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 March 31, 2019

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 every Interactive Data File required to be submitted 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, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer  þ	Accelerated filer o
Non-accelerated filer  o	Smaller reporting company  o
	Emerging growth company  o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act 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

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common shares (without par value)	CAH	New York Stock Exchange

The number of the registrant’s common shares, without par value, outstanding as of April 30, 2019, was the following: 298,059,831.

Cardinal Health

Q3 Fiscal 2019 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	14
Quantitative and Qualitative Disclosures about Market Risk	18
Controls and Procedures	18
Legal Proceedings	18
Risk Factors	18
Other Information	18
Unregistered Sales of Equity Securities and Use of Proceeds	18
Financial Statements and Supplementary Data	19
Exhibits	36
Form 10-Q Cross Reference Index	37
Signatures	38

About Cardinal Health

Cardinal Health, Inc. is an Ohio corporation formed in 1979 and is a globally integrated healthcare services and products company providing customized solutions for hospitals, healthcare systems, pharmacies, ambulatory surgery centers, clinical laboratories and physician offices. We provide medical products and pharmaceuticals and cost-effective solutions that enhance supply chain efficiency. We connect patients, providers, payers, pharmacists and manufacturers for integrated care coordination and better patient management. We manage our business and report our financial results in two segments: Pharmaceutical and Medical. As used in this report, “we,” “our,” “us,” and similar pronouns refer to Cardinal Health, Inc. and its subsidiaries, unless the context requires otherwise. Our fiscal year ends on June 30. References to fiscal 2019 and fiscal 2018 are to the fiscal years ending or ended June 30, 2019 and June 30, 2018, respectively.

Forward-Looking Statements

This Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 (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 Operations ("MD&A"), but there are others in this Form 10-Q, which may be identified by 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. These matters are subject to risks and uncertainties that could cause actual results to differ materially from those made, projected or implied. The most significant of these risks and uncertainties are described in Exhibit 99.1 to this Form 10-Q and in "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended June 30, 2018 (our “2018 Form 10-K”). Forward-looking statements in this Form 10-Q 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 statement.

Non-GAAP Financial Measures

In the "Overview of Consolidated Results" section of MD&A, we use financial measures that are derived from our consolidated financial data but are not presented in our condensed consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). These measures are considered "non-GAAP financial measures" under the Securities and Exchange Commission ("SEC") rules. 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 Financial Measures” section following MD&A in this Form 10-Q.

1 Cardinal Health | Q3Fiscal 2019 Form 10-Q

MD&A Overview

Management's Discussion and Analysis of Financial Condition and Results of Operations

The discussion and analysis presented below is concerned with material changes in financial condition and results of operations between the periods specified in our condensed consolidated balance sheets at March 31, 2019 and June 30, 2018, and in our condensed consolidated statements of earnings for the three and nine months ended March 31, 2019 and 2018. All comparisons presented are with respect to the prior-year period, unless stated otherwise. This discussion and analysis should be read in conjunction with the MD&A included in our 2018 Form 10-K.

Overview of Consolidated Results

Revenue

During the three and nine months ended March 31, 2019, revenue increased 5 percent to $35.2 billion and 7 percent to $108.2 billion, respectively, primarily due to sales growth from pharmaceutical distribution and specialty pharmaceutical customers, partially offset by the February 2018 divestiture of our China distribution business.

Cardinal Health | Q3Fiscal 2019 Form 10-Q 2

MD&A Overview

GAAP and Non-GAAP Operating Earnings

	Three Months Ended March 31,							Nine Months Ended March 31,
(in millions)	2019		2018			Change		2019			2018		Change
GAAP operating earnings	$	432	$	546		(21	)%	$	1,752		$	1,206	45	%
Restructuring and employee severance	53		2					97			155
Amortization and other acquisition-related costs	154		175					468			543
Impairments and (gain)/loss on disposal of assets	11		(6		)			(492		)	62
Litigation (recoveries)/charges, net	17		64					20			155
Non-GAAP operating earnings	$	667	$	781		(15	)%	$	1,845		$	2,121	(13	)%

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

The decrease in GAAP operating earnings during the three months ended March 31, 2019 was primarily due to the decrease in our Pharmaceutical and Medical segment profit and an increase in restructuring costs, partially offset by a smaller amount of net litigation charges. The change in Pharmaceutical and Medical segment profit is primarily due to the negative impact of our Pharmaceutical segment generics program, performance of Medical segment Cardinal Health Brand products and the adverse impact of Pharmaceutical segment customer contract renewals. These factors were partially offset by growth from our specialty pharmaceutical products distribution and services business within our Pharmaceutical segment.

The increase in GAAP operating earnings during the nine months ended March 31, 2019 was primarily due to a $508 million gain from the divestiture of our naviHealth Holdings, LLC ("naviHealth") business and a smaller amount of net litigation charges. These positive factors were partially offset by the Pharmaceutical and Medical segment profit discussed above.

The decrease in non-GAAP operating earnings during the three and nine months ended March 31, 2019 was due to the decrease in Pharmaceutical and Medical segment profit discussed above.

3 Cardinal Health | Q3Fiscal 2019 Form 10-Q

MD&A Overview

GAAP and Non-GAAP Diluted EPS

	Three Months Ended March 31,							Nine Months Ended March 31,
($ per share)	2019		2018			Change		2019			2018			Change
GAAP (1)	$	0.99	$	0.81		22	%	$	3.88		$	4.50		(14	)%
Restructuring and employee severance	0.13		0.06					0.24			0.40
Amortization and other acquisition-related costs	0.39		0.42					1.18			1.27
Impairments and (gain)/loss on disposal of assets	0.03		0.02					(1.20		)	0.38
Litigation (recoveries)/charges, net	0.03		0.14					0.04			0.33
Transitional tax benefit, net	0.02		(0.06		)			0.03			(2.88		)
Non-GAAP (1)	$	1.59	$	1.39		14	%	$	4.17		$	3.99		5	%

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

(1) diluted earnings per share attributable to Cardinal Health, Inc. ("diluted EPS")

During the three months ended March 31, 2019, GAAP diluted EPS increased primarily due to a $0.31 per share impact from the lower effective tax rate in the current period compared to the significantly higher prior year effective tax rate, partially offset by the decrease in GAAP operating earnings.

During the nine months ended March 31, 2019, GAAP diluted EPS decreased primarily due to the $2.88 per share impact in the prior year from the estimated net transitional benefit from the remeasurement of our deferred tax assets and liabilities partially offset by the repatriation tax on cash and earnings of foreign subsidiaries. This decrease was mostly offset by the increase in GAAP operating earnings, favorable changes in discrete tax items and the benefits from applying a lower federal statutory tax rate to our U.S. pre-tax earnings as a result of the U.S. Tax Cuts and Jobs Act ("Tax Act"). The increase in GAAP operating earnings during the nine months ended March 31, 2019 was primarily due to a $508 million gain from the divestiture of our naviHealth business and a smaller amount of net litigation charges.

During the three months ended March 31, 2019, non-GAAP diluted EPS increased primarily due to a $0.32 per share impact from the lower effective tax rate in the current period compared to the significantly higher prior year effective tax rate and due to a lower share count as a result of share repurchases, partially offset by the decrease in non-GAAP operating earnings. The tax rate is lower in the current year because of the prior year unfavorable impact from changes in jurisdictional mix, favorable changes in discrete tax items and the benefits from applying a lower federal statutory tax rate to our U.S. pre-tax earnings as a result of the Tax Act.

During the nine months ended March 31, 2019, non-GAAP diluted EPS increased primarily due to a $0.58 per share impact from the lower effective tax rate in the current period compared to the significantly higher prior year effective tax rate and due to a lower share count as a result of share repurchases, mostly offset by the decrease in non-GAAP operating earnings. The tax rate is lower in the current year because of favorable changes in discrete tax items, the benefits from applying a lower federal statutory tax rate to our U.S. pre-tax earnings as a result of the Tax Act and the prior year unfavorable impact from changes in jurisdictional mix.

Cardinal Health | Q3Fiscal 2019 Form 10-Q 4

MD&A Overview

Cash and Equivalents

Our cash and equivalents balance was $3.4 billion at March 31, 2019 compared to $1.8 billion at June 30, 2018. The increase in cash and equivalents during the nine months ended March 31, 2019 was due to $2.2 billion provided by operating activities and $737 million of net cash proceeds from the sale of our naviHealth business, offset in part by $600 million paid for share repurchases and$435 million paid in dividends. We plan to repay our outstanding 1.948% notes at maturity in June 2019 with $1.0 billion of available cash.

Significant Developments in Fiscal 2019

Divestitures

In August 2018, we sold our 98 percent ownership interest in naviHealth in exchange for cash proceeds of $737 million and a 44 percent equity interest in a partnership that owns 100 percent of naviHealth. We also have certain call rights to reacquire naviHealth. We recognized a pre-tax gain of $508 million related to this divestiture during the nine months ended March 31, 2019.

5 Cardinal Health | Q3Fiscal 2019 Form 10-Q

MD&A Results of Operations

Results of Operations

Revenue

	Three Months Ended March 31,								Nine Months Ended March 31,
(in millions)	2019			2018			Change		2019			2018			Change
Pharmaceutical	$	31,361		$	29,720		6	%	$	96,516		$	89,786		7	%
Medical	3,871			3,916			(1	)%	11,678			11,684			—	%
Total segment revenue	35,232			33,636			5	%	108,194			101,470			7	%
Corporate	(4		)	(3		)	33	%	(13		)	(10		)	30	%
Total revenue	$	35,228		$	33,633		5	%	$	108,181		$	101,460		7	%

Pharmaceutical Segment

Pharmaceutical segment revenue growth was primarily due to sales growth from pharmaceutical distribution and specialty pharmaceutical customers, which together increased revenue by $2.0 billion and $8.7 billion during the three and nine months ended March 31, 2019, respectively. The increase was partially offset by the February 2018 divestiture of our China distribution business.

Medical Segment

Medical segment revenue decreased slightly during the three and nine months ended March 31, 2019 due to the divestitures of our China distribution and naviHealth businesses, largely offset by sales growth from existing customers. The nine months ended March 31, 2019 benefited from an extra month of contribution from the Patient Recovery acquisition.

Cost of Products Sold

Cost of products sold for the three and nine months ended March 31, 2019 increased $1.7 billion(5 percent) and $7.0 billion (7 percent) compared to the respective prior-year periods as a result of the factors affecting the changes in revenue and gross margin.

Cardinal Health | Q3Fiscal 2019 Form 10-Q 6

MD&A Results of Operations

Gross Margin

	Three Months Ended March 31,						Nine Months Ended March 31,
(in millions)	2019		2018		Change		2019		2018		Change
Gross margin	$	1,764	$	1,913	(8	)%	$	5,160	$	5,446	(5	)%

Gross margin decreased $149 million during the three months ended March 31, 2019 primarily due to lower contribution from our Pharmaceutical segment generics program and from Medical segment Cardinal Health Brand products, partially offset by sales growth from our specialty pharmaceutical products distribution and services business within our Pharmaceutical segment.

Gross margin decreased $286 million during the nine months ended March 31, 2019 primarily due to lower contribution from our Pharmaceutical segment generics program and the adverse impact of Pharmaceutical segment customer contract renewals, partially offset by sales growth from our specialty pharmaceutical products distribution and services business within our Pharmaceutical segment.

Gross margin rate declined 68 and 60 basis points during the three and nine months ended March 31, 2019, respectively, mainly due to changes in product mix, lower contribution from our Pharmaceutical segment generics program and the adverse impact of Pharmaceutical segment customer contract renewals.

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

	Three Months Ended March 31,						Nine Months Ended March 31,
(in millions)	2019		2018		Change		2019		2018		Change
SG&A expenses	$	1,097	$	1,132	(3	)%	$	3,315	$	3,325	—	%

During the three and nine months ended March 31, 2019, SG&A expenses decreased due to the beneficial impact of divestitures and enterprise-wide cost saving measures, largely offset by certain costs to exit transition service agreements for our Patient Recovery Business and legal expenses for opioid-related matters.

7 Cardinal Health | Q3Fiscal 2019 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 March 31,								Nine Months Ended March 31,
(in millions)	2019			2018			Change		2019			2018			Change
Pharmaceutical	$	536		$	596		(10	)%	$	1,388		$	1,576		(12	)%
Medical	155			199			(22	)%	479			548			(13	)%
Total segment profit	691			795			(13	)%	1,867			2,124			(12	)%
Corporate	(259		)	(249		)	4	%	(115		)	(918		)	(87	)%
Total consolidated operating earnings	$	432		$	546		(21	)%	$	1,752		$	1,206		45	%

Pharmaceutical Segment Profit

Pharmaceutical segment profit during the three and nine months ended March 31, 2019 was adversely impacted by our generics program performance and customer contract renewals. The decreases were partially offset by growth from our specialty pharmaceutical products distribution and services business.

Medical Segment Profit

The decrease in Medical segment profit during the three and nine months ended March 31, 2019 was primarily due to the performance of Cardinal Health Brand products. The decrease during the nine months ended March 31, 2019 was partially offset by the net impact of acquisitions and divestitures, which includes the beneficial comparison to the prior-year fair value step-up of inventory acquired with the Patient Recovery Business.

Corporate

The changes in Corporate during the three and nine months ended March 31, 2019 were due to the factors discussed in the Other Components of Consolidated Operating Earnings section that follows.

Cardinal Health | Q3Fiscal 2019 Form 10-Q 8

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 March 31,					Nine Months Ended March 31,
(in millions)	2019		2018			2019			2018
Restructuring and employee severance	$	53	$	2		$	97		$	155
Amortization and other acquisition-related costs	154		175			468			543
Impairments and (gain)/loss on disposal of assets, net	11		(6		)	(492		)	62
Litigation (recoveries)/charges, net	17		64			20			155

Restructuring and Employee Severance

During the three and nine months ended March 31, 2019, we recognized $27 million and $60 million, respectively, of employee-related severance costs in connection with enterprise-wide cost-saving measures that began in fiscal 2019.

During the nine months ended March 31, 2018, we incurred $125 million of contract termination costs to transition the distribution of our Medical segment surgeon gloves in certain international markets from a third-party distribution arrangement to a direct distribution model.

Amortization and Other Acquisition-Related Costs

Amortization of acquisition-related intangible assets was $133 million and $148 million for the three months ended March 31, 2019 and 2018, respectively, and $399 million and $435 million for the nine months ended March 31, 2019 and 2018, respectively.

Transaction and integration costs associated with the acquisition of the Patient Recovery Business were $17 million and $25 million for the three months ended March 31, 2019 and 2018, respectively, and $62 million and $85 million for the nine months ended March 31, 2019 and 2018, respectively.

Impairments and (Gain)/Loss On Disposal of Assets, Net

During the nine months ended March 31, 2019, we recognized a pre-tax gain of $508 million related to the divestiture of our naviHealth business.

During the nine months ended March 31, 2018, we recognized a $67 million write-down of the net assets held for sale from the divestiture of our China distribution business.

Litigation (Recoveries)/Charges, Net

During the three and nine months ended March 31, 2019, we recognized $46 million and $94 million, respectively, of recoveries in class action antitrust lawsuits in which we were a class member. The costs we recognized in connection with the IVC filter product liability claims during the three months ended March 31, 2019 and 2018 were $58 million and $69 million, respectively, and $104 million and $159 million for the nine months ended March 31, 2019 and 2018, respectively.

Earnings Before Income Taxes

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

	Three Months Ended March 31,								Nine Months Ended March 31,
(in millions)	2019			2018			Change		2019		2018			Change
Other (income)/expense, net	$	(13	)	$	(2	)	N.M.		$	13	$	(6	)	N.M.
Interest expense, net	75			84			(11	)%	227		251			(10	)%
Loss on extinguishment of debt	—			—			N.M.		—		2			N.M.

9 Cardinal Health | Q3Fiscal 2019 Form 10-Q

MD&A Results of Operations

Provision for/(Benefit from) Income Taxes

During the three months ended March 31, 2019 and 2018, the effective tax rate was 20.0 percent and 45.1 percent, respectively. The change in the effective tax rate for the three months ended March 31, 2019 compared to the prior period was due to discrete tax items, a lower federal statutory tax rate applied to our U.S. pre-tax earnings as a result of the Tax Act and the prior year unfavorable impact from changes in jurisdictional mix. The three months ended March 31, 2019 benefited from net favorable discrete items of $12 million and the three months ended March 31, 2018 were adversely affected by net unfavorable discrete items of $18 million.

During the nine months ended March 31, 2019 and 2018, the effective tax rate was 22.6 percent and (48.6) percent, respectively. The change in the effective tax rates for the nine months ended March 31, 2019 compared to the prior period was primarily due to the prior year transitional tax benefits from the enactment of the Tax Act. The nine months ended March 31, 2019 also included net discrete benefits of $50 million, primarily related to international legal entity changes, and the nine months ended March 31, 2018 were adversely affected by net unfavorable discrete items of $12 million.

The transitional tax benefits from the Tax Act during the three and nine months ended March 31, 2018 included a provisional net tax benefit of $18 million and $952 million, respectively, related to the remeasurement of our deferred tax assets and liabilities to the new federal statutory rate and the nine months ended March 31, 2018 included a provisional tax expense of $41 million for the one-time repatriation tax applied to our undistributed foreign earnings. Our effective tax rates for the three and nine months ended March 31, 2018 also included $57 million of tax expense recognized in connection with the sale of our China distribution business.

Cardinal Health | Q3Fiscal 2019 Form 10-Q 10

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 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 $3.4 billion at March 31, 2019 compared to $1.8 billion at June 30, 2018. At March 31, 2019, our cash and equivalents were held in cash depository accounts with major banks or invested in high quality, short-term liquid investments.

During the nine months ended March 31, 2019, net cash provided by operating activities was $2.2 billion, driven by net earnings and changes in net working capital, including timing of inventory purchases. In August 2018, we completed the sale of our interest in naviHealth and received proceeds of $737 million and a 44 percent equity interest in a partnership that owns naviHealth. Also, during the nine months ended March 31, 2019, we deployed $600 million for share repurchases and $435 million for cash dividends.

The cash and equivalents balance at March 31, 2019 includes $795 million of cash held by subsidiaries outside of the United States.

Though our foreign earnings have been deemed to be repatriated from a U.S. federal tax perspective, we have not yet completed our assessment of any additional pending regulatory changes on our plans to reinvest foreign earnings, and as such, we have not changed our prior conclusion that the earnings are indefinitely reinvested. If

we decide to change our assertion on indefinite reinvestment or repatriate these earnings in the future, we may be subject to certain non-U.S. taxes at that time. See Note 7 of the "Notes to Condensed Consolidated Financial Statements" for additional information on the Tax Act.

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.

We expect our cash and equivalents balance at June 30, 2019 to be lower than the balance at March 31, 2019 primarily due to our plan to repay $1.0 billion of 1.948% notes that mature in June 2019 with available cash. In addition, we expect our net cash provided by operating activities to be lower during the three months ending June 30, 2019 than the three months ended March 31, 2019 primarily due to anticipated changes in working capital largely driven by the timing of inventory purchases.

Other Financing Arrangements and Financial Instruments

Credit Facilities and Commercial Paper

In addition to cash and equivalents and operating cash flow, other sources of liquidity at March 31, 2019 include a $2.0 billion commercial paper program, backed by a $2.0 billion revolving credit facility. We also have a $1.0 billion committed receivables sales facility. At March 31, 2019, we had no amounts outstanding under our commercial paper program, revolving credit facility or our committed receivables sales facility. Under our commercial paper program, we had maximum amounts outstanding of $630 million and $785 million during the three and nine months ended March 31, 2019, respectively, and an average daily amount outstanding of $14 million and $20 million during the three and nine months ended March 31, 2019, respectively.

Our revolving credit and committed receivables facilities provide that, as of the end of any calendar quarter, our maximum consolidated leverage ratio may be no more than 4.25-to-1. The maximum permitted ratio will reduce to 4.00-to-1 in September 2019, to 3.75-to-1 in March 2020 and to 3.25-to-1 in September 2020. As of March 31, 2019, we were in compliance with this financial covenant.

Long-Term Debt

At March 31, 2019, we had total long-term obligations, including the current portion and other short-term borrowings, of $9.1 billion. We plan to repay our outstanding 1.948% notes at maturity in June 2019 with $1.0 billion of available cash.

11 Cardinal Health | Q3Fiscal 2019 Form 10-Q

MD&A Liquidity and Capital Resources

Capital Deployment

Capital Expenditures

Capital expenditures during the nine months ended March 31, 2019 and 2018 were $192 million and $246 million, respectively.

Dividends

On February 6, 2019, our Board of Directors approved a quarterly dividend of $0.4763 per share, or $1.91 per share on an annualized basis, payable on April 15, 2019 to shareholders of record on April 1, 2019.

On May 8, 2019, our Board of Directors approved a quarterly dividend of $0.4811 per share, or $1.92 per share on an annualized basis, payable on July 15, 2019 to shareholders of record on July 1, 2019.

Share Repurchases

During the nine months ended March 31, 2019, we repurchased $600 million of our common shares. See Note 11 of the "Notes to condensed consolidated financial statements" for additional information. At March 31, 2019, we had $1.3 billion authorized for share repurchases remaining under all programs.

Cardinal Health | Q3Fiscal 2019 Form 10-Q 12

MD&A Other Items

Other Items

The MD&A in our 2018 Form 10-K addresses our contractual obligations and off-balance sheet arrangements, as of and for the fiscal year ended June 30, 2018. There have been no subsequent material changes outside of the ordinary course of business to those items.

Critical Accounting Policies and Sensitive Accounting Estimates

The discussion and analysis presented below is a supplemental disclosure to the critical accounting policies and sensitive accounting estimates specified in our consolidated balance sheets at June 30, 2018. This discussion and analysis should be read in conjunction with the Critical Accounting Policies and Sensitive Accounting Estimates included in our 2018 Form 10-K.

Critical accounting policies are those accounting policies that (i) can have a significant impact on our financial condition and results of operations and (ii) require the use of complex and subjective estimates based upon past experience and management’s judgment. Other people applying reasonable judgment to the same facts and circumstances could develop different estimates. Because estimates are inherently uncertain, actual results may differ. In this section, we describe the significant policies applied in preparing our consolidated financial statements that management believes are the most dependent on estimates and assumptions for goodwill impairment testing.

Goodwill

Purchased goodwill is tested for impairment annually or when indicators of impairment exist. Goodwill impairment testing involves a comparison of the estimated fair value of reporting units to the respective carrying amount, which may be performed utilizing either a qualitative or quantitative assessment. Qualitative factors are first assessed to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If it is determined that it is more likely than not that the fair value does not exceed the carrying amount, then a quantitative test is performed. The quantitative goodwill impairment test involves a comparison of the estimated fair value of the reporting unit to the respective carrying amount. A reporting unit is defined as an operating segment or one level below an operating segment (also known as a component).

Goodwill impairment testing involves judgment, including the identification of reporting units, qualitative evaluation of events and circumstances to determine if it is more likely than not that an impairment exists, and, if necessary, the estimation of the fair value of the applicable reporting unit. Our qualitative evaluation considers the weight of evidence and significance of all identified events and circumstances and most relevant drivers of fair value, both positive and negative, in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

Medical Unit Goodwill Qualitative Assessment

During the fourth quarter of fiscal 2018, we recorded a $1.4 billion goodwill impairment within our Medical segment. Although we believe the assumptions used to arrive at the estimate of fair value during the fourth quarter of fiscal 2018 continue to be reasonable and appropriate, changes in key assumptions during the remainder of fiscal 2019, including a failure to meet expected earnings or other financial plans, or other unanticipated events and circumstances, such as a rise in interest rates or a significant change in industry or economic trends, may affect future estimates. Adverse changes in key assumptions may result in a further decline in fair value below the carrying value in the future and an additional impairment in our Medical segment in future periods, which could adversely affect our results of operations.

13 Cardinal Health | Q3Fiscal 2019 Form 10-Q

Explanation and Reconciliation of Non-GAAP Financial Measures

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 addition to analyzing our business based on financial information prepared in accordance with GAAP, we use these non-GAAP financial measures internally to evaluate our performance, engage in financial and operational planning, and determine incentive compensation because we believe that these measures provide additional perspective on and, in some circumstances are more closely correlated to, the performance of our underlying, ongoing business. 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 on a year-over-year basis and in comparing our performance to that of our competitors. However, the non-GAAP financial measures that we use 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 statements set forth below should be carefully evaluated.

Exclusions from Non-GAAP Financial Measures

Management believes it is useful to exclude the following items from the non-GAAP measures presented in this report for its own and for investors’ assessment of the business for the reasons identified below:

• LIFO charges and credits are excluded because the factors that drive last-in first-out ("LIFO") inventory charges or credits, such as pharmaceutical manufacturer price appreciation or deflation and year-end inventory levels (which can be meaningfully influenced by customer buying behavior immediately preceding our fiscal year-end), are largely out of our control and cannot be accurately predicted. The exclusion of LIFO charges and credits from non-GAAP metrics facilitates comparison of our current financial results to our historical financial results and to our peer group companies’ financial results.

• State opioid assessment related to prior fiscal years is the portion of the New York State assessment under the Opioid Stewardship Act for prescription opioid medications that were sold or distributed in periods prior to fiscal 2019. This portion was excluded from non-GAAP financial measures because it related to sales in prior fiscal years and inclusion would have obscured analysis of the current fiscal year results of our underlying, ongoing business. Additionally, while the New York law would have required us to make payments on an ongoing basis, the portion of the assessment related to sales in periods prior to fiscal 2019 was contemplated to be a one-time, nonrecurring item. In December 2018, this assessment was declared to be unconstitutional.

• Restructuring and employee severance costs are excluded because they are not part of the ongoing operations of our underlying business.

• Amortization and other acquisition-related costs, which include transaction costs, integration costs, and changes in the fair value of contingent consideration obligations, are excluded because they are not part of the ongoing operations of our underlying business and to facilitate comparison of our current financial results to our historical financial results and to our peer group companies' financial results. Additionally, costs for amortization of acquisition-related intangible assets are non-cash amounts, which are variable in amount and frequency and are significantly impacted by the timing and size of acquisitions, so their exclusion facilitates comparison of historical, current and forecasted financial results. We also exclude other acquisition-related costs, which are directly related to an acquisition but do not meet the criteria to be recognized on the acquired entity’s initial balance sheet as part of the purchase price allocation. These costs are also significantly impacted by the timing, complexity and size of acquisitions.

• Impairments and gain or loss on disposal of assets are excluded because they do not occur in or reflect the ordinary course of our ongoing business operations and are inherently unpredictable in timing and amount, and in the case of impairments, are non-cash amounts, so their exclusion facilitates comparison of historical, current and forecasted financial results.

• Litigation recoveries or charges, net are excluded because they often relate to events that may have occurred in prior or multiple periods, do not occur in or reflect the ordinary course of our business and are inherently unpredictable in timing and amount.

• Loss on extinguishment of debt is excluded because it does not typically occur in the normal course of business and may obscure analysis of trends and financial performance. Additionally, the amount and frequency of this type of charge is not consistent and is significantly impacted by the timing and size of debt extinguishment transactions.

• Transitional tax benefit, net related to the Tax Cuts and Jobs Act is excluded because it results from the one-time impact of a very significant change in the U.S. federal corporate tax rate and, due to the significant size of the benefit, obscures analysis of trends and financial performance. The transitional tax benefit includes the initial estimate and subsequent adjustments for the re-measurement of deferred tax assets and liabilities due to the reduction of the U.S. federal corporate income tax rate and the repatriation tax on undistributed foreign earnings.

Cardinal Health | Q3Fiscal 2019 Form 10-Q 14

Explanation and Reconciliation of Non-GAAP Financial Measures

The tax effect for each of the items listed above, other than the transitional tax benefit item, is determined using the tax rate and other tax attributes applicable to the item and the jurisdiction(s) in which the item is recorded. The gross, tax and net impact of each item are presented with our GAAP to non-GAAP reconciliations.

Definitions

Growth rate calculation: growth rates in this Form 10-Q are determined by dividing the difference between current-period results and prior-period results by prior-period results.

Non-GAAP operating earnings: operating earnings excluding (1) LIFO charges/(credits), (2) state opioid assessment related to prior fiscal years, (3) restructuring and employee severance, (4) amortization and other acquisition-related costs, (5) impairments and (gain)/loss on disposal of assets, and (6) litigation (recoveries)/charges, net.

Non-GAAP earnings before income taxes: earnings before income taxes excluding (1) LIFO charges/(credits), (2) state opioid assessment related to prior fiscal years, (3) restructuring and employee severance, (4) amortization and other acquisition-related costs, (5) impairments and (gain)/loss on disposal of assets, (6) litigation (recoveries)/charges, net, and (7) loss on extinguishment of debt.

Non-GAAP net earnings attributable to Cardinal Health, Inc.: net earnings attributable to Cardinal Health, Inc. excluding (1) LIFO charges/(credits), (2) state opioid assessment related to prior fiscal years, (3) restructuring and employee severance, (4) amortization and other acquisition-related costs, (5) impairments and (gain)/loss on disposal of assets, (6) litigation (recoveries)/charges, net, (7) loss on extinguishment of debt, each net of tax, and (8) transitional tax benefit, net.

Non-GAAP effective tax rate: provision for income taxes adjusted for (1) LIFO charges/(credits), (2) state opioid assessment related to prior fiscal years, (3) restructuring and employee severance, (4) amortization and other acquisition-related costs, (5) impairments and (gain)/loss on disposal of assets, (6) litigation (recoveries)/charges, net, (7) loss on extinguishment of debt, and (8) transitional tax benefit, (net) divided by (earnings before income taxes adjusted for the first seven items).

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

15 Cardinal Health | Q3Fiscal 2019 Form 10-Q

Explanation and Reconciliation of Non-GAAP Financial Measures

GAAP to Non-GAAP Reconciliations

(in millions, except per common share amounts)	Operating Earnings			Operating Earnings Growth Rate		Earnings Before Income Taxes			Provision for Income Taxes			Net Earnings1			Net Earnings1 Growth Rate		Effective Tax Rate		Diluted EPS1,3,4			Diluted EPS1 Growth Rate
	Three Months Ended March 31, 2019
GAAP	$	432		(21	)%	$	370		$	74		$	296		16	%	20.0	%	$	0.99		22	%
Restructuring and employee severance	53					53			14			39							0.13
Amortization and other acquisition-related costs	154					154			38			116							0.39
Impairments and (gain)/loss on disposal of assets, net	11					11			4			7							0.03
Litigation (recoveries)/charges, net	17					17			7			10							0.03
Transitional tax benefit, net2	—					—			(5		)	5							0.02
Non-GAAP	$	667		(15	)%	$	605		$	130		$	475		9	%	21.6	%	$	1.59		14	%
	Three Months Ended March 31, 2018
GAAP	$	546		(10	)%	$	464		$	209		$	255		(33	)%	45.1	%	$	0.81		(33	)%
Restructuring and employee severance	2					2			(17		)	19							0.06
Amortization and other acquisition-related costs	175					175			44			131							0.42
Impairments and (gain)/loss on disposal of assets, net	(6		)			(6		)	(14		)	8							0.02
Litigation (recoveries)/charges, net	64					64			21			43							0.14
Transitional tax benefit, net2	—					—			17			(17		)					(0.06		)
Non-GAAP	$	781		3	%	$	700		$	262		$	437		(10	)%	37.5	%	$	1.39		(9	)%
	Nine Months Ended March 31, 2019
GAAP	$	1,752		45	%	$	1,512		$	342		$	1,169		(18	)%	22.6	%	$	3.88		(14	)%
Restructuring and employee severance	97					97			25			72							0.24
Amortization and other acquisition-related costs	468					468			112			356							1.18
Impairments and (gain)/loss on disposal of assets, net	(492		)			(492		)	(129		)	(363		)					(1.20		)
Litigation (recoveries)/charges, net	20					20			7			13							0.04
Transitional tax benefit, net2	—					—			(8		)	8							0.03
Non-GAAP	$	1,845		(13	)%	$	1,605		$	349		$	1,255		—	%	21.7	%	$	4.17		5	%
	Nine Months Ended March 31, 2018
GAAP	$	1,206		(28	)%	$	959		$	(466	)	$	1,422		40	%	(48.6	)%	$	4.50		42	%
Restructuring and employee severance	155					155			29			126							0.40
Amortization and other acquisition-related costs	543					543			143			400							1.27
Impairments and (gain)/loss on disposal of assets, net	62					62			(57		)	119							0.38
Litigation (recoveries)/charges, net	155					155			51			104							0.33
Loss on extinguishment of debt	—					2			1			1							—
Transitional tax benefit, net2	—					—			911			(911		)					(2.88		)
Non-GAAP	$	2,121		—	%	$	1,875		$	612		$	1,261		(4	)%	32.6	%	$	3.99		(3	)%

¹  attributable to Cardinal Health, Inc.

²  Reflects the net transitional benefit from the remeasurement of our deferred tax assets and liabilities partially offset by the repatriation tax on cash and earnings of foreign subsidiaries. See Note 7 of the "Notes to Condensed Consolidated Financial Statements" for more information on the Tax Act.

Cardinal Health | Q3Fiscal 2019 Form 10-Q 16

Explanation and Reconciliation of Non-GAAP Financial Measures

³  GAAP diluted EPS for the three months ended March 31,2019 compared to the prior year period was favorably impacted by $0.36 per share, which includes $0.31 per share due to change in the effective tax rate and $0.05 per share due to the change in weighted average shares outstanding. GAAP diluted EPS for the nine months ended March 31, 2019 compared to the prior year period was unfavorably impacted by $(3.39) per share, which includes $(3.57) per share due to change in the effective tax rate and $0.18 per share due to the change in weighted average shares outstanding. The change in GAAP diluted EPS due to the effective tax rate is calculated as ((GAAP Earnings before Income Taxes for the current period times (one minus the current period GAAP Effective Tax Rate)) minus (GAAP Earnings before Income Taxes for the current period times (one minus the prior period GAAP Effective Tax Rate))) divided by the current period weighted average shares outstanding. The change in GAAP diluted EPS due to the weighted average shares outstanding is calculated as (GAAP Net Earnings for the current period divided by the current period weighted average shares outstanding) minus (GAAP Net Earnings for the current period divided by the prior period weighted average shares outstanding).

⁴  Non-GAAP diluted EPS for the three months ended March 31, 2019 compared to the prior year period was favorably impacted by $0.40 per share, which includes $0.32 per share due to change in the effective tax rate and $0.08 per share due to the change in weighted average shares outstanding. Non-GAAP diluted EPS for the nine months ended March 31, 2019 compared to the prior year period was favorably impacted by $0.77 per share, which includes $0.58 per share due to change in the effective tax rate and $0.19 per share due to the change in weighted average shares outstanding. The change in Non-GAAP diluted EPS due to the effective tax rate is calculated as ((Non-GAAP Earnings before Income Taxes for the current period times (one minus the current period Non-GAAP Effective Tax Rate)) minus (Non-GAAP Earnings before Income Tax for the current period times (one minus the prior period Non-GAAP Effective Tax Rate))) divided by the current period weighted average shares outstanding. The change in Non-GAAP diluted EPS due to the weighted average shares outstanding is calculated as (Non-GAAP Net Earnings for the current period divided by the current period weighted average shares outstanding) minus (Non-GAAP Net Earnings for the current period divided by the prior period weighted average shares outstanding).

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

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

17 Cardinal Health | Q3Fiscal 2019 Form 10-Q

Other

Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in the quantitative and qualitative market risk disclosures included in our 2018 Form 10-K since the end of fiscal 2018 through March 31, 2019.

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 ofMarch 31, 2019. Based on this evaluation, our principal executive officer and principal financial officer have concluded that as of March 31, 2019, 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 March 31, 2019 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 8 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 2018 Form 10-K and our filings with the SEC since June 30, 2018. 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.

Other Information

In May 2019, we announced that we renewed our pharmaceutical distribution contracts with CVS Health for a four-year term, through June 2023.

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 Programs (2)	Approximate Dollar Value of Shares That May Yet be Purchased Under the Program (2) (in millions)
January 2019	259	$	48.49	—	$	1,293
February 2019	258	53.78		—	1,293
March 2019	257	48.53		—	1,293
Total	774	$	50.26	—	$	1,293

(1) Reflects 259, 258 and 257 common shares purchased in January, February and March 2019, respectively, through a rabbi trust as investments of participants in our Deferred Compensation Plan.

(2) On February 7, 2018, our Board of Directors approved a $1.0 billion share repurchase program that expires on December 31, 2020. On November 7, 2018, our Board of Directors approved an additional $1.0 billion share repurchase program that expires on December 31, 2021. As of March 31, 2019, we have $1.3 billion authorized for share repurchases remaining under these programs.

Cardinal Health | Q3Fiscal 2019 Form 10-Q 18

Financial Statements

Condensed Consolidated Statements of Earnings

(Unaudited)

	Three Months Ended March 31,						Nine Months Ended March 31,
(in millions, except per common share amounts)	2019			2018			2019			2018
Revenue	$	35,228		$	33,633		$	108,181		$	101,460
Cost of products sold	33,464			31,720			103,021			96,014
Gross margin	1,764			1,913			5,160			5,446
Operating expenses:
Distribution, selling, general and administrative expenses	1,097			1,132			3,315			3,325
Restructuring and employee severance	53			2			97			155
Amortization and other acquisition-related costs	154			175			468			543
Impairments and (gain)/loss on disposal of assets, net	11			(6		)	(492		)	62
Litigation (recoveries)/charges, net	17			64			20			155
Operating earnings	432			546			1,752			1,206
Other (income)/expense, net	(13		)	(2		)	13			(6		)
Interest expense, net	75			84			227			251
Loss on extinguishment of debt	—			—			—			2
Earnings before income taxes	370			464			1,512			959
Provision for/(benefit from) income taxes	74			209			342			(466		)
Net earnings	296			255			1,170			1,425
Less: Net earnings attributable to noncontrolling interests	—			—			(1		)	(3		)
Net earnings attributable to Cardinal Health, Inc.	$	296		$	255		$	1,169		$	1,422
Earnings per common share attributable to Cardinal Health, Inc.:
Basic	$	0.99		$	0.81		$	3.89		$	4.52
Diluted	0.99			0.81			3.88			4.50
Weighted-average number of common shares outstanding:
Basic	298			313			301			314
Diluted	299			315			302			316
Cash dividends declared per common share	$	0.4763		$	0.4624		$	1.4289		$	1.3872

See notes to condensed consolidated financial statements.

19 Cardinal Health | Q3Fiscal 2019 Form 10-Q

Financial Statements

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

	Three Months Ended March 31,						Nine Months Ended March 31,
(in millions)	2019			2018			2019			2018
Net earnings	$	296		$	255		$	1,170		$	1,425
Other comprehensive income/(loss):
Foreign currency translation adjustments and other	13			110			(16		)	141
Amounts reclassified to earnings	—			(23		)	—			(23		)
Net unrealized gain/(loss) on derivative instruments, net of tax	(1		)	3			(3		)	2
Total other comprehensive income/(loss), net of tax	12			90			(19		)	120
Total comprehensive income	308			345			1,151			1,545
Less: comprehensive income attributable to noncontrolling interests	—			—			(1		)	(3		)
Total comprehensive income attributable to Cardinal Health, Inc.	$	308		$	345		$	1,150		$	1,542

See notes to condensed consolidated financial statements.

Cardinal Health | Q3Fiscal 2019 Form 10-Q 20

Financial Statements

Condensed Consolidated Balance Sheets

(Unaudited)

(in millions)	March 31, 2019			June 30, 2018
Assets
Current assets:
Cash and equivalents	$	3,438		$	1,763
Trade receivables, net	7,879			7,800
Inventories, net	12,622			12,308
Prepaid expenses and other	1,643			1,926
Assets held for sale	—			756
Total current assets	25,582			24,553
Property and equipment, net	2,322			2,487
Goodwill and other intangibles, net	11,860			12,229
Other assets	1,045			682
Total assets	$	40,809		$	39,951
Liabilities, Redeemable Noncontrolling Interests and Shareholders’ Equity
Current liabilities:
Accounts payable	$	20,517		$	19,677
Current portion of long-term obligations and other short-term borrowings	1,451			1,001
Other accrued liabilities	1,951			2,002
Liabilities related to assets held for sale	—			213
Total current liabilities	23,919			22,893
Long-term obligations, less current portion	7,629			8,012
Deferred income taxes and other liabilities	3,029			2,975
Redeemable noncontrolling interests	—			12
Shareholders’ equity:
Preferred shares, without par value:
Authorized—500 thousand shares, Issued—none	—			—
Common shares, without par value:
Authorized—755 million shares, Issued—327 million shares at March 31, 2019 and June 30, 2018, respectively	2,748			2,730
Retained earnings	5,386			4,645
Common shares in treasury, at cost: 29 million shares and 18 million shares at March 31, 2019 and June 30, 2018, respectively	(1,793		)	(1,224		)
Accumulated other comprehensive loss	(111		)	(92		)
Total Cardinal Health, Inc. shareholders' equity	6,230			6,059
Noncontrolling interests	2			—
Total shareholders’ equity	6,232			6,059
Total liabilities, redeemable noncontrolling interests and shareholders’ equity	$	40,809		$	39,951

See notes to condensed consolidated financial statements.

21 Cardinal Health | Q3Fiscal 2019 Form 10-Q

Financial Statements

Condensed Consolidated Statements of Shareholders' Equity

(Unaudited)

	Common Shares						Treasury Shares					Accumulated Other Comprehensive Income/(Loss)			Noncontrolling Interests		Total Shareholders’ Equity
(in millions)	Shares Issued	Amount		Retained Earnings			Shares		Amount
	Three Months Ended March 31, 2019
Balance at December 31, 2018	327	$	2,728	$	5,233		(29	)	$	(1,795	)	$	(123	)	$	—	$	6,043
Net earnings				296													296
Other comprehensive income/(loss), net of tax												12					12
Employee stock plans activity, net of shares withheld for employee taxes	—	20					—		2								22
Treasury shares acquired				—			—		—								—
Dividends declared				(143		)											(143		)
Other				—											2		2
Balance at March 31, 2019	327	$	2,748	$	5,386		(29	)	$	(1,793	)	$	(111	)	$	2	$	6,232

	Three Months Ended March 31, 2018
Balance at December 31, 2017	327	$	2,694	$	5,848		(12	)	$	(848	)	$	(95	)	$	20		$	7,619
Net earnings				255														255
Other comprehensive income/(loss), net of tax												90						90
Purchase and divestiture of noncontrolling interests															(19		)	(19		)
Employee stock plans activity, net of shares withheld for employee taxes	—	16					—		22									38
Treasury shares acquired							(4	)	(300		)							(300		)
Dividends declared				(144		)												(144		)
Other				(1		)												(1		)
Balance at March 31, 2018	327	$	2,710	$	5,958		(16	)	$	(1,126	)	$	(5	)	$	1		$	7,538

	Nine Months Ended March 31, 2019
Balance at June 30, 2018	327	$	2,730	$	4,645		(18	)	$	(1,224	)	$	(92	)	$	—	$	6,059
Net earnings				1,169											1		1,170
Other comprehensive income/(loss), net of tax												(19		)			(19		)
Employee stock plans activity, net of shares withheld for employee taxes	—	18					1		31								49
Treasury shares acquired							(12	)	(600		)						(600		)
Dividends declared				(429		)											(429		)
Other				1											1		2
Balance at March 31, 2019	327	$	2,748	$	5,386		(29	)	$	(1,793	)	$	(111	)	$	2	$	6,232

	Nine Months Ended March 31, 2018
Balance at June 30, 2017	327	$	2,697	$	4,967		(11	)	$	(731	)	$	(125	)	$	20		$	6,828
Net earnings				1,422														1,422
Other comprehensive income/(loss), net of tax												120						120
Purchase and divestiture of noncontrolling interests															(19		)	(19		)
Employee stock plans activity, including tax benefit of $9 million	—	13					1		55									68
Treasury shares acquired							(6	)	(450		)							(450		)
Dividends declared				(436		)												(436		)
Other				5														5
Balance at March 31, 2018	327	$	2,710	$	5,958		(16	)	$	(1,126	)	$	(5	)	$	1		$	7,538

See notes to condensed consolidated financial statements.

Cardinal Health | Q3Fiscal 2019 Form 10-Q 22

Financial Statements

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended March 31,
(in millions)	2019			2018
Cash flows from operating activities:
Net earnings	$	1,170		$	1,425
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	759			779
Impairments and loss on sale of other investments	2			6
Impairments and (gain)/loss on disposal of assets, net	(492		)	62
Share-based compensation	64			64
Provision for bad debts	59			50
Change in fair value of contingent consideration obligation	—			(2		)
Change in operating assets and liabilities, net of effects from acquisitions and divestitures:
Increase in trade receivables	(156		)	(632		)
Increase in inventories	(345		)	(865		)
Increase in accounts payable	846			1,635
Other accrued liabilities and operating items, net	309			(308		)
Net cash provided by operating activities	2,216			2,214
Cash flows from investing activities:
Acquisition of subsidiaries, net of cash acquired	(38		)	(6,142		)
Additions to property and equipment	(192		)	(246		)
Purchase of available-for-sale securities and other investments	(11		)	(7		)
Proceeds from sale of available-for-sale securities and other investments	3			65
Proceeds from divestitures, net of cash sold, and disposal of property and equipment	749			862
Net cash provided by/(used in) investing activities	511			(5,468		)
Cash flows from financing activities:
Payment of contingent consideration obligation	—			(22		)
Net change in short-term borrowings	—			(50		)
Purchase of noncontrolling interests	—			(106		)
Proceeds from long-term obligations, net of issuance costs	1			3
Reduction of long-term obligations	(3		)	(403		)
Net tax withholdings from share-based compensation	(13		)	(3		)
Dividends on common shares	(435		)	(436		)
Purchase of treasury shares	(600		)	(450		)
Net cash used in financing activities	(1,050		)	(1,467		)
Effect of exchange rates changes on cash and equivalents	(2		)	17
Net increase/(decrease) in cash and equivalents	1,675			(4,704		)
Cash and equivalents at beginning of period	1,763			6,879
Cash and equivalents at end of period	$	3,438		$	2,175

See notes to condensed consolidated financial statements.

23 Cardinal Health | Q3Fiscal 2019 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 these condensed consolidated financial statements refer to Cardinal Health, Inc. and its majority-owned or controlled subsidiaries unless the context requires otherwise.

Our fiscal year ends on June 30. References to fiscal 2019 and 2018 in these condensed consolidated financial statements are to the fiscal years ending or ended June 30, 2019 and June 30, 2018, 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 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 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. To conform to the current year presentation, certain prior year amounts have been reclassified. In addition, financial results presented for this fiscal 2019 interim period are not necessarily indicative of the results that may be expected for the full fiscal year ending June 30, 2019. These condensed consolidated financial statements are unaudited and, accordingly, 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, 2018 (the "2018 Form 10-K").

Recent Financial Accounting Standards

In October 2018, the Financial Accounting Standards Board ("FASB") issued amended accounting guidance related to derivatives and hedging which permits the use of the Secured Overnight Financing Rate ("SOFR") Overnight Index Swap ("OIS") as a Benchmark Interest Rate for Hedge Accounting Purposes. This guidance will be effective for us in the first quarter of fiscal 2020 and must be applied on a prospective basis. The impact of adoption on our condensed consolidated financial statements is contingent upon future events.

In March 2018, the FASB issued amended accounting guidance to codify SEC staff accounting bulletin 118 (“SAB 118”), which was issued in connection with the Tax Cuts and Jobs Act (the “Tax Act”)

of December 2017. The guidance allows companies to use provisional estimates to record the effects of the Tax Act and also provides a measurement period (not to exceed one year from the date of enactment) to complete the accounting for the impacts of the Tax Act. We adopted this guidance in the second quarter of fiscal 2018 when it was initially issued as SAB 118. We completed our accounting for the impacts from enactment of the Tax Act during the three months ended December 31, 2018. Future adjustments to the financial statements may be necessary as final tax regulations and any additional pending regulatory changes are issued, the impacts of which are being currently assessed, or will be assessed, as final regulations are issued. See Note 7 for additional information regarding income taxes.

In June 2016, the FASB issued amended accounting guidance that will require entities to measure credit losses on trade and other receivables, held-to-maturity debt securities, loans and other instruments using an "expected credit loss" model that considers historical experience, current conditions and reasonable supportable forecasts. This guidance also requires that credit losses on available-for-sale debt securities with unrealized losses be recognized as allowances rather than as deductions in the amortized cost of the securities. This guidance will be effective for us in the first quarter of fiscal 2021. We are currently evaluating the impact of adoption on our condensed consolidated financial statements.

Leases

In February 2016, the FASB issued amended accounting guidance that requires lessees to recognize most leases on the balance sheet as a lease liability and corresponding right-of-use asset. The guidance also requires disclosures that meet the objective of enabling financial statement users to assess the amount, timing and uncertainty of cash flows arising from leases. We will adopt this guidance when it is effective for us in the first quarter of fiscal 2020 and we expect to elect the transition option which will allow us to not apply the amended lease accounting guidance to comparative periods that will be presented. We are continuing to evaluate the impact of this standard on our condensed consolidated financial statements, including identification of embedded leases and performing lease contract reviews. The majority of our lease spend relates to certain real estate with the remaining lease spend primarily related to equipment. Although we are continuing to assess the impact of the amended guidance, we generally anticipate that the adoption of the amended lease guidance will result in an increase to the assets and liabilities on our condensed consolidated balance sheets and will require certain changes to our systems and processes.

Revenue Recognition

In May 2014, the FASB issued amended accounting guidance related to revenue recognition which we adopted in the first quarter of fiscal 2019 using the modified retrospective method and that we applied to customer contracts that were not completed as of June 30, 2018.

Cardinal Health | Q3Fiscal 2019 Form 10-Q 24

Notes to Financial Statements

The adoption of the amended accounting guidance did not have a material impact on our condensed consolidated financial statements. We did not record any material contract assets, contract liabilities, or deferred contract costs in our condensed consolidated balance sheets upon adopting the amended accounting guidance. Assets recorded for the right to recover products from customers and the associated refund liabilities for return allowances were not material.

We elected the practical expedient to expense costs to obtain a contract when incurred when the amortization period would have been one year or less. Additionally, we elected the practical expedients to not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less, contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed and for contracts for which the variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation. See Note 13 for additional information regarding our disaggregation of revenue.

Revenue in both segments is primarily related to the distribution of pharmaceutical and medical products, which we recognize at a point in time when title transfers to customers and we have no further obligation to provide services related to such merchandise. Service revenues are recognized over the period that services are provided to the customer. Revenues derived from services are not material for either segment for all periods presented.

We are generally the principal in a transaction, therefore our revenue is primarily recorded on a gross basis. When we are a principal in a transaction, we have determined that we control the ability to direct the use of the product or service prior to transfer to a customer, are primarily responsible for fulfilling the promise to provide the product or service to our customer, have discretion in establishing prices, and ultimately control the transfer of the product or services provided to the customer.

Revenue is recorded net of sales returns and allowances. Revenues are measured based on the amount of consideration that we expect to receive, reduced by estimates for return allowances, discounts, rebates and other variable consideration. Sales returns are recorded based on estimates using historical data. Shipping and handling costs are primarily included in distribution, selling, general and administrative ("SG&A") expenses in our condensed consolidated statements of earnings and include all delivery expenses as well as all costs to prepare the product for shipment to the end customer.  Shipping and handling costs incurred after control has transferred to the customer are treated as fulfillment costs.

In the first quarter of fiscal 2019, we adopted the following Accounting Standards Updates ("ASU"). ASU 2016-01 Financial Instruments: Recognition and Measurement of Financial Assets and Financial Liabilities; ASU 2018-03 Technical Corrections and Improvements to Financial Instruments; ASU 2016-15 Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments; ASU 2016-16 Income Taxes: Intra-Entity Transfers of Assets Other Than

Inventory; and ASU 2017-12 Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities. The adoption of these ASU's did not have a material impact on our condensed consolidated financial statements.

2. Acquisitions and Divestitures

Acquisitions

Patient Recovery Business

On July 29, 2017, we acquired the Patient Care, Deep Vein Thrombosis, and Nutritional Insufficiency businesses (the "Patient Recovery Business") from Medtronic plc for $6.1 billion in cash. The acquisition further expands our Medical segment's portfolio of self-manufactured products.

Transaction and integration costs associated with the acquisition of the Patient Recovery business were $17 million and $25 million for the three months ended March 31, 2019 and 2018, respectively, and $62 million and $85 million for the nine months ended March 31, 2019 and 2018, respectively. These costs are included in amortization and other acquisition-related costs in the condensed consolidated statements of earnings.

Fair Value of Assets Acquired and Liabilities Assumed

The allocation of the fair value of assets acquired and liabilities assumed for the acquisition of the Patient Recovery Business was finalized during the three months ended September 30, 2018, resulting in goodwill of $3.3 billion. There were no significant adjustments to the allocation of the fair value of assets acquired and liabilities assumed for the Patient Recovery Business acquisition from those disclosed in our fiscal 2018 Form 10-K.

Divestitures

In August 2018, we sold our 98 percent ownership interest in naviHealth Holdings, LLC ("naviHealth") to investor entities controlled by Clayton, Dubilier & Rice in exchange for cash proceeds of $737 million (after adjusting for certain fees and expenses) and a 44 percent equity interest in a partnership that owns 100 percent of the equity interest of naviHealth. We also have certain call rights to reacquire naviHealth. Refer to Note 5 for further discussion regarding this investment.

During the nine months ended March 31, 2019, we recognized a pre-tax gain of $508 million related to this divestiture in impairments and (gain)/loss on disposal of assets in our condensed consolidated statement of earnings. This gain includes our initial recognition of an equity method investment for $358 million and the derecognition of redeemable noncontrolling interests of $12 million. The fiscal 2019 tax expense as a result of this transaction will be approximately $130 million. We determined that the sale of the naviHealth business does not meet the criteria to be classified as discontinued operations. The naviHealth business operated within our Medical segment.

25 Cardinal Health | Q3Fiscal 2019 Form 10-Q

Notes to Financial Statements

3. Restructuring and Employee Severance

The following table summarizes restructuring and employee severance costs:

	Three Months Ended March 31,
(in millions)	2019		2018
Employee-related costs (1)	$	29	$	(1	)
Facility exit and other costs (2)	24		3
Total restructuring and employee severance	$	53	$	2

	Nine Months Ended March 31,
(in millions)	2019		2018
Employee-related costs (1)	$	70	$	18
Facility exit and other costs (2)	27		137
Total restructuring and employee severance	$	97	$	155

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

(2) Facility exit and other costs primarily consist of product distribution and lease contract termination costs, lease costs associated with vacant facilities, accelerated depreciation, equipment relocation costs, project consulting fees, costs associated with restructuring our delivery of information technology infrastructure services and certain other divestiture-related costs.

In early fiscal 2019, we began implementing certain enterprise-wide cost-saving measures, which we expect to reduce our future operating expenses. As a result of these measures, we incurred pre-tax employee-related severance costs of $27 million and $60 million, during the three and nine months ended March 31, 2019, respectively, which are reflected in restructuring and employee severance in the condensed consolidated statements of earnings.

In fiscal 2018, we entered into an agreement to transition the distribution of our Medical segment's surgeon gloves in certain international markets from a third-party distribution arrangement to a direct distribution model. The costs associated with this restructuring included $125 million, on a pre-tax basis, in contract termination costs that were paid during fiscal 2018. These costs are reflected in restructuring and employee severance in the condensed consolidated statements of earnings during the nine months ended March 31, 2018.

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, 2018	$	24		$	4		$	28
Additions	60			14			74
Payments and other adjustments	(32		)	(2		)	(34		)
Balance at March 31, 2019	$	52		$	16		$	68

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, 2018	$	2,621		$	5,695		$	8,316
Goodwill acquired, net of purchase price adjustments	19			7			26
Foreign currency translation adjustments and other	(3		)	(9		)	(12		)
Balance at March 31, 2019	$	2,637		$	5,693		$	8,330

Other Intangible Assets

The following tables summarize other intangible assets by class at:

	March 31, 2019
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible		Weighted- Average Remaining Amortization Period (Years)
Indefinite-life intangibles:
IPR&D, trademarks and other	$	59	$	—	$	59	N/A
Total indefinite-life intangibles	59		—		59		N/A
Definite-life intangibles:
Customer relationships	3,528		1,432		2,096		14
Trademarks, trade names and patents	669		283		386		14
Developed technology and other	1,563		574		989		12
Total definite-life intangibles	5,760		2,289		3,471		14
Total other intangible assets	$	5,819	$	2,289	$	3,530	N/A

Cardinal Health | Q3Fiscal 2019 Form 10-Q 26

Notes to Financial Statements

	June 30, 2018
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible
Indefinite-life intangibles:
IPR&D, trademarks and other	$	62	$	—	$	62
Total indefinite-life intangibles	62		—		62
Definite-life intangibles:
Customer relationships	3,513		1,191		2,322
Trademarks, trade names and patents	667		246		421
Developed technology and other	1,562		454		1,108
Total definite-life intangibles	5,742		1,891		3,851
Total other intangible assets	$	5,804	$	1,891	$	3,913

Total amortization of intangible assets was $133 million and $148 million for the three months ended March 31, 2019 and 2018, respectively, and $399 million and $435 million for the nine months ended March 31, 2019 and 2018, respectively. For acquisitions closed on or before March 31, 2019, estimated annual amortization of intangible assets for the remainder of fiscal 2019 through 2023 is as follows: $133 million, $504 million, $436 million, $401 million and $351 million.

5. Investments

Investments in non-marketable equity securities are accounted for under the fair value, equity or net asset value method of accounting and are included in other assets in the condensed consolidated balance sheets. For equity securities without a readily determinable fair value, we use the fair value measurement alternative and measure the securities at cost less impairment, if any, including adjustments for observable price changes in orderly transactions for an identical or similar investment of the same issuer. For investments in which we can exercise significant influence but do not control, we use the equity method of accounting. Our share of the earnings and losses are recorded in other income, net in the condensed consolidated statements of earnings. We closely monitor our investments for other-than-temporary impairment by considering factors such as the operating performance of the investment and current economic and market conditions.

In connection with the naviHealth divestiture discussed in Note 2, we obtained a 44 percent equity interest in a partnership that owns 100 percent of the equity interest of naviHealth. We accounted for this investment initially at its fair value using Level 3 unobservable inputs based on expected sales proceeds following a competitive bidding process. We initially recognized a $358 million equity method investment.

We are accounting for our equity interest in naviHealth using the equity method of accounting on a one-month reporting lag. The impact of our proportionate share of naviHealth's results was not material to our condensed consolidated statements of earnings for the nine months ended March 31, 2019. Upon the divestiture closing, we received a non-cash distribution of $14 million in the form of the

partnership's payment for certain of our divestiture transaction costs directly to the applicable third-party. At March 31, 2019 the carrying value of this investment was $339 million.

6. Long-Term Obligations and Other Short-Term Borrowings

Long-Term Debt

At March 31, 2019 and June 30, 2018, we had total long-term obligations, including the current portion and other short-term borrowings, of $9.1 billion and $9.0 billion, respectively. All the borrowings represent unsecured obligations of Cardinal Health, Inc. and rank equally in right of payment with all of our existing and future unsecured and unsubordinated indebtedness. Interest is paid pursuant to the terms of the obligations. These obligations are effectively subordinated to the liabilities of our subsidiaries, including trade payables of $20.5 billion.

Other Financing Arrangements

In addition to cash and equivalents and operating cash flow, other sources of liquidity include a $2.0 billion commercial paper program backed by a $2.0 billion revolving credit facility. We also have a $1.0 billion committed receivables sales facility.

On November 6, 2018, we increased the maximum consolidated leverage ratio permitted under our revolving credit and committed receivables facilities to provide that, as of the end of any calendar quarter, our maximum consolidated leverage ratio may be no more than 4.25-to-1. The maximum permitted ratio will reduce to 4.00-to-1 in September 2019, to 3.75-to-1 in March 2020 and to 3.25-to-1 in September 2020. As of March 31, 2019, we were in compliance with this financial covenant.

In November 2016, we renewed our committed receivables sales facility program through Cardinal Health Funding, LLC (“CHF”) through November 1, 2019. CHF was organized for the sole purpose of buying receivables and selling undivided interests in those receivables to third-party purchasers. Although consolidated with Cardinal Health, Inc. in accordance with GAAP, CHF is a separate legal entity from Cardinal Health, Inc. and from our subsidiary that sells receivables to CHF. CHF is designed to be a special purpose, bankruptcy-remote entity whose assets are available solely to satisfy the claims of its creditors.

7. Income Taxes

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

U.S. Tax Cuts and Jobs Act

On December 22, 2017, the United States enacted the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act made broad and complex changes to the U.S. tax code that affected fiscal 2018 and will incrementally affect our fiscal year 2019 financial results in several ways. First, the U.S. statutory tax rate in fiscal 2019 is reduced to 21 percent. Second, the Tax Act established new tax provisions that

27 Cardinal Health | Q3Fiscal 2019 Form 10-Q

Notes to Financial Statements

affected us beginning July 1, 2018 including, (1) eliminating the U.S. manufacturing deduction; (2) establishing new limitations on deductible interest expense and certain executive compensation; (3) eliminating the corporate alternative minimum tax; (4) creating the base erosion anti-abuse tax; (5) creating a new provision designed to tax global intangible low-tax income (“GILTI”) and allow for a deduction related to foreign derived intangible income ("FDII"); (6) generally eliminating U.S. federal income taxes on dividends from foreign subsidiaries; and (7) changing rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017.

Regarding the new GILTI tax rules, we elected to treat taxes due on future GILTI inclusions in U.S. taxable income as a current period expense when incurred.

In accordance with SAB 118, we finalized our provisional estimates related to transitional tax benefits (i.e., remeasurement of deferred tax assets and liabilities and the repatriation tax on undistributed foreign earnings) which did not have a significant impact on tax expense during the nine months ended March 31, 2019. Future adjustments to the financial statements may be necessary as final tax regulations, including issued and pending regulatory changes, the impact of which is or will be assessed as final regulations are issued.

Effective Tax Rate

During the three months ended March 31, 2019 and 2018, the effective tax rate was 20.0 percent and 45.1 percent, respectively. The change in the effective tax rates for the three months ended March 31, 2019 compared to the prior period was due to discrete tax items, a lower federal statutory tax rate applied to our U.S. pre-tax earnings as a result of the Tax Act and the prior year unfavorable impact from changes in jurisdictional mix. The three months ended March 31, 2019 benefited from net favorable discrete items of $12 million and the three months ended March 31, 2018 were adversely affected by net unfavorable discrete items of $18 million.

During the nine months ended March 31, 2019 and 2018, the effective tax rate was 22.6 percent and (48.6) percent, respectively. The change in the effective tax rates for the nine months ended March 31, 2019 compared to the prior period was primarily due to the prior year transitional tax benefits from the enactment of the Tax Act. The nine months ended March 31, 2019 also included net discrete benefits of $50 million, primarily related to international legal entity changes, and the nine months ended March 31, 2018 were adversely affected by net unfavorable discrete items of $12 million.

The transitional tax benefits from the Tax Act during the three and nine months ended March 31, 2018 included a provisional net tax benefit of $18 million and $952 million, respectively, related to the remeasurement of our deferred tax assets and liabilities to the new federal statutory rate and the nine months ended March 31, 2018 a provisional tax expense of $41 million for the one-time repatriation tax applied to our undistributed foreign earnings. Our effective tax rates for the three and nine months ended March 31, 2018 also

included $57 million of tax expense recognized in connection with the sale of our China distribution business.

Unrecognized Tax Benefits

At March 31, 2019 and June 30, 2018, we had $436 million and $423 million of unrecognized tax benefits, respectively. The March 31, 2019 and June 30, 2018 balances include $275 million and $262 million of unrecognized tax benefits, respectively, that if recognized, would have an impact on the effective tax rate.

At March 31, 2019 and June 30, 2018, we had $116 million and $110 million, respectively, accrued for the payment of interest and penalties related to unrecognized tax benefits, which we recognize in the provision for/(benefit from) 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 between zero and a net decrease of $20 million, exclusive of penalties and interest.

Other Tax Matters

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 2008 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 $159 million and $151 million at March 31, 2019 and June 30, 2018, respectively, and is included in other assets in the condensed consolidated balance sheets.

As a result of the acquisition of the Patient Recovery Business, Medtronic plc is obligated to indemnify us for certain tax exposures and transaction taxes related to periods prior to the acquisition under the purchase agreement. The indemnification receivable was $24 million and $21 million at March 31, 2019 and June 30, 2018, respectively, and is included in other assets in the condensed consolidated balance sheet.

Cardinal Health | Q3Fiscal 2019 Form 10-Q 28

Notes to Financial Statements

8. Commitments, Contingent Liabilities and Litigation

Commitments

Generic Sourcing Venture with CVS Health Corporation ("CVS Health")

Red Oak Sourcing, LLC ("Red Oak Sourcing") is a U.S.-based generic pharmaceutical sourcing venture with CVS Health for an initial term through June 2024. Red Oak Sourcing negotiates generic pharmaceutical supply contracts on behalf of its participants. Due to the achievement of predetermined milestones, we are required to make quarterly payments of $45.6 million to CVS Health for the initial term.

Contingent Liabilities

New York Opioid Stewardship Act

In April 2018, the State of New York passed a budget which included the Opioid Stewardship Act (the "OSA"). The OSA created an aggregate $100 million annual assessment on all manufacturers and distributors licensed to sell or distribute opioids in New York. Under the OSA, each licensed manufacturer and distributor would be required to pay a portion of the assessment based on its ratable share, as determined by the state, of the total morphine milligram equivalents sold or distributed in New York during the applicable calendar year, beginning in 2017.

In October, we received notices from the New York Department of Health of our estimated payment amount for calendar year 2017. In December 2018, the U.S. District Court for the Southern District of New York ruled that the OSA is unconstitutional and enjoined its enforcement (the "Ruling"). In January 2019, the State filed notice of its intent to appeal the Ruling. In April 2019, the State, among other things, amended the OSA so that the assessment would only cover opioid sales in 2017 and 2018, subject to the State's pending appeal of the Ruling.

We accrue for contingencies if it is probable that a liability has been incurred and the amount can be estimated. At September 30, 2018, we recorded an aggregate accrual of $34 million for calendar year 2017 and the first three quarters of calendar 2018 based on the estimated payment amount, which reflected our best estimate of the OSA payments owed through September 30, 2018. As a result of the Ruling, in the three-months ended December 31, 2018, we reversed this accrual because we no longer believe it is probable that a liability has been incurred.

Legal Proceedings

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

We may be named from time to time in qui tam actions initiated by private third parties. In such actions, the private parties purport to act on behalf of federal or state governments, allege that false claims have been submitted for payment by the government and may receive an award if their claims are successful. 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 purporting to act on behalf of the government.

From time to time, we become aware through employees, internal audits or other parties of possible compliance matters, such as complaints or concerns relating to accounting, internal accounting controls, financial reporting, auditing, or other ethical matters or relating to compliance with laws such as healthcare fraud and abuse, anti-corruption or anti-bribery laws. When we become aware of such possible compliance matters, we investigate internally and take appropriate corrective action. In addition, from time to time, we receive subpoenas or requests for information from various federal or state agencies relating to our business or to the business of a customer, supplier or other industry participants. Internal investigations, subpoenas or requests for information could lead to the assertion of claims or the commencement of legal proceedings against us or result in sanctions.

From time to time, we may determine that products we manufacture or market do not meet our specifications, regulatory requirements, or published standards. When we or a regulatory agency identify a potential quality or regulatory issue, 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, action by regulators and product liability claims and lawsuits, including class actions. Even absent an identified regulatory or quality issue or product recall, we can become subject to product liability claims and lawsuits.

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.

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

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

Opioid Lawsuits

Pharmaceutical wholesale distributors, including us, have been named as defendants in over 2,000 lawsuits relating to the distribution of prescription opioid pain medications. These lawsuits have been filed in various federal, state, and other courts by a variety of plaintiffs, primarily counties, municipalities and other political subdivisions. Plaintiffs also include unions and other health and welfare funds, hospital systems and other healthcare providers, as well as

29 Cardinal Health | Q3Fiscal 2019 Form 10-Q

Notes to Financial Statements

individuals. Of these lawsuits, 63 are purported class actions. The lawsuits seek equitable relief and monetary damages based on a variety of legal theories including various common law claims, such as negligence, public nuisance and unjust enrichment as well as violations of controlled substance laws, the Racketeer Influenced and Corrupt Organizations Act and various other statutes. These lawsuits also name pharmaceutical manufacturers, retail pharmacy chains and other entities as defendants.

The vast majority of these lawsuits were filed in U.S. federal court and have been transferred for consolidated pre-trial proceedings in a Multi-District Litigation proceeding in the U.S. District Court for the Northern District of Ohio. The court, among other things, has ordered that a bellwether trial begin in October 2019. In December 2018, the court denied distributor defendants' motions to dismiss the complaints associated with the bellwether case.

In addition, 15 state attorneys general have filed lawsuits against distributors, including us, in various state courts, and 43 state attorneys general, including 8 that have filed suit, have formed a multi-state task force to investigate the manufacturing, distribution, dispensing and prescribing practices of opioid medications. We have received requests related to this multi-state investigation, as well as separate civil investigative demands, subpoenas or requests for information from these and other state attorneys general offices. We are cooperating with the offices conducting these investigations.

In connection with these proceedings, distributors continue to engage in discussions with various parties, including state attorneys general and representatives of the MDL plaintiffs, regarding possible resolution.

We are vigorously defending ourselves in all of these opioid-related matters. Given the uncertainty surrounding these lawsuits and investigations, we are unable to predict their outcome or estimate a range of reasonably possible losses.

Product Liability Lawsuits

As of May 3, 2019, we are named as a defendant in 237 product liability lawsuits coordinated in Alameda County Superior Court in California involving claims by approximately 2,797 plaintiffs that allege personal injuries associated with the use of Cordis OptEase and TrapEase inferior vena cava (IVC) filter products. Another 22 similar lawsuits involving claims by approximately 24 plaintiffs are pending in other jurisdictions. These lawsuits seek a variety of remedies, including unspecified monetary damages. We are vigorously defending ourselves in these lawsuits.

At March 31, 2019, we had a total of $359 million, net of estimated insurance recoveries, accrued for losses and legal defense costs related to the Cordis IVC filter lawsuits which are presented on a gross basis in the condensed consolidated balance sheets. We believe there is a range of estimated losses with respect to these matters. Because no amount within the range is a better estimate than any other amount within the range, we have accrued the minimum amount in the range. We estimate the high end of the range to be approximately $729 million, net of estimated insurance recoveries.

Antitrust Litigation Proceeds

We received and recognized income resulting from settlements of class action lawsuits in which we were a class member of $46 million and $94 million in the three and nine-months ended March 31, 2019, respectively.

9. Fair Value Measurements

Assets and (liabilities) measured on a recurring basis

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

	March 31, 2019
(in millions)	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	875	$	—	$	—	$	875
Other investments (1)	112		—		—		112
Liabilities:
Forward contracts (2)	—		5		—		5

	June 30, 2018
(in millions)	Level 1		Level 2			Level 3		Total
Assets:
Cash equivalents	$	200	$	—		$	—	$	200
Other investments (1)	117		—			—		117
Liabilities:
Forward contracts (2)	—		(76		)	—		(76		)

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

(2) The fair value of interest rate swaps, foreign currency contracts, net investment hedges 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.

10. 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 fair value through earnings at the end of each period. We are exposed to counterparty credit risk on all of our derivative instruments. Accordingly, we have established and maintain strict counterparty credit guidelines and only enter into derivative instruments with major

Cardinal Health | Q3Fiscal 2019 Form 10-Q 30

Notes to Financial Statements

financial institutions that are rated investment grade or better. We do not have significant exposure to any one counterparty and we believe the risk of loss is remote. Additionally, we do not require collateral under these agreements.

Interest Rate Risk Management

We are exposed to the impact of interest rate changes. Our objective is to manage the impact of interest rate changes on cash flows and the market value of our borrowings. We utilize a mix of debt maturities along with both fixed-rate and variable-rate debt to manage changes in interest rates. In addition, we enter into interest rate swaps to further manage our exposure to interest rate variations related to our borrowings and to lower our overall borrowing costs.

Currency Exchange Risk Management

We conduct business in several major international currencies and are subject to risks associated with changing foreign exchange rates. Our objective is to reduce volatility in earnings, cash flow and net investments in certain subsidiaries to allow management to focus its attention on business operations. Accordingly, we enter into various contracts that change in value as foreign exchange rates change to protect the value of existing foreign currency assets and liabilities, commitments and anticipated foreign currency revenue and expenses.

Commodity Price Risk Management

We are exposed to changes in the price of certain commodities. Our objective is to reduce earnings and cash flow volatility associated with forecasted purchases of these commodities to allow management to focus its attention on business operations. Accordingly, we enter into derivative contracts when possible to manage the price risk associated with certain forecasted purchases.

Fair Value Hedges

We enter into pay-floating interest rate swaps to hedge the changes in the fair value of fixed-rate debt resulting from fluctuations in interest rates. These contracts are designated and qualify as fair value hedges. Accordingly, the gain or loss recorded on the pay-floating interest rate swaps is directly offset by the change in fair value of the underlying debt. Both the derivative instrument and the underlying debt are adjusted to market value at the end of each period with any resulting gain or loss recorded in interest expense in the condensed consolidated statements of earnings. For the three and nine months ended March 31, 2019 and 2018, there was no gain or loss recorded to interest expense as changes in the market value of our derivative instruments offset changes in the market value of the underlying debt.

During the nine months ended March 31, 2019, no new pay-floating interest rate swaps were executed. During the nine months ended March 31, 2018, we entered into pay-floating interest rate swaps with a total notional amount of $650 million. These swaps have been designated as fair value hedges of our fixed rate debt and are included in other assets in the condensed consolidated balance sheet.

Cash Flow Hedges

We enter into derivative instruments to hedge our exposure to changes in cash flows attributable to interest rate, foreign currency

and commodity price fluctuations associated with certain forecasted transactions.

These derivative instruments are designated and qualify as cash flow hedges. Accordingly, the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same line item associated with the forecasted transaction and in the same period during which the hedged transaction affects earnings. Gains and losses recognized in accumulated other comprehensive loss and reclassified into earnings were immaterial for the three and nine months ended March 31, 2019 and 2018.

All gains and losses currently included within accumulated other comprehensive loss associated with our foreign exchange forward contracts that are expected to be reclassified into net earnings within the next 12 months are immaterial.

Net Investment Hedges

We hedge the foreign currency risk associated with certain net investment positions in European subsidiaries. To accomplish this, we enter into cross-currency swaps that are designated as hedges of net investments.

In September 2018, we entered into a €200 million cross-currency swap maturing in 2023.

Cross-currency swaps designated as net investment hedges are marked-to-market using the current spot exchange rate as of the end of the period, with gains and losses included in the foreign currency translation component of accumulated other comprehensive loss until the sale or substantial liquidation of the underlying net investments. To the extent the cross-currency swaps designated as net investment hedges are not highly effective, changes in carrying value attributable to the change in spot rates are recorded in earnings. There was no ineffectiveness in our net investment hedges during the nine months endedMarch 31, 2019.

Economic (Non-Designated) Hedges

We enter into foreign currency contracts to manage our foreign exchange exposure related to sales transactions, intercompany financing transactions and other balance sheet items subject to revaluation that do not meet the requirements for hedge accounting treatment. Accordingly, these derivative instruments are adjusted to current market value at the end of each period through earnings. The gain or loss recorded on these instruments is substantially offset by the remeasurement adjustment on the foreign currency denominated asset or liability. The settlement of the derivative instrument and the remeasurement adjustment on the foreign currency denominated asset or liability are both recorded in other income, net. We recorded an $8 million expense and $9 million income in the nine months ended March 31, 2019 and 2018, respectively. The principal currencies managed through foreign currency contracts are the Euro, Canadian dollar, British pound, Japanese yen, and Chinese renminbi.

31 Cardinal Health | Q3Fiscal 2019 Form 10-Q

Notes to Financial Statements

Fair Value of Financial Instruments

The carrying amounts of cash and equivalents, trade receivables, accounts payable and other accrued liabilities at March 31, 2019 and June 30, 2018 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)	March 31, 2019		June 30, 2018
Estimated fair value	$	8,925	$	8,852
Carrying amount	9,080		9,013

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.

11. Shareholders' Equity

During the nine months ended March 31, 2019, we repurchased 11.5 million common shares having an aggregate cost of $600 million. The average price paid per common share was $52.32. These repurchases were made under an accelerated share repurchase ("ASR") program, which began on August 16, 2018 and was completed on October 25, 2018.

During the nine months ended March 31, 2018, we repurchased 6.5 million common shares having an aggregate cost of $450 million. The average price paid per common share was $68.81. These repurchases include $300 million purchased under an ASR program, which began on February 14, 2018 and was completed on March 21, 2018. We repurchased 4.3 million shares under the ASR at an average price paid per share of $69.26.

We funded the repurchases with available cash and short-term borrowings. 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 Income/(Loss)
Balance at June 30, 2018	$	(113	)	$	21		$	(92	)
Other comprehensive income/(loss), before reclassifications	(16		)	—			(16		)
Amounts reclassified to earnings	—			(3		)	(3		)
Other comprehensive income/(loss), net of tax	(16		)	(3		)	(19		)
Balance at March 31, 2019	$	(129	)	$	18		$	(111	)

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 March 31,
(in millions)	2019	2018
Weighted-average common shares–basic	298	313
Effect of dilutive securities:
Employee stock options, restricted share units and performance share units	1	2
Weighted-average common shares–diluted	299	315

	Nine Months Ended March 31,
(in millions)	2019	2018
Weighted-average common shares–basic	301	314
Effect of dilutive securities:
Employee stock options, restricted share units and performance share units	1	2
Weighted-average common shares–diluted	302	316

The potentially dilutive employee stock options, restricted share units and performance share units that were antidilutive were 6 million and 5 million for the three months ended March 31, 2019 and 2018, respectively, and 6 million and 5 million for the nine months ended March 31, 2019 and 2018, respectively.

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.

Revenue

Our Pharmaceutical segment distributes branded and generic pharmaceutical, specialty pharmaceutical and over-the-counter healthcare and consumer products in the United States. This segment also provides services to pharmaceutical manufacturers and healthcare providers for specialty pharmaceutical products; operates nuclear pharmacies and radiopharmaceutical manufacturing facilities; provides pharmacy management services to hospitals as well as medication therapy management and patient outcomes services to hospitals, other healthcare providers and payers; and repackages generic pharmaceuticals and over-the-counter healthcare products.

Our Medical segment manufactures, sources and distributes Cardinal Health branded medical, surgical and laboratory products,

Cardinal Health | Q3Fiscal 2019 Form 10-Q 32

Notes to Financial Statements

which are sold in the United States, Canada, Europe, Asia and other markets. In addition to distributing Cardinal Health branded products, this segment also distributes a broad range of national brand products and provides supply chain services and solutions to hospitals, ambulatory surgery centers, clinical laboratories and other healthcare providers in the United States and Canada.

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

	Three Months Ended March 31,
(in millions)	2019			2018
Pharmaceutical	$	31,361		$	29,720
Medical	3,871			3,916
Total segment revenue	35,232			33,636
Corporate (1)	(4		)	(3		)
Total revenue	$	35,228		$	33,633

	Nine Months Ended March 31,
(in millions)	2019			2018
Pharmaceutical	$	96,516		$	89,786
Medical	11,678			11,684
Total segment revenue	108,194			101,470
Corporate (1)	(13		)	(10		)
Total revenue	$	108,181		$	101,460

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

The following table presents disaggregated revenue within our two reportable segments:

	Three Months Ended March 31, 2019			Nine Months Ended March 31, 2019
(in millions)
Pharmaceutical distribution and specialty	$	31,146		$	95,888
Nuclear and Precision Health Solutions (1)	215			628
Pharmaceutical segment revenue	31,361			96,516
Medical distribution and products (2)	3,431			10,339
Cardinal Health At Home	440			1,339
Medical segment revenue	3,871			11,678
Total segment revenue	35,232			108,194
Corporate (3)	(4		)	(13		)
Total revenue	$	35,228		$	108,181

(1) Our Nuclear and Precision Health Solutions division was formerly referred to as our Nuclear Pharmacy Services division.

(2) Comprised of all Medical segment businesses except for Cardinal Health At Home division.

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

The following table presents revenue by geographic area:

	Three Months Ended March 31, 2019			Nine Months Ended March 31, 2019
(in millions)
United States	$	34,230		$	105,190
International	1,002			3,004
Total segment revenue	35,232			108,194
Corporate (1)	(4		)	(13		)
Total revenue	$	35,228		$	108,181

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

Segment Profit

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, legal and compliance. Corporate expenses are allocated to the segments based on headcount, level of benefit provided and other ratable allocation methodologies. The results attributable to noncontrolling interests are recorded within segment profit.

We do not allocate the following items to our segments: last-in first-out, or ("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)/expense, net; interest expense, net; loss on extinguishment of debt; and provision for/(benefit from) income taxes.

In addition, certain investment spending, 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. Because approval for these projects is dependent on executive management, we retain these expenses at Corporate. Investment spending within Corporate was $17 million and $7 million for the three months ended March 31, 2019 and 2018, respectively, and $36 million and $17 million for the nine months ended March 31, 2019 and 2018, respectively.

In connection with the naviHealth divestiture discussed in Note 2, we recognized a pre-tax gain of $508 million during the nine months ended March 31, 2019, which was retained at Corporate.

33 Cardinal Health | Q3Fiscal 2019 Form 10-Q

Notes to Financial Statements

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

	Three Months Ended March 31,
(in millions)	2019			2018
Pharmaceutical	$	536		$	596
Medical	155			199
Total segment profit	691			795
Corporate	(259		)	(249		)
Total operating earnings	$	432		$	546

	Nine Months Ended March 31,
(in millions)	2019			2018
Pharmaceutical	$	1,388		$	1,576
Medical	479			548
Total segment profit	1,867			2,124
Corporate	(115		)	(918		)
Total operating earnings	$	1,752		$	1,206

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

(in millions)	March 31, 2019		June 30, 2018
Pharmaceutical	$	21,426	$	21,421
Medical	15,548		16,066
Corporate	3,835		2,464
Total assets	$	40,809	$	39,951

14. Share-Based Compensation

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 March 31,
(in millions)	2019		2018
Restricted share unit expense	$	17	$	20
Employee stock option expense	2		7
Performance share unit expense	4		(4		)
Total share-based compensation	$	23	$	24

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

	Nine Months Ended March 31,
(in millions)	2019		2018
Restricted share unit expense	$	47	$	56
Employee stock option expense	8		17
Performance share unit expense	9		(9		)
Total share-based compensation	$	64	$	64

The total tax benefit related to share-based compensation was $4 million and $8 million for the three months ended March 31, 2019 and 2018, respectively, and $13 million and $20 million for the nine months ended March 31, 2019 and 2018, respectively.

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, 2018	2		$	71.58
Granted	2		50.50
Vested	(1	)	74.99
Canceled and forfeited	—		—
Nonvested at March 31, 2019	3		$	52.08

At March 31, 2019, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested restricted share units not yet recognized was $89 million, which is expected to be recognized over a weighted-average period of two years.

Stock Options

Employee stock options granted under the Plans generally vest in equal annual installments over three years and are exercisable for 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, 2018	7	$	64.50
Granted	—	—
Exercised	—	—
Canceled and forfeited	—	—
Outstanding at March 31, 2019	7	$	63.92
Exercisable at March 31, 2019	6	$	62.81

At March 31, 2019, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested stock options not yet recognized was $7 million, which is expected to be recognized over a weighted-average period of one year.

Cardinal Health | Q3Fiscal 2019 Form 10-Q 34

Notes to Financial Statements

The following tables provide additional detail related to stock options:

(in millions)	March 31, 2019		June 30, 2018
Aggregate intrinsic value of outstanding options at period end	$	12	$	13
Aggregate intrinsic value of exercisable options at period end	12		13

(in years)	March 31, 2019	June 30, 2018
Weighted-average remaining contractual life of outstanding options	6	7
Weighted-average remaining contractual life of exercisable options	5	5

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, 2018	0.4		$	66.13
Granted	0.5		50.96
Vested (1)	(0.1	)	84.27
Canceled and forfeited	(0.1	)	51.75
Nonvested at March 31, 2019	0.7		$	51.30

(1) No payout was made because the threshold performance goal was not met.

At March 31, 2019, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested performance share units not yet recognized was $21 million, which is expected to be recognized over a weighted-average period of two years if targets are achieved.

35 Cardinal Health | Q3Fiscal 2019 Form 10-Q

Exhibits

Exhibits

Exhibit Number	Exhibit Description
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 June 30, 2016, File No. 1-11373)
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

Cardinal Health uses its website as a channel of distribution for material company information. Important information, including news releases, financial information, earnings and analyst presentations and information about upcoming presentations and events is routinely posted and accessible at ir.cardinalhealth.com. In addition, the website allows investors and other interested persons to sign up automatically to receive e-mail alerts when the company posts news releases, SEC filings and certain other information on its website.

Cardinal Health | Q3Fiscal 2019 Form 10-Q 36

Form 10-Q Cross Reference Index

Form 10-Q Cross Reference Index

Item Number		Page
	Part I. Financial Information
Item 1	Financial Statements	19
Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	2
Item 3	Quantitative and Qualitative Disclosures about Market Risk	18
Item 4	Controls and Procedures	18
	Part II. Other Information
Item 1	Legal Proceedings	18
Item 1A	Risk Factors	18
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	18
Item 3	Defaults Upon Senior Securities	N/A
Item 4	Mine Safety Disclosures	N/A
Item 5	Other Information	N/A
Item 6	Exhibits	36
	Signatures	38

N/A Not applicable

37 Cardinal Health | Q3Fiscal 2019 Form 10-Q

Additional Information

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:	May 9, 2019	/s/    MICHAEL C. KAUFMANN
		Michael C. Kaufmann
		Chief Executive Officer
		/s/    JORGE M. GOMEZ
		Jorge M. Gomez
		Chief Financial Officer

Cardinal Health | Q3Fiscal 2019 Form 10-Q 38

EX-31.1

Exhibit 31.1

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: May 9, 2019

/s/ MICHAEL C. KAUFMANN

Michael C. Kaufmann

Chief Executive Officer

EX-31.2

Exhibit 31.2

I, Jorge M. Gomez, 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: May 9, 2019

/s/ JORGE M. GOMEZ

Jorge M. Gomez

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

(1) the Annual Report on Form 10-Q for the quarter ended March 31, 2019 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: May 9, 2019

/s/ MICHAEL C. KAUFMANN

Michael C. Kaufmann

Chief Executive Officer

/s/ JORGE M. GOMEZ

Jorge M. Gomez

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 this Annual Report on Form 10-K for the fiscal year ended June 30, 2018 (the “2018 Form 10-K”), our quarterly reports on Form 10-Q and 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, including materials posted on our website, 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;

• uncertainties relating to the pricing of generic pharmaceuticals;

• uncertainties relating to the timing, frequency and profitability of generic pharmaceutical launches;

• our ability to maintain the benefits of our generic pharmaceutical sourcing venture with CVS Health Corporation;

• with respect to our distribution services agreements with branded pharmaceutical manufacturers, changes in the amount of service fees we receive or, in cases where part of our compensation under these agreements is based on branded pharmaceutical price appreciation, changes in the frequency or magnitude of such price appreciation;

• changes in manufacturer approaches to pricing branded pharmaceutical products and risks related to our compensation under contractual arrangements with manufacturers being set as a percentage of the wholesale acquisition cost of branded pharmaceuticals;

• changes in the timing or frequency of the introduction of branded pharmaceuticals;

• our high sales concentration with certain key customers, including CVS Health Corporation and OptumRx;

• actions of regulatory bodies and other governmental authorities, including the U.S. Drug Enforcement Administration, certain agencies within the U.S. Department of Health and Human Services (including the U.S. Food and Drug Administration, 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 authorities, state health departments, state insurance departments, state Medicaid departments or comparable regulatory bodies or governmental authorities or foreign equivalents that, in each case, could delay, limit or suspend product development, manufacturing, distribution, importation or sales or result in warning letters, recalls, seizures, injunctions or monetary sanctions;

• any compromise of our information systems or of those of a third-party service provider, including unauthorized access to or use or disclosure of company or customer information, disruption of access and ancillary risks associated with our ability to effectively manage any issues arising from any such compromise or disruption;

• possible losses that may arise or expenses that we may incur from the resolution and defense of the lawsuits and investigations in which we have been named relating to the distribution of prescription opioid pain medication;

• potential damage to our reputation, adverse operational impacts or other effects that may result from the national opioid epidemic and the allegations that have been made about our role in such epidemic;

• potential adverse impact to our financial results resulting from enacted and proposed state taxes or other assessments on the sale or distribution of opioid medications;

• risks and uncertainties relating to the acquisition of the Patient Care, Deep Vein Thrombosis and Nutritional Insufficiency businesses from Medtronic plc (the "Patient Recovery Business"), including the ability to successfully integrate the acquired business into our operations; the ability to achieve the expected synergies and accretion in earnings; and unforeseen internal control, regulatory or compliance issues;

• uncertainties related to our ability to manage infrastructure and cost challenges within the Cordis business and to improve Cordis' performance;

• risks associated with the realignment of our Medical segment's supply chain and other businesses, including our ability to achieve the expected benefits from such realignment;

• 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;

• manufacturing disruptions, whether due to regulatory action, production quality deviations, safety issues or raw material shortages or defects, or because a key product is manufactured at a single manufacturing facility with limited alternate facilities;

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

• 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 and related product liability claims and lawsuits, including class action lawsuits;

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

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

• risks arising from certain of our businesses being Medicare-certified suppliers or participating in other federal and state healthcare programs, such as state Medicaid programs and the federal 340B drug pricing program, which businesses are subject to accreditation and quality standards and other rules and regulations, including applicable reporting, billing, payment and record-keeping requirements;

• risks arising from certain of our businesses manufacturing pharmaceutical and medical products or repackaging pharmaceuticals that are purchased or reimbursed through, or are otherwise governed by, federal or state healthcare programs, which businesses are subject to federal and state laws that establish eligibility for reimbursement by such programs and other applicable standards and regulations;

• 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;

• material reductions in purchases, pricing changes, non-renewal, early termination, or delinquencies or defaults under contracts with key customers;

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

• risks arising from changes in U.S. or foreign tax laws, including our ability to effectively implement and account for the recently enacted Tax Cuts and Jobs Act and unfavorable challenges to our tax positions and payments to settle these challenges;

• uncertainties due to possible government healthcare reform, including proposals related to Medicare drug rebate arrangements, possible repeal or replacement of major parts of the Patient Protection and Affordable Care Act and the possible adoption of Medicare-For-All;

• reductions or limitations on governmental funding at the state or federal level or efforts by healthcare insurance companies to limit payments for products and services;

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

• changes in legislation or regulations governing prescription drug pricing, healthcare services or mandated benefits;

• changes in hospital buying groups or hospital buying practices;

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

• the risks of counterfeit products in the supply chain;

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

• 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 or result in the loss of customers;

• disruption, damage or lack of access to, or failure of, our or our third-party service providers' information systems, our critical facilities, including our national logistics center, or our distribution networks;

• risks to our business and information and controls systems in the event that business process improvements, infrastructure modernizations or initiatives to use third-party service providers for key systems and processes are not effectively implemented;

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

• possible losses relating to product liability lawsuits and claims regarding products for which we cannot obtain product liability insurance or for which such insurance may not be adequate to cover our losses, including the product liability lawsuits we are currently defending relating to alleged personal injuries associated with the use of Cordis inferior vena cava filter products;

• our ability to maintain adequate intellectual property protections;

• 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, and uncertainties relating to our ability to achieve the anticipated results from acquisitions;

• our ability to manage and complete divestitures or other strategic business combination transactions, including our ability to find buyers or other strategic exit opportunities and risks associated with the possibility that we could experience greater dis-synergies than anticipated or otherwise fail to achieve our strategic objectives;

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

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

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

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

• 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 including currently proposed tariffs;

• risks associated with our use of and reliance on the global capital and credit markets, including our ability to access credit and our cost of credit, which may adversely affect our ability to efficiently fund our operations or undertake certain expenditures;

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

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

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

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

• other factors described in the “Risk Factors” section of the 2018 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.

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Document and Entity Information - shares	9 Months Ended
	Mar. 31, 2019	Apr. 30, 2019
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
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 Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		298,059,831

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Condensed Consolidated Statements of Earnings - USD ($) shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Income Statement [Abstract]
Revenue	$ 35,228	$ 33,633	$ 108,181	$ 101,460
Cost of products sold	33,464	31,720	103,021	96,014
Gross margin	1,764	1,913	5,160	5,446
Operating expenses:
Distribution, selling, general and administrative expenses	1,097	1,132	3,315	3,325
Restructuring and employee severance	53	2	97	155
Amortization and other acquisition-related costs	154	175	468	543
Impairments and (gain)/loss on disposal of assets, net	11	(6)	(492)	62
Litigation (recoveries)/charges, net	17	64	20	155
Operating earnings	432	546	1,752	1,206
Other (income)/expense, net	(13)	(2)	13	(6)
Interest expense, net	75	84	227	251
Loss on Extinguishment of Debt	0	0	0	2
Earnings before income taxes	370	464	1,512	959
Provision for/(benefit from) income taxes	74	209	342	(466)
Net earnings	296	255	1,170	1,425
Net earnings attributable to noncontrolling interests	0	0	(1)	(3)
Net earnings attributable to Cardinal Health, Inc.	$ 296	$ 255	$ 1,169	$ 1,422
Earnings per common share attributable to Cardinal Health, Inc.:
Basic (in shares)	$ 0.99	$ 0.81	$ 3.89	$ 4.52
Income (Loss) from Continuing Operations, Per Diluted Share	$ 0.99	$ 0.81	$ 3.88	$ 4.50
Weighted-average number of common shares outstanding:
Basic (in shares)	298	313	301	314
Diluted (in shares)	299	315	302	316
Cash dividends declared per common share	$ 0.4763	$ 0.4624	$ 1.4289	$ 1.3872

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Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Net earnings	$ 296	$ 255	$ 1,170	$ 1,425
Other comprehensive income/(loss):
Foreign currency translation adjustments and other	13	110	(16)	141
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Net of Tax	0	(23)	0	(23)
Net unrealized gain/(loss) on derivative instruments, net of tax	(1)	3	(3)	2
Total other comprehensive income/(loss), net of tax		90	(19)	120
Total comprehensive income	308	345	1,151	1,545
Net Income (Loss) Attributable to Noncontrolling Interest	0	0	1	3
Total comprehensive income attributable to Cardinal Health, Inc.	$ 308	$ 345	$ 1,150	$ 1,542

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Condensed Consolidated Balance Sheets - USD ($) $ in Millions	Mar. 31, 2019	Jun. 30, 2018
Current assets:
Cash and equivalents	$ 3,438	$ 1,763
Trade receivables, net	7,879	7,800
Inventories, net	12,622	12,308
Prepaid expenses and other	1,643	1,926
Assets held for sale	0	756
Total current assets	25,582	24,553
Property and equipment, net	2,322	2,487
Goodwill and other intangibles, net	11,860	12,229
Other assets	1,045	682
Total assets	40,809	39,951
Current liabilities:
Accounts payable	20,517	19,677
Current portion of long-term obligations and other short-term borrowings	1,451	1,001
Other accrued liabilities	1,951	2,002
Liabilities related to assets held for sale	0	213
Total current liabilities	23,919	22,893
Long-term obligations, less current portion	7,629	8,012
Deferred income taxes and other liabilities	3,029	2,975
Redeemable noncontrolling interests	0	12
Preferred shares, without par value:
Authorized—500 thousand shares, Issued—none	0	0
Common shares, without par value:
Authorized—755 million shares, Issued—327 million shares at March 31, 2019 and June 30, 2018, respectively	2,748	2,730
Retained earnings	5,386	4,645
Common shares in treasury, at cost: 29 million shares and 18 million shares at March 31, 2019 and June 30, 2018, respectively	(1,793)	(1,224)
Accumulated other comprehensive loss	(111)	(92)
Total Cardinal Health, Inc. shareholders' equity	6,230	6,059
Noncontrolling interests	2	0
Total shareholders’ equity	6,232	6,059
Total liabilities, redeemable noncontrolling interests and shareholders’ equity	$ 40,809	$ 39,951

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Condensed Consolidated Balance Sheets (Parenthetical) - shares	Mar. 31, 2019	Jun. 30, 2018
Statement of Financial Position [Abstract]
Preferred shares, authorized	500,000	500,000
Preferred shares, issued	0	0
Common shares, authorized	755,000,000	755,000,000
Common shares, issued	327,000,000	327,000,000
Common shares in treasury	29,000,000	18,000,000

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Condensed Consolidated Statements of Shareholders' Equity - USD ($) shares in Millions, $ in Millions	Total	Common Stock	Retained Earnings	Treasury Stock	Accumulated Other Comprehensive Income/(Loss)	Noncontrolling Interest
Net Income (Loss) Attributable to Parent	$ 1,422		$ 1,422
Balance at beginning of period (in shares) at Jun. 30, 2017		327.0
Balance at beginning of period at Jun. 30, 2017	6,828	$ 2,697	4,967		$ (125)	$ 20
Treasury, balance at beginning of period (in shares) at Jun. 30, 2017				(11.0)
Treasury, balance at beginning of period at Jun. 30, 2017				$ (731)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	1,425
Net Earnings Including Portion Attributable to Noncontrolling Interest Excluding Redeemable Noncontrolling Interest	1,422
Other Comprehensive Income (Loss), Net of Tax	120				120
Other Comprehensive Income (Loss), Net of Tax	120
Purchase from noncontrolling interests	(19)					(19)
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures				1.0
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures	68	$ 13		$ 55
Treasury shares acquired (in shares)				(6.5)
Treasury shares acquired	(450)			$ (450)
Dividends declared	(436)		(436)
Other	5		5
Balance at end of period (in shares) at Mar. 31, 2018		327.0
Balance at end of period at Mar. 31, 2018	7,538	$ 2,710	5,958		(5)	1
Treasury, balance at end of period (in shares) at Mar. 31, 2018				(16.0)
Treasury, balance at end of period at Mar. 31, 2018				$ (1,126)
Net Income (Loss) Attributable to Parent	255		255
Balance at beginning of period (in shares) at Dec. 31, 2017		327.0
Balance at beginning of period at Dec. 31, 2017	7,619	$ 2,694	5,848		(95)	20
Treasury, balance at beginning of period (in shares) at Dec. 31, 2017				(12.0)
Treasury, balance at beginning of period at Dec. 31, 2017				$ (848)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	255
Net Earnings Including Portion Attributable to Noncontrolling Interest Excluding Redeemable Noncontrolling Interest	255
Other Comprehensive Income (Loss), Net of Tax	90				90
Other Comprehensive Income (Loss), Net of Tax	90
Purchase from noncontrolling interests	(19)					(19)
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures	38	$ 16		$ 22
Treasury shares acquired (in shares)				(4.0)
Treasury shares acquired	(300)			$ (300)
Dividends declared	(144)		(144)
Other	(1)		(1)
Balance at end of period (in shares) at Mar. 31, 2018		327.0
Balance at end of period at Mar. 31, 2018	7,538	$ 2,710	5,958		(5)	1
Treasury, balance at end of period (in shares) at Mar. 31, 2018				(16.0)
Treasury, balance at end of period at Mar. 31, 2018				$ (1,126)
Net Income (Loss) Attributable to Parent	$ 1,169		1,169
Balance at beginning of period (in shares) at Jun. 30, 2018	327.0	327.0
Balance at beginning of period at Jun. 30, 2018	$ 6,059	$ 2,730	4,645		(92)	0
Treasury, balance at beginning of period (in shares) at Jun. 30, 2018	(18.0)			(18.0)
Treasury, balance at beginning of period at Jun. 30, 2018	$ (1,224)			$ (1,224)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	1,170					1
Net Earnings Including Portion Attributable to Noncontrolling Interest Excluding Redeemable Noncontrolling Interest	1,170
Other Comprehensive Income (Loss), Net of Tax	(19)				(19)
Other Comprehensive Income (Loss), Net of Tax	(19)
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures				1.0
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures	49	$ 18		$ 31
Treasury shares acquired (in shares)				(11.5)
Treasury shares acquired	(600)			$ (600)
Dividends declared	(429)		(429)
Other	$ 2		1			1
Balance at end of period (in shares) at Mar. 31, 2019	327.0	327.0
Balance at end of period at Mar. 31, 2019	$ 6,232	$ 2,748	5,386		(111)	2
Treasury, balance at end of period (in shares) at Mar. 31, 2019	(29.0)			(29.0)
Treasury, balance at end of period at Mar. 31, 2019	$ (1,793)			$ (1,793)
Net Income (Loss) Attributable to Parent	296
Balance at beginning of period (in shares) at Dec. 31, 2018		327.0
Balance at beginning of period at Dec. 31, 2018	6,043	$ 2,728	5,233		(123)	0
Treasury, balance at beginning of period (in shares) at Dec. 31, 2018				(29.0)
Treasury, balance at beginning of period at Dec. 31, 2018				$ (1,795)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	296
Net Earnings Including Portion Attributable to Noncontrolling Interest Excluding Redeemable Noncontrolling Interest	296
Other Comprehensive Income (Loss), Net of Tax					12
Other Comprehensive Income (Loss), Net of Tax	12
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures	22	$ 20		$ 2
Dividends declared	(143)		(143)
Other	$ 2					2
Balance at end of period (in shares) at Mar. 31, 2019	327.0	327.0
Balance at end of period at Mar. 31, 2019	$ 6,232	$ 2,748	$ 5,386		$ (111)	$ 2
Treasury, balance at end of period (in shares) at Mar. 31, 2019	(29.0)			(29.0)
Treasury, balance at end of period at Mar. 31, 2019	$ (1,793)			$ (1,793)

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions	9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Cash flows from operating activities:
Net earnings	$ 1,170	$ 1,425
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	759	779
Loss on Sale of Investments	2	6
Impairments and (gain)/loss on disposal of assets, net	(492)	62
Share-based compensation	(64)	(64)
Provision for bad debts	59	50
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability	0	(2)
Change in operating assets and liabilities, net of effects from acquisitions and divestitures:
Increase in trade receivables	(156)	(632)
Increase in inventories	(345)	(865)
Increase in accounts payable	846	1,635
Other accrued liabilities and operating items, net	309	(308)
Net cash provided by operating activities	2,216	2,214
Cash flows from investing activities:
Acquisition of subsidiaries, net of cash acquired	(38)	(6,142)
Additions to property and equipment	(192)	(246)
Purchase of available-for-sale securities and other investments	(11)	(7)
Proceeds from sale of available-for-sale securities and other investments	3	65
Proceeds from divestitures and disposal of property and equipment and held for sale assets	749	862
Net cash provided by/(used in) investing activities	511	(5,468)
Cash flows from financing activities:
Payment for Contingent Consideration Liability, Financing Activities	0	22
Net change in short-term borrowings	0	(50)
Purchase of noncontrolling interests	0	(106)
Proceeds from Issuance of Long-term Debt and Capital Securities, Net	1	3
Reduction of long-term obligations	(3)	(403)
Net proceeds/(tax withholdings) from share-based compensation	(13)	(3)
Dividends on common shares	(435)	(436)
Payments for Repurchase of Common Stock	(600)	(450)
Net cash used in financing activities	(1,050)	(1,467)
Effect of exchange rates changes on cash and equivalents	(2)	17
Net increase/(decrease) in cash and equivalents	1,675	(4,704)
Cash and equivalents at beginning of period	1,763	6,879
Cash and equivalents at end of period	$ 3,438	$ 2,175

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Basis of Presentation and Summary of Significant Accounting Policies

9 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Basis of Presentation and Summary of Significant Accounting Policies

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 these condensed consolidated financial statements refer to Cardinal Health, Inc. and its majority-owned or controlled subsidiaries unless the context requires otherwise.

Our fiscal year ends on June 30. References to fiscal 2019 and 2018 in these condensed consolidated financial statements are to the fiscal years ending or ended June 30, 2019 and June 30, 2018, 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 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 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. To conform to the current year presentation, certain prior year amounts have been reclassified. In addition, financial results presented for this fiscal 2019 interim period are not necessarily indicative of the results that may be expected for the full fiscal year ending June 30, 2019. These condensed consolidated financial statements are unaudited and, accordingly, 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, 2018 (the "2018 Form 10-K").

Recent Financial Accounting Standards

In October 2018, the Financial Accounting Standards Board ("FASB") issued amended accounting guidance related to derivatives and hedging which permits the use of the Secured Overnight Financing Rate ("SOFR") Overnight Index Swap ("OIS") as a Benchmark Interest Rate for Hedge Accounting Purposes. This guidance will be effective for us in the first quarter of fiscal 2020 and must be applied on a prospective basis. The impact of adoption on our condensed consolidated financial statements is contingent upon future events.

In March 2018, the FASB issued amended accounting guidance to codify SEC staff accounting bulletin 118 (“SAB 118”), which was issued in connection with the Tax Cuts and Jobs Act (the “Tax Act”) of December 2017. The guidance allows companies to use provisional estimates to record the effects of the Tax Act and also provides a measurement period (not to exceed one year from the date of enactment) to complete the accounting for the impacts of the Tax Act. We adopted this guidance in the second quarter of fiscal 2018 when it was initially issued as SAB 118. We completed our accounting for the impacts from enactment of the Tax Act during the three months ended December 31, 2018. Future adjustments to the financial statements may be necessary as final tax regulations and any additional pending regulatory changes are issued, the impacts of which are being currently assessed, or will be assessed, as final regulations are issued. See Note 7 for additional information regarding income taxes.

In June 2016, the FASB issued amended accounting guidance that will require entities to measure credit losses on trade and other receivables, held-to-maturity debt securities, loans and other instruments using an "expected credit loss" model that considers historical experience, current conditions and reasonable supportable forecasts. This guidance also requires that credit losses on available-for-sale debt securities with unrealized losses be recognized as allowances rather than as deductions in the amortized cost of the securities. This guidance will be effective for us in the first quarter of fiscal 2021. We are currently evaluating the impact of adoption on our condensed consolidated financial statements.

Leases

In February 2016, the FASB issued amended accounting guidance that requires lessees to recognize most leases on the balance sheet as a lease liability and corresponding right-of-use asset. The guidance also requires disclosures that meet the objective of enabling financial statement users to assess the amount, timing and uncertainty of cash flows arising from leases. We will adopt this guidance when it is effective for us in the first quarter of fiscal 2020 and we expect to elect the transition option which will allow us to not apply the amended lease accounting guidance to comparative periods that will be presented. We are continuing to evaluate the impact of this standard on our condensed consolidated financial statements, including identification of embedded leases and performing lease contract reviews. The majority of our lease spend relates to certain real estate with the remaining lease spend primarily related to equipment. Although we are continuing to assess the impact of the amended guidance, we generally anticipate that the adoption of the amended lease guidance will result in an increase to the assets and liabilities on our condensed consolidated balance sheets and will require certain changes to our systems and processes.

Revenue Recognition

In May 2014, the FASB issued amended accounting guidance related to revenue recognition which we adopted in the first quarter of fiscal 2019 using the modified retrospective method and that we applied to customer contracts that were not completed as of June 30, 2018.

The adoption of the amended accounting guidance did not have a material impact on our condensed consolidated financial statements. We did not record any material contract assets, contract liabilities, or deferred contract costs in our condensed consolidated balance sheets upon adopting the amended accounting guidance. Assets recorded for the right to recover products from customers and the associated refund liabilities for return allowances were not material.

We elected the practical expedient to expense costs to obtain a contract when incurred when the amortization period would have been one year or less. Additionally, we elected the practical expedients to not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less, contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed and for contracts for which the variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation. See Note 13 for additional information regarding our disaggregation of revenue.

Revenue in both segments is primarily related to the distribution of pharmaceutical and medical products, which we recognize at a point in time when title transfers to customers and we have no further obligation to provide services related to such merchandise. Service revenues are recognized over the period that services are provided to the customer. Revenues derived from services are not material for either segment for all periods presented.

We are generally the principal in a transaction, therefore our revenue is primarily recorded on a gross basis. When we are a principal in a transaction, we have determined that we control the ability to direct the use of the product or service prior to transfer to a customer, are primarily responsible for fulfilling the promise to provide the product or service to our customer, have discretion in establishing prices, and ultimately control the transfer of the product or services provided to the customer.

Revenue is recorded net of sales returns and allowances. Revenues are measured based on the amount of consideration that we expect to receive, reduced by estimates for return allowances, discounts, rebates and other variable consideration. Sales returns are recorded based on estimates using historical data. Shipping and handling costs are primarily included in distribution, selling, general and administrative ("SG&A") expenses in our condensed consolidated statements of earnings and include all delivery expenses as well as all costs to prepare the product for shipment to the end customer.  Shipping and handling costs incurred after control has transferred to the customer are treated as fulfillment costs.

In the first quarter of fiscal 2019, we adopted the following Accounting Standards Updates ("ASU"). ASU 2016-01 Financial Instruments: Recognition and Measurement of Financial Assets and Financial Liabilities; ASU 2018-03 Technical Corrections and Improvements to Financial Instruments; ASU 2016-15 Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments; ASU 2016-16 Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory; and ASU 2017-12 Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities. The adoption of these ASU's did not have a material impact on our condensed consolidated financial statements.

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Acquisitions and Divestitures

9 Months Ended

Mar. 31, 2019

Business Combinations [Abstract]

Acquisitions

2. Acquisitions and Divestitures

Acquisitions

Patient Recovery Business

On July 29, 2017, we acquired the Patient Care, Deep Vein Thrombosis, and Nutritional Insufficiency businesses (the "Patient Recovery Business") from Medtronic plc for $6.1 billion in cash. The acquisition further expands our Medical segment's portfolio of self-manufactured products.

Transaction and integration costs associated with the acquisition of the Patient Recovery business were $17 million and $25 million for the three months ended March 31, 2019 and 2018, respectively, and $62 million and $85 million for the nine months ended March 31, 2019 and 2018, respectively. These costs are included in amortization and other acquisition-related costs in the condensed consolidated statements of earnings.

Fair Value of Assets Acquired and Liabilities Assumed

The allocation of the fair value of assets acquired and liabilities assumed for the acquisition of the Patient Recovery Business was finalized during the three months ended September 30, 2018, resulting in goodwill of $3.3 billion. There were no significant adjustments to the allocation of the fair value of assets acquired and liabilities assumed for the Patient Recovery Business acquisition from those disclosed in our fiscal 2018 Form 10-K.

Divestitures

In August 2018, we sold our 98 percent ownership interest in naviHealth Holdings, LLC ("naviHealth") to investor entities controlled by Clayton, Dubilier & Rice in exchange for cash proceeds of $737 million (after adjusting for certain fees and expenses) and a 44 percent equity interest in a partnership that owns 100 percent of the equity interest of naviHealth. We also have certain call rights to reacquire naviHealth. Refer to Note 5 for further discussion regarding this investment.

During the nine months ended March 31, 2019, we recognized a pre-tax gain of $508 million related to this divestiture in impairments and (gain)/loss on disposal of assets in our condensed consolidated statement of earnings. This gain includes our initial recognition of an equity method investment for $358 million and the derecognition of redeemable noncontrolling interests of $12 million. The fiscal 2019 tax expense as a result of this transaction will be approximately $130 million. We determined that the sale of the naviHealth business does not meet the criteria to be classified as discontinued operations. The naviHealth business operated within our Medical segment.

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Restructuring and Employee Severance

9 Months Ended

Mar. 31, 2019

Restructuring Charges [Abstract]

Restructuring and Employee Severance

3. Restructuring and Employee Severance

The following table summarizes restructuring and employee severance costs:

	Three Months Ended March 31,
(in millions)	2019		2018
Employee-related costs (1)	$	29	$	(1	)
Facility exit and other costs (2)	24		3
Total restructuring and employee severance	$	53	$	2

	Nine Months Ended March 31,
(in millions)	2019		2018
Employee-related costs (1)	$	70	$	18
Facility exit and other costs (2)	27		137
Total restructuring and employee severance	$	97	$	155

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

(2) Facility exit and other costs primarily consist of product distribution and lease contract termination costs, lease costs associated with vacant facilities, accelerated depreciation, equipment relocation costs, project consulting fees, costs associated with restructuring our delivery of information technology infrastructure services and certain other divestiture-related costs.

In early fiscal 2019, we began implementing certain enterprise-wide cost-saving measures, which we expect to reduce our future operating expenses. As a result of these measures, we incurred pre-tax employee-related severance costs of $27 million and $60 million, during the three and nine months ended March 31, 2019, respectively, which are reflected in restructuring and employee severance in the condensed consolidated statements of earnings.

In fiscal 2018, we entered into an agreement to transition the distribution of our Medical segment's surgeon gloves in certain international markets from a third-party distribution arrangement to a direct distribution model. The costs associated with this restructuring included $125 million, on a pre-tax basis, in contract termination costs that were paid during fiscal 2018. These costs are reflected in restructuring and employee severance in the condensed consolidated statements of earnings during the nine months ended March 31, 2018.

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, 2018	$	24		$	4		$	28
Additions	60			14			74
Payments and other adjustments	(32		)	(2		)	(34		)
Balance at March 31, 2019	$	52		$	16		$	68

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Goodwill and Other Intangible Assets

9 Months Ended

Mar. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

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, 2018	$	2,621		$	5,695		$	8,316
Goodwill acquired, net of purchase price adjustments	19			7			26
Foreign currency translation adjustments and other	(3		)	(9		)	(12		)
Balance at March 31, 2019	$	2,637		$	5,693		$	8,330

Other Intangible Assets

The following tables summarize other intangible assets by class at:

	March 31, 2019
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible		Weighted- Average Remaining Amortization Period (Years)
Indefinite-life intangibles:
IPR&D, trademarks and other	$	59	$	—	$	59	N/A
Total indefinite-life intangibles	59		—		59		N/A
Definite-life intangibles:
Customer relationships	3,528		1,432		2,096		14
Trademarks, trade names and patents	669		283		386		14
Developed technology and other	1,563		574		989		12
Total definite-life intangibles	5,760		2,289		3,471		14
Total other intangible assets	$	5,819	$	2,289	$	3,530	N/A

	June 30, 2018
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible
Indefinite-life intangibles:
IPR&D, trademarks and other	$	62	$	—	$	62
Total indefinite-life intangibles	62		—		62
Definite-life intangibles:
Customer relationships	3,513		1,191		2,322
Trademarks, trade names and patents	667		246		421
Developed technology and other	1,562		454		1,108
Total definite-life intangibles	5,742		1,891		3,851
Total other intangible assets	$	5,804	$	1,891	$	3,913

Total amortization of intangible assets was $133 million and $148 million for the three months ended March 31, 2019 and 2018, respectively, and $399 million and $435 million for the nine months ended March 31, 2019 and 2018, respectively. For acquisitions closed on or before March 31, 2019, estimated annual amortization of intangible assets for the remainder of fiscal 2019 through 2023 is as follows: $133 million, $504 million, $436 million, $401 million and $351 million.

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Investments

9 Months Ended

Mar. 31, 2019

Investments, Debt and Equity Securities [Abstract]

Investments

5. Investments

Investments in non-marketable equity securities are accounted for under the fair value, equity or net asset value method of accounting and are included in other assets in the condensed consolidated balance sheets. For equity securities without a readily determinable fair value, we use the fair value measurement alternative and measure the securities at cost less impairment, if any, including adjustments for observable price changes in orderly transactions for an identical or similar investment of the same issuer. For investments in which we can exercise significant influence but do not control, we use the equity method of accounting. Our share of the earnings and losses are recorded in other income, net in the condensed consolidated statements of earnings. We closely monitor our investments for other-than-temporary impairment by considering factors such as the operating performance of the investment and current economic and market conditions.

In connection with the naviHealth divestiture discussed in Note 2, we obtained a 44 percent equity interest in a partnership that owns 100 percent of the equity interest of naviHealth. We accounted for this investment initially at its fair value using Level 3 unobservable inputs based on expected sales proceeds following a competitive bidding process. We initially recognized a $358 million equity method investment.

We are accounting for our equity interest in naviHealth using the equity method of accounting on a one-month reporting lag. The impact of our proportionate share of naviHealth's results was not material to our condensed consolidated statements of earnings for the nine months ended March 31, 2019. Upon the divestiture closing, we received a non-cash distribution of $14 million in the form of the partnership's payment for certain of our divestiture transaction costs directly to the applicable third-party. At March 31, 2019 the carrying value of this investment was $339 million.

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Long-Term Obligations and Other Short-Term Borrowings

9 Months Ended

Mar. 31, 2019

Long-Term Obligations and Other Short-Term Borrowings [Abstract]

Debt Disclosure [Text Block]

6. Long-Term Obligations and Other Short-Term Borrowings

Long-Term Debt

At March 31, 2019 and June 30, 2018, we had total long-term obligations, including the current portion and other short-term borrowings, of $9.1 billion and $9.0 billion, respectively. All the borrowings represent unsecured obligations of Cardinal Health, Inc. and rank equally in right of payment with all of our existing and future unsecured and unsubordinated indebtedness. Interest is paid pursuant to the terms of the obligations. These obligations are effectively subordinated to the liabilities of our subsidiaries, including trade payables of $20.5 billion.

Other Financing Arrangements

In addition to cash and equivalents and operating cash flow, other sources of liquidity include a $2.0 billion commercial paper program backed by a $2.0 billion revolving credit facility. We also have a $1.0 billion committed receivables sales facility.

On November 6, 2018, we increased the maximum consolidated leverage ratio permitted under our revolving credit and committed receivables facilities to provide that, as of the end of any calendar quarter, our maximum consolidated leverage ratio may be no more than 4.25-to-1. The maximum permitted ratio will reduce to 4.00-to-1 in September 2019, to 3.75-to-1 in March 2020 and to 3.25-to-1 in September 2020. As of March 31, 2019, we were in compliance with this financial covenant.

In November 2016, we renewed our committed receivables sales facility program through Cardinal Health Funding, LLC (“CHF”) through November 1, 2019. CHF was organized for the sole purpose of buying receivables and selling undivided interests in those receivables to third-party purchasers. Although consolidated with Cardinal Health, Inc. in accordance with GAAP, CHF is a separate legal entity from Cardinal Health, Inc. and from our subsidiary that sells receivables to CHF. CHF is designed to be a special purpose, bankruptcy-remote entity whose assets are available solely to satisfy the claims of its creditors.

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Income Taxes

9 Months Ended

Mar. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

7. Income Taxes

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

U.S. Tax Cuts and Jobs Act

On December 22, 2017, the United States enacted the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act made broad and complex changes to the U.S. tax code that affected fiscal 2018 and will incrementally affect our fiscal year 2019 financial results in several ways. First, the U.S. statutory tax rate in fiscal 2019 is reduced to 21 percent. Second, the Tax Act established new tax provisions that affected us beginning July 1, 2018 including, (1) eliminating the U.S. manufacturing deduction; (2) establishing new limitations on deductible interest expense and certain executive compensation; (3) eliminating the corporate alternative minimum tax; (4) creating the base erosion anti-abuse tax; (5) creating a new provision designed to tax global intangible low-tax income (“GILTI”) and allow for a deduction related to foreign derived intangible income ("FDII"); (6) generally eliminating U.S. federal income taxes on dividends from foreign subsidiaries; and (7) changing rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017.

Regarding the new GILTI tax rules, we elected to treat taxes due on future GILTI inclusions in U.S. taxable income as a current period expense when incurred.

In accordance with SAB 118, we finalized our provisional estimates related to transitional tax benefits (i.e., remeasurement of deferred tax assets and liabilities and the repatriation tax on undistributed foreign earnings) which did not have a significant impact on tax expense during the nine months ended March 31, 2019. Future adjustments to the financial statements may be necessary as final tax regulations, including issued and pending regulatory changes, the impact of which is or will be assessed as final regulations are issued.

Effective Tax Rate

During the three months ended March 31, 2019 and 2018, the effective tax rate was 20.0 percent and 45.1 percent, respectively. The change in the effective tax rates for the three months ended March 31, 2019 compared to the prior period was due to discrete tax items, a lower federal statutory tax rate applied to our U.S. pre-tax earnings as a result of the Tax Act and the prior year unfavorable impact from changes in jurisdictional mix. The three months ended March 31, 2019 benefited from net favorable discrete items of $12 million and the three months ended March 31, 2018 were adversely affected by net unfavorable discrete items of $18 million.

During the nine months ended March 31, 2019 and 2018, the effective tax rate was 22.6 percent and (48.6) percent, respectively. The change in the effective tax rates for the nine months ended March 31, 2019 compared to the prior period was primarily due to the prior year transitional tax benefits from the enactment of the Tax Act. The nine months ended March 31, 2019 also included net discrete benefits of $50 million, primarily related to international legal entity changes, and the nine months ended March 31, 2018 were adversely affected by net unfavorable discrete items of $12 million.

The transitional tax benefits from the Tax Act during the three and nine months ended March 31, 2018 included a provisional net tax benefit of $18 million and $952 million, respectively, related to the remeasurement of our deferred tax assets and liabilities to the new federal statutory rate and the nine months ended March 31, 2018 a provisional tax expense of $41 million for the one-time repatriation tax applied to our undistributed foreign earnings. Our effective tax rates for the three and nine months ended March 31, 2018 also included $57 million of tax expense recognized in connection with the sale of our China distribution business.

Unrecognized Tax Benefits

At March 31, 2019 and June 30, 2018, we had $436 million and $423 million of unrecognized tax benefits, respectively. The March 31, 2019 and June 30, 2018 balances include $275 million and $262 million of unrecognized tax benefits, respectively, that if recognized, would have an impact on the effective tax rate.

At March 31, 2019 and June 30, 2018, we had $116 million and $110 million, respectively, accrued for the payment of interest and penalties related to unrecognized tax benefits, which we recognize in the provision for/(benefit from) 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 between zero and a net decrease of $20 million, exclusive of penalties and interest.

Other Tax Matters

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 2008 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 $159 million and $151 million at March 31, 2019 and June 30, 2018, respectively, and is included in other assets in the condensed consolidated balance sheets.

As a result of the acquisition of the Patient Recovery Business, Medtronic plc is obligated to indemnify us for certain tax exposures and transaction taxes related to periods prior to the acquisition under the purchase agreement. The indemnification receivable was $24 million and $21 million at March 31, 2019 and June 30, 2018, respectively, and is included in other assets in the condensed consolidated balance sheet.

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Commitments, Contingent Liabilities and Litigation

9 Months Ended

Mar. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments, Contingent Liabilities and Litigation

8. Commitments, Contingent Liabilities and Litigation

Commitments

Generic Sourcing Venture with CVS Health Corporation ("CVS Health")

Red Oak Sourcing, LLC ("Red Oak Sourcing") is a U.S.-based generic pharmaceutical sourcing venture with CVS Health for an initial term through June 2024. Red Oak Sourcing negotiates generic pharmaceutical supply contracts on behalf of its participants. Due to the achievement of predetermined milestones, we are required to make quarterly payments of $45.6 million to CVS Health for the initial term.

Contingent Liabilities

New York Opioid Stewardship Act

In April 2018, the State of New York passed a budget which included the Opioid Stewardship Act (the "OSA"). The OSA created an aggregate $100 million annual assessment on all manufacturers and distributors licensed to sell or distribute opioids in New York. Under the OSA, each licensed manufacturer and distributor would be required to pay a portion of the assessment based on its ratable share, as determined by the state, of the total morphine milligram equivalents sold or distributed in New York during the applicable calendar year, beginning in 2017.

In October, we received notices from the New York Department of Health of our estimated payment amount for calendar year 2017. In December 2018, the U.S. District Court for the Southern District of New York ruled that the OSA is unconstitutional and enjoined its enforcement (the "Ruling"). In January 2019, the State filed notice of its intent to appeal the Ruling. In April 2019, the State, among other things, amended the OSA so that the assessment would only cover opioid sales in 2017 and 2018, subject to the State's pending appeal of the Ruling.

We accrue for contingencies if it is probable that a liability has been incurred and the amount can be estimated. At September 30, 2018, we recorded an aggregate accrual of $34 million for calendar year 2017 and the first three quarters of calendar 2018 based on the estimated payment amount, which reflected our best estimate of the OSA payments owed through September 30, 2018. As a result of the Ruling, in the three-months ended December 31, 2018, we reversed this accrual because we no longer believe it is probable that a liability has been incurred.

Legal Proceedings

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

We may be named from time to time in qui tam actions initiated by private third parties. In such actions, the private parties purport to act on behalf of federal or state governments, allege that false claims have been submitted for payment by the government and may receive an award if their claims are successful. 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 purporting to act on behalf of the government.

From time to time, we become aware through employees, internal audits or other parties of possible compliance matters, such as complaints or concerns relating to accounting, internal accounting controls, financial reporting, auditing, or other ethical matters or relating to compliance with laws such as healthcare fraud and abuse, anti-corruption or anti-bribery laws. When we become aware of such possible compliance matters, we investigate internally and take appropriate corrective action. In addition, from time to time, we receive subpoenas or requests for information from various federal or state agencies relating to our business or to the business of a customer, supplier or other industry participants. Internal investigations, subpoenas or requests for information could lead to the assertion of claims or the commencement of legal proceedings against us or result in sanctions.

From time to time, we may determine that products we manufacture or market do not meet our specifications, regulatory requirements, or published standards. When we or a regulatory agency identify a potential quality or regulatory issue, 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, action by regulators and product liability claims and lawsuits, including class actions. Even absent an identified regulatory or quality issue or product recall, we can become subject to product liability claims and lawsuits.

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.

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

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

Opioid Lawsuits

Pharmaceutical wholesale distributors, including us, have been named as defendants in over 2,000 lawsuits relating to the distribution of prescription opioid pain medications. These lawsuits have been filed in various federal, state, and other courts by a variety of plaintiffs, primarily counties, municipalities and other political subdivisions. Plaintiffs also include unions and other health and welfare funds, hospital systems and other healthcare providers, as well as individuals. Of these lawsuits, 63 are purported class actions. The lawsuits seek equitable relief and monetary damages based on a variety of legal theories including various common law claims, such as negligence, public nuisance and unjust enrichment as well as violations of controlled substance laws, the Racketeer Influenced and Corrupt Organizations Act and various other statutes. These lawsuits also name pharmaceutical manufacturers, retail pharmacy chains and other entities as defendants.

The vast majority of these lawsuits were filed in U.S. federal court and have been transferred for consolidated pre-trial proceedings in a Multi-District Litigation proceeding in the U.S. District Court for the Northern District of Ohio. The court, among other things, has ordered that a bellwether trial begin in October 2019. In December 2018, the court denied distributor defendants' motions to dismiss the complaints associated with the bellwether case.

In addition, 15 state attorneys general have filed lawsuits against distributors, including us, in various state courts, and 43 state attorneys general, including 8 that have filed suit, have formed a multi-state task force to investigate the manufacturing, distribution, dispensing and prescribing practices of opioid medications. We have received requests related to this multi-state investigation, as well as separate civil investigative demands, subpoenas or requests for information from these and other state attorneys general offices. We are cooperating with the offices conducting these investigations.

In connection with these proceedings, distributors continue to engage in discussions with various parties, including state attorneys general and representatives of the MDL plaintiffs, regarding possible resolution.

We are vigorously defending ourselves in all of these opioid-related matters. Given the uncertainty surrounding these lawsuits and investigations, we are unable to predict their outcome or estimate a range of reasonably possible losses.

Product Liability Lawsuits

As of May 3, 2019, we are named as a defendant in 237 product liability lawsuits coordinated in Alameda County Superior Court in California involving claims by approximately 2,797 plaintiffs that allege personal injuries associated with the use of Cordis OptEase and TrapEase inferior vena cava (IVC) filter products. Another 22 similar lawsuits involving claims by approximately 24 plaintiffs are pending in other jurisdictions. These lawsuits seek a variety of remedies, including unspecified monetary damages. We are vigorously defending ourselves in these lawsuits.

At March 31, 2019, we had a total of $359 million, net of estimated insurance recoveries, accrued for losses and legal defense costs related to the Cordis IVC filter lawsuits which are presented on a gross basis in the condensed consolidated balance sheets. We believe there is a range of estimated losses with respect to these matters. Because no amount within the range is a better estimate than any other amount within the range, we have accrued the minimum amount in the range. We estimate the high end of the range to be approximately $729 million, net of estimated insurance recoveries.

Antitrust Litigation Proceeds

We received and recognized income resulting from settlements of class action lawsuits in which we were a class member of $46 million and $94 million in the three and nine-months ended March 31, 2019, respectively.

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Fair Value Measurements

9 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

9. Fair Value Measurements

Assets and (liabilities) measured on a recurring basis

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

	March 31, 2019
(in millions)	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	875	$	—	$	—	$	875
Other investments (1)	112		—		—		112
Liabilities:
Forward contracts (2)	—		5		—		5

	June 30, 2018
(in millions)	Level 1		Level 2			Level 3		Total
Assets:
Cash equivalents	$	200	$	—		$	—	$	200
Other investments (1)	117		—			—		117
Liabilities:
Forward contracts (2)	—		(76		)	—		(76		)

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

(2) The fair value of interest rate swaps, foreign currency contracts, net investment hedges 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.

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Financial Instruments

9 Months Ended

Mar. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Financial Instruments

10. 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 fair value through earnings at the end of each period. We are exposed to counterparty credit risk on all of our derivative instruments. Accordingly, we have established and maintain strict counterparty credit guidelines and only enter into derivative instruments with major financial institutions that are rated investment grade or better. We do not have significant exposure to any one counterparty and we believe the risk of loss is remote. Additionally, we do not require collateral under these agreements.

Interest Rate Risk Management

We are exposed to the impact of interest rate changes. Our objective is to manage the impact of interest rate changes on cash flows and the market value of our borrowings. We utilize a mix of debt maturities along with both fixed-rate and variable-rate debt to manage changes in interest rates. In addition, we enter into interest rate swaps to further manage our exposure to interest rate variations related to our borrowings and to lower our overall borrowing costs.

Currency Exchange Risk Management

We conduct business in several major international currencies and are subject to risks associated with changing foreign exchange rates. Our objective is to reduce volatility in earnings, cash flow and net investments in certain subsidiaries to allow management to focus its attention on business operations. Accordingly, we enter into various contracts that change in value as foreign exchange rates change to protect the value of existing foreign currency assets and liabilities, commitments and anticipated foreign currency revenue and expenses.

Commodity Price Risk Management

We are exposed to changes in the price of certain commodities. Our objective is to reduce earnings and cash flow volatility associated with forecasted purchases of these commodities to allow management to focus its attention on business operations. Accordingly, we enter into derivative contracts when possible to manage the price risk associated with certain forecasted purchases.

Fair Value Hedges

We enter into pay-floating interest rate swaps to hedge the changes in the fair value of fixed-rate debt resulting from fluctuations in interest rates. These contracts are designated and qualify as fair value hedges. Accordingly, the gain or loss recorded on the pay-floating interest rate swaps is directly offset by the change in fair value of the underlying debt. Both the derivative instrument and the underlying debt are adjusted to market value at the end of each period with any resulting gain or loss recorded in interest expense in the condensed consolidated statements of earnings. For the three and nine months ended March 31, 2019 and 2018, there was no gain or loss recorded to interest expense as changes in the market value of our derivative instruments offset changes in the market value of the underlying debt.

During the nine months ended March 31, 2019, no new pay-floating interest rate swaps were executed. During the nine months ended March 31, 2018, we entered into pay-floating interest rate swaps with a total notional amount of $650 million. These swaps have been designated as fair value hedges of our fixed rate debt and are included in other assets in the condensed consolidated balance sheet.

Cash Flow Hedges

We enter into derivative instruments to hedge our exposure to changes in cash flows attributable to interest rate, foreign currency and commodity price fluctuations associated with certain forecasted transactions.

These derivative instruments are designated and qualify as cash flow hedges. Accordingly, the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same line item associated with the forecasted transaction and in the same period during which the hedged transaction affects earnings. Gains and losses recognized in accumulated other comprehensive loss and reclassified into earnings were immaterial for the three and nine months ended March 31, 2019 and 2018.

All gains and losses currently included within accumulated other comprehensive loss associated with our foreign exchange forward contracts that are expected to be reclassified into net earnings within the next 12 months are immaterial.

Net Investment Hedges

We hedge the foreign currency risk associated with certain net investment positions in European subsidiaries. To accomplish this, we enter into cross-currency swaps that are designated as hedges of net investments.

In September 2018, we entered into a €200 million cross-currency swap maturing in 2023.

Cross-currency swaps designated as net investment hedges are marked-to-market using the current spot exchange rate as of the end of the period, with gains and losses included in the foreign currency translation component of accumulated other comprehensive loss until the sale or substantial liquidation of the underlying net investments. To the extent the cross-currency swaps designated as net investment hedges are not highly effective, changes in carrying value attributable to the change in spot rates are recorded in earnings. There was no ineffectiveness in our net investment hedges during the nine months endedMarch 31, 2019.

Economic (Non-Designated) Hedges

We enter into foreign currency contracts to manage our foreign exchange exposure related to sales transactions, intercompany financing transactions and other balance sheet items subject to revaluation that do not meet the requirements for hedge accounting treatment. Accordingly, these derivative instruments are adjusted to current market value at the end of each period through earnings. The gain or loss recorded on these instruments is substantially offset by the remeasurement adjustment on the foreign currency denominated asset or liability. The settlement of the derivative instrument and the remeasurement adjustment on the foreign currency denominated asset or liability are both recorded in other income, net. We recorded an $8 million expense and $9 million income in the nine months ended March 31, 2019 and 2018, respectively. The principal currencies managed through foreign currency contracts are the Euro, Canadian dollar, British pound, Japanese yen, and Chinese renminbi.

Fair Value of Financial Instruments

The carrying amounts of cash and equivalents, trade receivables, accounts payable and other accrued liabilities at March 31, 2019 and June 30, 2018 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)	March 31, 2019		June 30, 2018
Estimated fair value	$	8,925	$	8,852
Carrying amount	9,080		9,013

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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Shareholders' Equity

9 Months Ended

Mar. 31, 2019

Equity [Abstract]

Shareholders' Equity

11. Shareholders' Equity

During the nine months ended March 31, 2019, we repurchased 11.5 million common shares having an aggregate cost of $600 million. The average price paid per common share was $52.32. These repurchases were made under an accelerated share repurchase ("ASR") program, which began on August 16, 2018 and was completed on October 25, 2018.

During the nine months ended March 31, 2018, we repurchased 6.5 million common shares having an aggregate cost of $450 million. The average price paid per common share was $68.81. These repurchases include $300 million purchased under an ASR program, which began on February 14, 2018 and was completed on March 21, 2018. We repurchased 4.3 million shares under the ASR at an average price paid per share of $69.26.

We funded the repurchases with available cash and short-term borrowings. 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 Income/(Loss)
Balance at June 30, 2018	$	(113	)	$	21		$	(92	)
Other comprehensive income/(loss), before reclassifications	(16		)	—			(16		)
Amounts reclassified to earnings	—			(3		)	(3		)
Other comprehensive income/(loss), net of tax	(16		)	(3		)	(19		)
Balance at March 31, 2019	$	(129	)	$	18		$	(111	)

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Earnings Per Share Attributable to Cardinal Health, Inc.

9 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Earnings Per Share Attributable to Cardinal Health, Inc.

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 March 31,
(in millions)	2019	2018
Weighted-average common shares–basic	298	313
Effect of dilutive securities:
Employee stock options, restricted share units and performance share units	1	2
Weighted-average common shares–diluted	299	315

	Nine Months Ended March 31,
(in millions)	2019	2018
Weighted-average common shares–basic	301	314
Effect of dilutive securities:
Employee stock options, restricted share units and performance share units	1	2
Weighted-average common shares–diluted	302	316

The potentially dilutive employee stock options, restricted share units and performance share units that were antidilutive were 6 million and 5 million for the three months ended March 31, 2019 and 2018, respectively, and 6 million and 5 million for the nine months ended March 31, 2019 and 2018, respectively.

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Segment Information

9 Months Ended

Mar. 31, 2019

Segment Reporting [Abstract]

Segment Information

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.

Revenue

Our Pharmaceutical segment distributes branded and generic pharmaceutical, specialty pharmaceutical and over-the-counter healthcare and consumer products in the United States. This segment also provides services to pharmaceutical manufacturers and healthcare providers for specialty pharmaceutical products; operates nuclear pharmacies and radiopharmaceutical manufacturing facilities; provides pharmacy management services to hospitals as well as medication therapy management and patient outcomes services to hospitals, other healthcare providers and payers; and repackages generic pharmaceuticals and over-the-counter healthcare products.

Our Medical segment manufactures, sources and distributes Cardinal Health branded medical, surgical and laboratory products, which are sold in the United States, Canada, Europe, Asia and other markets. In addition to distributing Cardinal Health branded products, this segment also distributes a broad range of national brand products and provides supply chain services and solutions to hospitals, ambulatory surgery centers, clinical laboratories and other healthcare providers in the United States and Canada.

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

	Three Months Ended March 31,
(in millions)	2019			2018
Pharmaceutical	$	31,361		$	29,720
Medical	3,871			3,916
Total segment revenue	35,232			33,636
Corporate (1)	(4		)	(3		)
Total revenue	$	35,228		$	33,633

	Nine Months Ended March 31,
(in millions)	2019			2018
Pharmaceutical	$	96,516		$	89,786
Medical	11,678			11,684
Total segment revenue	108,194			101,470
Corporate (1)	(13		)	(10		)
Total revenue	$	108,181		$	101,460

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

The following table presents disaggregated revenue within our two reportable segments:

	Three Months Ended March 31, 2019			Nine Months Ended March 31, 2019
(in millions)
Pharmaceutical distribution and specialty	$	31,146		$	95,888
Nuclear and Precision Health Solutions (1)	215			628
Pharmaceutical segment revenue	31,361			96,516
Medical distribution and products (2)	3,431			10,339
Cardinal Health At Home	440			1,339
Medical segment revenue	3,871			11,678
Total segment revenue	35,232			108,194
Corporate (3)	(4		)	(13		)
Total revenue	$	35,228		$	108,181

(1) Our Nuclear and Precision Health Solutions division was formerly referred to as our Nuclear Pharmacy Services division.

(2) Comprised of all Medical segment businesses except for Cardinal Health At Home division.

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

The following table presents revenue by geographic area:

	Three Months Ended March 31, 2019			Nine Months Ended March 31, 2019
(in millions)
United States	$	34,230		$	105,190
International	1,002			3,004
Total segment revenue	35,232			108,194
Corporate (1)	(4		)	(13		)
Total revenue	$	35,228		$	108,181

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

Segment Profit

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, legal and compliance. Corporate expenses are allocated to the segments based on headcount, level of benefit provided and other ratable allocation methodologies. The results attributable to noncontrolling interests are recorded within segment profit.

We do not allocate the following items to our segments: last-in first-out, or ("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)/expense, net; interest expense, net; loss on extinguishment of debt; and provision for/(benefit from) income taxes.

In addition, certain investment spending, 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. Because approval for these projects is dependent on executive management, we retain these expenses at Corporate. Investment spending within Corporate was $17 million and $7 million for the three months ended March 31, 2019 and 2018, respectively, and $36 million and $17 million for the nine months ended March 31, 2019 and 2018, respectively.

In connection with the naviHealth divestiture discussed in Note 2, we recognized a pre-tax gain of $508 million during the nine months ended March 31, 2019, which was retained at Corporate.

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

	Three Months Ended March 31,
(in millions)	2019			2018
Pharmaceutical	$	536		$	596
Medical	155			199
Total segment profit	691			795
Corporate	(259		)	(249		)
Total operating earnings	$	432		$	546

	Nine Months Ended March 31,
(in millions)	2019			2018
Pharmaceutical	$	1,388		$	1,576
Medical	479			548
Total segment profit	1,867			2,124
Corporate	(115		)	(918		)
Total operating earnings	$	1,752		$	1,206

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

(in millions)	March 31, 2019		June 30, 2018
Pharmaceutical	$	21,426	$	21,421
Medical	15,548		16,066
Corporate	3,835		2,464
Total assets	$	40,809	$	39,951

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Share-Based Compensation

9 Months Ended

Mar. 31, 2019

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

Share-Based Compensation

14. Share-Based Compensation

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 March 31,
(in millions)	2019		2018
Restricted share unit expense	$	17	$	20
Employee stock option expense	2		7
Performance share unit expense	4		(4		)
Total share-based compensation	$	23	$	24

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

	Nine Months Ended March 31,
(in millions)	2019		2018
Restricted share unit expense	$	47	$	56
Employee stock option expense	8		17
Performance share unit expense	9		(9		)
Total share-based compensation	$	64	$	64

The total tax benefit related to share-based compensation was $4 million and $8 million for the three months ended March 31, 2019 and 2018, respectively, and $13 million and $20 million for the nine months ended March 31, 2019 and 2018, respectively.

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, 2018	2		$	71.58
Granted	2		50.50
Vested	(1	)	74.99
Canceled and forfeited	—		—
Nonvested at March 31, 2019	3		$	52.08

At March 31, 2019, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested restricted share units not yet recognized was $89 million, which is expected to be recognized over a weighted-average period of two years.

Stock Options

Employee stock options granted under the Plans generally vest in equal annual installments over three years and are exercisable for 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, 2018	7	$	64.50
Granted	—	—
Exercised	—	—
Canceled and forfeited	—	—
Outstanding at March 31, 2019	7	$	63.92
Exercisable at March 31, 2019	6	$	62.81

At March 31, 2019, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested stock options not yet recognized was $7 million, which is expected to be recognized over a weighted-average period of one year.

The following tables provide additional detail related to stock options:

(in millions)	March 31, 2019		June 30, 2018
Aggregate intrinsic value of outstanding options at period end	$	12	$	13
Aggregate intrinsic value of exercisable options at period end	12		13

(in years)	March 31, 2019	June 30, 2018
Weighted-average remaining contractual life of outstanding options	6	7
Weighted-average remaining contractual life of exercisable options	5	5

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, 2018	0.4		$	66.13
Granted	0.5		50.96
Vested (1)	(0.1	)	84.27
Canceled and forfeited	(0.1	)	51.75
Nonvested at March 31, 2019	0.7		$	51.30

(1) No payout was made because the threshold performance goal was not met.

At March 31, 2019, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested performance share units not yet recognized was $21 million, which is expected to be recognized over a weighted-average period of two years if targets are achieved.

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

9 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Basis of Presentation

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 these condensed consolidated financial statements refer to Cardinal Health, Inc. and its majority-owned or controlled subsidiaries unless the context requires otherwise.

Our fiscal year ends on June 30. References to fiscal 2019 and 2018 in these condensed consolidated financial statements are to the fiscal years ending or ended June 30, 2019 and June 30, 2018, 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 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 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. To conform to the current year presentation, certain prior year amounts have been reclassified. In addition, financial results presented for this fiscal 2019 interim period are not necessarily indicative of the results that may be expected for the full fiscal year ending June 30, 2019. These condensed consolidated financial statements are unaudited and, accordingly, 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, 2018 (the "2018 Form 10-K").

Recent Financial Accounting Standards

Recent Financial Accounting Standards

In October 2018, the Financial Accounting Standards Board ("FASB") issued amended accounting guidance related to derivatives and hedging which permits the use of the Secured Overnight Financing Rate ("SOFR") Overnight Index Swap ("OIS") as a Benchmark Interest Rate for Hedge Accounting Purposes. This guidance will be effective for us in the first quarter of fiscal 2020 and must be applied on a prospective basis. The impact of adoption on our condensed consolidated financial statements is contingent upon future events.

In March 2018, the FASB issued amended accounting guidance to codify SEC staff accounting bulletin 118 (“SAB 118”), which was issued in connection with the Tax Cuts and Jobs Act (the “Tax Act”) of December 2017. The guidance allows companies to use provisional estimates to record the effects of the Tax Act and also provides a measurement period (not to exceed one year from the date of enactment) to complete the accounting for the impacts of the Tax Act. We adopted this guidance in the second quarter of fiscal 2018 when it was initially issued as SAB 118. We completed our accounting for the impacts from enactment of the Tax Act during the three months ended December 31, 2018. Future adjustments to the financial statements may be necessary as final tax regulations and any additional pending regulatory changes are issued, the impacts of which are being currently assessed, or will be assessed, as final regulations are issued. See Note 7 for additional information regarding income taxes.

In June 2016, the FASB issued amended accounting guidance that will require entities to measure credit losses on trade and other receivables, held-to-maturity debt securities, loans and other instruments using an "expected credit loss" model that considers historical experience, current conditions and reasonable supportable forecasts. This guidance also requires that credit losses on available-for-sale debt securities with unrealized losses be recognized as allowances rather than as deductions in the amortized cost of the securities. This guidance will be effective for us in the first quarter of fiscal 2021. We are currently evaluating the impact of adoption on our condensed consolidated financial statements.

Leases

In February 2016, the FASB issued amended accounting guidance that requires lessees to recognize most leases on the balance sheet as a lease liability and corresponding right-of-use asset. The guidance also requires disclosures that meet the objective of enabling financial statement users to assess the amount, timing and uncertainty of cash flows arising from leases. We will adopt this guidance when it is effective for us in the first quarter of fiscal 2020 and we expect to elect the transition option which will allow us to not apply the amended lease accounting guidance to comparative periods that will be presented. We are continuing to evaluate the impact of this standard on our condensed consolidated financial statements, including identification of embedded leases and performing lease contract reviews. The majority of our lease spend relates to certain real estate with the remaining lease spend primarily related to equipment. Although we are continuing to assess the impact of the amended guidance, we generally anticipate that the adoption of the amended lease guidance will result in an increase to the assets and liabilities on our condensed consolidated balance sheets and will require certain changes to our systems and processes.

Revenue Recognition

In May 2014, the FASB issued amended accounting guidance related to revenue recognition which we adopted in the first quarter of fiscal 2019 using the modified retrospective method and that we applied to customer contracts that were not completed as of June 30, 2018.

The adoption of the amended accounting guidance did not have a material impact on our condensed consolidated financial statements. We did not record any material contract assets, contract liabilities, or deferred contract costs in our condensed consolidated balance sheets upon adopting the amended accounting guidance. Assets recorded for the right to recover products from customers and the associated refund liabilities for return allowances were not material.

We elected the practical expedient to expense costs to obtain a contract when incurred when the amortization period would have been one year or less. Additionally, we elected the practical expedients to not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less, contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed and for contracts for which the variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation. See Note 13 for additional information regarding our disaggregation of revenue.

Revenue in both segments is primarily related to the distribution of pharmaceutical and medical products, which we recognize at a point in time when title transfers to customers and we have no further obligation to provide services related to such merchandise. Service revenues are recognized over the period that services are provided to the customer. Revenues derived from services are not material for either segment for all periods presented.

We are generally the principal in a transaction, therefore our revenue is primarily recorded on a gross basis. When we are a principal in a transaction, we have determined that we control the ability to direct the use of the product or service prior to transfer to a customer, are primarily responsible for fulfilling the promise to provide the product or service to our customer, have discretion in establishing prices, and ultimately control the transfer of the product or services provided to the customer.

Revenue is recorded net of sales returns and allowances. Revenues are measured based on the amount of consideration that we expect to receive, reduced by estimates for return allowances, discounts, rebates and other variable consideration. Sales returns are recorded based on estimates using historical data. Shipping and handling costs are primarily included in distribution, selling, general and administrative ("SG&A") expenses in our condensed consolidated statements of earnings and include all delivery expenses as well as all costs to prepare the product for shipment to the end customer.  Shipping and handling costs incurred after control has transferred to the customer are treated as fulfillment costs.

In the first quarter of fiscal 2019, we adopted the following Accounting Standards Updates ("ASU"). ASU 2016-01 Financial Instruments: Recognition and Measurement of Financial Assets and Financial Liabilities; ASU 2018-03 Technical Corrections and Improvements to Financial Instruments; ASU 2016-15 Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments; ASU 2016-16 Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory; and ASU 2017-12 Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities. The adoption of these ASU's did not have a material impact on our condensed consolidated financial statements.

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Restructuring and Employee Severance (Tables)

9 Months Ended

Mar. 31, 2019

Restructuring Charges [Abstract]

Summary of Restructuring and Employee Severance

The following table summarizes restructuring and employee severance costs:

	Three Months Ended March 31,
(in millions)	2019		2018
Employee-related costs (1)	$	29	$	(1	)
Facility exit and other costs (2)	24		3
Total restructuring and employee severance	$	53	$	2

	Nine Months Ended March 31,
(in millions)	2019		2018
Employee-related costs (1)	$	70	$	18
Facility exit and other costs (2)	27		137
Total restructuring and employee severance	$	97	$	155

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

(2) Facility exit and other costs primarily consist of product distribution and lease contract termination costs, lease costs associated with vacant facilities, accelerated depreciation, equipment relocation costs, project consulting fees, costs associated with restructuring our delivery of information technology infrastructure services and certain other divestiture-related costs.

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, 2018	$	24		$	4		$	28
Additions	60			14			74
Payments and other adjustments	(32		)	(2		)	(34		)
Balance at March 31, 2019	$	52		$	16		$	68

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Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Mar. 31, 2019

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, 2018	$	2,621		$	5,695		$	8,316
Goodwill acquired, net of purchase price adjustments	19			7			26
Foreign currency translation adjustments and other	(3		)	(9		)	(12		)
Balance at March 31, 2019	$	2,637		$	5,693		$	8,330

Schedule of Finite-Lived Intangible Assets

The following tables summarize other intangible assets by class at:

	March 31, 2019
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible		Weighted- Average Remaining Amortization Period (Years)
Indefinite-life intangibles:
IPR&D, trademarks and other	$	59	$	—	$	59	N/A
Total indefinite-life intangibles	59		—		59		N/A
Definite-life intangibles:
Customer relationships	3,528		1,432		2,096		14
Trademarks, trade names and patents	669		283		386		14
Developed technology and other	1,563		574		989		12
Total definite-life intangibles	5,760		2,289		3,471		14
Total other intangible assets	$	5,819	$	2,289	$	3,530	N/A

	June 30, 2018
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible
Indefinite-life intangibles:
IPR&D, trademarks and other	$	62	$	—	$	62
Total indefinite-life intangibles	62		—		62
Definite-life intangibles:
Customer relationships	3,513		1,191		2,322
Trademarks, trade names and patents	667		246		421
Developed technology and other	1,562		454		1,108
Total definite-life intangibles	5,742		1,891		3,851
Total other intangible assets	$	5,804	$	1,891	$	3,913

Schedule of Indefinite-Lived Intangible Assets

The following tables summarize other intangible assets by class at:

	March 31, 2019
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible		Weighted- Average Remaining Amortization Period (Years)
Indefinite-life intangibles:
IPR&D, trademarks and other	$	59	$	—	$	59	N/A
Total indefinite-life intangibles	59		—		59		N/A
Definite-life intangibles:
Customer relationships	3,528		1,432		2,096		14
Trademarks, trade names and patents	669		283		386		14
Developed technology and other	1,563		574		989		12
Total definite-life intangibles	5,760		2,289		3,471		14
Total other intangible assets	$	5,819	$	2,289	$	3,530	N/A

	June 30, 2018
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible
Indefinite-life intangibles:
IPR&D, trademarks and other	$	62	$	—	$	62
Total indefinite-life intangibles	62		—		62
Definite-life intangibles:
Customer relationships	3,513		1,191		2,322
Trademarks, trade names and patents	667		246		421
Developed technology and other	1,562		454		1,108
Total definite-life intangibles	5,742		1,891		3,851
Total other intangible assets	$	5,804	$	1,891	$	3,913

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Fair Value Measurements (Tables)

9 Months Ended

Mar. 31, 2019

Fair Value Disclosures [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:

	March 31, 2019
(in millions)	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	875	$	—	$	—	$	875
Other investments (1)	112		—		—		112
Liabilities:
Forward contracts (2)	—		5		—		5

	June 30, 2018
(in millions)	Level 1		Level 2			Level 3		Total
Assets:
Cash equivalents	$	200	$	—		$	—	$	200
Other investments (1)	117		—			—		117
Liabilities:
Forward contracts (2)	—		(76		)	—		(76		)

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

(2) The fair value of interest rate swaps, foreign currency contracts, net investment hedges 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.

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Financial Instruments (Tables)

9 Months Ended

Mar. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

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

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)	March 31, 2019		June 30, 2018
Estimated fair value	$	8,925	$	8,852
Carrying amount	9,080		9,013

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Shareholders' Equity (Tables)

9 Months Ended

Mar. 31, 2019

Equity [Abstract]

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

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 Income/(Loss)
Balance at June 30, 2018	$	(113	)	$	21		$	(92	)
Other comprehensive income/(loss), before reclassifications	(16		)	—			(16		)
Amounts reclassified to earnings	—			(3		)	(3		)
Other comprehensive income/(loss), net of tax	(16		)	(3		)	(19		)
Balance at March 31, 2019	$	(129	)	$	18		$	(111	)

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Earnings Per Share Attributable to Cardinal Health, Inc. (Tables)

9 Months Ended

Mar. 31, 2019

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 March 31,
(in millions)	2019	2018
Weighted-average common shares–basic	298	313
Effect of dilutive securities:
Employee stock options, restricted share units and performance share units	1	2
Weighted-average common shares–diluted	299	315

	Nine Months Ended March 31,
(in millions)	2019	2018
Weighted-average common shares–basic	301	314
Effect of dilutive securities:
Employee stock options, restricted share units and performance share units	1	2
Weighted-average common shares–diluted	302	316

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Segment Information (Tables)

9 Months Ended

Mar. 31, 2019

Segment Reporting [Abstract]

Revenue by Reportable Segment

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

	Three Months Ended March 31,
(in millions)	2019			2018
Pharmaceutical	$	31,361		$	29,720
Medical	3,871			3,916
Total segment revenue	35,232			33,636
Corporate (1)	(4		)	(3		)
Total revenue	$	35,228		$	33,633

	Nine Months Ended March 31,
(in millions)	2019			2018
Pharmaceutical	$	96,516		$	89,786
Medical	11,678			11,684
Total segment revenue	108,194			101,470
Corporate (1)	(13		)	(10		)
Total revenue	$	108,181		$	101,460

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

Disaggregation of Revenue [Table Text Block]

The following table presents disaggregated revenue within our two reportable segments:

	Three Months Ended March 31, 2019			Nine Months Ended March 31, 2019
(in millions)
Pharmaceutical distribution and specialty	$	31,146		$	95,888
Nuclear and Precision Health Solutions (1)	215			628
Pharmaceutical segment revenue	31,361			96,516
Medical distribution and products (2)	3,431			10,339
Cardinal Health At Home	440			1,339
Medical segment revenue	3,871			11,678
Total segment revenue	35,232			108,194
Corporate (3)	(4		)	(13		)
Total revenue	$	35,228		$	108,181

(1) Our Nuclear and Precision Health Solutions division was formerly referred to as our Nuclear Pharmacy Services division.

(2) Comprised of all Medical segment businesses except for Cardinal Health At Home division.

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

Revenue from External Customers by Geographic Areas [Table Text Block]

The following table presents revenue by geographic area:

	Three Months Ended March 31, 2019			Nine Months Ended March 31, 2019
(in millions)
United States	$	34,230		$	105,190
International	1,002			3,004
Total segment revenue	35,232			108,194
Corporate (1)	(4		)	(13		)
Total revenue	$	35,228		$	108,181

(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 March 31,
(in millions)	2019			2018
Pharmaceutical	$	536		$	596
Medical	155			199
Total segment profit	691			795
Corporate	(259		)	(249		)
Total operating earnings	$	432		$	546

	Nine Months Ended March 31,
(in millions)	2019			2018
Pharmaceutical	$	1,388		$	1,576
Medical	479			548
Total segment profit	1,867			2,124
Corporate	(115		)	(918		)
Total operating earnings	$	1,752		$	1,206

Assets by Reportable Segment

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

(in millions)	March 31, 2019		June 30, 2018
Pharmaceutical	$	21,426	$	21,421
Medical	15,548		16,066
Corporate	3,835		2,464
Total assets	$	40,809	$	39,951

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Share-Based Compensation (Tables)

9 Months Ended

Mar. 31, 2019

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 March 31,
(in millions)	2019		2018
Restricted share unit expense	$	17	$	20
Employee stock option expense	2		7
Performance share unit expense	4		(4		)
Total share-based compensation	$	23	$	24

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

	Nine Months Ended March 31,
(in millions)	2019		2018
Restricted share unit expense	$	47	$	56
Employee stock option expense	8		17
Performance share unit expense	9		(9		)
Total share-based compensation	$	64	$	64

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, 2018	7	$	64.50
Granted	—	—
Exercised	—	—
Canceled and forfeited	—	—
Outstanding at March 31, 2019	7	$	63.92
Exercisable at March 31, 2019	6	$	62.81

Schedule of Additional Data Related to Stock Option Activity

The following tables provide additional detail related to stock options:

(in millions)	March 31, 2019		June 30, 2018
Aggregate intrinsic value of outstanding options at period end	$	12	$	13
Aggregate intrinsic value of exercisable options at period end	12		13

(in years)	March 31, 2019	June 30, 2018
Weighted-average remaining contractual life of outstanding options	6	7
Weighted-average remaining contractual life of exercisable options	5	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, 2018	2		$	71.58
Granted	2		50.50
Vested	(1	)	74.99
Canceled and forfeited	—		—
Nonvested at March 31, 2019	3		$	52.08

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, 2018	0.4		$	66.13
Granted	0.5		50.96
Vested (1)	(0.1	)	84.27
Canceled and forfeited	(0.1	)	51.75
Nonvested at March 31, 2019	0.7		$	51.30

(1) No payout was made because the threshold performance goal was not met.

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Acquisitions and Divestitures (Narrative) (Details) - USD ($) $ in Millions			3 Months Ended		9 Months Ended
	Aug. 01, 2018	Jul. 29, 2017	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018	Jun. 30, 2018
Business Acquisition [Line Items]
Cash paid for acquisitions, net of cash acquired					$ 38	$ 6,142
Goodwill			$ 8,330		8,330		$ 8,316
Patient Recovery Business
Business Acquisition [Line Items]
Cash paid for acquisitions, net of cash acquired		$ 6,100
Transaction and integration costs			17	$ 25	62	$ 85
Goodwill			3,300		3,300
naviHealth [Member]
Business Acquisition [Line Items]
Equity Method Investments	$ 358		$ 339		339
Noncontrolling Interest, Ownership Percentage by Parent	98.00%
Proceeds from Divestiture of Businesses	$ 737
Pre-Tax Gain on Divestiture					508
Redeemable Non Controlling Interest Divested	$ 12
Tax Expense From Divestiture of a Business					$ 130

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Restructuring and Employee Severance (Activity Related to Restructuring and Employee Severance Costs) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Restructuring Cost and Reserve [Line Items]
Employee-related costs	$ 29	$ (1)	$ 70	$ 18
Facility Exit and Other Costs	24	3	27	137
Total restructuring and employee severance	$ 53	$ 2	$ 97	$ 155

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Restructuring and Employee Severance (Liabilities Associated with Restructuring and Employee Severance Activities) (Details) $ in Millions	9 Months Ended
	Mar. 31, 2019 USD ($)
Restructuring Reserve [Roll Forward]
Beginning Balance	$ 28
Additions	74
Payments and other adjustments	(34)
Ending Balance	68
Employee- Related Costs
Restructuring Reserve [Roll Forward]
Beginning Balance	24
Additions	60
Payments and other adjustments	(32)
Ending Balance	52
Facility Exit and Other Costs
Restructuring Reserve [Roll Forward]
Beginning Balance	4
Additions	14
Payments and other adjustments	(2)
Ending Balance	$ 16

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Restructuring and Employee Severance Narative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	$ 29	$ (1)	$ 70	$ 18
Facility Exit and Other Costs	24	$ 3	27	$ 137
Medline
Restructuring Cost and Reserve [Line Items]
Facility Exit and Other Costs			125
Enterprise Wide Cost Saving Measures [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	$ 27		$ 60

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Goodwill and Other Intangible Assets (Schedule of Goodwill by Reportable Segment) (Details) $ in Millions	9 Months Ended
	Mar. 31, 2019 USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 8,316
Goodwill acquired, net of purchase price adjustments	26
Foreign currency translation adjustments and other	12
Ending balance	8,330
Pharmaceutical
Goodwill [Roll Forward]
Beginning balance	2,621
Goodwill acquired, net of purchase price adjustments	19
Foreign currency translation adjustments and other	3
Ending balance	2,637
Medical
Goodwill [Roll Forward]
Beginning balance	5,695
Goodwill acquired, net of purchase price adjustments	7
Foreign currency translation adjustments and other	9
Ending balance	$ 5,693

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Goodwill and Other Intangible Assets (Schedule of Intangible Assets) (Details) - USD ($) $ in Millions	9 Months Ended
	Mar. 31, 2019	Jun. 30, 2018
Indefinite-lived Intangible Assets [Line Items]
Net Intangible	$ 59	$ 62
Finite-Lived Intangible Assets [Line Items]
Gross Intangible	5,760	5,742
Accumulated Amortization	2,289	1,891
Net Intangible	$ 3,471	3,851
Weighted- Average Remaining Amortization Period (Years)	14 years
Gross Intangible, Total other intangible assets	$ 5,819	5,804
Net Intangible, Total other intangible assets	3,530	3,913
IPR&D, trademarks and other
Indefinite-lived Intangible Assets [Line Items]
Net Intangible	59	62
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Intangible	3,528	3,513
Accumulated Amortization	1,432	1,191
Net Intangible	$ 2,096	2,322
Weighted- Average Remaining Amortization Period (Years)	14 years
Trademarks, trade names and patents
Finite-Lived Intangible Assets [Line Items]
Gross Intangible	$ 669	667
Accumulated Amortization	283	246
Net Intangible	$ 386	421
Weighted- Average Remaining Amortization Period (Years)	14 years
Developed technology and other
Finite-Lived Intangible Assets [Line Items]
Gross Intangible	$ 1,563	1,562
Accumulated Amortization	574	454
Net Intangible	$ 989	$ 1,108
Weighted- Average Remaining Amortization Period (Years)	12 years

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Goodwill and Other Intangible Assets (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets	$ 133	$ 148	$ 399	$ 435
Finite-Lived Intangible Assets, Amortization Expense, Remainder of Fiscal Year	133		133
Estimated annual amortization of intangible assets - Year Two	504		504
Estimated annual amortization of intangible assets - Year Three	436		436
Estimated annual amortization of intangible assets - Year Four	401		401
Estimated annual amortization of intangible assets - Year Five	$ 351		$ 351

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Investments (Narrative) (Details) - naviHealth [Member] - USD ($) $ in Millions	9 Months Ended
	Mar. 31, 2019	Aug. 01, 2018
Investment [Line Items]
Equity Method Investments	$ 339	$ 358
Proceeds from Equity Method Investment, Distribution, Return of Capital	$ 14

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Long-Term Obligations and Other Short-Term Borrowings (Details) - USD ($) $ in Millions	Mar. 31, 2019	Jun. 30, 2018
Debt Instrument [Line Items]
Carrying amount	$ 9,080	$ 9,013
Accounts payable	20,517	$ 19,677
Commercial Paper [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	2,000
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	2,000
Short Term Credit Facilities Member | Committed Receivables Sales Facility Program [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 1,000

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Income Taxes (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018	Jun. 30, 2018
Income Taxes
Remeasurement Deferred Tax Assets and Liabilities expense (benefit)		$ (18)		$ (952)
Foreign income, transition tax				$ 41
Unrecognized tax benefits	$ 436		$ 436		$ 423
Unrecognized tax benefits that would impact effective tax rate	275		275		262
Unrecognized tax benefits, interest and penalties accrued	$ 116		$ 116		110
Effective Income Tax Rate Reconciliation, Percent	20.00%	45.10%	22.60%	(48.60%)
Net Discrete Tax Benefit (Expense)	$ 12	$ (18)	$ 50	$ (12)
Minimum
Income Taxes
Estimated range of decrease in unrecognized tax benefits within the next 12 months	0		0
Maximum
Income Taxes
Estimated range of decrease in unrecognized tax benefits within the next 12 months	20		20
Patient Recovery Business
Income Taxes
Indemnification Receivable	24		24		21
Disposal Group, Held-for-sale, Not Discontinued Operations [Member]
Income Taxes
Disposal Group, Including Discontinued Operation, Provisional Tax Expense				$ 57
CareFusion [Member]
Income Taxes
Indemnification Receivable	$ 159		$ 159		$ 151

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Commitments, Contingent Liabilities and Litigation (Details) $ in Millions		3 Months Ended		9 Months Ended
	May 03, 2019 plaintiff lawsuit	Mar. 31, 2019 USD ($)	Sep. 30, 2018 USD ($)	Mar. 31, 2019 USD ($)
Loss Contingencies [Line Items]
Opioid Stewardship Act Loss Contingency Accrual			$ 34.0
Income from Settlements of Class Action Lawsuits		$ 46.0		$ 94.0
Product Liability Lawsuits | Subsequent Event
Loss Contingencies [Line Items]
Number of lawsuits filed | lawsuit	22
CVS Health
Loss Contingencies [Line Items]
Maximum quarterly payment				45.6
Opioid Lawsuits | Subsequent Event
Loss Contingencies [Line Items]
Number of lawsuits filed | lawsuit	2,000
Product Liability Lawsuits | Subsequent Event
Loss Contingencies [Line Items]
Number of lawsuits filed | lawsuit	237
Minimum
Loss Contingencies [Line Items]
Loss Contingency Accrual, Net of Insurance Recoveries		359.0		359.0
Maximum
Loss Contingencies [Line Items]
Loss Contingency Accrual, Net of Insurance Recoveries		$ 729.0		$ 729.0
Alameda County [Member] | Product Liability Lawsuits | Subsequent Event
Loss Contingencies [Line Items]
Number of plaintiffs | plaintiff	2,797
Other Jurisdictions [Member] | Product Liability Lawsuits | Subsequent Event
Loss Contingencies [Line Items]
Number of plaintiffs | plaintiff	24
Class Action Lawsuits [Member] | Opioid Lawsuits | Subsequent Event
Loss Contingencies [Line Items]
Number of lawsuits filed | lawsuit	63

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Fair Value Measurements (Fair Value of Assets and Liabilities Measured on a Recurring Basis) (Details) - Recurring - USD ($) $ in Millions	Mar. 31, 2019	Jun. 30, 2018
Assets:
Cash equivalents	$ 875	$ 200
Other investments	112	117
Liabilities:
Forward contracts	5	(76)
Level 1
Assets:
Cash equivalents	875	200
Other investments	112	117
Liabilities:
Forward contracts	0	0
Level 2
Assets:
Cash equivalents	0	0
Other investments	0	0
Liabilities:
Forward contracts	5	(76)
Level 3
Assets:
Cash equivalents	0	0
Other investments	0	0
Liabilities:
Forward contracts	$ 0	$ 0

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Financial Instruments (Narrative) (Details) € in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2019 USD ($)	Mar. 31, 2018 USD ($)	Mar. 31, 2019 USD ($)	Mar. 31, 2018 USD ($)	Mar. 31, 2019 EUR (€)
Derivative [Line Items]
Change in Unrealized Gain (Loss) on Fair Value Hedging Instruments	$ 0	$ 0	$ 0	$ 0
Currency Swap [Member]
Derivative [Line Items]
Derivative Liability, Notional Amount | €					€ 200
Designated as Hedging Instrument | Fair Value Hedging | Interest Rate Swap
Derivative [Line Items]
Derivative, notional amount		$ 650		650
Other Nonoperating Income (Expense) [Member] | Not Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member]
Derivative [Line Items]
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net			$ 8	$ 9

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Financial Instruments Summary of Estimated Fair Value of Long-term Obligations and Other Short-term Borrowings (Details) - USD ($) $ in Millions	Mar. 31, 2019	Jun. 30, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying amount	$ 9,080	$ 9,013
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Estimated fair value	$ 8,925	$ 8,852

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Shareholders' Equity (Narrative) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	1 Months Ended	3 Months Ended	9 Months Ended
	Mar. 21, 2018	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Class of Stock [Line Items]
Payments for Repurchase of Common Stock			$ 600	$ 450
Treasury Shares
Class of Stock [Line Items]
Treasury Stock, Shares, Acquired		(4.0)	(11.5)	(6.5)
Treasury shares acquired, average price per share (in usd per share)			$ 52.32	$ 68.81
accelerated share repurchase plan [Member] | Treasury Shares
Class of Stock [Line Items]
Treasury Stock, Shares, Acquired	(4.3)
Payments for Repurchase of Common Stock	$ 300
Treasury shares acquired, average price per share (in usd per share)	$ 69.26

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Shareholders' Equity (Changes in the Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
AOCI, Net of Tax [Roll Forward]
Balance at beginning of period	$ 6,043	$ 7,619	$ 6,059	$ 6,828
Total other comprehensive income/(loss), net of tax		90	(19)	120
Balance at end of period	6,232	$ 7,538	6,232	$ 7,538
Foreign Currency Translation Adjustments
AOCI, Net of Tax [Roll Forward]
Balance at beginning of period			(113)
Other comprehensive income/(loss), before reclassifications			(16)
Amounts reclassified to earnings			0
Total other comprehensive income/(loss), net of tax			(16)
Balance at end of period	(129)		(129)
Unrealized Gain/(Loss) on Derivatives, net of tax
AOCI, Net of Tax [Roll Forward]
Balance at beginning of period			21
Other comprehensive income/(loss), before reclassifications			0
Amounts reclassified to earnings			(3)
Total other comprehensive income/(loss), net of tax			(3)
Balance at end of period	18		18
Accumulated Other Comprehensive Income/(Loss)
AOCI, Net of Tax [Roll Forward]
Balance at beginning of period			(92)
Other comprehensive income/(loss), before reclassifications			(16)
Amounts reclassified to earnings			(3)
Total other comprehensive income/(loss), net of tax			(19)
Balance at end of period	$ (111)		$ (111)

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Earnings Per Share Attributable to Cardinal Health, Inc. (Narrative) (Details) - shares shares in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Earnings Per Share [Abstract]
Potentially dilutive employee stock options, restricted share units and performance share units that were antidilutive (in shares)	6	5	6	5

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Earnings Per Share Attributable to Cardinal Health, Inc. (Reconciliation of Common Shares Used to Compute Basic and Diluted EPS) (Details) - shares shares in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Earnings Per Share [Abstract]
Weighted-average common shares–basic (in shares)	298	313	301	314
Effect of dilutive securities:
Employee stock options, restricted share units, and performance share units (in shares)	1	2	1	2
Weighted-average common shares–diluted (in shares)	299	315	302	316

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Segment Information (Narrative) (Details) $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2019 USD ($)	Mar. 31, 2018 USD ($)	Mar. 31, 2019 USD ($) segment	Mar. 31, 2018 USD ($)
Segment Reporting Information [Line Items]
Number of operating segments			2
Number of reportable segments			2
Project costs on investment and other spending | $	$ 17	$ 7	$ 36	$ 17

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Segment Information (Revenue by Reportable Segment) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Segment Reporting Information [Line Items]
Total revenue	$ 35,228	$ 33,633	$ 108,181	$ 101,460
Operating Segments
Segment Reporting Information [Line Items]
Total revenue	35,232	33,636	108,194	101,470
Operating Segments | Pharmaceutical
Segment Reporting Information [Line Items]
Total revenue	31,361	29,720	96,516	89,786
Operating Segments | Medical
Segment Reporting Information [Line Items]
Total revenue	3,871	3,916	11,678	11,684
Corporate
Segment Reporting Information [Line Items]
Total revenue	(4)	$ (3)	(13)	$ (10)
Pharmaceutical distribution and specialty [Member] | Operating Segments | Pharmaceutical
Segment Reporting Information [Line Items]
Total revenue	31,146		95,888
Nuclear Precision Health Services [Member] | Operating Segments | Pharmaceutical
Segment Reporting Information [Line Items]
Total revenue	215		628
Medical distribution and products [Member] | Operating Segments | Medical
Segment Reporting Information [Line Items]
Total revenue	3,431		10,339
Cardinal Health At Home [Member] | Operating Segments | Medical
Segment Reporting Information [Line Items]
Total revenue	$ 440		$ 1,339

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Segment Information (Segment Profit by Reportable Segment) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total operating earnings	$ 432	$ 546	$ 1,752	$ 1,206
Operating Segments
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total operating earnings	691	795	1,867	2,124
Operating Segments | Pharmaceutical
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total operating earnings	536	596	1,388	1,576
Operating Segments | Medical
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total operating earnings	155	199	479	548
Corporate
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total operating earnings	$ (259)	$ (249)	$ (115)	$ (918)

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Segment Information (Assets by Reportable Segment) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Jun. 30, 2018
Segment Reporting Information [Line Items]
Total assets	$ 40,809	$ 39,951
Operating Segments | Pharmaceutical
Segment Reporting Information [Line Items]
Total assets	21,426	21,421
Operating Segments | Medical
Segment Reporting Information [Line Items]
Total assets	15,548	16,066
Corporate
Segment Reporting Information [Line Items]
Total assets	$ 3,835	$ 2,464

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Segment Information Revenue From External Customers By Geographic Areas (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Segment Revenue from External Customers by Geographic Area [Line Items]
Revenue	$ 35,228	$ 33,633	$ 108,181	$ 101,460
UNITED STATES
Segment Revenue from External Customers by Geographic Area [Line Items]
Revenue	34,230		105,190
Non-US [Member]
Segment Revenue from External Customers by Geographic Area [Line Items]
Revenue	1,002		3,004
Operating Segments
Segment Revenue from External Customers by Geographic Area [Line Items]
Revenue	35,232	33,636	108,194	101,470
Corporate
Segment Revenue from External Customers by Geographic Area [Line Items]
Revenue	$ (4)	$ (3)	$ (13)	$ (10)

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Share-Based Compensation (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Tax benefit related to share-based compensation	$ 4	$ 8	$ 13	$ 20
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	7		$ 7
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition			1 year
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	89		$ 89
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition			2 years
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	$ 21		$ 21
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition			2 years
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%

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Share-Based Compensation (Schedule of Total Share-Based Compensation Expense by Type of Award) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation	$ 23	$ 24	$ 64	$ 64
Restricted Share Unit
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation	17	20	47	56
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation	2	7	8	17
Performance Share Unit
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation	$ 4	$ (4)	$ 9	$ (9)

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Share-Based Compensation (Schedule of All Stock Option Transactions Under the Plans) (Details) shares in Millions	9 Months Ended
	Mar. 31, 2019 $ / shares shares
Stock Options
Outstanding at beginning of period (in shares) | shares	7
Granted (in shares) | shares	0
Exercised (in shares) | shares	0
Canceled and forfeited (in shares) | shares	0
Outstanding at end of period (in shares) | shares	7
Exercisable at end of period (in shares) | shares	6
Weighted-Average Exercise Price per Common Share
Outstanding at beginning of period (in usd per share) | $ / shares	$ 64.50
Granted (in usd per share) | $ / shares	0.00
Exercised (in usd per share) | $ / shares	0.00
Canceled and forfeited (in usd per share) | $ / shares	0.00
Outstanding at end of period (in usd per share) | $ / shares	63.92
Exercisable at end of period (in usd per share) | $ / shares	$ 62.81

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Share-Based Compensation (Schedule of Additional Data Related to Stock Options) (Details) - Stock Options - USD ($) $ in Millions	9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Jun. 30, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized	$ 7
Aggregate intrinsic value of outstanding options at period end	12		$ 13
Aggregate intrinsic value of exercisable options at period end	$ 12		$ 13
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	6 years	7 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term	5 years	5 years

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Share-Based Compensation (Schedule of All Transactions Related to Restricted Share Units Under the Plans) (Details) $ / shares in Units, shares in Millions, $ in Millions	9 Months Ended
	Mar. 31, 2019 USD ($) $ / shares shares
Restricted Share Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	2 years
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $	$ 89
Restricted Share Units
Nonvested at beginning of period (in shares) | shares	2
Granted (in shares) | shares	2
Vested (in shares) | shares	(1)
Canceled and forfeited (in shares) | shares	0
Nonvested at end of period (in shares) | shares	3
Weighted-Average Grant Date Fair Value per Share
Nonvested at beginning of period (in usd per share) | $ / shares	$ 71.58
Granted (in usd per share) | $ / shares	50.50
Vested (in usd per share) | $ / shares	74.99
Canceled and forfeited (in usd per share) | $ / shares	0.00
Nonvested at end of period (in usd per share) | $ / shares	$ 52.08
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	1 year
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $	$ 7

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Share-Based Compensation (Schedule of All Transactions Related to Performance Share Units Under the Plans) (Details) - Performance Share Units $ / shares in Units, shares in Millions, $ in Millions	9 Months Ended
	Mar. 31, 2019 USD ($) $ / shares shares
Performance Share Units
Nonvested at beginning of period (in shares) | shares	0.4
Granted (in shares) | shares	0.5
Vested (in shares) | shares	(0.1)
Canceled and forfeited (in shares) | shares	(0.1)
Nonvested at end of period (in shares) | shares	0.7
Weighted-Average Grant Date Fair Value per Share
Nonvested at beginning of period (in usd per share) | $ / shares	$ 66.13
Granted (in usd per share) | $ / shares	50.96
Vested (in usd per share) | $ / shares	84.27
Canceled and forfeited (in usd per share) | $ / shares	51.75
Nonvested at end of period (in usd per share) | $ / shares	$ 51.30
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $	$ 21
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	2 years
Award vesting period (in years)	3 years