Segment Information

12 Months Ended

Jun. 30, 2012

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 our performance combined with the nature of the individual business activities. The accounting policies of the segments are the same as those described in Note 1.

Effective the first quarter of fiscal 2012, we began reporting the operating results of certain operations previously reported within the Pharmaceutical segment, including portions of our Cardinal Health China and Cardinal Health Puerto Rico subsidiaries, within the Medical segment to better align reported results with the nature of the services provided. Prior period financial results have not been adjusted because the change in reporting was not significant to previously reported segment results.

The Pharmaceutical segment distributes branded and generic pharmaceutical, specialty pharmaceutical, over-the-counter healthcare and consumer products. It also operates nuclear pharmacies and cyclotron facilities that prepare and deliver radiopharmaceuticals for use in nuclear imaging and other procedures in hospitals and clinics. In addition, this segment franchises retail pharmacies and provides pharmacy services to hospitals and other healthcare facilities. Through our Cardinal Health China business, this segment imports and distributes pharmaceuticals, over-the-counter and consumer products as well as provides services in China.

The Medical segment develops, manufactures, sources and distributes medical, surgical and laboratory products. Our medical and surgical products are sold directly or through third-party distributors in the United States, Canada, Europe, South America, China and other parts of the Asia/Pacific region.

The following table includes revenue for each reportable segment and reconciling items necessary to agree to amounts reported in the consolidated financial statements:

(in millions)	2012			2011			2010
Pharmaceutical	$	97,925		$	93,744		$	89,790
Medical	9,642			8,922			8,750
Total segment revenue	107,567			102,666			98,540
Corporate (1)	(15		)	(22		)	(37		)
Total consolidated revenue	$	107,552		$	102,644		$	98,503

(1) Corporate revenue consists of the elimination of inter-segment revenue.

We evaluate segment performance based upon segment profit, among other measures. Segment profit is segment revenue, less segment cost of products sold, less segment SG&A expense. Segment SG&A expenses include equity share-based compensation expense as well as allocated corporate expenses for shared functions, including corporate management, corporate finance, financial shared services, human resources, information technology, legal and an integrated hospital sales organization. Corporate expenses are allocated to the segments based upon headcount, level of benefit provided and ratable allocation. Information about interest income and expense and income taxes is not provided at the segment level.

Restructuring and employee severance, acquisition-related costs, impairments and loss on disposal of assets, litigation (recoveries)/charges, net, certain investment and other spending are not allocated to the segments. See Notes 2, 3, 4 and 9, respectively for further discussion of our acquisition-related costs, restructuring and employee severance, impairments and loss on disposal of assets and litigation (recoveries)/charges, net and Note 1 for a discussion of the reclassification of amortization of acquisition-related intangible assets. Investment spending generally includes the first year spend for certain projects that require incremental strategic investments in the form of additional operating expenses. We encourage our segments 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 $21 million, $14 million and $26 million for fiscal 2012, 2011 and 2010, respectively. Spin-Off costs included in SG&A expenses of $2 million, $10 million and $11 million for fiscal 2012, 2011 and 2010, respectively, are not allocated to our segments.

The following table includes segment profit by reportable segment and reconciling items necessary to agree to amounts reported in the consolidated financial statements:

(in millions)	2012			2011			2010
Pharmaceutical	$	1,558		$	1,329		$	1,011
Medical	332			373			429
Total segment profit	1,890			1,702			1,440
Corporate	(98		)	(188		)	(133		)
Total consolidated operating earnings	$	1,792		$	1,514		$	1,307

The following tables include depreciation and amortization and capital expenditures for fiscal 2012, 2011 and 2010 for each segment:

(in millions)	2012		2011		2010
Pharmaceutical	$	42	$	42	$	41
Medical	72		62		63
Corporate	211		209		150
Total depreciation and amortization	$	325	$	313	$	254

(in millions)	2012		2011		2010
Pharmaceutical	$	44	$	55	$	33
Medical	100		123		81
Corporate	119		113		146
Total capital expenditures	$	263	$	291	$	260

The following table includes total assets at June 30, 2012, 2011 and 2010 for each segment as well as reconciling items necessary to total the amounts reported in the consolidated financial statements:

(in millions)	2012		2011		2010
Pharmaceutical	$	16,642	$	16,126	$	12,103
Medical	4,399		3,895		3,868
Corporate	3,219		2,825		4,019
Total consolidated assets	$	24,260	$	22,846	$	19,990

The following tables present revenue and net property and equipment for fiscal 2012, 2011 and 2010 by geographic area:

(in millions)	2012		2011		2010
United States	$	105,205	$	101,080	$	97,663
International	2,347		1,564		840
Total consolidated revenue	$	107,552	$	102,644	$	98,503

(in millions)	2012		2011		2010
United States	$	1,425	$	1,398	$	1,355
International	126		114		114
Total consolidated property and equipment, net	$	1,551	$	1,512	$	1,469