10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2015

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File Number: 1-11373

Cardinal Health, Inc.

(Exact name of registrant as specified in its charter)

Ohio	31-0958666
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
7000 Cardinal Place, Dublin, Ohio	43017
(Address of principal executive offices)	(Zip Code)
(614) 757-5000
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ    No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes þ    No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  þ	Accelerated filer o
Non-accelerated filer  o (Do not check if a smaller reporting company)	Smaller reporting company  o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  o  No þ

The number of the registrant’s common shares, without par value, outstanding as of October 30, 2015, was the following: 328,981,086.

Cardinal Health

Q1 Fiscal 2016 Form 10-Q

Table of Contents

	Page
Management's Discussion and Analysis of Financial Condition and Results of Operations	2
Explanation and Reconciliation of Non-GAAP Financial Measures	9
Quantitative and Qualitative Disclosures about Market Risk	11
Controls and Procedures	11
Legal Proceedings	11
Risk Factors	11
Unregistered Sales of Equity Securities	11
Financial Statements and Supplementary Data	12
Exhibits	25
Form 10-Q Cross Reference Index	26
Signatures	27

Forward-Looking Statements

This Form 10-Q (including information incorporated by reference) includes "forward-looking statements" addressing expectations, prospects, estimates and other matters that are dependent upon future events or developments. Many forward-looking statements appear in Management’s Discussion and Analysis of Financial Condition and Results of Operation ("MD&A"), but there are others in the document, which may be identified by the words such as "expect," "anticipate," "intend," "plan," "believe," "will," "should," "could," "would," "project," "continue," "likely," and similar expressions, and include statements reflecting future results, trends or guidance, statements of outlook and expense accruals. The matters discussed in these forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those made, projected or implied in the forward-looking statements. The most significant of these risks, uncertainties and other factors are described in Exhibit 99.1 to this Form 10-Q and in "Item 1A: Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended June 30, 2015 (our “2015 Form 10-K”). Forward-looking statements in this document speak only as of the date of this document. Except to the extent required by applicable law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

About Cardinal Health

Cardinal Health, Inc. is an Ohio corporation formed in 1979. As used in this report, “we,” “our,” “us,” and similar pronouns refer to Cardinal Health, Inc. and its subsidiaries, unless the context requires otherwise. We are a healthcare services and products company that improves the cost-effectiveness of health care. We help pharmacies, hospitals, and other healthcare providers focus on patient care while reducing costs, enhancing efficiency, and improving quality. We also provide medical products to patients in the home.

We manage our business and report our financial results in two segments: Pharmaceutical and Medical.

Non-GAAP Financial Measures

We use "non-GAAP financial measures" in the "Overview of Consolidated Results" section of MD&A. These measures are derived from our condensed consolidated financial data but are not presented in our financial statements in accordance with U.S. generally accepted accounting principles ("GAAP"). The reasons we use these non-GAAP financial measures and the reconciliations to their most directly comparable GAAP financial measures are included in the “Explanation and Reconciliation of Non-GAAP Measures” section following MD&A. The remaining sections of MD&A refer to GAAP measures only.

1 Cardinal Health | Q1 Fiscal 2016 Form 10-Q

MD&A

Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)

The discussion and analysis presented below is concerned with material changes in financial condition and results of operations for our condensed consolidated balance sheets at September 30, 2015 and June 30, 2015, and for our condensed consolidated statements of earnings for the three months ended September 30, 2015 and 2014. All comparisons presented are with respect to the prior-year period, unless stated otherwise. This discussion and analysis should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our 2015 Form 10-K.

Significant Developments

Harvard Drug

On July 2, 2015, we completed the acquisition of The Harvard Drug Group ("Harvard Drug") for $1.1 billion using cash on hand and proceeds from our debt offering in June 2015. The acquisition of Harvard Drug, a distributor of generic pharmaceuticals, over-the-counter healthcare and related products to retail, institutional, and alternate care customers, enhances our Pharmaceutical segment's generic pharmaceutical distribution and related services businesses. Harvard Drug also manufactures and repackages generic pharmaceuticals and over-the-counter healthcare products.

naviHealth

On August 26, 2015, we acquired a 71 percent ownership interest in naviHealth Group Holdings, L.P. ("naviHealth") for $238 million, net of cash acquired of $53 million. We funded the acquisition with cash on hand. The acquisition of naviHealth, a leader in post-acute care management solutions, expands our ability to serve health plans, health systems, and providers. We consolidate the results of naviHealth in our condensed consolidated financial statements and will report those consolidated results in our Medical segment. The portion of naviHealth net earnings attributable to third-party interest holders is reported as a reduction to net earnings in the condensed consolidated statements of earnings.

Cordis

On October 2, 2015, we completed the acquisition of the Cordis business from Ethicon, Inc., a wholly-owned subsidiary of Johnson and Johnson for $1.9 billion, using existing cash and proceeds from our debt offering in June 2015. The acquisition of Cordis, a manufacturer and distributor of interventional cardiology devices and endovascular solutions, expands our Medical segment's portfolio of self-manufactured products and its geographic scope. Cordis is a global company, with operations in more than 50 countries. We expect this acquisition to have a significant negative impact on GAAP operating earnings and earnings before income taxes throughout the remainder of fiscal 2016, largely due to the expected impact of amortization and other acquisition-related costs and the roll out of the inventory fair value step up. Transaction and integration costs associated with the acquisition of Cordis were $21 million during the three months ended September 30, 2015 and are included in amortization and other acquisition-related costs in the condensed consolidated statements of earnings.

Refer to Note 2 of the "Notes to Condensed Consolidated Financial Statements" for additional information on acquisitions.

Cardinal Health | Q1Fiscal 2016 Form 10-Q 2

MD&A Results of Operations

Overview of Consolidated Results

Revenue

Revenue for the three months ended September 30, 2015 was $28.1 billion, a 17 percent increase from the prior-year period due primarily to sales growth from existing and new pharmaceutical distribution customers.

GAAP and Non-GAAP Operating Earnings

	Three Months Ended September 30
(in millions)	2015		2014		Change
GAAP	$	620	$	466	33	%
Restructuring and employee severance	12		19
Amortization and other acquisition-related costs	105		53
Litigation (recoveries)/charges, net	—		28
Non-GAAP	$	737	$	566	30	%

GAAP operating earnings increased 33 percent to $620 million compared to the prior-year period and non-GAAP operating earnings increased 30 percent to $737 million. The increases in both GAAP and non-GAAP operating earnings were due to sales growth from existing and new pharmaceutical distribution customers, strong performance from our Pharmaceutical segment generics program and acquisitions, offset in part by customer pricing changes. GAAP operating earnings was also impacted by increased amortization and other acquisition-related costs.

GAAP and Non-GAAP Diluted EPS

	Three Months Ended September 30
	2015		2014		Change
GAAP	$	1.15	$	0.78	47	%
Restructuring and employee severance	0.02		0.04
Amortization and other acquisition-related costs	0.21		0.10
Litigation (recoveries)/charges, net	—		0.08
Non-GAAP	$	1.38	$	1.00	38	%

During the three months ended September 30, 2015, GAAP diluted earnings per share ("EPS") attributable to Cardinal Health, Inc. increased $0.37 or 47 percent to $1.15 and non-GAAP diluted EPS increased $0.38 or 38 percent to $1.38. GAAP and non-GAAP diluted EPS increased primarily due to the factors impacting GAAP and non-GAAP operating earnings as well as net favorable discrete income tax items and a lower share count as a result of share repurchases in fiscal 2015.

Cash and Equivalents

Our cash and equivalents balance was $3.0 billion at September 30, 2015 compared to $4.6 billion at June 30, 2015. The decrease in cash and equivalents during the quarter was driven by cash deployed for acquisitions of $1.4 billion, dividends of $131 million, and cash used in operating activities of $52 million. On October 2, 2015, we paid $1.9 billion in cash to acquire Cordis.

3 Cardinal Health | Q1 Fiscal 2016 Form 10-Q

MD&A Results of Operations

Results of Operations

Revenue

	Three Months Ended September 30
(in millions)	2015			2014		Change
Pharmaceutical	$	25,140		$	21,209	19	%
Medical	2,919			2,852		2	%
Total segment revenue	28,059			24,061		17	%
Corporate	(4		)	9		N.M.
Total revenue	$	28,055		$	24,070	17	%

Pharmaceutical Segment

Pharmaceutical segment revenue growth for the three months ended September 30, 2015 compared to the prior-year period was primarily due to sales growth from existing and new pharmaceutical distribution customers, which increased revenue by $3.5 billion, including the impact of continued branded pharmaceutical price inflation. Acquisitions also contributed to revenue growth ($647 million).

Medical Segment

Medical segment revenue growth for the three months ended September 30, 2015 compared to the prior-year period was primarily due to sales growth of Cardinal Health brand products and Cardinal Health at Home, which had a combined impact of $45 million.

Cost of Products Sold

As a result of the same factors affecting the change in revenue, consolidated cost of products sold increased $3.7 billion (16 percent) compared to the prior-year period. See the "Gross Margin" section for additional drivers impacting cost of products sold.

Cardinal Health | Q1Fiscal 2016 Form 10-Q 4

MD&A Results of Operations

Gross Margin

	Three Months Ended September 30
(in millions)	2015		2014		Change
Gross margin	$	1,579	$	1,341	18	%

Gross margin increased during the three months ended September 30, 2015 compared to the prior-year period by $238 million (18 percent).

Gross margin growth during three months ended September 30, 2015 was positively impacted by sales growth from existing and new pharmaceutical distribution customers ($120 million) and acquisitions ($72 million).

Gross margin rate expansion contributed $17 million during the three months ended September 30, 2015, reflecting strong performance from our generics program, including the net benefits from Red Oak Sourcing, offset in part by the adverse impact of customer pricing changes.

Distribution, Selling, General, and Administrative ("SG&A") Expenses

	Three Months Ended September 30
(in millions)	2015		2014		Change
SG&A expenses	$	842	$	775	9	%

The increase in SG&A expenses during the three months ended September 30, 2015 over the prior-year period was primarily due to acquisitions, net of divestitures ($31 million).

5 Cardinal Health | Q1 Fiscal 2016 Form 10-Q

MD&A Results of Operations

Segment Profit

We evaluate segment performance based on segment profit, among other measures. See Note 13 of the "Notes to Condensed Consolidated Financial Statements" for additional information on segment profit.

	Three Months Ended September 30
(in millions)	2015			2014			Change
Pharmaceutical	$	657		$	451		46	%
Medical	101			113			(11	)%
Total segment profit	758			564			34	%
Corporate	(138		)	(98		)	N.M.
Total consolidated operating earnings	$	620		$	466		33	%

Pharmaceutical Segment Profit

The increase in Pharmaceutical segment profit during the three months ended September 30, 2015 over the prior-year period was due to sales growth from existing and new pharmaceutical distribution customers and strong performance from our generics program, including the net benefits from Red Oak Sourcing, offset in part by customer pricing changes. Acquisitions also contributed to segment profit growth.

Medical Segment Profit

The decrease in Medical segment profit during the three months ended September 30, 2015 compared to the prior-year period was

primarily due to our Canada business, including the impact of foreign currency. Included in the prior-year results for Canada is a previously disclosed, one-time benefit resulting from winding down the CareFusion contract.

Corporate

As discussed further in sections that follow, the principal driver for the change in Corporate during the three months ended September 30, 2015 compared to the prior-year period was increased amortization and other acquisition-related costs primarily due to costs incurred in connection with the acquisitions of Cordis and Harvard Drug.

Cardinal Health | Q1Fiscal 2016 Form 10-Q 6

MD&A Results of Operations

Other Components of Consolidated Operating Earnings

In addition to revenue, gross margin, and SG&A expenses discussed previously, consolidated operating earnings were impacted by the following:

	Three Months Ended September 30
(in millions)	2015		2014
Restructuring and employee severance	$	12	$	19
Amortization and other acquisition-related costs	105		53
Litigation (recoveries)/charges, net	—		28

Amortization and Other Acquisition-Related Costs

Amortization of acquisition-related intangible assets was $67 million and $44 million for the three months ended September 30, 2015 and 2014, respectively. Transaction and integration costs associated with the acquisition of Cordis were $21 million during the three months ended September 30, 2015.

Litigation (Recoveries)/Charges, Net

During the three months ended September 30, 2014, we accrued $27 million related to the U.S. Drug Enforcement Administration investigation and related matters. This matter is discussed further in Note 7 of the "Notes to Condensed Consolidated Financial Statements."

Earnings Before Income Taxes

In addition to the items discussed above, earnings before income taxes was impacted by the following:

	Three Months Ended September 30
(in millions)	2015		2014			Change
Other (income)/expense, net	$	8	$	(3	)	N.M.
Interest expense, net	44		34			32	%

Interest Expense, Net

Interest expense, net increased during the three months ended September 30, 2015 primarily as a result of the additional $1.5 billion of debt issued in the prior year to fund the Harvard Drug and Cordis acquisitions.

Provision for Income Taxes

During the three months ended September 30, 2015 and 2014, the effective tax rate was 32.3 percent and 38.9 percent, respectively. The effective tax rate during the three months ended September 30, 2015 was impacted by net favorable discrete items of $28 million.

7 Cardinal Health | Q1 Fiscal 2016 Form 10-Q

MD&A Liquidity and Capital Resources

Liquidity and Capital Resources

We currently believe that, based on available capital resources (cash on hand and committed credit facilities) and projected operating cash flow, we have adequate capital resources to fund working capital needs; currently anticipated capital expenditures; currently anticipated business growth and expansion; contractual obligations; tax payments; and current and projected debt service requirements, dividends, and share repurchases. If we decide to engage in one or more additional acquisitions, depending on the size and timing of such transactions, we may need to access capital markets for additional financing.

Cash and Equivalents

Our cash and equivalents balance was $3.0 billion at September 30, 2015 compared to $4.6 billion at June 30, 2015. We acquired Harvard Drug on July 2, 2015 for $1.1 billion. We acquired naviHealth on August 26, 2015 for $238 million, net of cash acquired of $53 million. At September 30, 2015, our cash and equivalents were held in cash depository accounts with major banks or invested in high quality, short-term liquid investments. On October 2, 2015, we acquired Cordis for $1.9 billion.

During the three months ended September 30, 2015, net cash used in operating activities of $52 million was due to the timing of collections and purchases. During the three months ended September 30, 2015, we deployed $1.4 billion for acquisitions and $131 million for cash dividends.

The cash and equivalents balance at September 30, 2015 included $480 million of cash held by subsidiaries outside of the United States. Although the vast majority of this cash is available for repatriation, permanently bringing the money into the United States could trigger U.S. federal, state, and local income tax obligations. As a U.S. parent company, we may temporarily access cash held by our foreign subsidiaries without becoming subject to U.S. federal income tax through intercompany loans.

Changes in working capital, which impact operating cash flow, can vary significantly depending on factors such as the timing of customer payments, inventory purchases and payments to vendors in the regular course of business, as well as fluctuating working capital needs driven by customer and product mix.

Financial Instruments and Other Financing Arrangements

Credit Facilities and Commercial Paper

Other sources of liquidity include a $1.5 billion revolving credit facility and a $950 million committed receivables sales facility program. We also have a commercial paper program of up to $1.5 billion, backed by the revolving credit facility. At September 30, 2015, we had no outstanding balances or borrowings under these facilities, except for standby letters of credit of $41 million under the committed receivables sales facility program.

Our revolving credit facility and committed receivables sales facility program require us to maintain a consolidated interest coverage ratio of at least 4-to-1 and consolidated leverage ratio of no more than 3.25-to-1. As of September 30, 2015, we were in compliance with these financial covenants.

Available-for-Sale Securities

At September 30, 2015, we held $193 million of marketable securities, which are classified as available-for-sale.

Capital Deployment

Capital Expenditures

Capital expenditures during the three months ended September 30, 2015 and 2014 were $83 million and $36 million, respectively.

Dividends

On August 5, 2015, our Board of Directors approved a quarterly dividend of $0.3870 per share, or $1.55 per share on an annualized basis, payable on October 15, 2015 to shareholders of record on October 1, 2015.

Share Repurchases

Our Board of Directors has approved a $2.0 billion share repurchase program, which expires on December 31, 2016. At September 30, 2015, we had $693 million remaining under this repurchase authorization.

During the three months ended September 30, 2015 we did not repurchase common shares under this program.

Acquisitions

During the three months ended September 30, 2015, we acquired businesses in both the Pharmaceutical and Medical segments, including Harvard Drug and naviHealth, for an aggregate of $1.4 billion.

Cardinal Health | Q1Fiscal 2016 Form 10-Q 8

MD&A

Other Items

The MD&A in our 2015 Form 10-K addresses our contractual obligations, critical accounting policies and sensitive accounting estimates, and the absence of off-balance sheet arrangements, as of and for the fiscal year ended June 30, 2015. There have been no subsequent material changes outside of the ordinary course of business to those items.

Explanation and Reconciliation of Non-GAAP Financial Measures

The "Overview of Consolidated Results" section within MD&A in this Form 10-Q contains financial measures that are not calculated in accordance with GAAP. In general, the measures exclude items and charges that we do not believe reflect our core business and relate more to strategic, multi-year corporate activities, or the items and charges relate to activities or actions that may have occurred over multiple or in prior periods without predictable trends. We use these non-GAAP financial measures internally to evaluate our performance, evaluate the balance sheet, engage in financial and operational planning, and determine incentive compensation.

We provide these non-GAAP financial measures to investors as supplemental metrics to assist readers in assessing the effects of items and events on our financial and operating results and in comparing our performance to that of our competitors. However, the non-GAAP financial measures used by us may be calculated

differently from, and therefore may not be comparable to, similarly titled measures used by other companies.

The non-GAAP financial measures disclosed by us should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial measures should be carefully evaluated.

Following are definitions of the non-GAAP financial measures presented in this Form 10-Q and reconciliations of the differences between the non-GAAP financial measures and their most directly comparable GAAP financial measures. For all other definitions, refer to our 2015 Form 10-K.

Definitions

Non-GAAP net earnings attributable to Cardinal Health, Inc. or "Non-GAAP net earnings": net earnings attributable to Cardinal Health, Inc. excluding (1) restructuring and employee severance, (2) amortization and other acquisition-related costs, (3) impairments and (gain)/loss on disposal of assets, (4) litigation (recoveries)/charges, net, (5) LIFO charges/(credits), and (6) loss on extinguishment of debt, each net of tax.

Non-GAAP diluted EPS attributable to Cardinal Health, Inc. or "Non-GAAP diluted EPS": non-GAAP net earnings attributable to Cardinal Health, Inc. divided by diluted weighted-average shares outstanding.

Non-GAAP operating earnings: operating earnings excluding (1) restructuring and employee severance, (2) amortization and other acquisition-related costs, (3) impairments and (gain)/loss on disposal of assets, (4) litigation (recoveries)/charges, net, and (5) LIFO charges/(credits).

9 Cardinal Health | Q1 Fiscal 2016 Form 10-Q

MD&A

GAAP to Non-GAAP Reconciliations

	First Quarter 2016
							Net Earnings				Diluted EPS
					Net Earnings		attributable		Diluted EPS		attributable
			Operating		attributable		to Cardinal		attributable		to Cardinal
(in millions, except per common share amounts)	Operating		Earnings		to Cardinal		Health, Inc.		to Cardinal		Health, Inc.
	Earnings		Growth Rate		Health, Inc.		Growth Rate		Health, Inc.		Growth Rate
GAAP	$	620	33	%	$	383	44	%	$	1.15	47	%
Restructuring and employee severance	12				7				0.02
Amortization and other acquisition-related costs	105				68				0.21
Impairments and (gain)/loss on disposal of assets	—				—				—
Litigation (recoveries)/charges, net	—				—				—
LIFO charges/(credits)	—				—				—
Loss on extinguishment of debt	—				—				—
Non-GAAP	$	737	30	%	$	458	35	%	$	1.38	38	%
	First Quarter 2015
GAAP	$	466	(1	)%	$	266	(22	)%	$	0.78	(21	)%
Restructuring and employee severance	19				12				0.04
Amortization and other acquisition-related costs	53				34				0.10
Impairments and (gain)/loss on disposal of assets	—				—				—
Litigation (recoveries)/charges, net	28				28				0.08
LIFO charges/(credits)	—				—				—
Loss on extinguishment of debt	—				—				—
Non-GAAP	$	566	6	%	$	340	(10	)%	$	1.00	(9	)%

The sum of the components may not equal the total due to rounding.

We apply varying tax rates depending on the item's nature and tax jurisdiction where it is incurred.

Cardinal Health | Q1Fiscal 2016 Form 10-Q 10

Other Items

Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in the quantitative and qualitative market risks since the end of fiscal 2015 through September 30, 2015 from those reported in our 2015 Form 10-K, excluding the impact of acquisitions that had not yet closed as of September 30, 2015. The acquisition of Cordis will increase our foreign currency transactional and translational exposure due to operations in more than 50 countries.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We evaluated, with the participation of our principal executive officer and principal financial officer, the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act")) as of September 30, 2015. Based on this evaluation, our principal executive officer and principal financial officer have concluded that as of September 30, 2015, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms and that such information is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended September 30, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Legal Proceedings

The legal proceedings described in Note 7 of the "Notes to Condensed Consolidated Financial Statements" are incorporated in this "Legal Proceedings" section by reference.

Risk Factors

You should carefully consider the information in this Form 10-Q and the risk factors discussed in "Risk Factors" and other risks discussed in our 2015 Form 10-K and our filings with the SEC since June 30, 2015. These risks could materially and adversely affect our results of operations, financial condition, liquidity, and cash flows. Our business also could be affected by risks that we are not presently aware of or that we currently consider immaterial to our operations.

Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program (2)	Approximate Dollar Value of Shares That May Yet be Purchased Under the Program (2) (in millions)
July 2015	194	$	85.55	—	$	693
August 2015	299	85.45		—	693
September 2015	2,768	81.48		—	693
Total	3,261	$	82.08	—	$	693

(1) Reflects 194, 299, and 2,768 common shares purchased in July, August, and September 2015, respectively, through a rabbi trust as investments of participants in our Deferred Compensation Plan.

(2) On October 29, 2013, our Board of Directors approved a $1.0 billion share repurchase program and on August 6, 2014, the Board of Directors authorized an additional $1.0 billion under the program, for a total of $2.0 billion. This program expires on December 31, 2016. During the three months ended September 30, 2015, we did not repurchase common shares under this program.

11 Cardinal Health | Q1 Fiscal 2016 Form 10-Q

Financial Statements

Condensed Consolidated Statements of Earnings

(Unaudited)

	Three Months Ended September 30
(in millions, except per common share amounts)	2015			2014
Revenue	$	28,055		$	24,070
Cost of products sold	26,476			22,729
Gross margin	1,579			1,341
Operating expenses:
Distribution, selling, general, and administrative expenses	842			775
Restructuring and employee severance	12			19
Amortization and other acquisition-related costs	105			53
Litigation (recoveries)/charges, net	—			28
Operating earnings	620			466
Other (income)/expense, net	8			(3		)
Interest expense, net	44			34
Earnings before income taxes	568			435
Provision for income taxes	184			169
Net earnings	384			266
Less: Net earnings attributable to noncontrolling interests	(1		)	—
Net earnings attributable to Cardinal Health, Inc.	$	383		$	266
Earnings per common share attributable to Cardinal Health, Inc.:
Basic	$	1.17		$	0.79
Diluted	1.15			0.78
Weighted-average number of common shares outstanding:
Basic	328			336
Diluted	331			340
Cash dividends declared per common share	$	0.3870		$	0.3425

See notes to condensed consolidated financial statements.

Cardinal Health | Q1Fiscal 2016 Form 10-Q 12

Financial Statements

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

	Three Months Ended September 30
(in millions)	2015			2014
Net earnings	$	384		$	266
Other comprehensive loss:
Foreign currency translation adjustments	(44		)	(24		)
Net unrealized loss on derivative instruments, net of tax	(1		)	—
Total other comprehensive loss, net of tax	(45		)	(24		)
Total comprehensive income	339			242
Less: Comprehensive income attributable to noncontrolling interests	(1		)	—
Total comprehensive income attributable to Cardinal Health, Inc.	$	338		$	242

See notes to condensed consolidated financial statements.

13 Cardinal Health | Q1 Fiscal 2016 Form 10-Q

Financial Statements

Condensed Consolidated Balance Sheets

(in millions)	September 30, 2015			June 30, 2015
Assets	(Unaudited)
Current assets:
Cash and equivalents	$	2,974		$	4,616
Trade receivables, net	6,996			6,523
Inventories, net	9,758			9,211
Prepaid expenses and other	1,490			1,402
Total current assets	21,218			21,752
Property and equipment, net	1,546			1,506
Goodwill and other intangibles, net	7,564			6,018
Other assets	894			866
Total assets	$	31,222		$	30,142
Liabilities, Redeemable Noncontrolling Interests, and Shareholders’ Equity
Current liabilities:
Accounts payable	$	14,868		$	14,368
Current portion of long-term obligations and other short-term borrowings	319			281
Other accrued liabilities	2,595			2,594
Total current liabilities	17,782			17,243
Long-term obligations, less current portion	5,231			5,211
Deferred income taxes and other liabilities	1,563			1,432
Redeemable noncontrolling interests	119			—
Shareholders’ equity:
Preferred shares, without par value:
Authorized—500 thousand shares, Issued—none	—			—
Common shares, without par value:
Authorized—755 million shares, Issued—364million shares at September 30, 2015 and June 30, 2015	2,957			3,003
Retained earnings	5,774			5,521
Common shares in treasury, at cost: 35 million shares and 36 million shares at September 30, 2015 and June 30, 2015, respectively	(2,158		)	(2,245		)
Accumulated other comprehensive loss	(68		)	(23		)
Total Cardinal Health, Inc. shareholders' equity	6,505			6,256
Noncontrolling interests	22			—
Total shareholders’ equity	6,527			6,256
Total liabilities, redeemable noncontrolling interests, and shareholders’ equity	$	31,222		$	30,142

See notes to condensed consolidated financial statements.

Cardinal Health | Q1Fiscal 2016 Form 10-Q 14

Financial Statements

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Three Months Ended September 30
(in millions)	2015			2014
Cash flows from operating activities:
Net earnings	$	384		$	266
Adjustments to reconcile net earnings to net cash provided by/(used in) operating activities:
Depreciation and amortization	137			108
Gain on sale of other investments	—			(5		)
Share-based compensation	30			25
Provision for bad debts	17			12
Change in fair value of contingent consideration obligation	(1		)	—
Change in operating assets and liabilities, net of effects from acquisitions:
Increase in trade receivables	(348		)	(291		)
Decrease/(increase) in inventories	(495		)	199
Increase/(decrease) in accounts payable	425			(157		)
Other accrued liabilities and operating items, net	(201		)	(96		)
Net cash provided by/(used in) operating activities	(52		)	61
Cash flows from investing activities:
Acquisition of subsidiaries, net of cash acquired	(1,399		)	(61		)
Additions to property and equipment	(83		)	(36		)
Purchase of available-for-sale securities and other investments	(26		)	(75		)
Proceeds from sale of available-for-sale securities and other investments	25			91
Proceeds from maturities of available-for-sale securities and held-to-maturity securities	5			—
Net cash used in investing activities	(1,478		)	(81		)
Cash flows from financing activities:
Payment of contingent consideration obligation	(23		)	—
Net change in short-term borrowings	36			40
Reduction of long-term obligations	(4		)	—
Net proceeds/(tax withholdings) from share-based compensation	(21		)	25
Tax proceeds from share-based compensation	31			38
Dividends on common shares	(131		)	(119		)
Purchase of treasury shares	—			(360		)
Net cash used in financing activities	(112		)	(376		)
Net decrease in cash and equivalents	(1,642		)	(396		)
Cash and equivalents at beginning of period	4,616			2,865
Cash and equivalents at end of period	$	2,974		$	2,469

See notes to condensed consolidated financial statements.

15 Cardinal Health | Q1 Fiscal 2016 Form 10-Q

Notes to Financial Statements

Notes to Condensed Consolidated Financial Statements

1. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

Our condensed consolidated financial statements include the accounts of all majority-owned or controlled subsidiaries, and all significant intercompany transactions and amounts have been eliminated. References to "we," "our," and similar pronouns in this Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 (this "Form 10-Q") refer to Cardinal Health, Inc. and its majority-owned or controlled subsidiaries unless the context requires otherwise. The results of businesses acquired or disposed of are included in the condensed consolidated financial statements from the effective date of the acquisition or up to the date of disposal, respectively.

Our condensed consolidated financial statements have been prepared in accordance with the U.S. Securities and Exchange Commission ("SEC") instructions to Quarterly Reports on Form 10-Q and include all of the information and disclosures required by accounting principles generally accepted in the United States ("GAAP") for interim financial reporting. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect amounts reported in the condensed consolidated financial statements and accompanying notes. Actual amounts may differ from these estimated amounts. In addition, operating results presented for this fiscal 2016 interim period are not necessarily indicative of the results that may be expected for the full fiscal year ending June 30, 2016.

These condensed consolidated financial statements are unaudited and are presented pursuant to the rules and regulations of the SEC. Accordingly, the condensed consolidated financial statements included in this Form 10-Q should be read in conjunction with the audited consolidated financial statements and related notes contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2015 (the "2015 Form 10-K"). In our opinion, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included. Except as disclosed elsewhere in this Form 10-Q, all such adjustments are of a normal and recurring nature.

Recent Financial Accounting Standards

In September 2015, the Financial Accounting Standards Board ("FASB") issued amended accounting guidance that eliminates the requirement that an acquirer in a business combination account for measurement-period adjustments on a retrospective basis. Under the new guidance, the acquirer will recognize a measurement-period adjustment during the period in which it determines the amount of the adjustment. This amendment will be effective for us in the first quarter of fiscal 2017, with early adoption permitted. We are currently evaluating the impact of adoption on our financial position and results of operations.

In July 2015, the FASB issued amended accounting guidance that simplifies the current guidance surrounding the measurement of inventory. Under this amended guidance, inventory is measured at the lower of cost and net realizable value, which eliminates the need to determine replacement cost and evaluate whether the inventory is above or below net realizable value. Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The amended guidance does not apply to inventory measured under the last in, first out ("LIFO") method. This amendment will be effective for us in the first quarter of fiscal 2018. We are currently evaluating the impact of adoption on our financial position and results of operations.

In May 2014, the FASB issued amended accounting guidance related to revenue recognition. This guidance is based on the principle that revenue is recognized in an amount that reflects the consideration to which an entity expects to be entitled in exchange for the transfer of goods or services to customers. The guidance also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In July 2015, the FASB finalized a proposal to defer the effective date for one year beyond the originally specified effective date. This amendment will be effective for us in the first quarter of fiscal 2019. We are continuing to evaluate the options for adoption and the impact on our financial position and results of operations.

In April 2014, the FASB issued amended accounting guidance related to the reporting of discontinued operations and disclosures of disposals of components of an entity. The amended guidance changes the thresholds for disposals to qualify as discontinued operations and requires additional disclosures. We adopted this guidance in the first quarter of fiscal 2016. The adoption of this guidance did not materially impact our financial position or results of operations.

Cardinal Health | Q1Fiscal 2016 Form 10-Q 16

Notes to Financial Statements

2. Acquisitions

During the three months ended September 30, 2015, we completed several acquisitions, the most significant of which are described in more detail below. The pro forma results of operations and the results of operations for acquired businesses since the acquisition dates have not been separately disclosed because the effects were not significant compared to the condensed consolidated financial statements, individually or in the aggregate.

Harvard Drug

On July 2, 2015, we completed the acquisition of The Harvard Drug Group ("Harvard Drug") for $1.1 billion using cash on hand and proceeds from our debt offering in June 2015. The acquisition of Harvard Drug, a distributor of generic pharmaceuticals, over-the-counter healthcare and related products to retail, institutional and alternate care customers, enhances our Pharmaceutical segment's generic pharmaceutical distribution and related services businesses. Harvard Drug also manufactures and repackages generic pharmaceuticals and over-the-counter health care products.

naviHealth

On August 26, 2015, we acquired a 71 percent ownership interest in naviHealth Group Holdings, L.P. ("naviHealth") for a purchase price of $238 million, net of cash acquired of $53 million, in an all-cash transaction. We funded the acquisition with cash on hand. The acquisition of naviHealth, a leader in post-acute care management solutions, expands our ability to serve health plans, health systems, and providers that are facing a shift to a value-based reimbursement environment. The terms of the agreement provide us with the option to acquire the remaining 29 percent noncontrolling interests at any time after the two-year anniversary of the closing. The third-party noncontrolling interests holders also hold an option, which allows them to sell their noncontrolling interests to us at any time after the two-year anniversary of the closing. Refer to Note 10 for further information on the redeemable noncontrolling interests.

Fair Value of Assets Acquired and Liabilities Assumed

The allocation of the purchase price for the acquisitions of naviHealth and Harvard Drug are not yet finalized and are subject to adjustment as we complete the valuation analysis for these acquisitions. The purchase prices are also subject to adjustment based on working capital requirements as set forth in the acquisition agreements.

The valuation of identifiable intangible assets utilizes significant unobservable inputs and thus represents a Level 3 nonrecurring fair value measurement. The estimated fair value of the identifiable intangible assets was determined using an income-based approach, which includes market participant expectations of the cash flows that an asset could generate over its remaining useful life, discounted back to present value using an appropriate rate of return. The discount rates used to arrive at the present value of the identifiable intangible assets ranged from 12 percent to 14 percent, and reflect the internal rate of return and uncertainty in the cash flow projections.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the acquisition dates for naviHealth and Harvard Drug:

(in millions)	naviHealth			Harvard Drug
Identifiable intangible assets:
Customer relationships (1)	$	38		$	260
Trade names (2)	16			130
Developed technology (3)	61			—
Total identifiable intangible assets acquired	115			390
Cash and equivalents	53			44
Trade receivables	36			67
Inventories	—			49
Prepaid expenses and other	15			13
Property and equipment	5			16
Accounts payable	(2		)	(48		)
Other accrued liabilities	(95		)	(39		)
Deferred income taxes and other liabilities	(42		)	(104		)
Redeemable noncontrolling interests	(119		)	—
Total identifiable net assets/(liabilities) acquired	(34		)	388
Goodwill	325			763
Total net assets acquired	$	291		$	1,151

(1) The weighted-average useful lives of customer relationships range from 4 to 14 years.

(2) The weighted-average useful lives of trade names range from 3 to 16 years.

(3) The weighted-average useful life of developed technology is 10 years.

Cordis

On October 2, 2015, we acquired the Cordis business from Ethicon, Inc., a wholly-owned subsidiary of Johnson & Johnson, for $1.9 billion in an all-cash transaction. We financed the acquisition using proceeds from our debt offering in June 2015, and cash on hand. The acquisition of Cordis, a manufacturer and distributor of interventional cardiology devices and endovascular solutions, expands our Medical segment's portfolio of self-manufactured products and its geographic scope. Cordis is a global company, with operations in more than 50 countries. Transaction and integration costs associated with the acquisition of Cordis were $21 million during the three months ended September 30, 2015, and are included in amortization and other acquisition-related costs in the condensed consolidated statements of earnings.

17 Cardinal Health | Q1 Fiscal 2016 Form 10-Q

Notes to Financial Statements

3. Restructuring and Employee Severance

The following table summarizes restructuring and employee severance costs:

	Three Months Ended September 30
(in millions)	2015		2014
Employee-related costs (1)	$	6	$	16
Facility exit and other costs (2)	6		3
Total restructuring and employee severance	$	12	$	19

(1) Employee-related costs primarily consist of termination benefits provided to employees who have been involuntarily terminated and duplicate payroll costs during transition periods.

(2) Facility exit and other costs primarily consist of lease termination costs, accelerated depreciation, equipment relocation costs, project consulting fees, and costs associated with restructuring our delivery of information technology infrastructure services.

The following table summarizes activity related to liabilities associated with restructuring and employee severance:

(in millions)	Employee- Related Costs			Facility Exit and Other Costs		Total
Balance at June 30, 2015	$	22		$	—	$	22
Additions	5			1		6
Payments and other adjustments	(6		)	—		(6		)
Balance at September 30, 2015	$	21		$	1	$	22

4. Goodwill and Other Intangible Assets

Goodwill

The following table summarizes the changes in the carrying amount of goodwill, by segment, and in total:

(in millions)	Pharmaceutical			Medical			Total
Balance at June 30, 2015	$	2,199		$	2,871		$	5,070
Goodwill acquired, net of purchase price adjustments	787			319			1,106
Foreign currency translation adjustments and other	(9		)	(8		)	(17		)
Balance at September 30, 2015	$	2,977		$	3,182		$	6,159

The increase in the Pharmaceutical segment goodwill is primarily due to the Harvard Drug acquisition. Goodwill recognized in connection with this acquisition primarily represents the expected benefits from synergies of integrating this business, the existing workforce of the acquired entity, and expected growth from new customers. The increase in the Medical segment goodwill is primarily due to the naviHealth acquisition. Goodwill recognized in connection with this acquisition primarily represents the existing workforce of the acquired entity, expected growth from new customers, new service offerings, and the expected growth from existing technology. See Note 2 for further discussion of these acquisitions.

Other Intangible Assets

The following tables summarize other intangible assets by class at:

	September 30, 2015
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible		Weighted Average Remaining Amortization Period (Years)
Indefinite-life intangibles:
Trademarks and other	$	15	$	—	$	15	N/A
Total indefinite-life intangibles	15		—		15		N/A
Definite-life intangibles:
Customer relationships	1,409		544		865		8
Trademarks, trade names and patents	382		99		283		12
Developed technology and other	387		145		242		9
Total definite-life intangibles	2,178		788		1,390		9
Total other intangible assets	$	2,193	$	788	$	1,405	N/A

	June 30, 2015
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible
Indefinite-life intangibles:
Trademarks and other	$	14	$	—	$	14
Total indefinite-life intangibles	14		—		14
Definite-life intangibles:
Customer relationships	1,103		501		602
Trademarks, trade names and patents	237		91		146
Developed technology and other	320		134		186
Total definite-life intangibles	1,660		726		934
Total other intangible assets	$	1,674	$	726	$	948

Total amortization of intangible assets was $67 million and $45 million for the three months ended September 30, 2015 and 2014, respectively. For acquisitions that have closed on or before September 30, 2015, estimated annual amortization of intangible assets for the remainder of fiscal 2016 through 2020 is as follows: $210 million, $259 million, $211 million, $160 million, and $131 million. These estimates do not include amortization of intangibles relating to the Cordis acquisition, which may be significant.

Cardinal Health | Q1Fiscal 2016 Form 10-Q 18

Notes to Financial Statements

5. Available-for-Sale Securities

We invest in marketable securities, which are classified as available-for-sale and are carried at fair value in the condensed consolidated balance sheets. We held the following investments in marketable securities at fair value at:

(in millions)	September 30, 2015		June 30, 2015
Current available-for-sale securities:
Commercial paper	$	3	$	4
Treasury bills	7		12
International bonds	2		2
Corporate bonds	47		34
U.S. agency bonds	3		5
Asset-backed securities	23		8
U.S. agency mortgage-backed securities	22		26
Total current available-for-sale securities	107		91
Long-term available-for-sale securities:
Corporate bonds	33		33
U.S. agency bonds	18		18
Asset-backed securities	26		41
U.S. agency mortgage-backed securities	9		10
Total long-term available-for-sale securities	86		102
Total available-for-sale securities	$	193	$	193

Gross unrealized gains and losses were immaterial at September 30, 2015 and June 30, 2015. During the three months ended September 30, 2015 and 2014, gross realized gains and losses were immaterial and we did not recognize any other-than-temporary impairments. At September 30, 2015, the weighted-average effective maturity of our current and long-term investments was approximately 6 months and 15 months, respectively.

6. Income Taxes

Fluctuations in our provision for income taxes as a percentage of pretax earnings (“effective tax rate”) are due to changes in international and U.S. state effective tax rates resulting from our business mix and discrete items.

During the three months ended September 30, 2015 and 2014, the effective tax rate was 32.3 percent and 38.9 percent, respectively. The effective tax rate during the three months ended September 30, 2015 was impacted by net favorable discrete items of $28 million.

At September 30, 2015, and June 30, 2015, we had $534 million and $542 million of unrecognized tax benefits, respectively. The September 30, 2015, and June 30, 2015, balances include $351 million and $357 million of unrecognized tax benefits, respectively, that if recognized, would have an impact on the effective tax rate.

At September 30, 2015, and June 30, 2015, we had $157 million and $169 million, respectively, accrued for the payment of interest and penalties related to unrecognized tax benefits, which we recognize in the provision for income taxes in the condensed consolidated statements of earnings. These balances are gross amounts before any tax benefits and are included in deferred income taxes and other liabilities in the condensed consolidated balance sheets.

It is reasonably possible that there could be a change in the amount of unrecognized tax benefits within the next 12 months due to activities of the U.S. Internal Revenue Service ("IRS") or other taxing authorities, possible settlement of audit issues, reassessment of existing unrecognized tax benefits or the expiration of statutes of limitations. We estimate that the range of the possible change in unrecognized tax benefits within the next 12 months is a net decrease of zero to $190 million, exclusive of penalties and interest.

We file income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions, and various foreign jurisdictions. With few exceptions, we are subject to audit by taxing authorities for fiscal years 2006 through the current fiscal year.

We are a party to a tax matters agreement with CareFusion Corporation ("CareFusion"), which has been acquired by Becton, Dickinson and Company. Under the tax matters agreement, CareFusion is obligated to indemnify us for certain tax exposures and transaction taxes prior to our fiscal 2010 spin-off of CareFusion. The indemnification receivable was $222 million and $219 million at September 30, 2015, and June 30, 2015, respectively, and is included in other assets in the condensed consolidated balance sheets.

7. Commitments, Contingent Liabilities and Litigation

Commitments

Generic Sourcing Venture With CVS Health Corporation

In July 2014, we established Red Oak Sourcing, LLC ("Red Oak Sourcing"), a U.S.-based generic pharmaceutical sourcing venture with CVS Health Corporation (“CVS Health”) with an initial term of 10 years. Both companies have contributed sourcing and supply chain expertise to the 50/50 venture and have committed to source generic pharmaceuticals through arrangements negotiated by the venture. Red Oak Sourcing negotiates generic pharmaceutical supply contracts on behalf of both companies. We are required to pay 39 quarterly payments of $25.6 million to CVS Health which commenced in October 2014. Due to the achievement of a milestone, the quarterly payment to CVS Health increased by $10 million beginning in the first quarter of fiscal 2016. In addition, if an additional milestone is achieved, the quarterly payment will increase in fiscal 2017 by a further $10 million resulting in a maximum quarterly payment of $45.6 million if all milestones are met. 

Cordis

On March 1, 2015, we entered into a binding offer letter with Ethicon, Inc., a wholly-owned subsidiary of Johnson & Johnson, to purchase its Cordis business for a purchase price of $1.9 billion in cash, subject to certain adjustments. On May 27, 2015, Ethicon accepted the offer. As described in Note 2, the acquisition was completed on October 2, 2015 for $1.9 billion.

Legal Proceedings

We become involved from time to time in disputes, litigation, and regulatory matters incidental to our business.

We may be named from time to time in qui tam actions, which are initiated by private third parties purporting to act on behalf of federal or state governments, that allege that false claims have been

19 Cardinal Health | Q1 Fiscal 2016 Form 10-Q

Notes to Financial Statements

submitted or have been caused to be submitted for payment by the government. After a private party has filed a qui tam action, the government must investigate the private party's claim and determine whether to intervene in and take control over the litigation. These actions may remain under seal while the government makes this determination. If the government declines to intervene, the private party may nonetheless continue to pursue the litigation on his or her own on behalf of the government.

From time to time, we receive subpoenas or requests for information from various government agencies relating to our business or to the business of a customer, supplier or other industry participant. Most of these matters are resolved without incident; however, such subpoenas or requests can lead to the assertion of claims, or the commencement of legal proceedings, against us.

In addition, we occasionally may suspect that products we manufacture, market or distribute do not meet product specifications, published standards or regulatory requirements. In such circumstances, we investigate and take appropriate corrective action. Such actions can lead to product recalls, costs to repair or replace affected products, temporary interruptions in product sales, and action by regulators.

We accrue for contingencies related to disputes, litigation, and regulatory matters if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Because these matters are inherently unpredictable and unfavorable developments or resolutions can occur, assessing contingencies is highly subjective and requires judgments about future events. We regularly review contingencies to determine whether our accruals and related disclosures are adequate. The amount of ultimate loss may differ from these estimates.

With respect to the unresolved matters described below, we are unable to estimate a range of reasonably possible loss for matters for which there is no accrual, or additional loss for matters for which we have recorded an accrual, since damages or fines have not been specified or the proceedings are at stages where significant uncertainty exists as to legal or factual issues and as to whether such matters will proceed to trial. We do not believe, based on currently available information, that the outcomes of these matters will have a material adverse effect on our financial position, results of operations, or cash flows, though the outcome of one or more of these matters could be material to our results of operations for a particular period.

We recognize income from the favorable outcome of litigation when we receive the associated cash or assets.

We recognize estimated loss contingencies for litigation and regulatory matters and income from favorable resolution of litigation in litigation (recoveries)/charges, net in our condensed consolidated statements of earnings.

DEA Investigation and Related Matters

In February 2012, the U.S. Drug Enforcement Administration (the "DEA") issued an order to show cause and immediate suspension of our Lakeland, Florida distribution center's registration to distribute controlled substances, asserting that we failed to maintain required

controls against the diversion of controlled substances. In May 2012, we entered into a settlement agreement with the DEA that resolved the administrative aspects of the DEA's action but did not resolve potential liability for civil fines in Florida or elsewhere for the conduct covered by the settlement agreement. In that regard, we are continuing to engage in discussions with several offices of the U.S. Department of Justice (the "DOJ"), including discussions regarding a possible settlement. We accrued litigation charges of $41 million for this matter during fiscal 2015, including $27 million in the three months ended September 30, 2014. Our total accrual for this matter at both September 30, 2015 and June 30, 2015 is $41 million, which is included in other accrued liabilities in the condensed consolidated balance sheets.

State of West Virginia vs. Cardinal Health, Inc.

In June 2012, the West Virginia Attorney General filed complaints, which have been amended, against 13 pharmaceutical wholesale distributors, including us and Harvard Drug, which we acquired on July 2, 2015, as described in Note 2. The complaints, which were filed in the Circuit Court of Boone County, West Virginia, allege, among other things, that the distributors failed to maintain effective controls to guard against diversion of controlled substances in West Virginia, failed to report suspicious orders of controlled substances in accordance with the West Virginia Uniform Controlled Substances Act, and were negligent in distributing controlled substances to pharmacies that serve individuals who abuse controlled substances. In addition to injunctive and other equitable relief, the complaints seek monetary damages and the creation of a court-supervised fund, to be financed by the defendants in these actions, for a medical monitoring program focused on prescription drug abuse. We are vigorously defending ourselves in this matter.

Qui Tam Action

As previously disclosed, following an investigation, in July 2015, the DOJ declined to intervene as to us in a qui tam action naming our Cardinal Health at Home division as a defendant, and the private third-party plaintiff voluntarily dismissed us from the action. We had been named as a defendent in an amended qui tam complaint that was filed in November 2014 by the private third-party plaintiff in the U.S. District Court for the District of Massachusetts against several manufacturers and distributors of ostomy and continence care products.

Cardinal Health | Q1Fiscal 2016 Form 10-Q 20

Notes to Financial Statements

8. Fair Value Measurements

The following tables present the fair values for assets and (liabilities) measured on a recurring basis at:

	September 30, 2015
(in millions)	Level 1		Level 2		Level 3			Total
Assets:
Cash equivalents (1)	$	91	$	—	$	—		$	91
Forward contracts (2)	—		26		—			26
Available-for-sale securities (3)	—		193		—			193
Other investments (4)	111		—		—			111
Liabilities:
Contingent Consideration (5)	—		—		(29		)	(29		)
Total	$	202	$	219	$	(29	)	$	392

	June 30, 2015
(in millions)	Level 1		Level 2		Level 3			Total
Assets:
Cash equivalents (1)	$	1,809	$	—	$	—		$	1,809
Forward contracts (2)	—		5		—			5
Available-for-sale securities (3)	—		193		—			193
Other investments (4)	111		—		—			111
Liabilities:
Contingent Consideration (5)	—		—		(53		)	(53		)
Total	$	1,920	$	198	$	(53	)	$	2,065

(1) Cash equivalents are comprised of highly liquid investments purchased with a maturity of three months or less. The carrying value of these cash equivalents approximates fair value due to their short-term maturities.

(2) The fair value of interest rate swaps, foreign currency contracts, and commodity contracts is determined based on the present value of expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Observable Level 2 inputs are used to determine the present value of expected future cash flows. The fair value of these derivative contracts, which are subject to master netting arrangements under certain circumstances, is presented on a gross basis in the condensed consolidated balance sheets.

(3) We invest in marketable securities, which are classified as available-for-sale and are carried at fair value in the condensed consolidated balance sheets. Observable Level 2 inputs such as quoted prices for similar securities, interest rate spreads, yield curves, and credit risk are used to determine the fair value. See Note 5 for additional information regarding available-for-sale securities.

(4) The other investments balance includes investments in mutual funds, which are used to offset fluctuations in deferred compensation liabilities. These mutual funds primarily invest in the equity securities of companies with large market capitalization and high quality fixed income debt securities. The fair value of these investments is determined using quoted market prices.

(5) Contingent consideration represents the obligations incurred in connection with acquisitions. We do not deem the fair value of the contingent consideration obligations under any single acquisition to be significant. The estimate of fair value of the contingent consideration obligations requires subjective assumptions to be made regarding future business results, discount rates, discount periods, and probabilities assigned to various potential business result scenarios and was determined using probability assessments with respect to the likelihood of reaching various targets or from achieving certain milestones. The fair value measurement is based on significant inputs unobservable in the market and thus represents a Level 3 measurement. Failure to meet current expectations of progress could increase the probability of not achieving the targets within the measurement periods and result in a reduction in the fair value of the contingent consideration obligation.

The following table presents a reconciliation of those liabilities measured at fair value on a recurring basis using unobservable inputs (Level 3):

(in millions)	Contingent Consideration Obligation
Balance at June 30, 2015	$	53
Additions from acquisitions	—
Changes in fair value of contingent consideration (1)	(1		)
Payment of contingent consideration	(23		)
Balance at September 30, 2015	$	29

(1) Amount is included in amortization and other acquisition-related costs in the condensed consolidated statements of earnings.

9. Financial Instruments

We utilize derivative financial instruments to manage exposure to certain risks related to our ongoing operations. The primary risks managed through the use of derivative instruments include interest rate risk, currency exchange risk, and commodity price risk. We do not use derivative instruments for trading or speculative purposes. While the majority of our derivative instruments are designated as hedging instruments, we also enter into derivative instruments that are designed to hedge a risk, but are not designated as hedging instruments. These derivative instruments are adjusted to current fair value through earnings at the end of each period. Our derivative and hedging programs are consistent with those described in the 2015 Form 10-K. The amount of ineffectiveness associated with these derivative instruments was immaterial for the three months ended September 30, 2015 and 2014, respectively.

During the three months ended September 30, 2014, we entered into forward interest rate swaps with a total notional amount of $50 million to hedge probable, but not firmly committed, future transactions associated with our debt.

Fair Value of Financial Instruments

The carrying amounts of cash and equivalents, trade receivables, net, accounts payable, and other accrued liabilities at September 30, 2015 and June 30, 2015 approximate fair value due to their short-term maturities.

The following table summarizes the estimated fair value of our long-term obligations and other short-term borrowings compared to the respective carrying amounts at:

(in millions)	September 30, 2015		June 30, 2015
Estimated fair value	$	5,618	$	5,521
Carrying amount	5,550		5,492

The fair value of our long-term obligations and other short-term borrowings is estimated based on either the quoted market prices for the same or similar issues or other inputs derived from available market information, which represents a Level 2 measurement.

21 Cardinal Health | Q1 Fiscal 2016 Form 10-Q

Notes to Financial Statements

10. Redeemable Noncontrolling Interests

In connection with the acquisition of a 71 percent ownership interest in naviHealth described in Note 2, we recognized noncontrolling interests with a fair value of $119 million at the acquisition date.

The noncontrolling interests are redeemable at the option of the third-party noncontrolling interests holders at any time after the two-year anniversary of the closing. As such, the noncontrolling interests have been presented as redeemable noncontrolling interests in our condensed consolidated balance sheets. The noncontrolling interests will be adjusted each period for net earnings and dividends attributable to the noncontrolling interests and changes in the noncontrolling ownership interests in naviHealth, if any. An additional adjustment to the carrying value of the noncontrolling interests may be required if the redemption value under the terms of the agreement exceeds the carrying value. Changes in the carrying value of the noncontrolling interests related to a change in the redemption value will be recorded through retained earnings and will not affect net earnings attributable to Cardinal Health, Inc.

The reconciliation of the changes in redeemable noncontrolling interests are as follows:

(in millions)
Balance at June 30, 2015	$	—
Redeemable noncontrolling interests acquired	118.9
Net earnings attributable to redeemable noncontrolling interests	0.5
Balance at September 30, 2015	$	119.4

11. Shareholders' Equity

During the three months ended September 30, 2015, we did not repurchase any common shares.

During the three months ended September 30, 2014, we repurchased 4.8 million common shares having an aggregate cost of $360 million. The average price paid per common share was $74.36.

We funded the repurchases with available cash. The common shares repurchased are held in treasury to be used for general corporate purposes.

Accumulated Other Comprehensive Loss

The following table summarizes the changes in the balance of accumulated other comprehensive loss by component and in total:

(in millions)	Foreign Currency Translation Adjustments			Unrealized Gain/(Loss) on Derivatives, net of tax			Accumulated Other Comprehensive Loss
Balance at June 30, 2015	$	(41	)	$	18		$	(23	)
Other comprehensive loss, net of tax before reclassifications	(44		)	(1		)	(45		)
Amounts reclassified to earnings	—			—			—
Total other comprehensive loss	(44		)	(1		)	(45		)
Balance at September 30, 2015	$	(85	)	$	17		$	(68	)

Activity related to realized and unrealized gains and losses on available-for-sale securities, as described in Note 5, was immaterial during the three months ended September 30, 2015.

12. Earnings Per Share Attributable to Cardinal Health, Inc.

The following table reconciles the number of common shares used to compute basic and diluted earnings per share attributable to Cardinal Health, Inc.:

	Three Months Ended September 30
(in millions)	2015	2014
Weighted-average common shares–basic	328	336
Effect of dilutive securities:
Employee stock options, restricted share units, and performance share units	3	4
Weighted-average common shares–diluted	331	340

The potentially dilutive employee stock options, restricted share units, and performance share units that were antidilutive for the three months ended September 30, 2015, and 2014 were 2 million and 1 million, respectively.

Cardinal Health | Q1Fiscal 2016 Form 10-Q 22

Notes to Financial Statements

13. Segment Information

Our operations are principally managed on a products and services basis and are comprised of two operating segments, which are the same as our reportable segments: Pharmaceutical and Medical. The factors for determining the reportable segments include the manner in which management evaluates performance for purposes of allocating resources and assessing performance combined with the nature of the individual business activities.

The following table presents revenue for each reportable segment and Corporate:

	Three Months Ended September 30
(in millions)	2015			2014
Pharmaceutical	$	25,140		$	21,209
Medical	2,919			2,852
Total segment revenue	28,059			24,061
Corporate (1)	(4		)	9
Total revenue	$	28,055		$	24,070

(1) Corporate revenue consists of the elimination of inter-segment revenue and other revenue not allocated to the segments.

We evaluate segment performance based on segment profit, among other measures. Segment profit is segment revenue, less segment cost of products sold, less segment SG&A expenses. Segment SG&A expenses include share-based compensation expense as well as allocated corporate expenses for shared functions, including corporate management, corporate finance, financial, and customer care shared services, human resources, information technology, and legal and compliance. The results attributable to noncontrolling interests are recorded within segment profit. Corporate expenses are allocated to the segments based on headcount, level of benefit provided and other ratable allocation methodologies.

We do not allocate the following items to our segments: LIFO inventory charges/(credits); restructuring and employee severance; amortization and other acquisition-related costs; impairments and (gain)/loss on disposal of assets; litigation (recoveries)/charges, net; other income, net; interest expense, net; loss on extinguishment of debt; and provision for income taxes. We did not recognize any LIFO charges or credits during the three months ended September 30, 2015 and 2014. In addition, certain investments, certain portions of enterprise-wide incentive compensation, and other spending are not allocated to the segments. Investment spending generally includes the first-year spend for certain projects that require incremental investments in the form of additional operating expenses. We encourage our segments and corporate functions to identify investment projects that will promote innovation and provide future returns. As approval decisions for such projects are dependent upon executive management, the expenses for such projects are often retained at Corporate. Investment spending within Corporate was $6 million and $2 million for the three months ended September 30, 2015 and 2014, respectively.

Beginning in fiscal 2016, we changed our methodology for allocating certain portions of enterprise-wide incentive compensation expenses among Corporate and the segments. This change does not impact

consolidated operating earnings or net earnings, and did not materially impact either segment during the three months ended September 30, 2015.

The following table presents segment profit by reportable segment and Corporate:

	Three Months Ended September 30
(in millions)	2015			2014
Pharmaceutical	$	657		$	451
Medical	101			113
Total segment profit	758			564
Corporate	(138		)	(98		)
Total operating earnings	$	620		$	466

The following table presents total assets for each reportable segment and Corporate at:

(in millions)	September 30, 2015		June 30, 2015
Pharmaceutical	$	19,596	$	17,385
Medical	7,833		7,095
Corporate	3,793		5,662
Total assets	$	31,222	$	30,142

14. Share-Based Compensation and Savings Plans

Share-Based Compensation Plans

We maintain stock incentive plans (collectively, the “Plans”) for the benefit of certain of our officers, directors, and employees.

The following table provides total share-based compensation expense by type of award:

	Three Months Ended September 30
(in millions)	2015		2014
Restricted share unit expense	$	13	$	16
Employee stock option expense	5		5
Performance share unit expense	12		4
Total share-based compensation	$	30	$	25

The total tax benefit related to share-based compensation was $11 million and $9 million for the three months ended September 30, 2015 and 2014, respectively.

Stock Options

Employee stock options granted under the Plans generally vest in equal annual installments over three years and are exercisable for periods ranging from seven to ten years from the grant date. All stock options are exercisable at a price equal to the market value of the common shares underlying the option on the grant date.

23 Cardinal Health | Q1 Fiscal 2016 Form 10-Q

Notes to Financial Statements

The following table summarizes all stock option transactions under the Plans:

(in millions, except per share amounts)	Stock Options		Weighted-Average Exercise Price per Common Share
Outstanding at June 30, 2015	8		$	46.50
Granted	1		84.28
Exercised	(1	)	37.20
Canceled and forfeited	—		—
Outstanding at September 30, 2015	8		$	53.24
Exercisable at September 30, 2015	5		$	42.18

At September 30, 2015, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested stock options not yet recognized was $37 million, which is expected to be recognized over a weighted-average period of two years. The following table provides additional detail related to stock options:

(in millions, except per share amounts)	September 30, 2015		June 30, 2015
Aggregate intrinsic value of outstanding options at period end	$	201	$	281
Aggregate intrinsic value of exercisable options at period end	182		193
Weighted-average remaining contractual life of outstanding options (in years)	7		6
Weighted-average remaining contractual life of exercisable options (in years)	6		5

Restricted Share Units

Restricted share units granted under the Plans generally vest in equal annual installments over three years. Restricted share units accrue cash dividend equivalents that are payable upon vesting of the awards.

The following table summarizes all transactions related to restricted share units under the Plans:

(in millions, except per share amounts)	Restricted Share Units		Weighted-Average Grant Date Fair Value per Share
Nonvested at June 30, 2015	3		$	59.69
Granted	1		84.30
Vested	(1	)	53.31
Canceled and forfeited	—		—
Nonvested at September 30, 2015	3		$	73.29

At September 30, 2015, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested restricted share units not yet recognized was $121 million, which is expected to be recognized over a weighted-average period of two years.

Performance Share Units

Performance share units vest over a three-year performance period based on achievement of specific performance goals. Based on the extent to which the targets are achieved, vested shares may range from zero to 200 percent of the target award amount. Performance share units accrue cash dividend equivalents that are payable upon vesting of the awards.

The following table summarizes all transactions related to performance share units under the Plans (based on target award amounts):

(in millions, except per share amounts)	Performance Share Units		Weighted-Average Grant Date Fair Value per Share
Nonvested at June 30, 2015	0.9		$	50.31
Granted	0.3		84.34
Vested (1)	(0.4	)	39.81
Canceled and forfeited	—		—
Nonvested at September 30, 2015	0.8		$	62.64

(1) Vested based on achievement of 133 percent of the target performance goal.

At September 30, 2015, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested performance share units not yet recognized was $26 million, which is expected to be recognized over a weighted-average period of two years.

15. Subsequent Events

As discussed in Note 2, on October 2, 2015 we acquired the Cordis business from Ethicon, Inc., a wholly-owned subsidiary of Johnson & Johnson, for $1.9 billion.

Cardinal Health | Q1Fiscal 2016 Form 10-Q 24

Exhibits

Exhibits

Exhibit Number	Exhibit Description
2.1	Amendment No. 1, dated as of October 2, 2015, to the Stock and Asset Purchase Agreement, dated as of March 1, 2015, by and between Ethicon, Inc. and Cardinal Health, Inc.
3.1	Amended and Restated Articles of Incorporation of Cardinal Health, Inc., as amended (incorporated by reference to Exhibit 3.1 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, File No. 1-11373)
3.2	Cardinal Health, Inc. Restated Code of Regulations (incorporated by reference to Exhibit 3.2 to Cardinal Health’s Current Report on Form 8-K filed on July 1, 2015, File No. 1-11373)
10.1	Amendment, dated August 5, 2015, to Employment Agreement, dated September 4, 2012, between Cardinal Health, Inc. and George S. Barrett (incorporated by reference to Exhibit 10.1 to Cardinal Health’s Current Report on Form 8-K filed on August 6, 2015, File No. 1-11373)
10.2	Aircraft Time Sharing Agreement, effective August 5, 2015, between Cardinal Health, Inc. and George S. Barrett (incorporated by reference to Exhibit 10.2 to Cardinal Health’s Current Report on Form 8-K filed on August 6, 2015, File No. 1-11373)
12.1	Computation of Ratio of Earnings to Fixed Charges
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.1	Statement Regarding Forward-Looking Information
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

Cardinal Health Website

We use our website as a channel of distribution for material information about us. Important information, including news releases, financial information, earnings and analyst presentations and information about upcoming presentations and events, is routinely posted and accessible on the Investors page at ir.cardinalhealth.com. In addition, our website allows investors and other interested persons to sign up to automatically receive email alerts when we post news releases, SEC filings and certain other information on our website.

25 Cardinal Health | Q1 Fiscal 2016 Form 10-Q

Form 10-Q Cross Reference Index

Form 10-Q Cross Reference Index

Item Number		Page
	Part I. Financial Information
Item 1	Financial Statements	12
Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operation	2
Item 3	Quantitative and Qualitative Disclosures about Market Risk	11
Item 4	Controls and Procedures	11
	Part II. Other Information
Item 1	Legal Proceedings	11
Item 1A	Risk Factors	11
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	11
Item 3	Defaults Upon Senior Securities	N/A
Item 4	Mine Safety Disclosures	N/A
Item 5	Other Information	N/A
Item 6	Exhibits	25
	Signatures	27

N/A Not applicable

Cardinal Health | Q1Fiscal 2016 Form 10-Q 26

Signatures

Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		Cardinal Health, Inc.
Date:	November 3, 2015	/s/    GEORGE S. BARRETT
		George S. Barrett
		Chairman and Chief Executive Officer
		/s/    MICHAEL C. KAUFMANN
		Michael C. Kaufmann
		Chief Financial Officer

27 Cardinal Health | Q1 Fiscal 2016 Form 10-Q

EX-2.1

Exhibit 2.1

AMENDMENT NO. 1

TO

STOCK AND ASSET PURCHASE AGREEMENT

This AMENDMENT NO. 1, dated as of October 2, 2015 (this “Amendment”), to the Stock and Asset Purchase Agreement, dated as of March 1, 2015 (the “Purchase Agreement”), by and between Ethicon, Inc., a Delaware corporation (“Seller”) and Cardinal Health, Inc., a Delaware corporation (“Buyer”).

WHEREAS, the parties desire to amend certain provisions of the Purchase Agreement as described herein;

NOW, THEREFORE, in consideration of the mutual agreements set forth in the Purchase Agreement and this Amendment, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Buyer and Seller hereby agree as follows:

1.Definitions. Terms used herein and not defined shall have the meanings ascribed thereto in the Purchase Agreement.

2.Principal Closing. The fourth sentence of Section 2.01(a) of the Purchase Agreement is hereby amended and restated in its entirety as follows:

“The Principal Closing shall be deemed to take effect at 11:59 P.M, local time (in each Principal Country Unit), on the date of such Principal Closing; provided, however, that the Applicable Closing in respect of Japan and Spain shall be deemed to take effect at 12:00 A.M., local time, on the day immediately following the Principal Closing Date.”

3.Sales and Incentive Compensation. Clause (ii) of Section 8.01(h) of the Purchase Agreement is hereby amended and restated in its entirety as follows:

“(ii) all base salary, wages or other amounts (but not including any annual bonuses or incentives) in respect of services performed by each Employee of the Business for Seller or its Affiliates that are earned and accrued but unpaid as of the Transfer Time, as applicable, in each case, to be paid as soon as administratively practicable after the Transfer Time or as required by law, but in no event later than thirty (30) business days after the Transfer Time. Notwithstanding the foregoing, commissions and other sales incentive compensation (but not including any annual bonuses or incentives) that are earned and accrued but unpaid as of the Transfer Time shall be paid in accordance with Seller’s or its Affiliate’s, as the case may be, customary payment cycles.”

4.UK Export.

a. The definition of “Principal Country Units” in Section 1.01 of the Purchase Agreement is hereby amended replacing the words “(including UK export)” with “(excluding UK export)” and the word “France” with “France (excluding France export)”.

5.Sweden and Other Scandinavian Country Units.

a. The definition of “Principal Country Units” in Section 1.01 of the Purchase Agreement is hereby amended to delete the text “Sweden,” from such definition.

6.Tax Matters.

a. Section 7.08(a)(i) of the Purchase Agreement is hereby amended and restated in its entirety as follows:

“Seller shall prepare and file all Tax Returns of the Transferred Companies or in respect of the Transferred Assets or the Business that are due (including applicable extensions) before the Applicable Closing. Seller shall prepare and file all Tax Returns (other than Tax Returns of the Transferred Companies) in respect of the Transferred Assets or the Business for all taxable periods ending on or before the Applicable Closing Date. Seller shall also prepare and file all Tax Returns for Transferred Companies that are required to be included in (or filed with) a Tax Return of an affiliated, consolidated, combined, unitary or aggregate group of which Seller or any of its Affiliates (other than a Transferred Company) is parent for Pre-Closing Tax Periods.  Seller shall prepare, and deliver to Buyer for review, completion and filing, any separate state Tax Returns required to be filed for Pre-Closing Tax Periods that were deemed to end as a result of the Section 338(h)(10) Election, such delivery to occur no later than twenty (20) days prior to the due date for the filing of such Tax Return. Seller shall also draft unaudited 2015 statutory accounts and the 2015 corporate income Tax Return required to be filed for Cordis Cashel, which drafts shall be delivered to Buyer for review, completion and filing no later than twenty (20) days prior to the due date for the filing of such Tax Return.  Buyer shall provide Seller with such information and records as may reasonably be requested by Seller for the preparation of the Cordis Cashel accounts and Tax Return. Any Tax Returns required to be prepared pursuant to this Section 7.08(a)(i) shall be prepared on a basis consistent with the past practices of the Transferred Company or with respect to the Transferred Assets or the Business, respectively.”

b. Section 7.08(a)(iii) of the Purchase Agreement is hereby amended and restated in its entirety as follows:

“All Taxes due and payable with respect to Tax Returns described in Section 7.08(a) will be paid by the filer, subject to reimbursement by the other party pursuant to Section 7.08(d); provided that, with respect to any Tax Return described in Section 7.08(a)(ii) for any Pre-Closing Tax Period or any Straddle Period and any Tax Return described in Section 7.08(a)(i) that is to be filed by Buyer, Seller shall pay any Excluded Taxes or any Taxes that are Excluded Liabilities, in each case relating to such Tax Return, to Buyer no later than five (5) days prior to the due date for the filing of such Tax Return.”

c. Clause (A)(i) of the definition of “Buyer Tax Act” is hereby amended by replacing the words “Section 7.08(a)(ii)” with “Section 7.08(a)(i) or (ii)”.

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d. The last sentence of Section 7.08(f)(i)(3) of the Purchase Agreement is hereby amended and restated in its entirety as follows:

“For the absence of doubt, IRS Form 8023 shall be executed by the Parties and filed by the Seller by the due date for such Form.”

7.Payment of Purchase Price.

a. Section 2.03(b) of the Purchase Agreement is hereby amended by adding the following at the end of such section:

“In the event that the portion of the Purchase Price allocated to any Non-Principal Country Unit pursuant to Section 2.05 of the Purchase Agreement is required by applicable Law to be paid in a Foreign Currency and the portion of the Purchase Price allocable to such Country Unit was previously paid by Buyer in U.S. dollars, (i) on or prior to the Applicable Closing Date, Buyer or its Affiliates will pay to Seller an amount in the applicable Foreign Currency equal to (x) the portion of the Purchase Price allocated to such Non-Principal Country Unit in U.S. dollars multiplied by (y) the closing rate from U.S. dollars to the applicable Foreign Currency provided by Bloomberg at 5:00 A.M. New York City Time three (3) business days prior to the Applicable Closing Date and (ii) upon receipt of Buyer’s or its Affiliate’s payment pursuant to the immediately preceding clause (i) (as evidenced by a wire reference number or equivalent documentation) Seller or its Affiliates shall no later than the first (1st) Business Day after the Applicable Closing Date refund to Buyer the portion of the Purchase Price allocated to such Country Unit pursuant to Section 2.05 of the Purchase Agreement in U.S. dollars.”

b. Section 2.03(c) of the Purchase Agreement is hereby amended and restated in its entirety as follows:

“The “Purchase Price” shall be equal to one billion eight hundred seventy three million three thousand dollars ($1,873,003,000) increased or decreased as a result of the inventory adjustment, if any, pursuant to Section 2.04, and shall be allocated as described in Section 2.05.”

c. It is the expectation of the parties that the Greece, India and/or Russia Country Units shall be required by law to be paid in local currency and subject to the provisions of the last sentence of Section 2.03(b) should Buyer elect to use a local purchasing Affiliate in respect of such Country Unit.

8.China Country Unit Payment.

On the Principal Closing Date, Buyer (or its Affiliate, as the case may be) will make payment by wire transfer of immediately available funds to an account designated in writing by Seller an amount in U.S. dollars equal to the Purchase Price allocable to the

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China Country Unit under Section 2.05 (the “China U.S. Dollar Amount”) in respect of the China Country Unit. For the avoidance of doubt, at the discretion of Seller, such designated account may be the same account designated by Seller to receive other U.S. denominated consideration pursuant to Section 2.03(a) of the Purchase Agreement. By no later than 5:00 p.m. New York City time on October 16, 2015, Buyer (or its Affiliate, as the case may be) will make a payment to Seller (or its Affiliate as the case may be) by wire transfer of immediately available funds to an account designated in writing by Seller in yuan renminbi equal (x) to the China U.S. Dollar Amount multiplied by (y) the closing rate from U.S. dollars to yuan renminbi provided by Bloomberg at 4:30 A.M. New York City time on October 14, 2015. The first (1st) Business Day following the date of receipt of such funds (as evidenced by a wire reference number or equivalent documentation), Seller (or its Affiliate, as the case may be) will remit to Buyer (or its Affiliate, as the case may be) the China U.S. Dollar Amount by wire transfer of immediately available funds to an account designated in writing by Buyer.

9.Use of Trademarks.

a. Section 7.01(b) of the Purchase Agreement is hereby amended and restated in its entirety as follows:

“Seller hereby grants, and shall cause its Affiliates to grant, to Buyer and its Affiliates permission to use the Trademarks currently used in the Business as of the Applicable Closing Date (other than the Trademarks included in the Transferred IP) as specifically set forth on Schedules 3.04 and 3.10(a)(ii) to the Disclosure Letter, solely to the extent that such Trademark appears on any Transferred Asset conveyed pursuant hereto, including Inventory (collectively, the “Seller Trademarked Items”) until the earlier of (i) the depletion of such Seller Trademarked Items or (ii) (x) in the case of Inventory, twenty-four (24) months from the Applicable Closing Date or (y) in the case of any Transferred Asset other than Inventory, eighteen (18) months from the Applicable Closing Date (the “Expiration Period”) provided, that (i) label changes will be implemented within the Expiration Period and (ii) Products labeled prior to implementation of label changes will be used until expiration of such Products so long as Buyer and/or its Affiliates have used commercially reasonable efforts to implement label changes promptly following the Applicable Closing Date. When the Expiration Period expires, Buyer is responsible for the destruction and disposal of any remaining Seller Trademarked Items bearing the name or trademark of Seller or its Affiliates then in Buyer’s possession or returned to Buyer after the Expiration Period. Buyer and its Affiliates hereby agree to indemnify Seller and the other Seller Indemnitees from and against any and all Damages incurred or suffered as a result of such permitted use of Seller Trademarked Items in this Section 7.01(b), except to the extent that any such Damages result from the fraud or willful misconduct of Seller or any of its Affiliates.”

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b. Section 7.02 of the Purchase Agreement is hereby amended and restated in its entirety as follows:

“Use of Trademarks by Seller During Transition Period. (a) Buyer hereby grants to Seller and its Affiliates, on Buyer’s own behalf and on behalf of its Affiliates, permission to use (i) the Trademarks transferred to Buyer pursuant to this Agreement during the terms of the Transition Services Agreement and the Transition Manufacturing Services Agreement to the extent required by Seller and its Affiliates to provide the services described therein to Buyer or its Affiliates, and (ii) on a limited, non-exclusive basis during the terms of the Transition Services Agreement and the Transition Manufacturing Services Agreement, and only to the to the extent required by Seller and its Affiliates to provide the services described therein to Buyer or its Affiliates, the trademarks, servicemarks, trade dress and logos of the Buyer and its Affiliates to be included on any Product following the Closing (the “Buyer Marks”).

(b) Without limiting the rights granted to Seller pursuant to Section 7.02(a), Buyer hereby grants, and shall cause its Affiliates to grant, to Seller and its Affiliates permission to use the Trademarks transferred to Buyer pursuant to this Agreement and the Buyer Marks for a period of up to six months following the Applicable Closing Date to the extent that such Trademark or such Buyer Mark appears on any invoices, forms, certificates or other documents of Seller and its Affiliates.”

10.Inventory.

a.    Clause (ii) of Annex 2.02(a) to the Purchase Agreement is hereby amended and restated in its entirety as follows:

“(ii) Inventory. All Inventory owned or held by Seller or any Asset Selling Affiliate at the time of the Applicable Closing, excluding GMED Inventory.”

b. Annex 2.02(b) to the Purchase Agreement is hereby amended to include the following clause (xviii):

“(xviii) GMED Inventory. All Inventory owned or held by GMED Healthcare BVBA (“GMED”) (such Inventory, the “GMED Inventory”).”

c. Notwithstanding anything to the contrary in the Purchase Agreement, including the Exhibits expressly contemplated thereby and attached thereto, the Disclosure Letter, the Transaction Documents, the Confidentiality Agreement and the other agreements and certificates delivered in connection herewith or therewith, the provisions of Section 2.04 of the Agreement shall not apply to the following Country Units: United Kingdom, United Kingdom export, Spain, Sweden, Switzerland, Austria, Portugal,

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France, France export, Germany, Ireland, Italy, Belgium, Netherlands, Croatia, Czech Republic, Denmark, Estonia, Finland, Latvia, Lithuania and Norway.

11.Healthcare/Compliance Records.

a. The parties agree that from time to time as provided in paragraph (b) below, following the Principal Closing Date, Buyer will require access to healthcare compliance records relating to transactions with healthcare professionals and customers, including meals and entertainment receipts, needs assessments, fair market value determinations, grant and charitable donation reviews and approvals, audit and investigation reports, and any other documentation that would support compliance with State and Federal laws governing healthcare, transparency of interactions with healthcare professionals and/or institutions, and/or anti-bribery including but not limited the Foreign Corrupt Practices Act, 15 U.S.C. §§ 78dd-1, et seq. as amended, Medicare and Medicaid Law, 42 U.S.C. § 1320a-7b, as amended, the Federal Physician Self-Referral Act, 42 U.S.C. § 1395nn, as amended, the False Claims Act, 31 U.S.C. §§ 3729-33, as amended, and the Civil Monetary Penalties Law, 42 U.S.C. § 1320a-7a, as amended; Physician Payment Sunshine Act, §6002 of the Affordable Care Act, as amended (to the extent the foregoing constitute Transferred Records, the “Retained Compliance Records”). Subject to the last sentence of this paragraph (a), Seller shall, and shall cause its Affiliates to, (i) retain all Retained Compliance Records in accordance with Seller or its Affiliates’, as applicable, existing records retention policies as of the date of the Principal Closing and (ii) upon reasonable written notice and subject to applicable Law, afford to Buyer and its Affiliates and its and their respective representatives reasonable access during normal business hours to the Retained Compliance Records. There shall be no cost to Buyer for any such retention of or access to, the Retained Compliance Records. In the event Seller or its Affiliates intends to destroy or otherwise no longer retain any or all of the Retained Compliance Records for the length of time Seller or its Affiliates would ordinarily retain the Retained Compliance Records in accordance with the applicable existing records retention policies of Seller or its Affiliates as of the date of the Principal Closing, Seller shall provide at least 90 days’ advance written notice of such proposed action to Buyer and shall afford Buyer the opportunity to take possession of or copy (at the election of Buyer) such retained Compliance Records (at no cost to Buyer or its Affiliates).

b. Upon the written request of Buyer, Seller agrees, and shall cause its Affiliates to, furnish to Buyer a copy of any requested Retained Compliance Record as soon as reasonably practicable, but in no event later than the close of business on the fifth (5) Business Day after the date of the request.

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12.Replacement of Guarantees.

(a) “Guarantee” means any guarantee, letter of credit, surety bond (including any performance bond), credit support arrangement or other assurance of payment.

(b)    Following the Closing, Buyer and Seller will reasonably cooperate with one another so that Buyer will obtain, or cause an Affiliate of Buyer to provide or obtain, replacement Guarantees with respect to each Guarantee issued by Seller or an Affiliate of Seller for the benefit of any Transferred Company or with respect to any Transferred Asset or Assumed Liability that was not replaced on or prior to the Principal Closing Date (each, an “Existing Guarantee”). Buyer and Seller shall reasonably cooperate to obtain any necessary release of Seller and its Affiliates from such Existing Guarantees in form and substance reasonably satisfactory to Buyer and Seller.

13.Cordis Cashel.

a. Notwithstanding anything to the contrary in the Purchase Agreement, Buyer shall not, nor shall it cause one of its Affiliates to, make an election under Section 338 of the Code with respect to Cordis Cashel.

b. Clause (x) of Annex 2.02(b) to the Purchase Agreement is hereby amended by deleting the text “and the Cashel, Ireland offices”.

14.Allocation Schedule.

a. Clause (xiv) of Annex 2.02(b) to the Purchase Agreement is hereby amended and restated in its entirety as follows:

“BWI and Other Miami Lakes Equipment and Retained Juarez GC Line. (i) Any machinery, equipment, tools and other personal property of Biosense Webster, Inc. and, without limiting the generality of the foregoing, the equipment set forth on Schedule 2.02(b)(xiv)(i) to the Disclosure Letter (collectively the “BWI Equipment”), (ii) all assets, properties, machinery, equipment, tools, furniture, fixtures and other tangible personal property located at the facility of the Business in Miami Lakes, Florida exclusively related to any business of Seller or its Affiliates other than the Business and, without limiting the generality of the foregoing, the equipment set forth on Schedule 2.02(b)(xiv)(ii) to the Diclosure Letter (collectively the “Other Miami Lakes Equipment”, and collectively with the BWI Equipment, the “Seller Miami Equipment” and (iii) the assets set forth on Schedule 2.02(b)(xiv)(iii) to the Disclosure Letter (collectively, the “Retained Juarez GC Line”).”

b. Annex 2.02(d) of the Purchase Agreement is hereby amended by adding the following clause (ix):

“Guarantee. Without duplication of any remedy available to Buyer and its Affiliates under Section 10.02 of the Purchase Agreement, Seller and its Affiliates shall indemnify Buyer and its Affiliates for any losses incurred by Buyer or its Affiliates with respect to a guarantee Buyer or

- 7 -

its Affiliates may enter into following the Principal Closing Date in connection with Buyer’s or its Affiliates’ sub-lease of the office space of the Business in Sendai, Japan with Mori Trust; provided, that Seller and its Affiliates shall not be responsible for any losses incurred by Buyer or its Affiliates resulting from the activities of Buyer or its Affiliates in the office space of the Business in Sendai, Japan.”

15.Dispute Resolution. Notwithstanding anything to the contrary in any Country Transfer Agreement, all disputes arising in connection with any Country Transfer Agreement will be resolved pursuant to the applicable provisions of the Purchase Agreement.

16.Effect of Amendment. This Amendment shall not constitute an amendment or waiver of any provision of the Purchase Agreement not expressly amended or waived herein and shall not be construed as an amendment, waiver or consent to any action that would require an amendment, waiver or consent except as expressly stated herein. The Purchase Agreement, as amended by this Amendment, is and shall continue to be in full force and effect and is in all respects ratified and confirmed hereby.

17.Counterparts. This Amendment may be executed in two or more counterparts and such counterparts may be delivered in electronic format (including by fax or in portable document format (.pdf)), each of which shall be deemed to be an original and all of which shall be deemed to constitute the same Amendment.

18.Governing Law. This Amendment shall be governed by the law of the State of New York without reference to the choice of law doctrine of such state.

19.Other Miscellaneous Terms. The provisions of Article XI (Miscellaneous) shall apply mutatis mutandis to this Amendment, and to the Purchase Agreement, taken together as a single agreement, reflecting the terms as modified hereby.

[SIGNATURE PAGES FOLLOW]

- 8 -

IN WITNESS WHEREOF, the parties have duly executed this Amendment as of the date first above written.

CARDINAL HEALTH, INC.
By:	/s/ Samer Abdul-Samad
	Name: Samer Abdul Samad
	Title: Senior Vice President & Treasurer

ETHICON, INC.
By:	/s/ Alan J. Rae
	Name: Alan J. Rae
	Title: Vice President, New Business Development

[Signature Page to Amendment No. 1 to Stock and Asset Purchase Agreement]

EX-12.1

	Exhibit 12.1
Cardinal Health, Inc. and Subsidiaries

Computation of Ratio of Earnings to Fixed Charges

	Fiscal Year Ended June 30															Three Months Ended September 30, 2015
(in millions, except ratios)	2011			2012			2013			2014			2015
Earnings before income taxes	$	1,518.3		$	1,698.1		$	888.3		$	1,798.3		$	1,967.3		$	567.5
Plus fixed charges:
Interest expense	95.2			92.3			119.2			129.4			137.0			44.6
Capitalized interest	5.7			6.0			1.7			1.2			1.8			0.9
Amortization of debt offering costs	1.8			2.8			3.5			3.6			7.6			1.3
Interest portion of rent expense	7.1			7.8			8.3			9.8			9.6			2.4
Fixed charges	109.8			108.9			132.7			144.0			156.0			49.2
Plus: amortization of capitalized interest	5.3			3.2			3.4			2.9			2.4			0.6
Less: capitalized interest	(5.7		)	(6.0		)	(1.7		)	(1.2		)	(1.8		)	(0.9		)
Earnings	$	1,627.7		$	1,804.2		$	1,022.7		$	1,944.0		$	2,123.9		$	616.4
Ratio of earnings to fixed charges (1)	14.8			16.6			7.7			13.5			13.6			12.5

(1) The ratio of earnings to fixed charges is computed by dividing fixed charges into earnings before income taxes plus fixed charges and capitalized interest. Fixed charges include interest expense, amortization of debt offering costs and the portion of rent expense that is deemed to be representative of the interest factor. Interest expense recorded on tax exposures has been recorded in income tax expense and has therefore been excluded from the calculation.

EX-31.1

Exhibit 31.1

I, George S. Barrett, certify that:

1. I have reviewed this Form 10-Q of Cardinal Health, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 3, 2015

/s/ GEORGE S. BARRETT

George S. Barrett

Chairman and Chief Executive Officer

EX-31.2

Exhibit 31.2

I, Michael C. Kaufmann, certify that:

1. I have reviewed this Form 10-Q of Cardinal Health, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 3, 2015

/s/ MICHAEL C. KAUFMANN

Michael C. Kaufmann

Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification of the Chief Executive Officer and the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Each of George S. Barrett, Chairman and Chief Executive Officer of Cardinal Health, Inc. (the “Company”), and Michael C. Kaufmann, Chief Financial Officer of the Company, certifies, pursuant to 18 U.S.C. Section 1350, that:

(1) the Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 containing the financial statements of the Company (the “Periodic Report”), which this statement accompanies, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2) the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 3, 2015

/s/ GEORGE S. BARRETT

George S. Barrett

Chairman and Chief Executive Officer

/s/ MICHAEL C. KAUFMANN

Michael C. Kaufmann

Chief Financial Officer

EX-99.1

Exhibit 99.1

Statement Regarding Forward-Looking Information

As used in this exhibit, “we,” “our,” “us” and similar pronouns refer to Cardinal Health, Inc. and its subsidiaries, unless the context requires otherwise. Our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended June 30, 2015 (the “2015 Form 10-K”), our quarterly reports on Form 10-Q or our current reports on Form 8-K (along with any exhibits and amendments to such reports), as well as our news releases or any other written or oral statements made by or on behalf of us, may include, directly or by incorporation by reference, forward-looking statements that reflect our current view (as of the date the forward-looking statement is first made) about future events, prospects, projections or financial performance. The matters discussed in these forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected, anticipated or implied in or by such statements. These risks and uncertainties include:

• competitive pressures in the markets in which we operate, including pricing pressures;

• increasing consolidation in the healthcare industry, which could give the resulting enterprises greater bargaining power and may increase pressure on prices for our products and services;

• uncertainties due to government healthcare reform;

• changes to the prescription drug reimbursement formula and related reporting requirements for generic pharmaceuticals under Medicaid;

• material reductions in purchases, non-renewal or early termination of contracts, or delinquencies or defaults by key customers;

• risks associated with the generic pharmaceutical sourcing venture with CVS Health Corporation, including those relating to our ability to realize and maintain the benefits from the sourcing venture;

• actions of regulatory bodies and other governmental authorities, including the U.S. Drug Enforcement Administration ("DEA"), the U.S. Food and Drug Administration and other agencies within the U.S. Department of Health and Human Services, including the Centers for Medicare and Medicaid Services, the Office of Inspector General and the Office for Civil Rights, the U.S. Nuclear Regulatory Commission, the U.S. Federal Trade Commission, the U.S. Customs and Border Protection, various state boards of pharmacy, state controlled substance agencies, state health departments, state insurance departments, state Medicaid departments or comparable regulatory bodies or governmental authorities or foreign equivalents that could delay, limit or suspend product development, manufacturing, distribution, importation or sales or result in warning letters, recalls, seizures, injunctions or monetary sanctions;

• the possibility of civil fines levied against us (in excess of the reserve we have accrued) by the U.S. Department of Justice for conduct covered by the settlement agreement that we entered into in connection with the DEA's suspension of our Lakeland, Florida distribution center's registration to distribute controlled substances;

• the loss of, or default by, one or more key suppliers for which alternative suppliers may not be readily available;

• unfavorable changes to the terms of key customer or supplier relationships, or changes in customer mix;

• changes in manufacturers' pricing, selling, inventory, distribution or supply policies or practices;

• changes in regulatory policies regarding pharmaceutical manufacturer product pricing practices;

• changes in hospital buying groups or hospital buying practices;

• changes in the frequency or magnitude of brand or generic pharmaceutical price appreciation, restrictions in the amount of inventory available to us, or changes in the timing or frequency of generic launches or the introduction of brand pharmaceuticals;

• uncertainties relating to market conditions for pharmaceuticals;

• uncertainties relating to demand for our products and services;

• changes in distribution or sourcing models for pharmaceutical and medical/surgical products and services, including an increase in direct and limited distribution;

• the costs, difficulties and uncertainties related to the integration of acquired businesses, including liabilities relating to the operations or activities of such businesses prior to their acquisition;

• uncertainties relating to our ability to achieve the anticipated results from the acquisition of The Harvard Drug Group;

• risks and uncertainties relating to the acquisition of Cordis, including the ability to achieve the expected synergies and positive impact to operating results and the additional risks the Cordis acquisition will subject us to relating to regulatory matters, legal proceedings, tax laws or positions and global operations, including the effects of local economic environments and currency volatility;

• risks arising from certain of our businesses being Medicare-certified suppliers or participating in state Medicaid programs, which business are subject to accreditation and quality standards and other rules and regulations, including applicable billing, payment and record-keeping requirements;

• risks arising from certain of our businesses manufacturing or repackaging pharmaceuticals, which businesses are subject to federal and state laws that establish eligibility for reimbursement by federal and state healthcare programs;

• risks arising from possible violations of the U.S. Foreign Corrupt Practices Act, Chinese anti-corruption laws and other similar anti-corruption laws in other jurisdictions and U.S. and foreign export control, trade embargo and customs laws;

• risks arising from possible violations of healthcare fraud and abuse laws;

1

• risks arising from our collecting, handling and maintaining patient-identifiable healthcare information and other sensitive personal information, which are subject to federal, state and foreign laws that regulate the use and disclosure of such information;

• changes in laws or changes in the interpretation or application of laws or regulations, as well as possible failures to comply with applicable laws or regulations, including as a result of possible misinterpretations or misapplications;

• our ability to introduce and market new products and our ability to keep pace with advances in technology;

• our ability to maintain adequate intellectual property protections;

• costs or claims resulting from potential errors or defects in our manufacturing of medical devices or other products or in our compounding, repackaging, information systems or pharmacy management services that may injure persons or damage property or operations, including costs from remediation efforts or recalls;

• the results, costs, effects or timing of any commercial disputes, government contract compliance matters, patent infringement claims, qui tam actions or other legal proceedings;

• disruption or damage to, or failure of, our information or controls systems, including in the event that the Pharmaceutical segment's planned multi-year systems upgrade is not effectively implemented or fails to operate as intended, or a data security breach;

• disruptions to the proper functioning of our critical facilities, including our national logistics center;

• the costs, effects, timing or success of restructuring programs or plans;

• significant charges to earnings if goodwill or intangible assets become impaired;

• increased costs for commodities used in the Medical segment including various components, compounds, raw materials or energy such as oil-based resins, cotton, latex and other commodities;

• shortages in commodities, components, compounds, raw materials or energy used by our businesses, including supply disruptions of radioisotopes;

• the risks of counterfeit products in the supply chain;

• risks associated with volatility and disruption to the global capital and credit markets, which may adversely affect our ability to access credit, our cost of credit and the financial soundness of our customers and suppliers;

• bankruptcy, insolvency or other credit failure of a customer or supplier that has a substantial amount owed to us;

• risks associated with global operations, including the effect of local economic environments, inflation, recession, currency volatility and global competition, in addition to risks associated with compliance with U.S and international laws relating to global operations;

• difficulties or delays in the development, production, manufacturing, sourcing and marketing of new or existing products and services, including difficulties or delays associated with obtaining requisite regulatory consents or approvals associated with those activities;

• adverse changes in U.S. or foreign tax laws, unfavorable challenges to our tax positions and payments to settle these challenges; and

• uncertainties relating to general political, business, industry, regulatory and market conditions;

• other factors described in the “Risk Factors” section of the 2015 Form 10-K.

The words “expect,” “anticipate,” “intend,” “plan,” “believe,” “will,” “should,” “could,” “would,” “project,” “continue,” “likely,” and similar expressions generally identify “forward-looking statements,” which speak only as of the date the statements were made, and also include statements reflecting future results or guidance, statements of outlook and expense accruals. We undertake no obligation to update or revise any forward-looking statements, except to the extent required by applicable law.

2

XML

Goodwill and Other Intangible Assets (Schedule of Goodwill by Reportable Segment) (Details) $ in Millions	3 Months Ended
	Sep. 30, 2015 USD ($)
Goodwill
Beginning balance	$ 5,070
Goodwill acquired, net of purchase price adjustments	1,106
Foreign currency translation adjustments and other	(17)
Ending balance	6,159
Pharmaceutical
Goodwill
Beginning balance	2,199
Goodwill acquired, net of purchase price adjustments	787
Foreign currency translation adjustments and other	(9)
Ending balance	2,977
Medical
Goodwill
Beginning balance	2,871
Goodwill acquired, net of purchase price adjustments	319
Foreign currency translation adjustments and other	(8)
Ending balance	$ 3,182

XML

Earnings Per Share (Reconciliation of Common Shares Used to Compute Basic and Diluted EPS) (Details) - shares shares in Millions	3 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Earnings Per Share [Abstract]
Weighted-average common shares–basic (in shares)	328	336
Effect of dilutive securities:
Employee stock options, restricted share units and performance share units	3	4
Weighted-average common shares–diluted (in shares)	331	340

XML

Financial Instruments (Summary of estimated fair value of our long-term obligations and other short-term borrowings) (Details) - USD ($) $ in Millions	Sep. 30, 2015	Jun. 30, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying amount	$ 5,550	$ 5,492
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Estimated fair value	$ 5,618	$ 5,521

XML

Segment Information (Narrative) (Details) $ in Millions	3 Months Ended
	Sep. 30, 2015 USD ($) Segments Reportable_Segments	Sep. 30, 2014 USD ($) Segments Reportable_Segments
Segment Reporting [Abstract]
Number of operating segments | Segments	2	2
Number of reportable segments	2	2
Project costs on investment and other spending | $	$ 6	$ 2

XML

Fair Value Measurements Reconciliation of Liabilities Measured at Fair Value on a Recurring Basis Using Unobservable Inputs (Level 3) (Details) - Recurring - Contingent Consideration $ in Millions	3 Months Ended
	Sep. 30, 2015 USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at beginning of period	$ 53
Additions from acquisitions	0
Changes in fair value of contingent consideration	(1)	[1]
Payment of contingent consideration	(23)
Balance at end of period	$ 29

[1] Amount is included in amortization and other acquisition-related costs in the condensed consolidated statements of earnings.

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Share-Based Compensation and Savings Plans (Tables)

3 Months Ended

Sep. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Total Share-based Compensation Expense by Type of Award

The following table provides total share-based compensation expense by type of award:

	Three Months Ended September 30
(in millions)	2015		2014
Restricted share unit expense	$	13	$	16
Employee stock option expense	5		5
Performance share unit expense	12		4
Total share-based compensation	$	30	$	25

Schedule of Stock Option Transactions Under the Plans

The following table summarizes all stock option transactions under the Plans:

(in millions, except per share amounts)	Stock Options		Weighted-Average Exercise Price per Common Share
Outstanding at June 30, 2015	8		$	46.50
Granted	1		84.28
Exercised	(1	)	37.20
Canceled and forfeited	—		—
Outstanding at September 30, 2015	8		$	53.24
Exercisable at September 30, 2015	5		$	42.18

Schedule of Additional Data Related to Stock Option Activity

The following table provides additional detail related to stock options:

(in millions, except per share amounts)	September 30, 2015		June 30, 2015
Aggregate intrinsic value of outstanding options at period end	$	201	$	281
Aggregate intrinsic value of exercisable options at period end	182		193
Weighted-average remaining contractual life of outstanding options (in years)	7		6
Weighted-average remaining contractual life of exercisable options (in years)	6		5

Schedule of Transactions Related to Restricted Share Units Under the Plans

The following table summarizes all transactions related to restricted share units under the Plans:

(in millions, except per share amounts)	Restricted Share Units		Weighted-Average Grant Date Fair Value per Share
Nonvested at June 30, 2015	3		$	59.69
Granted	1		84.30
Vested	(1	)	53.31
Canceled and forfeited	—		—
Nonvested at September 30, 2015	3		$	73.29

Schedule of Transactions Related to Performance Share Units Under the Plans

The following table summarizes all transactions related to performance share units under the Plans (based on target award amounts):

(in millions, except per share amounts)	Performance Share Units		Weighted-Average Grant Date Fair Value per Share
Nonvested at June 30, 2015	0.9		$	50.31
Granted	0.3		84.34
Vested (1)	(0.4	)	39.81
Canceled and forfeited	—		—
Nonvested at September 30, 2015	0.8		$	62.64

(1) Vested based on achievement of 133 percent of the target performance goal.

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Segment Information (Segment Profit by Reportable Segment) (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Operating earnings	$ 620	$ 466
Pharmaceutical
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Operating earnings	657	451
Medical
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Operating earnings	101	113
Reportable Segments
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Operating earnings	758	564
Corporate
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Operating earnings	$ (138)	$ (98)

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Goodwill and Other Intangible Assets (Tables)

3 Months Ended

Sep. 30, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill by Reportable Segment

The following table summarizes the changes in the carrying amount of goodwill, by segment, and in total:

(in millions)	Pharmaceutical			Medical			Total
Balance at June 30, 2015	$	2,199		$	2,871		$	5,070
Goodwill acquired, net of purchase price adjustments	787			319			1,106
Foreign currency translation adjustments and other	(9		)	(8		)	(17		)
Balance at September 30, 2015	$	2,977		$	3,182		$	6,159

Schedule of Intangible Assets

The following tables summarize other intangible assets by class at:

	September 30, 2015
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible		Weighted Average Remaining Amortization Period (Years)
Indefinite-life intangibles:
Trademarks and other	$	15	$	—	$	15	N/A
Total indefinite-life intangibles	15		—		15		N/A
Definite-life intangibles:
Customer relationships	1,409		544		865		8
Trademarks, trade names and patents	382		99		283		12
Developed technology and other	387		145		242		9
Total definite-life intangibles	2,178		788		1,390		9
Total other intangible assets	$	2,193	$	788	$	1,405	N/A

	June 30, 2015
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible
Indefinite-life intangibles:
Trademarks and other	$	14	$	—	$	14
Total indefinite-life intangibles	14		—		14
Definite-life intangibles:
Customer relationships	1,103		501		602
Trademarks, trade names and patents	237		91		146
Developed technology and other	320		134		186
Total definite-life intangibles	1,660		726		934
Total other intangible assets	$	1,674	$	726	$	948

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Shareholders' Equity (Narrative) (Details) - Treasury Shares $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended
	Sep. 30, 2014 USD ($) $ / shares shares
Treasury shares acquired (using cost method), shares | shares	4.8
Treasury shares acquired (using cost method), value | $	$ 360
Treasury shares acquired, average price per share (in dollars per share)	$ 74.36

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Available-for-Sale Securities (Schedule of Available-for-Sale Securities) (Details) - USD ($) $ in Millions	Sep. 30, 2015	Jun. 30, 2015
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, current	$ 107	$ 91
Available-for-sale securities, long-term	86	102
Available-for-sale securities	193	193
Commercial paper
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, current	3	4
Treasury bills
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, current	7	12
International bonds
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, current	2	2
Corporate bonds
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, current	47	34
Available-for-sale securities, long-term	33	33
U.S. agency bonds
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, current	3	5
Available-for-sale securities, long-term	18	18
Asset-backed securities
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, current	23	8
Available-for-sale securities, long-term	26	41
U.S. agency mortgage-backed securities
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, current	22	26
Available-for-sale securities, long-term	$ 9	$ 10

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Restructuring and Employee Severance (Liabilities Associated with Restructuring and Employee Severance Activities) (Details) $ in Millions	3 Months Ended
	Sep. 30, 2015 USD ($)
Employee-Related Costs
Restructuring Reserve
Beginning Balance	$ 22
Additions	5
Payments and other adjustments	(6)
Ending Balance	21
Facility Exit and Other Costs
Restructuring Reserve
Beginning Balance	0
Additions	1
Payments and other adjustments	0
Ending Balance	1
Total
Restructuring Reserve
Beginning Balance	22
Additions	6
Payments and other adjustments	(6)
Ending Balance	$ 22

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Shareholders' Equity (Schedule of the changes in the balance in accumulated other comprehensive loss by component and in total) (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Accumulated other comprehensive loss at beginning of period	$ (23)
Other comprehensive loss, net of tax before reclassifications	(45)
Amounts reclassified to earnings	0
Other comprehensive loss, unrealized gain/(loss) on derivatives, net of tax	(1)	$ 0
Total other comprehensive loss, net of tax	(45)
Accumulated other comprehensive loss at end of period	(68)
Foreign Currency Translation Adjustments
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Accumulated other comprehensive loss at beginning of period	(41)
Other comprehensive loss, net of tax before reclassifications	(44)
Amounts reclassified to earnings	0
Other comprehensive loss, foreign currency translation adjustments net of tax	(44)
Accumulated other comprehensive loss at end of period	(85)
Unrealized Gain/(Loss) on Derivatives, net of tax
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Accumulated other comprehensive loss at beginning of period	18
Other comprehensive loss, net of tax before reclassifications	(1)
Amounts reclassified to earnings	0
Other comprehensive loss, unrealized gain/(loss) on derivatives, net of tax	(1)
Accumulated other comprehensive loss at end of period	$ 17

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Share-Based Compensation and Savings Plans (Schedule of All Stock Option Transactions Under the Plans) (Details) shares in Millions	3 Months Ended
	Sep. 30, 2015 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Stock Options Outstanding at Beginning of Period | shares	8
Stock Options Outstanding, Granted | shares	1
Stock Options Outstanding, Exercised | shares	(1)
Stock Options Outstanding, Canceled and forfeited | shares	0
Stock Options Outstanding at End of Period | shares	8
Stock Options Outstanding, Exercisable at End of Period | shares	5
Share Based Compensation Arrangement By Share Based Payment Award Options Outstanding Weighted-Average Exercise Price [Roll Forward]
Weighted-Average Exercise Price Per Common Share, Outstanding at Beginning of Period	$ 46.50
Weighted-Average Exercise Price Per Common Share, Granted	84.28
Weighted-Average Exercise Price Per Common Share, Exercised	37.20
Weighted-Average Exercise Price Per Common Share, Canceled and forfeited	0.00
Weighted-Average Exercise Price Per Common Share, Outstanding at End of Period	53.24
Weighted-Average Exercise Price Per Common Share, Exercisable at End of Period	$ 42.18

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Financial Instruments (Narrative) (Details) $ in Millions	Sep. 30, 2014 USD ($)
Forward Contracts | Designated as Hedging Instrument | Cash Flow Hedging | Interest Rate Swaps
Derivative [Line Items]
Derivative, notional amount	$ 50

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Restructuring and Employee Severance

3 Months Ended

Sep. 30, 2015

Restructuring Charges [Abstract]

Restructuring and Employee Severance

Restructuring and Employee Severance

The following table summarizes restructuring and employee severance costs:

	Three Months Ended September 30
(in millions)	2015		2014
Employee-related costs (1)	$	6	$	16
Facility exit and other costs (2)	6		3
Total restructuring and employee severance	$	12	$	19

(1) Employee-related costs primarily consist of termination benefits provided to employees who have been involuntarily terminated and duplicate payroll costs during transition periods.

(2) Facility exit and other costs primarily consist of lease termination costs, accelerated depreciation, equipment relocation costs, project consulting fees, and costs associated with restructuring our delivery of information technology infrastructure services.

The following table summarizes activity related to liabilities associated with restructuring and employee severance:

(in millions)	Employee- Related Costs			Facility Exit and Other Costs		Total
Balance at June 30, 2015	$	22		$	—	$	22
Additions	5			1		6
Payments and other adjustments	(6		)	—		(6		)
Balance at September 30, 2015	$	21		$	1	$	22

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Share-Based Compensation and Savings Plans (Schedule of Additional Data Related to Stock Options) (Details) - Stock Options - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Sep. 30, 2015	Jun. 30, 2015
Aggregate intrinsic value of outstanding options at period end	$ 201	$ 281
Aggregate intrinsic value of exercisable options at period end	$ 182	$ 193
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	7 years	6 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term	6 years	5 years

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Income Taxes (Narrative) (Details) - USD ($)	3 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Jun. 30, 2015
Income Taxes
Effective Income Tax Rate Reconciliation, Percent	32.30%	38.90%
Net unfavorable/(favorable) discrete items, amount	$ 28,000,000
Unrecognized tax benefits	534,000,000		$ 542,000,000
Unrecognized tax benefits that would impact effective tax rate	351,000,000		357,000,000
Unrecognized tax benefits, interest and penalties accrued	157,000,000		169,000,000
Amount CareFusion is liable under tax matters agreement in the event amount must be paid to the taxing authority	222,000,000		$ 219,000,000
Minimum
Income Taxes
Estimated range of decrease in unrecognized tax benefits within the next 12 months	0
Maximum
Income Taxes
Estimated range of decrease in unrecognized tax benefits within the next 12 months	$ 190,000,000
Federal | Minimum
Income Taxes
Tax years open for examination	2006
Federal | Maximum
Income Taxes
Tax years open for examination	2015
State | Minimum
Income Taxes
Tax years open for examination	2006
State | Maximum
Income Taxes
Tax years open for examination	2015
Foreign | Minimum
Income Taxes
Tax years open for examination	2006
Foreign | Maximum
Income Taxes
Tax years open for examination	2015

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Shareholders' Equity (Tables)

3 Months Ended

Sep. 30, 2015

Equity [Abstract]

Schedule of Changes in the Balance of Accumulated Other Comprehensive Loss by Component and in Total

The following table summarizes the changes in the balance of accumulated other comprehensive loss by component and in total:

(in millions)	Foreign Currency Translation Adjustments			Unrealized Gain/(Loss) on Derivatives, net of tax			Accumulated Other Comprehensive Loss
Balance at June 30, 2015	$	(41	)	$	18		$	(23	)
Other comprehensive loss, net of tax before reclassifications	(44		)	(1		)	(45		)
Amounts reclassified to earnings	—			—			—
Total other comprehensive loss	(44		)	(1		)	(45		)
Balance at September 30, 2015	$	(85	)	$	17		$	(68	)

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Financial Instruments (Tables)

3 Months Ended

Sep. 30, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of Estimated Fair Value of Long-term Obligations and Other Short-term Borrowings Compared to the Respective Carrying Amounts

The following table summarizes the estimated fair value of our long-term obligations and other short-term borrowings compared to the respective carrying amounts at:

(in millions)	September 30, 2015		June 30, 2015
Estimated fair value	$	5,618	$	5,521
Carrying amount	5,550		5,492

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Segment Information (Revenue by Reportable Segment) (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Segment Reporting Information [Line Items]
Revenue	$ 28,055	$ 24,070
Pharmaceutical
Segment Reporting Information [Line Items]
Revenue	25,140	21,209
Medical
Segment Reporting Information [Line Items]
Revenue	2,919	2,852
Reportable Segments
Segment Reporting Information [Line Items]
Revenue	28,059	24,061
Corporate
Segment Reporting Information [Line Items]
Revenue	$ (4)	$ 9

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Commitments, Contingent Liabilities and Litigation (Narrative) (Details) $ in Millions		3 Months Ended		12 Months Ended
	Oct. 02, 2015 USD ($)	Sep. 30, 2015 USD ($) distributor	Sep. 30, 2014 USD ($)	Jun. 30, 2015 USD ($)
Commitments [Abstract]
Payments to Acquire Businesses, Net of Cash Acquired		$ 1,399.0	$ 61.0
DEA Investigation and Related Matters
Loss Contingencies
Litigation charges			$ 27.0	$ 41.0
Litigation accrual		$ 41.0
State of West Virginia vs Cardinal Health, Inc
Loss Contingencies
Number of defendants | distributor		13
Cordis
Commitments [Abstract]
Payments to Acquire Businesses, Net of Cash Acquired	$ 1,900.0
CVS Health
Commitments [Abstract]
Initial term of Pharmaceutical Sourcing Venture		10 years
Number of quarterly payments		39
Quarterly payment		$ 25.6
Increase in quarterly payments		10.0
Fiscal 2017 | CVS Health
Commitments [Abstract]
Further Increase in Quarterly Payments		10.0
Maximum Quarterly Payment		$ 45.6

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Redeemable Noncontrolling Interests (Tables)

3 Months Ended

Sep. 30, 2015

Redeemable Noncontrolling Interest [Abstract]

Redeemable Noncontrolling Interest [Table Text Block]

(in millions)
Balance at June 30, 2015	$	—
Redeemable noncontrolling interests acquired	118.9
Net earnings attributable to redeemable noncontrolling interests	0.5
Balance at September 30, 2015	$	119.4

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Earnings Per Share (Tables)

3 Months Ended

Sep. 30, 2015

Earnings Per Share [Abstract]

Reconciliation of Common Shares Used to Compute Basic and Diluted Earnings Per Share

The following table reconciles the number of common shares used to compute basic and diluted earnings per share attributable to Cardinal Health, Inc.:

	Three Months Ended September 30
(in millions)	2015	2014
Weighted-average common shares–basic	328	336
Effect of dilutive securities:
Employee stock options, restricted share units, and performance share units	3	4
Weighted-average common shares–diluted	331	340

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Acquisitions

3 Months Ended

Sep. 30, 2015

Business Combinations [Abstract]

Acquisitions

Acquisitions

During the three months ended September 30, 2015, we completed several acquisitions, the most significant of which are described in more detail below. The pro forma results of operations and the results of operations for acquired businesses since the acquisition dates have not been separately disclosed because the effects were not significant compared to the condensed consolidated financial statements, individually or in the aggregate.

Harvard Drug

On July 2, 2015, we completed the acquisition of The Harvard Drug Group ("Harvard Drug") for $1.1 billion using cash on hand and proceeds from our debt offering in June 2015. The acquisition of Harvard Drug, a distributor of generic pharmaceuticals, over-the-counter healthcare and related products to retail, institutional and alternate care customers, enhances our Pharmaceutical segment's generic pharmaceutical distribution and related services businesses. Harvard Drug also manufactures and repackages generic pharmaceuticals and over-the-counter health care products.

naviHealth

On August 26, 2015, we acquired a 71 percent ownership interest in naviHealth Group Holdings, L.P. ("naviHealth") for a purchase price of $238 million, net of cash acquired of $53 million, in an all-cash transaction. We funded the acquisition with cash on hand. The acquisition of naviHealth, a leader in post-acute care management solutions, expands our ability to serve health plans, health systems, and providers that are facing a shift to a value-based reimbursement environment. The terms of the agreement provide us with the option to acquire the remaining 29 percent noncontrolling interests at any time after the two-year anniversary of the closing. The third-party noncontrolling interests holders also hold an option, which allows them to sell their noncontrolling interests to us at any time after the two-year anniversary of the closing. Refer to Note 10 for further information on the redeemable noncontrolling interests.

Fair Value of Assets Acquired and Liabilities Assumed

The allocation of the purchase price for the acquisitions of naviHealth and Harvard Drug are not yet finalized and are subject to adjustment as we complete the valuation analysis for these acquisitions. The purchase prices are also subject to adjustment based on working capital requirements as set forth in the acquisition agreements.

The valuation of identifiable intangible assets utilizes significant unobservable inputs and thus represents a Level 3 nonrecurring fair value measurement. The estimated fair value of the identifiable intangible assets was determined using an income-based approach, which includes market participant expectations of the cash flows that an asset could generate over its remaining useful life, discounted back to present value using an appropriate rate of return. The discount rates used to arrive at the present value of the identifiable intangible assets ranged from 12 percent to 14 percent, and reflect the internal rate of return and uncertainty in the cash flow projections.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the acquisition dates for naviHealth and Harvard Drug:

(in millions)	naviHealth			Harvard Drug
Identifiable intangible assets:
Customer relationships (1)	$	38		$	260
Trade names (2)	16			130
Developed technology (3)	61			—
Total identifiable intangible assets acquired	115			390
Cash and equivalents	53			44
Trade receivables	36			67
Inventories	—			49
Prepaid expenses and other	15			13
Property and equipment	5			16
Accounts payable	(2		)	(48		)
Other accrued liabilities	(95		)	(39		)
Deferred income taxes and other liabilities	(42		)	(104		)
Redeemable noncontrolling interests	(119		)	—
Total identifiable net assets/(liabilities) acquired	(34		)	388
Goodwill	325			763
Total net assets acquired	$	291		$	1,151

(1) The weighted-average useful lives of customer relationships range from 4 to 14 years.

(2) The weighted-average useful lives of trade names range from 3 to 16 years.

(3) The weighted-average useful life of developed technology is 10 years.

Cordis

On October 2, 2015, we acquired the Cordis business from Ethicon, Inc., a wholly-owned subsidiary of Johnson & Johnson, for $1.9 billion in an all-cash transaction. We financed the acquisition using proceeds from our debt offering in June 2015, and cash on hand. The acquisition of Cordis, a manufacturer and distributor of interventional cardiology devices and endovascular solutions, expands our Medical segment's portfolio of self-manufactured products and its geographic scope. Cordis is a global company, with operations in more than 50 countries. Transaction and integration costs associated with the acquisition of Cordis were $21 million during the three months ended September 30, 2015, and are included in amortization and other acquisition-related costs in the condensed consolidated statements of earnings.

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Segment Information (Tables)

3 Months Ended

Sep. 30, 2015

Segment Reporting Information [Line Items]

Revenue by Reportable Segment

The following table presents revenue for each reportable segment and Corporate:

	Three Months Ended September 30
(in millions)	2015			2014
Pharmaceutical	$	25,140		$	21,209
Medical	2,919			2,852
Total segment revenue	28,059			24,061
Corporate (1)	(4		)	9
Total revenue	$	28,055		$	24,070

(1) Corporate revenue consists of the elimination of inter-segment revenue and other revenue not allocated to the segments.

Segment Profit by Reportable Segment

The following table presents segment profit by reportable segment and Corporate:

	Three Months Ended September 30
(in millions)	2015			2014
Pharmaceutical	$	657		$	451
Medical	101			113
Total segment profit	758			564
Corporate	(138		)	(98		)
Total operating earnings	$	620		$	466

Assets by Reportable Segment

The following table presents total assets for each reportable segment and Corporate at:

(in millions)	September 30, 2015		June 30, 2015
Pharmaceutical	$	19,596	$	17,385
Medical	7,833		7,095
Corporate	3,793		5,662
Total assets	$	31,222	$	30,142

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Goodwill and Other Intangible Assets (Schedule of Intangible Assets) (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2015	Jun. 30, 2015
Indefinite-life intangibles:
Indefinite-lived intangible assets, gross (excluding goodwill)	$ 15	$ 14
Indefinite-lived intangible assets, accumulated amortization	0	0
Indefinite-lived intangible assets, net (excluding goodwill)	15	14
Definite-life intangibles:
Finite-lived intangible assets, gross	2,178	1,660
Finite-lived intangible assets, accumulated amortization	788	726
Finite-lived intangible assets, net	$ 1,390	934
Weighted average remaining amortization period (years)	9 years
Intangible assets, gross (excluding goodwill)	$ 2,193	1,674
Intangible assets, net (excluding goodwill)	1,405	948
Customer relationships
Definite-life intangibles:
Finite-lived intangible assets, gross	1,409	1,103
Finite-lived intangible assets, accumulated amortization	544	501
Finite-lived intangible assets, net	$ 865	602
Weighted average remaining amortization period (years)	8 years
Trademarks, trade names and patents
Definite-life intangibles:
Finite-lived intangible assets, gross	$ 382	237
Finite-lived intangible assets, accumulated amortization	99	91
Finite-lived intangible assets, net	$ 283	146
Weighted average remaining amortization period (years)	12 years
Developed technology and other
Definite-life intangibles:
Finite-lived intangible assets, gross	$ 387	320
Finite-lived intangible assets, accumulated amortization	145	134
Finite-lived intangible assets, net	$ 242	186
Weighted average remaining amortization period (years)	9 years
Trademarks and other
Indefinite-life intangibles:
Indefinite-lived intangible assets, gross (excluding goodwill)	$ 15	14
Indefinite-lived intangible assets, accumulated amortization	0	0
Indefinite-lived intangible assets, net (excluding goodwill)	$ 15	$ 14

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Earnings Per Share (Narrative) (Details) - shares shares in Millions	3 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Earnings Per Share [Abstract]
Potentially dilutive employee stock options, restricted share units and performance share units that were anitdilutive	2	1

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Condensed Consolidated Statements of Earnings - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Income Statement [Abstract]
Revenue	$ 28,055	$ 24,070
Cost of products sold	26,476	22,729
Gross margin	1,579	1,341
Operating expenses:
Distribution, selling, general, and administrative expenses	842	775
Restructuring and employee severance	12	19
Amortization and other acquisition-related costs	105	53
Litigation (recoveries)/charges, net	0	28
Operating earnings	620	466
Other (income)/expense, net	8	(3)
Interest expense, net	44	34
Earnings before income taxes	568	435
Provision for income taxes	184	169
Net Earnings	384	266
Net earnings attributable to non-controlling interests	(1)	0
Net earnings attributable to Cardinal Health, Inc.	$ 383	$ 266
Earnings per common share attributable to Cardinal Health, Inc.:
Net basic earnings per common share (in dollars per share)	$ 1.17	$ 0.79
Net diluted earnings per common share (in dollars per share)	$ 1.15	$ 0.78
Basic (in shares)	328	336
Diluted (in shares)	331	340
Cash dividends declared per common share	$ 0.3870	$ 0.3425

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Fair Value Measurements (Fair Value of Assets and Liabilities Measured on a Recurring Basis) (Details) - USD ($) $ in Millions		Sep. 30, 2015	Jun. 30, 2015
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Available-for-sale securities		$ 193	$ 193
Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Cash equivalents	[1]	91	1,809
Forward contracts	[2]	26	5
Available-for-sale securities	[3]	193	193
Other investments	[4]	111	111
Contingent Consideration	[5]	(29)	(53)
Total		392	2,065
Recurring | Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Cash equivalents	[1]	91	1,809
Forward contracts	[2]	0	0
Available-for-sale securities	[3]	0	0
Other investments	[4]	111	111
Contingent Consideration	[5]	0	0
Total		202	1,920
Recurring | Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Cash equivalents	[1]	0	0
Forward contracts	[2]	26	5
Available-for-sale securities	[3]	193	193
Other investments	[4]	0	0
Contingent Consideration	[5]	0	0
Total		219	198
Recurring | Level 3
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Cash equivalents	[1]	0	0
Forward contracts	[2]	0	0
Available-for-sale securities	[3]	0	0
Other investments	[4]	0	0
Contingent Consideration	[5]	(29)	(53)
Total		$ (29)	$ (53)

[1] Cash equivalents are comprised of highly liquid investments purchased with a maturity of three months or less. The carrying value of these cash equivalents approximates fair value due to their short-term maturities.

[2] The fair value of interest rate swaps, foreign currency contracts, and commodity contracts is determined based on the present value of expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Observable Level 2 inputs are used to determine the present value of expected future cash flows. The fair value of these derivative contracts, which are subject to master netting arrangements under certain circumstances, is presented on a gross basis in the condensed consolidated balance sheets.

[3] We invest in marketable securities, which are classified as available-for-sale and are carried at fair value in the condensed consolidated balance sheets. Observable Level 2 inputs such as quoted prices for similar securities, interest rate spreads, yield curves, and credit risk are used to determine the fair value. See Note 5 for additional information regarding available-for-sale securities.

[4] The other investments balance includes investments in mutual funds, which are used to offset fluctuations in deferred compensation liabilities. These mutual funds primarily invest in the equity securities of companies with large market capitalization and high quality fixed income debt securities. The fair value of these investments is determined using quoted market prices.

[5] Contingent consideration represents the obligations incurred in connection with acquisitions. We do not deem the fair value of the contingent consideration obligations under any single acquisition to be significant. The estimate of fair value of the contingent consideration obligations requires subjective assumptions to be made regarding future business results, discount rates, discount periods, and probabilities assigned to various potential business result scenarios and was determined using probability assessments with respect to the likelihood of reaching various targets or from achieving certain milestones. The fair value measurement is based on significant inputs unobservable in the market and thus represents a Level 3 measurement. Failure to meet current expectations of progress could increase the probability of not achieving the targets within the measurement periods and result in a reduction in the fair value of the contingent consideration obligation.

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flows from operating activities:
Net Earnings	$ 384	$ 266
Adjustments to reconcile net earnings to net cash provided by/(used in) operating activities:
Depreciation and amortization	137	108
Gain on sale of other investments	0	(5)
Share-based compensation	30	25
Provision for bad debts	17	12
Change in fair value of contingent consideration obligation	(1)	0
Change in operating assets and liabilities, net of effects from acquisitions:
Increase in trade receivables	(348)	(291)
Decrease/(increase) in inventories	(495)	199
Increase/(decrease) in accounts payable	425	(157)
Other accrued liabilities and operating items, net	(201)	(96)
Net cash provided by/(used in) operating activities	(52)	61
Cash flows from investing activities:
Acquisition of subsidiaries, net of cash acquired	(1,399)	(61)
Additions to property and equipment	(83)	(36)
Purchase of available-for-sale securities and other investments	(26)	(75)
Proceeds from sale of available-for-sale securities and other investments	25	91
Proceeds from maturities of available-for-sale securities and held-to-maturity securities	5	0
Net cash used in investing activities	(1,478)	(81)
Cash flows from financing activities:
Payment of contingent consideration obligation	(23)	0
Net change in short-term borrowings	36	40
Reduction of long-term obligations	(4)	0
Net proceeds/(tax withholdings) from share-based compensation	(21)	25
Tax proceeds from share-based compensation	31	38
Dividends on common shares	(131)	(119)
Purchase of treasury shares	0	(360)
Net cash used in financing activities	(112)	(376)
Net decrease in cash and equivalents	(1,642)	(396)
Cash and equivalents at beginning of period	4,616	2,865
Cash and equivalents at end of period	$ 2,974	$ 2,469

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Share-Based Compensation and Savings Plans (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Tax benefit related to share-based compensation	$ 11	$ 9
Performance Share Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period (in years)	3 years
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized	$ 26
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	2 years
Target performance goal (as a percent)	133.00%
Performance Share Units | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Target performance goal (as a percent)	0.00%
Performance Share Units | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Target performance goal (as a percent)	200.00%
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period (in years)	3 years
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized	$ 37
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	2 years
Stock Options | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercisable period of plans (in years)	7 years
Stock Options | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercisable period of plans (in years)	10 years
Restricted Share Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period (in years)	3 years
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized	$ 121
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	2 years

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Acquisitions Schedule of Estimated Fair Values of the Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions		Sep. 30, 2015	Aug. 26, 2015	Jun. 30, 2015
Business Acquisition [Line Items]
Redeemable Noncontrolling Interests			$ (119)
Goodwill		$ 6,159		$ 5,070
naviHealth [Member]
Business Acquisition [Line Items]
Identifiable intangible asset		115
Cash and Equivalents		53
Trade Receivables		36
Inventories		0
Prepaid Expense and Other		15
Property and Equipment		5
Accounts Payable		(2)
Other accrued liabilities		(95)
Deferred Income Tax Liabilities and Other Liabilities		(42)
Redeemable Noncontrolling Interests		(119)
Total identifiable net assets/(liabilities) acquired		(34)
Goodwill		325
Total net assets acquired		291
Harvard Drug Group [Member]
Business Acquisition [Line Items]
Identifiable intangible asset		390
Cash and Equivalents		44
Trade Receivables		67
Inventories		49
Prepaid Expense and Other		13
Property and Equipment		16
Accounts Payable		(48)
Other accrued liabilities		(39)
Deferred Income Tax Liabilities and Other Liabilities		(104)
Redeemable Noncontrolling Interests		0
Total identifiable net assets/(liabilities) acquired		388
Goodwill		763
Total net assets acquired		1,151
Customer relationships | naviHealth [Member]
Business Acquisition [Line Items]
Identifiable intangible asset	[1]	38
Customer relationships | Harvard Drug Group [Member]
Business Acquisition [Line Items]
Identifiable intangible asset	[1]	260
Trade Names | naviHealth [Member]
Business Acquisition [Line Items]
Identifiable intangible asset	[2]	16
Trade Names | Harvard Drug Group [Member]
Business Acquisition [Line Items]
Identifiable intangible asset	[2]	130
Developed technology and other | naviHealth [Member]
Business Acquisition [Line Items]
Identifiable intangible asset	[3]	61
Developed technology and other | Harvard Drug Group [Member]
Business Acquisition [Line Items]
Identifiable intangible asset	[3]	$ 0

[1] (1)The weighted-average useful lives of customer relationships range from 4 to 14 years.

[2] (2)The weighted-average useful lives of trade names range from 3 to 16 years.

[3] (3)The weighted-average useful life of developed technology is 10 years.

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Subsequent Events (Details) - USD ($) $ in Millions		3 Months Ended
	Oct. 02, 2015	Sep. 30, 2015	Sep. 30, 2014
Subsequent Event [Line Items]
Cash paid for acquisitions, net of cash acquired		$ 1,399	$ 61
Cordis
Subsequent Event [Line Items]
Cash paid for acquisitions, net of cash acquired	$ 1,900
Cordis | Subsequent Event
Subsequent Event [Line Items]
Cash paid for acquisitions, net of cash acquired	$ 1,900

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Basis of Presentation and Summary of Significant Accounting Policies (Policies)

3 Months Ended

Sep. 30, 2015

Accounting Policies [Abstract]

Basis of Presentation, Policy

Basis of Presentation

Our condensed consolidated financial statements include the accounts of all majority-owned or controlled subsidiaries, and all significant intercompany transactions and amounts have been eliminated. References to "we," "our," and similar pronouns in this Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 (this "Form 10-Q") refer to Cardinal Health, Inc. and its majority-owned or controlled subsidiaries unless the context requires otherwise. The results of businesses acquired or disposed of are included in the condensed consolidated financial statements from the effective date of the acquisition or up to the date of disposal, respectively.

Our condensed consolidated financial statements have been prepared in accordance with the U.S. Securities and Exchange Commission ("SEC") instructions to Quarterly Reports on Form 10-Q and include all of the information and disclosures required by accounting principles generally accepted in the United States ("GAAP") for interim financial reporting. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect amounts reported in the condensed consolidated financial statements and accompanying notes. Actual amounts may differ from these estimated amounts. In addition, operating results presented for this fiscal 2016 interim period are not necessarily indicative of the results that may be expected for the full fiscal year ending June 30, 2016.

These condensed consolidated financial statements are unaudited and are presented pursuant to the rules and regulations of the SEC. Accordingly, the condensed consolidated financial statements included in this Form 10-Q should be read in conjunction with the audited consolidated financial statements and related notes contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2015 (the "2015 Form 10-K"). In our opinion, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included. Except as disclosed elsewhere in this Form 10-Q, all such adjustments are of a normal and recurring nature.

Recent Financial Accounting Standards, Policy

Recent Financial Accounting Standards

In September 2015, the Financial Accounting Standards Board ("FASB") issued amended accounting guidance that eliminates the requirement that an acquirer in a business combination account for measurement-period adjustments on a retrospective basis. Under the new guidance, the acquirer will recognize a measurement-period adjustment during the period in which it determines the amount of the adjustment. This amendment will be effective for us in the first quarter of fiscal 2017, with early adoption permitted. We are currently evaluating the impact of adoption on our financial position and results of operations.

In July 2015, the FASB issued amended accounting guidance that simplifies the current guidance surrounding the measurement of inventory. Under this amended guidance, inventory is measured at the lower of cost and net realizable value, which eliminates the need to determine replacement cost and evaluate whether the inventory is above or below net realizable value. Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The amended guidance does not apply to inventory measured under the last in, first out ("LIFO") method. This amendment will be effective for us in the first quarter of fiscal 2018. We are currently evaluating the impact of adoption on our financial position and results of operations.

In May 2014, the FASB issued amended accounting guidance related to revenue recognition. This guidance is based on the principle that revenue is recognized in an amount that reflects the consideration to which an entity expects to be entitled in exchange for the transfer of goods or services to customers. The guidance also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In July 2015, the FASB finalized a proposal to defer the effective date for one year beyond the originally specified effective date. This amendment will be effective for us in the first quarter of fiscal 2019. We are continuing to evaluate the options for adoption and the impact on our financial position and results of operations.

In April 2014, the FASB issued amended accounting guidance related to the reporting of discontinued operations and disclosures of disposals of components of an entity. The amended guidance changes the thresholds for disposals to qualify as discontinued operations and requires additional disclosures. We adopted this guidance in the first quarter of fiscal 2016. The adoption of this guidance did not materially impact our financial position or results of operations.

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Restructuring and Employee Severance (Activity Related to Restructuring and Employee Severance Costs) (Details) - USD ($) $ in Millions		3 Months Ended
		Sep. 30, 2015	Sep. 30, 2014
Restructuring Cost and Reserve [Line Items]
Employee-related costs	[1]	$ 6	$ 16
Facility exit and other costs	[2]	6	3
Total restructuring and employee severance		$ 12	$ 19

[1] Employee-related costs primarily consist of termination benefits provided to employees who have been involuntarily terminated and duplicate payroll costs during transition periods.

[2] Facility exit and other costs primarily consist of lease termination costs, accelerated depreciation, equipment relocation costs, project consulting fees, and costs associated with restructuring our delivery of information technology infrastructure services.

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Restructuring and Employee Severance (Tables)

3 Months Ended

Sep. 30, 2015

Restructuring Charges [Abstract]

Summary of Restructuring and Employee Severance

The following table summarizes restructuring and employee severance costs:

	Three Months Ended September 30
(in millions)	2015		2014
Employee-related costs (1)	$	6	$	16
Facility exit and other costs (2)	6		3
Total restructuring and employee severance	$	12	$	19

(1) Employee-related costs primarily consist of termination benefits provided to employees who have been involuntarily terminated and duplicate payroll costs during transition periods.

(2) Facility exit and other costs primarily consist of lease termination costs, accelerated depreciation, equipment relocation costs, project consulting fees, and costs associated with restructuring our delivery of information technology infrastructure services.

Schedule of Activity Related to Liabilities Associated with Restructuring and Employee Severance

The following table summarizes activity related to liabilities associated with restructuring and employee severance:

(in millions)	Employee- Related Costs			Facility Exit and Other Costs		Total
Balance at June 30, 2015	$	22		$	—	$	22
Additions	5			1		6
Payments and other adjustments	(6		)	—		(6		)
Balance at September 30, 2015	$	21		$	1	$	22

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Basis of Presentation and Summary of Significant Accounting Policies

3 Months Ended

Sep. 30, 2015

Accounting Policies [Abstract]

Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

Our condensed consolidated financial statements include the accounts of all majority-owned or controlled subsidiaries, and all significant intercompany transactions and amounts have been eliminated. References to "we," "our," and similar pronouns in this Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 (this "Form 10-Q") refer to Cardinal Health, Inc. and its majority-owned or controlled subsidiaries unless the context requires otherwise. The results of businesses acquired or disposed of are included in the condensed consolidated financial statements from the effective date of the acquisition or up to the date of disposal, respectively.

Our condensed consolidated financial statements have been prepared in accordance with the U.S. Securities and Exchange Commission ("SEC") instructions to Quarterly Reports on Form 10-Q and include all of the information and disclosures required by accounting principles generally accepted in the United States ("GAAP") for interim financial reporting. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect amounts reported in the condensed consolidated financial statements and accompanying notes. Actual amounts may differ from these estimated amounts. In addition, operating results presented for this fiscal 2016 interim period are not necessarily indicative of the results that may be expected for the full fiscal year ending June 30, 2016.

These condensed consolidated financial statements are unaudited and are presented pursuant to the rules and regulations of the SEC. Accordingly, the condensed consolidated financial statements included in this Form 10-Q should be read in conjunction with the audited consolidated financial statements and related notes contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2015 (the "2015 Form 10-K"). In our opinion, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included. Except as disclosed elsewhere in this Form 10-Q, all such adjustments are of a normal and recurring nature.

Recent Financial Accounting Standards

In September 2015, the Financial Accounting Standards Board ("FASB") issued amended accounting guidance that eliminates the requirement that an acquirer in a business combination account for measurement-period adjustments on a retrospective basis. Under the new guidance, the acquirer will recognize a measurement-period adjustment during the period in which it determines the amount of the adjustment. This amendment will be effective for us in the first quarter of fiscal 2017, with early adoption permitted. We are currently evaluating the impact of adoption on our financial position and results of operations.

In July 2015, the FASB issued amended accounting guidance that simplifies the current guidance surrounding the measurement of inventory. Under this amended guidance, inventory is measured at the lower of cost and net realizable value, which eliminates the need to determine replacement cost and evaluate whether the inventory is above or below net realizable value. Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The amended guidance does not apply to inventory measured under the last in, first out ("LIFO") method. This amendment will be effective for us in the first quarter of fiscal 2018. We are currently evaluating the impact of adoption on our financial position and results of operations.

In May 2014, the FASB issued amended accounting guidance related to revenue recognition. This guidance is based on the principle that revenue is recognized in an amount that reflects the consideration to which an entity expects to be entitled in exchange for the transfer of goods or services to customers. The guidance also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In July 2015, the FASB finalized a proposal to defer the effective date for one year beyond the originally specified effective date. This amendment will be effective for us in the first quarter of fiscal 2019. We are continuing to evaluate the options for adoption and the impact on our financial position and results of operations.

In April 2014, the FASB issued amended accounting guidance related to the reporting of discontinued operations and disclosures of disposals of components of an entity. The amended guidance changes the thresholds for disposals to qualify as discontinued operations and requires additional disclosures. We adopted this guidance in the first quarter of fiscal 2016. The adoption of this guidance did not materially impact our financial position or results of operations.

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Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Statement of Comprehensive Income [Abstract]
Net Earnings	$ 384	$ 266
Other comprehensive loss:
Foreign currency translation adjustments	(44)	(24)
Net unrealized loss on derivative instruments, net of tax	(1)	0
Total other comprehensive loss, net of tax	(45)	(24)
Total comprehensive income	339	242
Comprehensive income/(loss), net of tax attributable to noncontrolling interests	(1)	0
Total comprehensive income attributable to Cardinal Health, Inc.	$ 338	$ 242

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Shareholders' Equity

3 Months Ended

Sep. 30, 2015

Equity [Abstract]

Shareholders' Equity

Shareholders' Equity

During the three months ended September 30, 2015, we did not repurchase any common shares.

During the three months ended September 30, 2014, we repurchased 4.8 million common shares having an aggregate cost of $360 million. The average price paid per common share was $74.36.

We funded the repurchases with available cash. The common shares repurchased are held in treasury to be used for general corporate purposes.

Accumulated Other Comprehensive Loss

The following table summarizes the changes in the balance of accumulated other comprehensive loss by component and in total:

(in millions)	Foreign Currency Translation Adjustments			Unrealized Gain/(Loss) on Derivatives, net of tax			Accumulated Other Comprehensive Loss
Balance at June 30, 2015	$	(41	)	$	18		$	(23	)
Other comprehensive loss, net of tax before reclassifications	(44		)	(1		)	(45		)
Amounts reclassified to earnings	—			—			—
Total other comprehensive loss	(44		)	(1		)	(45		)
Balance at September 30, 2015	$	(85	)	$	17		$	(68	)

Activity related to realized and unrealized gains and losses on available-for-sale securities, as described in Note 5, was immaterial during the three months ended September 30, 2015.

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Document and Entity Information - shares	3 Months Ended
	Sep. 30, 2015	Oct. 30, 2015
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2015
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Trading Symbol	cah
Entity Registrant Name	CARDINAL HEALTH INC
Entity Central Index Key	0000721371
Current Fiscal Year End Date	--06-30
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		328,981,086

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Earnings Per Share

3 Months Ended

Sep. 30, 2015

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share Attributable to Cardinal Health, Inc.

The following table reconciles the number of common shares used to compute basic and diluted earnings per share attributable to Cardinal Health, Inc.:

	Three Months Ended September 30
(in millions)	2015	2014
Weighted-average common shares–basic	328	336
Effect of dilutive securities:
Employee stock options, restricted share units, and performance share units	3	4
Weighted-average common shares–diluted	331	340

The potentially dilutive employee stock options, restricted share units, and performance share units that were antidilutive for the three months ended September 30, 2015, and 2014 were 2 million and 1 million, respectively.

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Condensed Consolidated Balance Sheets - USD ($) $ in Millions	Sep. 30, 2015	Jun. 30, 2015
Current assets:
Cash and equivalents	$ 2,974.0	$ 4,616.0
Trade receivables, net	6,996.0	6,523.0
Inventories, net	9,758.0	9,211.0
Prepaid expenses and other	1,490.0	1,402.0
Total current assets	21,218.0	21,752.0
Property and equipment, net	1,546.0	1,506.0
Goodwill and other intangibles, net	7,564.0	6,018.0
Other assets	894.0	866.0
Total assets	31,222.0	30,142.0
Current liabilities:
Accounts payable	14,868.0	14,368.0
Current portion of long-term obligations and other short-term borrowings	319.0	281.0
Other accrued liabilities	2,595.0	2,594.0
Total current liabilities	17,782.0	17,243.0
Long-term obligations, less current portion	5,231.0	5,211.0
Deferred income taxes and other liabilities	1,563.0	1,432.0
Redeemable noncontrolling interests	119.4	0.0
Preferred shares, without par value:
Authorized—500 thousand shares, Issued—none	0.0	0.0
Common shares, without par value:
Authorized—755 million shares, Issued—364 million shares at September 30, 2015 and June 30, 2015	2,957.0	3,003.0
Retained earnings	5,774.0	5,521.0
Common shares in treasury, at cost: 35 million shares and 36 million shares at September 30, 2015 and June 30, 2015, respectively	(2,158.0)	(2,245.0)
Accumulated other comprehensive loss	(68.0)	(23.0)
Total Cardinal Health, Inc. shareholder's equity	6,505.0	6,256.0
Noncontrolling interests	22.0	0.0
Total shareholder's equity	6,527.0	6,256.0
Total liabilities, redeemable noncontrolling interests, and shareholders’ equity	$ 31,222.0	$ 30,142.0

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Income Taxes

3 Months Ended

Sep. 30, 2015

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Fluctuations in our provision for income taxes as a percentage of pretax earnings (“effective tax rate”) are due to changes in international and U.S. state effective tax rates resulting from our business mix and discrete items.

During the three months ended September 30, 2015 and 2014, the effective tax rate was 32.3 percent and 38.9 percent, respectively. The effective tax rate during the three months ended September 30, 2015 was impacted by net favorable discrete items of $28 million.

At September 30, 2015, and June 30, 2015, we had $534 million and $542 million of unrecognized tax benefits, respectively. The September 30, 2015, and June 30, 2015, balances include $351 million and $357 million of unrecognized tax benefits, respectively, that if recognized, would have an impact on the effective tax rate.

At September 30, 2015, and June 30, 2015, we had $157 million and $169 million, respectively, accrued for the payment of interest and penalties related to unrecognized tax benefits, which we recognize in the provision for income taxes in the condensed consolidated statements of earnings. These balances are gross amounts before any tax benefits and are included in deferred income taxes and other liabilities in the condensed consolidated balance sheets.

It is reasonably possible that there could be a change in the amount of unrecognized tax benefits within the next 12 months due to activities of the U.S. Internal Revenue Service ("IRS") or other taxing authorities, possible settlement of audit issues, reassessment of existing unrecognized tax benefits or the expiration of statutes of limitations. We estimate that the range of the possible change in unrecognized tax benefits within the next 12 months is a net decrease of zero to $190 million, exclusive of penalties and interest.

We file income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions, and various foreign jurisdictions. With few exceptions, we are subject to audit by taxing authorities for fiscal years 2006 through the current fiscal year.

We are a party to a tax matters agreement with CareFusion Corporation ("CareFusion"), which has been acquired by Becton, Dickinson and Company. Under the tax matters agreement, CareFusion is obligated to indemnify us for certain tax exposures and transaction taxes prior to our fiscal 2010 spin-off of CareFusion. The indemnification receivable was $222 million and $219 million at September 30, 2015, and June 30, 2015, respectively, and is included in other assets in the condensed consolidated balance sheets.

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Available-for-Sale Securities

3 Months Ended

Sep. 30, 2015

Available-for-sale Securities [Abstract]

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

Available-for-Sale Securities

We invest in marketable securities, which are classified as available-for-sale and are carried at fair value in the condensed consolidated balance sheets. We held the following investments in marketable securities at fair value at:

(in millions)	September 30, 2015		June 30, 2015
Current available-for-sale securities:
Commercial paper	$	3	$	4
Treasury bills	7		12
International bonds	2		2
Corporate bonds	47		34
U.S. agency bonds	3		5
Asset-backed securities	23		8
U.S. agency mortgage-backed securities	22		26
Total current available-for-sale securities	107		91
Long-term available-for-sale securities:
Corporate bonds	33		33
U.S. agency bonds	18		18
Asset-backed securities	26		41
U.S. agency mortgage-backed securities	9		10
Total long-term available-for-sale securities	86		102
Total available-for-sale securities	$	193	$	193

Gross unrealized gains and losses were immaterial at September 30, 2015 and June 30, 2015. During the three months ended September 30, 2015 and 2014, gross realized gains and losses were immaterial and we did not recognize any other-than-temporary impairments. At September 30, 2015, the weighted-average effective maturity of our current and long-term investments was approximately 6 months and 15 months, respectively.

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Acquisitions (Tables)

3 Months Ended

Sep. 30, 2015

Business Combinations [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

(in millions)	naviHealth			Harvard Drug
Identifiable intangible assets:
Customer relationships (1)	$	38		$	260
Trade names (2)	16			130
Developed technology (3)	61			—
Total identifiable intangible assets acquired	115			390
Cash and equivalents	53			44
Trade receivables	36			67
Inventories	—			49
Prepaid expenses and other	15			13
Property and equipment	5			16
Accounts payable	(2		)	(48		)
Other accrued liabilities	(95		)	(39		)
Deferred income taxes and other liabilities	(42		)	(104		)
Redeemable noncontrolling interests	(119		)	—
Total identifiable net assets/(liabilities) acquired	(34		)	388
Goodwill	325			763
Total net assets acquired	$	291		$	1,151

(1) The weighted-average useful lives of customer relationships range from 4 to 14 years.

(2) The weighted-average useful lives of trade names range from 3 to 16 years.

(3) The weighted-average useful life of developed technology is 10 years.

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Segment Information

3 Months Ended

Sep. 30, 2015

Segment Reporting [Abstract]

Segment Information

Segment Information

Our operations are principally managed on a products and services basis and are comprised of two operating segments, which are the same as our reportable segments: Pharmaceutical and Medical. The factors for determining the reportable segments include the manner in which management evaluates performance for purposes of allocating resources and assessing performance combined with the nature of the individual business activities.

The following table presents revenue for each reportable segment and Corporate:

	Three Months Ended September 30
(in millions)	2015			2014
Pharmaceutical	$	25,140		$	21,209
Medical	2,919			2,852
Total segment revenue	28,059			24,061
Corporate (1)	(4		)	9
Total revenue	$	28,055		$	24,070

(1) Corporate revenue consists of the elimination of inter-segment revenue and other revenue not allocated to the segments.

We evaluate segment performance based on segment profit, among other measures. Segment profit is segment revenue, less segment cost of products sold, less segment SG&A expenses. Segment SG&A expenses include share-based compensation expense as well as allocated corporate expenses for shared functions, including corporate management, corporate finance, financial, and customer care shared services, human resources, information technology, and legal and compliance. The results attributable to noncontrolling interests are recorded within segment profit. Corporate expenses are allocated to the segments based on headcount, level of benefit provided and other ratable allocation methodologies.

We do not allocate the following items to our segments: LIFO inventory charges/(credits); restructuring and employee severance; amortization and other acquisition-related costs; impairments and (gain)/loss on disposal of assets; litigation (recoveries)/charges, net; other income, net; interest expense, net; loss on extinguishment of debt; and provision for income taxes. We did not recognize any LIFO charges or credits during the three months ended September 30, 2015 and 2014. In addition, certain investments, certain portions of enterprise-wide incentive compensation, and other spending are not allocated to the segments. Investment spending generally includes the first-year spend for certain projects that require incremental investments in the form of additional operating expenses. We encourage our segments and corporate functions to identify investment projects that will promote innovation and provide future returns. As approval decisions for such projects are dependent upon executive management, the expenses for such projects are often retained at Corporate. Investment spending within Corporate was $6 million and $2 million for the three months ended September 30, 2015 and 2014, respectively.

Beginning in fiscal 2016, we changed our methodology for allocating certain portions of enterprise-wide incentive compensation expenses among Corporate and the segments. This change does not impact consolidated operating earnings or net earnings, and did not materially impact either segment during the three months ended September 30, 2015.

The following table presents segment profit by reportable segment and Corporate:

	Three Months Ended September 30
(in millions)	2015			2014
Pharmaceutical	$	657		$	451
Medical	101			113
Total segment profit	758			564
Corporate	(138		)	(98		)
Total operating earnings	$	620		$	466

The following table presents total assets for each reportable segment and Corporate at:

(in millions)	September 30, 2015		June 30, 2015
Pharmaceutical	$	19,596	$	17,385
Medical	7,833		7,095
Corporate	3,793		5,662
Total assets	$	31,222	$	30,142

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Financial Instruments

3 Months Ended

Sep. 30, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Financial Instruments

Financial Instruments

We utilize derivative financial instruments to manage exposure to certain risks related to our ongoing operations. The primary risks managed through the use of derivative instruments include interest rate risk, currency exchange risk, and commodity price risk. We do not use derivative instruments for trading or speculative purposes. While the majority of our derivative instruments are designated as hedging instruments, we also enter into derivative instruments that are designed to hedge a risk, but are not designated as hedging instruments. These derivative instruments are adjusted to current fair value through earnings at the end of each period. Our derivative and hedging programs are consistent with those described in the 2015 Form 10-K. The amount of ineffectiveness associated with these derivative instruments was immaterial for the three months ended September 30, 2015 and 2014, respectively.

During the three months ended September 30, 2014, we entered into forward interest rate swaps with a total notional amount of $50 million to hedge probable, but not firmly committed, future transactions associated with our debt.

Fair Value of Financial Instruments

The carrying amounts of cash and equivalents, trade receivables, net, accounts payable, and other accrued liabilities at September 30, 2015 and June 30, 2015 approximate fair value due to their short-term maturities.

The following table summarizes the estimated fair value of our long-term obligations and other short-term borrowings compared to the respective carrying amounts at:

(in millions)	September 30, 2015		June 30, 2015
Estimated fair value	$	5,618	$	5,521
Carrying amount	5,550		5,492

The fair value of our long-term obligations and other short-term borrowings is estimated based on either the quoted market prices for the same or similar issues or other inputs derived from available market information, which represents a Level 2 measurement.

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Share-Based Compensation and Savings Plans (Schedule of Total Share-Based Compensation Expense by Type of Award) (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Share-based compensation expense	$ 30	$ 25
Restricted Share Units
Share-based compensation expense	13	16
Stock Options
Share-based compensation expense	5	5
Performance Share Units
Share-based compensation expense	$ 12	$ 4

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Commitments, Contingent Liabilities and Litigation

3 Months Ended

Sep. 30, 2015

Commitments and Contingencies Disclosure [Abstract]

Commitments, Contingent Liabilities and Litigation

Commitments, Contingent Liabilities and Litigation

Commitments

Generic Sourcing Venture With CVS Health Corporation

In July 2014, we established Red Oak Sourcing, LLC ("Red Oak Sourcing"), a U.S.-based generic pharmaceutical sourcing venture with CVS Health Corporation (“CVS Health”) with an initial term of 10 years. Both companies have contributed sourcing and supply chain expertise to the 50/50 venture and have committed to source generic pharmaceuticals through arrangements negotiated by the venture. Red Oak Sourcing negotiates generic pharmaceutical supply contracts on behalf of both companies. We are required to pay 39 quarterly payments of $25.6 million to CVS Health which commenced in October 2014. Due to the achievement of a milestone, the quarterly payment to CVS Health increased by $10 million beginning in the first quarter of fiscal 2016. In addition, if an additional milestone is achieved, the quarterly payment will increase in fiscal 2017 by a further $10 million resulting in a maximum quarterly payment of $45.6 million if all milestones are met. 

Cordis

On March 1, 2015, we entered into a binding offer letter with Ethicon, Inc., a wholly-owned subsidiary of Johnson & Johnson, to purchase its Cordis business for a purchase price of $1.9 billion in cash, subject to certain adjustments. On May 27, 2015, Ethicon accepted the offer. As described in Note 2, the acquisition was completed on October 2, 2015 for $1.9 billion.

Legal Proceedings

We become involved from time to time in disputes, litigation, and regulatory matters incidental to our business.

We may be named from time to time in qui tam actions, which are initiated by private third parties purporting to act on behalf of federal or state governments, that allege that false claims have been submitted or have been caused to be submitted for payment by the government. After a private party has filed a qui tam action, the government must investigate the private party's claim and determine whether to intervene in and take control over the litigation. These actions may remain under seal while the government makes this determination. If the government declines to intervene, the private party may nonetheless continue to pursue the litigation on his or her own on behalf of the government.

From time to time, we receive subpoenas or requests for information from various government agencies relating to our business or to the business of a customer, supplier or other industry participant. Most of these matters are resolved without incident; however, such subpoenas or requests can lead to the assertion of claims, or the commencement of legal proceedings, against us.

In addition, we occasionally may suspect that products we manufacture, market or distribute do not meet product specifications, published standards or regulatory requirements. In such circumstances, we investigate and take appropriate corrective action. Such actions can lead to product recalls, costs to repair or replace affected products, temporary interruptions in product sales, and action by regulators.

We accrue for contingencies related to disputes, litigation, and regulatory matters if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Because these matters are inherently unpredictable and unfavorable developments or resolutions can occur, assessing contingencies is highly subjective and requires judgments about future events. We regularly review contingencies to determine whether our accruals and related disclosures are adequate. The amount of ultimate loss may differ from these estimates.

With respect to the unresolved matters described below, we are unable to estimate a range of reasonably possible loss for matters for which there is no accrual, or additional loss for matters for which we have recorded an accrual, since damages or fines have not been specified or the proceedings are at stages where significant uncertainty exists as to legal or factual issues and as to whether such matters will proceed to trial. We do not believe, based on currently available information, that the outcomes of these matters will have a material adverse effect on our financial position, results of operations, or cash flows, though the outcome of one or more of these matters could be material to our results of operations for a particular period.

We recognize income from the favorable outcome of litigation when we receive the associated cash or assets.

We recognize estimated loss contingencies for litigation and regulatory matters and income from favorable resolution of litigation in litigation (recoveries)/charges, net in our condensed consolidated statements of earnings.

DEA Investigation and Related Matters

In February 2012, the U.S. Drug Enforcement Administration (the "DEA") issued an order to show cause and immediate suspension of our Lakeland, Florida distribution center's registration to distribute controlled substances, asserting that we failed to maintain required controls against the diversion of controlled substances. In May 2012, we entered into a settlement agreement with the DEA that resolved the administrative aspects of the DEA's action but did not resolve potential liability for civil fines in Florida or elsewhere for the conduct covered by the settlement agreement. In that regard, we are continuing to engage in discussions with several offices of the U.S. Department of Justice (the "DOJ"), including discussions regarding a possible settlement. We accrued litigation charges of $41 million for this matter during fiscal 2015, including $27 million in the three months ended September 30, 2014. Our total accrual for this matter at both September 30, 2015 and June 30, 2015 is $41 million, which is included in other accrued liabilities in the condensed consolidated balance sheets.

State of West Virginia vs. Cardinal Health, Inc.

In June 2012, the West Virginia Attorney General filed complaints, which have been amended, against 13 pharmaceutical wholesale distributors, including us and Harvard Drug, which we acquired on July 2, 2015, as described in Note 2. The complaints, which were filed in the Circuit Court of Boone County, West Virginia, allege, among other things, that the distributors failed to maintain effective controls to guard against diversion of controlled substances in West Virginia, failed to report suspicious orders of controlled substances in accordance with the West Virginia Uniform Controlled Substances Act, and were negligent in distributing controlled substances to pharmacies that serve individuals who abuse controlled substances. In addition to injunctive and other equitable relief, the complaints seek monetary damages and the creation of a court-supervised fund, to be financed by the defendants in these actions, for a medical monitoring program focused on prescription drug abuse. We are vigorously defending ourselves in this matter.

Qui Tam Action

As previously disclosed, following an investigation, in July 2015, the DOJ declined to intervene as to us in a qui tam action naming our Cardinal Health at Home division as a defendant, and the private third-party plaintiff voluntarily dismissed us from the action. We had been named as a defendent in an amended qui tam complaint that was filed in November 2014 by the private third-party plaintiff in the U.S. District Court for the District of Massachusetts against several manufacturers and distributors of ostomy and continence care products.

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Fair Value Measurements

3 Months Ended

Sep. 30, 2015

Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract]

Fair Value Measurements

Fair Value Measurements

The following tables present the fair values for assets and (liabilities) measured on a recurring basis at:

	September 30, 2015
(in millions)	Level 1		Level 2		Level 3			Total
Assets:
Cash equivalents (1)	$	91	$	—	$	—		$	91
Forward contracts (2)	—		26		—			26
Available-for-sale securities (3)	—		193		—			193
Other investments (4)	111		—		—			111
Liabilities:
Contingent Consideration (5)	—		—		(29		)	(29		)
Total	$	202	$	219	$	(29	)	$	392

	June 30, 2015
(in millions)	Level 1		Level 2		Level 3			Total
Assets:
Cash equivalents (1)	$	1,809	$	—	$	—		$	1,809
Forward contracts (2)	—		5		—			5
Available-for-sale securities (3)	—		193		—			193
Other investments (4)	111		—		—			111
Liabilities:
Contingent Consideration (5)	—		—		(53		)	(53		)
Total	$	1,920	$	198	$	(53	)	$	2,065

(1) Cash equivalents are comprised of highly liquid investments purchased with a maturity of three months or less. The carrying value of these cash equivalents approximates fair value due to their short-term maturities.

(2) The fair value of interest rate swaps, foreign currency contracts, and commodity contracts is determined based on the present value of expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Observable Level 2 inputs are used to determine the present value of expected future cash flows. The fair value of these derivative contracts, which are subject to master netting arrangements under certain circumstances, is presented on a gross basis in the condensed consolidated balance sheets.

(3) We invest in marketable securities, which are classified as available-for-sale and are carried at fair value in the condensed consolidated balance sheets. Observable Level 2 inputs such as quoted prices for similar securities, interest rate spreads, yield curves, and credit risk are used to determine the fair value. See Note 5 for additional information regarding available-for-sale securities.

(4) The other investments balance includes investments in mutual funds, which are used to offset fluctuations in deferred compensation liabilities. These mutual funds primarily invest in the equity securities of companies with large market capitalization and high quality fixed income debt securities. The fair value of these investments is determined using quoted market prices.

(5) Contingent consideration represents the obligations incurred in connection with acquisitions. We do not deem the fair value of the contingent consideration obligations under any single acquisition to be significant. The estimate of fair value of the contingent consideration obligations requires subjective assumptions to be made regarding future business results, discount rates, discount periods, and probabilities assigned to various potential business result scenarios and was determined using probability assessments with respect to the likelihood of reaching various targets or from achieving certain milestones. The fair value measurement is based on significant inputs unobservable in the market and thus represents a Level 3 measurement. Failure to meet current expectations of progress could increase the probability of not achieving the targets within the measurement periods and result in a reduction in the fair value of the contingent consideration obligation.

The following table presents a reconciliation of those liabilities measured at fair value on a recurring basis using unobservable inputs (Level 3):

(in millions)	Contingent Consideration Obligation
Balance at June 30, 2015	$	53
Additions from acquisitions	—
Changes in fair value of contingent consideration (1)	(1		)
Payment of contingent consideration	(23		)
Balance at September 30, 2015	$	29

(1) Amount is included in amortization and other acquisition-related costs in the condensed consolidated statements of earnings.

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Redeemable Noncontrolling Interests Redeemable Noncontrolling Interests

3 Months Ended

Sep. 30, 2015

Redeemable Noncontrolling Interest [Abstract]

Noncontrolling Interest Disclosure [Text Block]

Redeemable Noncontrolling Interests

In connection with the acquisition of a 71 percent ownership interest in naviHealth described in Note 2, we recognized noncontrolling interests with a fair value of $119 million at the acquisition date.

The noncontrolling interests are redeemable at the option of the third-party noncontrolling interests holders at any time after the two-year anniversary of the closing. As such, the noncontrolling interests have been presented as redeemable noncontrolling interests in our condensed consolidated balance sheets. The noncontrolling interests will be adjusted each period for net earnings and dividends attributable to the noncontrolling interests and changes in the noncontrolling ownership interests in naviHealth, if any. An additional adjustment to the carrying value of the noncontrolling interests may be required if the redemption value under the terms of the agreement exceeds the carrying value. Changes in the carrying value of the noncontrolling interests related to a change in the redemption value will be recorded through retained earnings and will not affect net earnings attributable to Cardinal Health, Inc.

The reconciliation of the changes in redeemable noncontrolling interests are as follows:

(in millions)
Balance at June 30, 2015	$	—
Redeemable noncontrolling interests acquired	118.9
Net earnings attributable to redeemable noncontrolling interests	0.5
Balance at September 30, 2015	$	119.4

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Share-Based Compensation and Savings Plans (Schedule of all Transactions Related to Performance Share Units Under the Plans) (Details) - Performance Share Units shares in Millions	3 Months Ended
	Sep. 30, 2015 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Nonvested at Beginning of Period | shares	0.9
Granted | shares	0.3
Vested | shares	(0.4)	[1]
Canceled and forfeited | shares	0.0
Nonvested at End of Period | shares	0.8
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted-Average Grant Date Fair Value [Roll Forward]
Weighted-Average Grant Date Fair Value Per Share, Nonvested at Beginning of Period	$ 50.31
Weighted-Average Grant Date Fair Value Per Share, Granted	84.34
Weighted-Average Grant Date Fair Value Per Share, Vested	39.81
Weighted-Average Grant Date Fair Value Per Share, Canceled and forfeited	0.00
Weighted-Average Grant Date Fair Value Per Share, Nonvested at End of Period	$ 62.64

[1] Vested based on achievement of 133 percent of the target performance goal.

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Share-Based Compensation and Savings Plans (Schedule of All Transactions Related to Restricted Share Units Under the Plans) (Details) - Restricted Share Units shares in Millions	3 Months Ended
	Sep. 30, 2015 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Nonvested at Beginning of Period | shares	3
Granted | shares	1
Vested | shares	(1)
Canceled and forfeited | shares	0
Nonvested at End of Period | shares	3
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted-Average Grant Date Fair Value [Roll Forward]
Weighted-Average Grant Date Fair Value Per Share, Nonvested at Beginning of Period	$ 59.69
Weighted-Average Grant Date Fair Value Per Share, Granted	84.30
Weighted-Average Grant Date Fair Value Per Share, Vested	53.31
Weighted-Average Grant Date Fair Value Per Share, Canceled and forfeited	0.00
Weighted-Average Grant Date Fair Value Per Share, Nonvested at End of Period	$ 73.29

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Acquisitions (Narrative) (Details) $ in Millions				3 Months Ended
	Oct. 02, 2015 USD ($) country	Aug. 26, 2015 USD ($)	Jul. 02, 2015 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)
Business Acquisition
Cash paid for acquisitions, net of cash acquired				$ 1,399	$ 61
Fair Value, Inputs, Level 3 | Minimum
Business Acquisition
Fair Value Inputs, Discount Rate				12.00%
Fair Value, Inputs, Level 3 | Maximum
Business Acquisition
Fair Value Inputs, Discount Rate				14.00%
naviHealth
Business Acquisition
Cash paid for acquisitions, net of cash acquired		$ 238
Noncontrolling Interest, Ownership Percentage by Parent		71.00%
Cash Acquired from Acquisition		$ 53
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners		29.00%
Harvard Drug Group
Business Acquisition
Cash paid for acquisitions, net of cash acquired			$ 1,100
Cordis
Business Acquisition
Cash paid for acquisitions, net of cash acquired	$ 1,900
Number of countries in which the entity operates | country	50
Transaction and integration costs				$ 21
Customer relationships | Minimum
Business Acquisition
Weighted-Average Useful Life				4 years
Customer relationships | Maximum
Business Acquisition
Weighted-Average Useful Life				14 years
Trade Names [Member] | Minimum
Business Acquisition
Weighted-Average Useful Life				3 years
Trade Names [Member] | Maximum
Business Acquisition
Weighted-Average Useful Life				16 years
Developed technology and other | naviHealth
Business Acquisition
Weighted-Average Useful Life				10 years

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Redeemable Noncontrolling Interests (Details) $ in Millions	3 Months Ended
	Sep. 30, 2015 USD ($)
Noncontrolling Interest [Line Items]
Balance at June 30, 2015	$ 0.0
Redeemable noncontrolling interests acquired	118.9
Net earnings attributable to redeemable noncontrolling interests	0.5
Balance at September 30, 2015	$ 119.4

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Subsequent Events

3 Months Ended

Sep. 30, 2015

Subsequent Events [Abstract]

Subsequent Events

October 2, 2015 we acquired the Cordis business from Ethicon, Inc., a wholly-owned subsidiary of Johnson & Johnson, for $1.9 billion.

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Available-for-Sale Securities (Tables)

3 Months Ended

Sep. 30, 2015

Investments, Debt and Equity Securities [Abstract]

Available-for-sale Securities

We held the following investments in marketable securities at fair value at:

(in millions)	September 30, 2015		June 30, 2015
Current available-for-sale securities:
Commercial paper	$	3	$	4
Treasury bills	7		12
International bonds	2		2
Corporate bonds	47		34
U.S. agency bonds	3		5
Asset-backed securities	23		8
U.S. agency mortgage-backed securities	22		26
Total current available-for-sale securities	107		91
Long-term available-for-sale securities:
Corporate bonds	33		33
U.S. agency bonds	18		18
Asset-backed securities	26		41
U.S. agency mortgage-backed securities	9		10
Total long-term available-for-sale securities	86		102
Total available-for-sale securities	$	193	$	193

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Redeemable Noncontrolling Interests (Narrative) (Details) $ in Millions	Aug. 26, 2015 USD ($)
Redeemable Noncontrolling Interest [Abstract]
Redeemable Noncontrolling Interest, Equity, Fair Value	$ 119

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Available-for-Sale Securities (Narrative) (Details)	3 Months Ended
	Sep. 30, 2015
Short Term
Schedule of Available-for-sale Securities [Line Items]
Weighted average effective maturity	6 months
Long Term
Schedule of Available-for-sale Securities [Line Items]
Weighted average effective maturity	15 months

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Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2015	Jun. 30, 2015
Statement of Financial Position [Abstract]
Preferred shares, No Par Value
Preferred shares, Authorized	500,000	500,000
Preferred shares, Issued	0	0
Common shares, No Par Value
Common shares, Authorized	755,000,000	755,000,000
Common shares, Issued	364,000,000	364,000,000
Common shares in treasury	35,000,000	36,000,000

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Goodwill and Other Intangible Assets

3 Months Ended

Sep. 30, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

Goodwill

The following table summarizes the changes in the carrying amount of goodwill, by segment, and in total:

(in millions)	Pharmaceutical			Medical			Total
Balance at June 30, 2015	$	2,199		$	2,871		$	5,070
Goodwill acquired, net of purchase price adjustments	787			319			1,106
Foreign currency translation adjustments and other	(9		)	(8		)	(17		)
Balance at September 30, 2015	$	2,977		$	3,182		$	6,159

The increase in the Pharmaceutical segment goodwill is primarily due to the Harvard Drug acquisition. Goodwill recognized in connection with this acquisition primarily represents the expected benefits from synergies of integrating this business, the existing workforce of the acquired entity, and expected growth from new customers. The increase in the Medical segment goodwill is primarily due to the naviHealth acquisition. Goodwill recognized in connection with this acquisition primarily represents the existing workforce of the acquired entity, expected growth from new customers, new service offerings, and the expected growth from existing technology. See Note 2 for further discussion of these acquisitions.

Other Intangible Assets

The following tables summarize other intangible assets by class at:

	September 30, 2015
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible		Weighted Average Remaining Amortization Period (Years)
Indefinite-life intangibles:
Trademarks and other	$	15	$	—	$	15	N/A
Total indefinite-life intangibles	15		—		15		N/A
Definite-life intangibles:
Customer relationships	1,409		544		865		8
Trademarks, trade names and patents	382		99		283		12
Developed technology and other	387		145		242		9
Total definite-life intangibles	2,178		788		1,390		9
Total other intangible assets	$	2,193	$	788	$	1,405	N/A

	June 30, 2015
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible
Indefinite-life intangibles:
Trademarks and other	$	14	$	—	$	14
Total indefinite-life intangibles	14		—		14
Definite-life intangibles:
Customer relationships	1,103		501		602
Trademarks, trade names and patents	237		91		146
Developed technology and other	320		134		186
Total definite-life intangibles	1,660		726		934
Total other intangible assets	$	1,674	$	726	$	948

Total amortization of intangible assets was $67 million and $45 million for the three months ended September 30, 2015 and 2014, respectively. For acquisitions that have closed on or before September 30, 2015, estimated annual amortization of intangible assets for the remainder of fiscal 2016 through 2020 is as follows: $210 million, $259 million, $211 million, $160 million, and $131 million. These estimates do not include amortization of intangibles relating to the Cordis acquisition, which may be significant.

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Segment Information (Assets by Reportable Segment) (Details) - USD ($) $ in Millions	Sep. 30, 2015	Jun. 30, 2015
Segment Reporting Information [Line Items]
Assets	$ 31,222	$ 30,142
Pharmaceutical
Segment Reporting Information [Line Items]
Assets	19,596	17,385
Medical
Segment Reporting Information [Line Items]
Assets	7,833	7,095
Corporate
Segment Reporting Information [Line Items]
Assets	$ 3,793	$ 5,662

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Fair Value Measurements (Tables)

3 Months Ended

Sep. 30, 2015

Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract]

Fair Value, Assets and Liabilities Measured on Recurring Basis

The following tables present the fair values for assets and (liabilities) measured on a recurring basis at:

	September 30, 2015
(in millions)	Level 1		Level 2		Level 3			Total
Assets:
Cash equivalents (1)	$	91	$	—	$	—		$	91
Forward contracts (2)	—		26		—			26
Available-for-sale securities (3)	—		193		—			193
Other investments (4)	111		—		—			111
Liabilities:
Contingent Consideration (5)	—		—		(29		)	(29		)
Total	$	202	$	219	$	(29	)	$	392

	June 30, 2015
(in millions)	Level 1		Level 2		Level 3			Total
Assets:
Cash equivalents (1)	$	1,809	$	—	$	—		$	1,809
Forward contracts (2)	—		5		—			5
Available-for-sale securities (3)	—		193		—			193
Other investments (4)	111		—		—			111
Liabilities:
Contingent Consideration (5)	—		—		(53		)	(53		)
Total	$	1,920	$	198	$	(53	)	$	2,065

(1) Cash equivalents are comprised of highly liquid investments purchased with a maturity of three months or less. The carrying value of these cash equivalents approximates fair value due to their short-term maturities.

(2) The fair value of interest rate swaps, foreign currency contracts, and commodity contracts is determined based on the present value of expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Observable Level 2 inputs are used to determine the present value of expected future cash flows. The fair value of these derivative contracts, which are subject to master netting arrangements under certain circumstances, is presented on a gross basis in the condensed consolidated balance sheets.

(3) We invest in marketable securities, which are classified as available-for-sale and are carried at fair value in the condensed consolidated balance sheets. Observable Level 2 inputs such as quoted prices for similar securities, interest rate spreads, yield curves, and credit risk are used to determine the fair value. See Note 5 for additional information regarding available-for-sale securities.

(4) The other investments balance includes investments in mutual funds, which are used to offset fluctuations in deferred compensation liabilities. These mutual funds primarily invest in the equity securities of companies with large market capitalization and high quality fixed income debt securities. The fair value of these investments is determined using quoted market prices.

(5) Contingent consideration represents the obligations incurred in connection with acquisitions. We do not deem the fair value of the contingent consideration obligations under any single acquisition to be significant. The estimate of fair value of the contingent consideration obligations requires subjective assumptions to be made regarding future business results, discount rates, discount periods, and probabilities assigned to various potential business result scenarios and was determined using probability assessments with respect to the likelihood of reaching various targets or from achieving certain milestones. The fair value measurement is based on significant inputs unobservable in the market and thus represents a Level 3 measurement. Failure to meet current expectations of progress could increase the probability of not achieving the targets within the measurement periods and result in a reduction in the fair value of the contingent consideration obligation.

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

The following table presents a reconciliation of those liabilities measured at fair value on a recurring basis using unobservable inputs (Level 3):

(in millions)	Contingent Consideration Obligation
Balance at June 30, 2015	$	53
Additions from acquisitions	—
Changes in fair value of contingent consideration (1)	(1		)
Payment of contingent consideration	(23		)
Balance at September 30, 2015	$	29

(1) Amount is included in amortization and other acquisition-related costs in the condensed consolidated statements of earnings.

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Goodwill and Other Intangible Assets (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization of intangible assets	$ 67	$ 45
Estimated annual amortization of intangible assets - 2016	210
Estimated annual amortization of intangible assets - 2017	259
Estimated annual amortization of intangible assets - 2018	211
Estimated annual amortization of intangible assets - 2019	160
Estimated annual amortization of intangible assets - 2020	$ 131

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Share-Based Compensation and Savings Plans

3 Months Ended

Sep. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation and Savings Plans

Share-Based Compensation and Savings Plans

Share-Based Compensation Plans

We maintain stock incentive plans (collectively, the “Plans”) for the benefit of certain of our officers, directors, and employees.

The following table provides total share-based compensation expense by type of award:

	Three Months Ended September 30
(in millions)	2015		2014
Restricted share unit expense	$	13	$	16
Employee stock option expense	5		5
Performance share unit expense	12		4
Total share-based compensation	$	30	$	25

The total tax benefit related to share-based compensation was $11 million and $9 million for the three months ended September 30, 2015 and 2014, respectively.

Stock Options

Employee stock options granted under the Plans generally vest in equal annual installments over three years and are exercisable for periods ranging from seven to ten years from the grant date. All stock options are exercisable at a price equal to the market value of the common shares underlying the option on the grant date.

The following table summarizes all stock option transactions under the Plans:

(in millions, except per share amounts)	Stock Options		Weighted-Average Exercise Price per Common Share
Outstanding at June 30, 2015	8		$	46.50
Granted	1		84.28
Exercised	(1	)	37.20
Canceled and forfeited	—		—
Outstanding at September 30, 2015	8		$	53.24
Exercisable at September 30, 2015	5		$	42.18

At September 30, 2015, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested stock options not yet recognized was $37 million, which is expected to be recognized over a weighted-average period of two years. The following table provides additional detail related to stock options:

(in millions, except per share amounts)	September 30, 2015		June 30, 2015
Aggregate intrinsic value of outstanding options at period end	$	201	$	281
Aggregate intrinsic value of exercisable options at period end	182		193
Weighted-average remaining contractual life of outstanding options (in years)	7		6
Weighted-average remaining contractual life of exercisable options (in years)	6		5

Restricted Share Units

Restricted share units granted under the Plans generally vest in equal annual installments over three years. Restricted share units accrue cash dividend equivalents that are payable upon vesting of the awards.

The following table summarizes all transactions related to restricted share units under the Plans:

(in millions, except per share amounts)	Restricted Share Units		Weighted-Average Grant Date Fair Value per Share
Nonvested at June 30, 2015	3		$	59.69
Granted	1		84.30
Vested	(1	)	53.31
Canceled and forfeited	—		—
Nonvested at September 30, 2015	3		$	73.29

At September 30, 2015, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested restricted share units not yet recognized was $121 million, which is expected to be recognized over a weighted-average period of two years.

Performance Share Units

Performance share units vest over a three-year performance period based on achievement of specific performance goals. Based on the extent to which the targets are achieved, vested shares may range from zero to 200 percent of the target award amount. Performance share units accrue cash dividend equivalents that are payable upon vesting of the awards.

The following table summarizes all transactions related to performance share units under the Plans (based on target award amounts):

(in millions, except per share amounts)	Performance Share Units		Weighted-Average Grant Date Fair Value per Share
Nonvested at June 30, 2015	0.9		$	50.31
Granted	0.3		84.34
Vested (1)	(0.4	)	39.81
Canceled and forfeited	—		—
Nonvested at September 30, 2015	0.8		$	62.64

(1) Vested based on achievement of 133 percent of the target performance goal.

At September 30, 2015, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested performance share units not yet recognized was $26 million, which is expected to be recognized over a weighted-average period of two years.