical drapes and gowns. Sales through our distribution network and significant international opportunities should contin- ue to drive growth of our self-manufactured products. Build Services – While smaller than the other  two areas of our company, the service businesses have experienced solid growth. These businesses are very well positioned to grow in the future as providers continue to seek ways to impr ove patient care while  controlling costs.  # 3 More important, though, is how these accomplishments have positioned us for growth in the years to come.  There are three principal areas where we are focusing  our efforts: • Successfully integrating our operations with Car dinal Health and meeting our synergy commitments, • Achieving revenue growth ahead of expectations  (due to the realization of cross-selling opportunities and sales beyond the hospital market), • Attaining the highest service levels in our history, • Realizing significant improvements in efficiency (expense dollars actually declined year-over-year), • Achieving record profitability as well as cash flow, • Building three new, highly efficient manufacturing facilities, • Significantly expanding our e-commerce  capabilities through cardinal.com. During the past year, Allegiance worked closely with  other Cardinal businesses to develop cardinal.com, one  of the most comprehensive and powerful order entry and information management web sites in healthcar e today. Cardinal.com enables customers to use the Inter net to order from an online catalog offering more than half a million pharmaceutical, medical-surgical and laboratory products. Additionally, cardinal.com empowers medical professionals with instant access to a wide ar ray of sup- ply-management information they need to improve quality in patient care and drive costs out of their operations. We are very pleased with our recent results, and prospects for continued growth. Allegiance is positioned as a global player in an incr easingly global market. We have significant infrastructure, scale and capacity. An aging population and continued development of new med - ical technologies also contribute positively to our outlook. We believe healthcare will continue to seek the lowest cost environment, which means continued growth of the care continuum. The investments we have made in the non-hospital market in 2000 position us well to capitalize on this trend. Strengthen Distribution – In fiscal 2000, our distri- bution business experienced solid revenue growth – especially in our preferred Best Value Product lines – balanced by very good expense control. Our top line is benefiting from the success of our ser vice initiatives, ongoing efforts to advance Allegiance’s value proposition with customers and the successful cr oss-selling of our distribution services with other Cardinal products and services, most notably drug distribution and automated supply dispensing (Pyxis). We have expanded our sales focus into the rapidly growing non-hospital customer seg- ment through internal development and the August 2000 acquisition of Bergen Brunswig Corporation’s medical supply distribution business. # 1 Grow Self-Manufactured Products – Allegiance’s strength in distribution has driven solid gr owth  of its higher-margin self-manufactured products. These are well-established, leading products that are attractive to customers. We continued to invest in R&D, # 2 14 Cardinal Health, Inc. Annual Report 2000 Joe Damico,  Group President,  Medical-Surgical Products  and Services 