Segment Information

3 Months Ended

Sep. 30, 2013

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 following table presents revenue for each reportable segment and reconciling items necessary to agree to amounts reported in the condensed consolidated statements of earnings:

	Three Months Ended September 30
(in millions)	2013			2012
Pharmaceutical (1)	$	21,813		$	23,498
Medical	2,711			2,393
Total segment revenue	24,524			25,891
Corporate (2)	(1		)	(2		)
Total revenue	$	24,523		$	25,889

(1) The decrease in Pharmaceutical segment revenue is primarily due to the expiration of our pharmaceutical distribution contracts with Walgreen Co. ("Walgreens") on August 31, 2013 and Express Scripts, Inc. on September 30, 2012.

(2) 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 distribution, selling, general and administrative ("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. Corporate expenses are allocated to the segments based upon headcount, level of benefit provided and ratable allocation. Other income, net, interest expense, net and provision for income taxes are not allocated to the segments.

Restructuring and employee severance, amortization and other acquisition-related costs, impairments and loss on disposal of assets and litigation (recoveries)/charges, net are not allocated to the segments. In addition, certain investment 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 $3 million and zero for the three months ended September 30, 2013 and 2012, respectively.

The following table presents segment profit by reportable segment and reconciling items necessary to agree to amounts reported in the condensed consolidated statements of earnings:

	Three Months Ended September 30
(in millions)	2013			2012
Pharmaceutical	$	433		$	400
Medical	106			74
Total segment profit	539			474
Corporate	(68		)	(17		)
Total operating earnings	$	471		$	457

The following table presents total assets for each reportable segment and reconciling items necessary to agree to amounts reported in the condensed consolidated balance sheets at the dates indicated below:

(in millions)	September 30, 2013		June 30, 2013
Pharmaceutical (1)	$	13,874	$	16,258
Medical	6,473		6,521
Corporate	3,469		3,040
Total assets	$	23,816	$	25,819

(1) The decrease in Pharmaceutical segment assets is primarily due to the decrease in trade receivables, net and inventories, net as a result of the expiration of our pharmaceutical distribution contract with Walgreens.