Segment Information

9 Months Ended

Mar. 31, 2024

Segment Reporting [Abstract]

Segment Information

13. Segment Information

Effective January 1, 2024, we operated under an updated organizational structure and re-aligned our reporting structure under two reportable segments: Pharmaceutical and Specialty Solutions segment and GMPD segment. All remaining operating segments that are not significant enough to require separate reportable segment disclosures are included in Other, which is comprised of Nuclear and Precision Health Solutions, at-Home Solutions and OptiFreight® Logistics. 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. Our previously reported segment results have been recast to conform to this re-aligned reporting structure and reflect changes in the elimination of inter-segment revenue and allocated corporate technology and shared function expenses, which are driven by the reporting structure change.

Our Pharmaceutical and Specialty Solutions 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; provides pharmacy management services to hospitals and operates a limited number of pharmacies, including pharmacies in community health centers; and repackages generic pharmaceuticals and over the counter healthcare products.

Our GMPD 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 medical, surgical and laboratory products known as national brand products to hospitals, ambulatory surgery centers, clinical laboratories and other healthcare providers in the United States and Canada.

The remaining three operating segments included in Other are Nuclear and Precision Health Solutions, at-Home Solutions and OptiFreight® Logistics. These operating segments respectively operate nuclear pharmacies and radiopharmaceutical manufacturing facilities, distribute medical products to patients' homes in the United States and provide supply chain services and solutions to our customers.

Revenue

The following tables present revenue for the two reportable segments and the remaining operating segments, included in Other, and Corporate:

	Three Months Ended March 31,
(in millions)	2024		2023
Pharmaceutical and Specialty Solutions	$	50,651	$	46,496
Global Medical Products and Distribution	3,113		2,989
Nuclear and Precision Health Solutions	352		313
at-Home Solutions	743		651
OptiFreight® Logistics	72		61
Other	1,167		1,025
Total segment revenue	54,931		50,510
Corporate (1)	(20)		(23)
Total revenue	$	54,911	$	50,487

	Nine Months Ended March 31,
(in millions)	2024		2023
Pharmaceutical and Specialty Solutions	$	154,524	$	139,441
Global Medical Products and Distribution	9,264		9,140
Nuclear and Precision Health Solutions	1,006		875
at-Home Solutions	2,188		1,986
OptiFreight® Logistics	198		177
Other	3,392		3,038
Total segment revenue	167,180		151,619
Corporate (1)	(61)		(60)
Total revenue	$	167,119	$	151,559

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

The following tables present revenue by geographic area:

	Three Months Ended March 31,
(in millions)	2024		2023
United States	$	53,715	$	49,343
International	1,216		1,167
Total segment revenue	54,931		50,510
Corporate (1)	(20)		(23)
Total revenue	$	54,911	$	50,487

	Nine Months Ended March 31,
(in millions)	2024		2023
United States	$	163,548	$	148,186
International	3,632		3,433
Total segment revenue	167,180		151,619
Corporate (1)	(61)		(60)
Total revenue	$	167,119	$	151,559

(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 distribution, selling, general and administrative ("SG&A") expenses. Segment SG&A expenses include share-based compensation expense as well as allocated corporate technology and shared function expenses, including corporate management, corporate finance, financial and customer care shared services, human resources, information technology and legal and compliance, including certain litigation defense costs. Corporate expenses are allocated to the operating 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);

•state opioid assessment related to prior fiscal years;

•shareholder cooperation agreement costs;

•restructuring and employee severance;

•amortization and other acquisition-related costs;

•impairments and (gain)/loss on disposal of assets, net; in connection with goodwill impairment testing for the GMPD segment as discussed further in Note 5, we recognized pre-tax goodwill impairment charges of $90 million during the three months ended March 31, 2024 and $671 million and $863 million during the nine months ended March 31, 2024 and 2023, respectively;

•litigation (recoveries)/charges, net;

•other (income)/expense, net;

•interest expense, net;

•loss on early extinguishment of debt; or

•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 $9 million for the three months ended March 31, 2024 and 2023, respectively, and $37 million and $20 million for the nine months ended March 31, 2024 and 2023, respectively.

The following tables present segment profit for the two reportable segments and the remaining operating segments, included in Other, and Corporate:

	Three Months Ended March 31,
(in millions)	2024		2023
Pharmaceutical and Specialty Solutions	$	580	$	560
Global Medical Products and Distribution	20		(46)
Other (1)	111		106
Total segment profit	711		620
Corporate	(344)		(48)
Total operating earnings	$	367	$	572

	Nine Months Ended March 31,
(in millions)	2024		2023
Pharmaceutical and Specialty Solutions	$	1,541	$	1,394
Global Medical Products and Distribution	18		(175)
Other (1)	319		305
Total segment profit	1,878		1,524
Corporate	(1,043)		(934)
Total operating earnings	$	835	$	590

(1)Comprised of the remaining operating segments, Nuclear and Precision Health Solutions, at-Home Solutions and OptiFreight® Logistics.

Segment Assets

The following table presents total assets for the two reportable segments and the remaining operating segments, included in Other, and Corporate:

(in millions)	March 31, 2024		June 30, 2023
Pharmaceutical and Specialty Solutions	$	30,496	$	27,615
Global Medical Products and Distribution	7,357		7,961
Other (1)	2,692		2,621
Corporate	5,335		5,220
Total assets	$	45,880	$	43,417

(1)Comprised of the remaining operating segments, Nuclear and Precision Health Solutions, at-Home Solutions and OptiFreight® Logistics.