Segment Information

6 Months Ended

Dec. 31, 2014

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 for purposes of allocating resources and assessing performance combined with the nature of the individual business activities.

The following tables present revenue for each reportable segment and Corporate:

	Three Months Ended December 31
(in millions)	2014			2013
Pharmaceutical	$	22,627		$	19,443
Medical	2,914			2,799
Total segment revenue	25,541			22,242
Corporate (1)	(4		)	(2		)
Total revenue	$	25,537		$	22,240

	Six Months Ended December 31
(in millions)	2014		2013
Pharmaceutical (2)	$	43,836	$	41,256
Medical	5,766		5,511
Total segment revenue	49,602		46,767
Corporate (1)	5		(4		)
Total revenue	$	49,607	$	46,763

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

(2) Our pharmaceutical distribution contract with Walgreen Co. expired on August 31, 2013.

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 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 other ratable allocation methodologies.

We do not allocate the following items to our segments: restructuring and employee severance; amortization and other acquisition-related costs; impairments and (gain)/loss on disposal of assets; litigation (recoveries)/charges; other income, net; interest expense, net; loss on extinguishment of debt; and, provision for income taxes. 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 $4 million and $6 million for the three months ended December 31, 2014 and 2013, respectively, and $6 million and $10 million for the six months ended December 31, 2014 and 2013, respectively.

The following tables present segment profit by reportable segment and Corporate:

	Three Months Ended December 31
(in millions)	2014			2013
Pharmaceutical	$	542		$	482
Medical	115			131
Total segment profit	657			613
Corporate	(111		)	(94		)
Total operating earnings	$	546		$	519

	Six Months Ended December 31
(in millions)	2014			2013
Pharmaceutical	$	992		$	916
Medical	229			238
Total segment profit	1,221			1,154
Corporate	(209		)	(164		)
Total operating earnings	$	1,012		$	990

^[1]

[1] 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.