10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

or

☐ 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)

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

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 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	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

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 ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  þ

The number of the registrant’s common shares, without par value, outstanding as of April 30, 2023, was the following: 254,600,182.

Cardinal Health

Q3 Fiscal 2023 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	16
Quantitative and Qualitative Disclosures about Market Risk	21
Controls and Procedures	21
Legal Proceedings	22
Risk Factors	23
Unregistered Sales of Equity Securities and Use of Proceeds	25
Financial Statements	26
Exhibits	44
Form 10-Q Cross Reference Index	45
Signatures	46

About Cardinal Health

Cardinal Health, Inc., an Ohio corporation formed in 1979, is a globally integrated healthcare services and products company providing customized solutions for hospitals, healthcare systems, pharmacies, ambulatory surgery centers, clinical laboratories, physician offices and patients in the home. We provide pharmaceuticals and medical products 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 majority-owned and consolidated subsidiaries, unless the context requires otherwise. Our fiscal year ends on June 30. References to fiscal 2023 and fiscal 2022 and to FY23 and FY22 are to the fiscal years ending or ended June 30, 2023 and June 30, 2022, respectively.

Forward-Looking Statements

This Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 (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 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 this Form 10-Q, including Exhibit 99.1, and in "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended June 30, 2022 (our “2022 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 United States 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 | Q3 Fiscal 2023 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, including amounts and certainty of cash flows from operations and from outside sources, between the periods specified in our condensed consolidated balance sheets at March 31, 2023 and June 30, 2022, and in our condensed consolidated statements of earnings/(loss) for the three and nine months ended March 31, 2023 and 2022. 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 2022 Form 10-K.

 2 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

MD&A Overview

Overview of Consolidated Results

Revenue

During the three and nine months ended March 31, 2023, revenue increased 13 percent to $50.5 billion and $151.6 billion, respectively, primarily due to branded and specialty pharmaceutical sales growth from existing customers. During the nine months ended March 31, 2023, pharmaceutical sales growth from net new customers also contributed to increased revenue.

GAAP and Non-GAAP Operating Earnings/(Loss)

	Three Months Ended March 31,						Nine Months Ended March 31,
(in millions)	2023		2022		Change		2023		2022		Change
GAAP operating earnings/(loss)	$	572	$	(97)	N.M.		$	590	$	(632)	N.M.
Surgical gown recall costs/(income)	—		—				—		1
State opioid assessment related to prior fiscal years	—		—				(6)		—
Shareholder cooperation agreement costs	—		—				8		—
Restructuring and employee severance	16		31				62		56
Amortization and other acquisition-related costs	74		79				216		237
Impairments and (gain)/loss on disposal of assets, net	20		471				883		1,764
Litigation (recoveries)/charges, net	(76)		61				(256)		113
Non-GAAP operating earnings	$	606	$	545	11	%	$	1,497	$	1,540	(3)	%

The sum of the components and certain computations may reflect rounding adjustments.

We had GAAP operating earnings of $572 million during the three months ended March 31, 2023 and a GAAP operating loss of $97 million during the three months ended March 31, 2022, which reflects no goodwill impairment charge recognized during the three months ended March 31, 2023 and the $474 million pre-tax non-cash goodwill impairment charge related to the Medical segment recognized during the three months ended March 31, 2022.

We had GAAP operating earnings of $590 million and a GAAP operating loss of $632 million during the nine months ended March 31, 2023 and 2022, respectively, which included the $863 million and $1.8 billion pre-tax non-cash goodwill impairment charges related to the Medical segment, respectively. See "Critical Accounting Policies and Sensitive Accounting Estimates" section of this MD&A and Note 4 of the "Notes to Condensed Consolidated Financial Statements" for additional detail related to goodwill impairment.

GAAP operating earnings during the three and nine months ended March 31, 2023 were favorably impacted by litigation recoveries. See "Results of Operations" section of this MD&A and Note 6 of the "Notes to Condensed Consolidated Financial Statements" for additional detail related to litigation recoveries.

Non-GAAP operating earnings during the three months ended March 31, 2023 increased 11 percent to $606 million primarily due to an increase in Pharmaceutical segment profit largely driven by the performance of our generics program and an increased contribution from branded and specialty pharmaceutical products. This increase was partially offset by a decrease in Medical segment profit largely resulting from lower volumes and unfavorable product sales mix within products and distribution.

Non-GAAP operating earnings during the nine months ended March 31, 2023 decreased 3 percent to $1.5 billion primarily due to a decrease in Medical segment profit largely resulting from lower volumes and unfavorable product sales mix within products and distribution and net inflationary impacts. This decrease was partially offset by an increase in Pharmaceutical segment profit primarily driven by the performance of our generics program and an increased contribution from branded and specialty pharmaceutical products.

 3 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

MD&A Overview

GAAP and Non-GAAP Diluted EPS

	Three Months Ended March 31,						Nine Months Ended March 31,
($ per share)	2023		2022(2)		Change		2023		2022(2)		Change
GAAP diluted EPS (1)	$	1.34	$	(5.05)	N.M.		$	1.23	$	(3.82)	N.M.
State opioid assessment related to prior fiscal years	—		—				0.02		—
Shareholder cooperation agreement costs	—		—				(0.02)		—
Restructuring and employee severance	0.05		0.08				0.18		0.15
Amortization and other acquisition-related costs	0.21		0.21				0.61		0.63
Impairments and (gain)/loss on disposal of assets, net (3)	0.35		6.03				2.82		6.71
Litigation (recoveries)/charges, net	(0.21)		0.18				(0.60)		0.33
Loss on early extinguishment of debt	—		—				—		0.03
Non-GAAP diluted EPS (1)	$	1.74	$	1.45	20	%	$	4.24	$	4.01	6	%

The sum of the components and certain computations may reflect rounding adjustments.

The reconciling items are presented within this table net of tax. See quantification of tax effect of each reconciling item in our GAAP to Non-GAAP Reconciliations in the "Explanation and Reconciliation of Non-GAAP Financial Measures."

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

(2)For the three and nine months ended March 31, 2022, GAAP diluted EPS and the EPS impact from the GAAP to non-GAAP per share reconciling items are calculated using a weighted average of 275 million and 281 million common shares, respectively, which excludes potentially dilutive securities from the denominator due to their anti-dilutive effects resulting from our GAAP net loss for the periods. For the three and nine months ended March 31, 2022, non-GAAP diluted EPS is calculated using a weighted average of 277 million and 282 million common shares, respectively, which includes potentially dilutive shares.

(3)Impairments and (gain)/loss on disposal of assets, net included pre-tax goodwill impairment charges related to the Medical segment of $863 million recorded during the nine months ended March 31, 2023. For fiscal 2023, the estimated net tax benefit related to the impairments is $68 million and is included in the annual effective tax rate. As a result, the amount of tax expense recognized increased approximately by an incremental $74 million during the three months ended March 31, 2023. The incremental interim tax benefit recognized during the nine months ended March 31, 2023 was $66 million and will reverse in the fourth quarter of the fiscal year.

During the three and nine months ended March 31, 2022, impairments and (gain)/loss on disposal of assets, net included pre-tax goodwill impairment charges of $474 million and $1.8 billion, respectively, related to the Medical segment. For fiscal 2022, the estimated net tax benefit related to the impairment was $126 million and was included in the annual effective tax rate. As a result, the amount of tax expense recognized during the three and nine months ended March 31, 2022 increased approximately by an incremental $1.2 billion and $180 million, respectively, and lowered the provision for income taxes during the fourth quarter of fiscal 2022 by approximately $180 million.

GAAP diluted EPS was adversely impacted by the goodwill impairment charges related to the Medical segment, which had a $(2.76) per share after tax impact during the nine months ended March 31, 2023, and $(6.01) and $(6.67) per share after tax impact during the three and nine months ended March 31, 2022, respectively. See "Critical Accounting Policies and Sensitive Accounting Estimates" section of this MD&A, and Note 4 and Note 7 of the "Notes to Condensed Consolidated Financial Statements" for additional detail. GAAP EPS during the three and nine months ended March 31, 2023 also includes the favorable impact of litigation recoveries as described further in the "Results of Operations" section of this MD&A and Note 6 of "Notes to Condensed Consolidated Financial Statements."

During the three months ended March 31, 2023, non-GAAP diluted EPS increased 20 percent to $1.74 per share due to higher non-GAAP operating earnings and a lower share count.

During the nine months ended March 31, 2023, non-GAAP diluted EPS increased 6 percent to $4.24 per share due to a lower share count and interest expense, partially offset by lower non-GAAP operating earnings.

Cash and Equivalents

Our cash and equivalents balance was $4.0 billion at March 31, 2023 compared to $4.7 billion at June 30, 2022. During the nine months ended March 31, 2023, net cash provided by operating activities was $2.0 billion, which includes the impact of our second annual payment of $372 million related to the agreement to settle the vast majority of the opioid lawsuits filed by states and local governmental entities (the "Settlement Agreement"). In addition, during the nine months ended March 31, 2023, we deployed $1.5 billion for share repurchases, $571 million for debt repayments, $399 million for cash dividends and $264 million for capital expenditures.

 4 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

MD&A Overview

Significant Developments in Fiscal 2023 and Trends

Inflationary Impacts

Beginning in fiscal 2022, Medical segment profit was negatively affected by incremental inflationary impacts, primarily related to transportation (including ocean and domestic freight), commodities and labor, and global supply chain constraints. Since that time, we have taken certain actions to mitigate these impacts, including implementing certain price increases and evolving our pricing and commercial contracting processes to provide us with greater pricing flexibility. In addition, certain decreases in some product-related costs are beginning to be recognized as the higher-cost inventory is moving through our supply chain. As a result, during the three months ended March 31, 2023, these inflationary impacts, net of our mitigation actions, and global supply chain constraints had a slightly favorable impact on Medical segment profit on a year-over-year basis. During the nine months ended March 31, 2023, these net inflationary impacts negatively affected Medical segment profit on a year-over-year basis.

We expect these net inflationary impacts to continue to affect Medical segment profit in fiscal 2023 and beyond, but to a lesser extent than in prior periods. These inflationary costs are difficult to predict and may be greater than we expect or continue longer than our current expectations. Any additional benefit to Medical segment profit from further decreases in these product-related costs will be delayed until the higher-cost inventory has moved through our supply chain. Our actions to increase prices and evolve our contracting strategies are subject to contingencies and uncertainties and it is possible that our results of operations will be adversely impacted to a greater extent than we currently anticipate or that we may not be able to mitigate the negative impact to the extent or on the timeline we anticipate.

To a lesser extent, inflationary impacts, primarily related to increased transportation and labor costs, also adversely affected Pharmaceutical segment profit during the three and nine months ended March 31, 2023 and on a year-over-year basis during the nine months ended March 31, 2023. During the three months ended March 31, 2023, these inflationary impacts did not have a meaningful impact on Pharmaceutical segment profit on a year-over-year basis.

PPE Demand and Pricing

Personal protective equipment ("PPE") refers to protective clothing, medical gloves, face shields, face masks and other equipment designed to protect the wearer from injury or the spread of infection or illness.

PPE adversely impacted Medical segment revenue during the three and nine months ended March 31, 2023 on a year-over-year basis, primarily due to declines in volumes and pricing.

Medical segment profit was favorably impacted during the three and nine months ended March 31, 2023 and on a year-over-year basis by a net positive contribution from PPE, primarily driven by lower costs.

The demand and pricing for PPE is subject to risks and uncertainties, which may continue to impact Medical segment revenue, Medical segment profit and consolidated operating earnings during the remainder of fiscal 2023.

Medical Goodwill

Due to changes in our long-term financial plan assumptions made during the three months ended March 31, 2023, we performed interim goodwill impairment testing for the Medical operating segment (excluding our Cardinal Health at-Home Solutions division) (the “Medical Unit”) at March 31, 2023. We concluded that there was no impairment of goodwill at March 31, 2023, as the estimated fair value of the Medical Unit exceeded its carrying value.

We performed quantitative goodwill impairment testing for the Medical Unit at December 31, 2022 and September 30, 2022, which resulted in pre-tax goodwill impairment charges of $709 million and $154 million, respectively. The cumulative pre-tax goodwill impairment charges of $863 million were recognized in impairments and (gain)/loss on disposal of assets, net in our condensed consolidated statements of earnings/(loss) for the nine months ended March 31, 2023. See "Critical Accounting Policies and Sensitive Accounting Estimates" section of this MD&A and Note 4 of the "Notes to Condensed Consolidated Financial Statements" for additional detail.

Adverse changes in key assumptions, including an increase in the discount rate, or a significant change in industry or economic trends during the remainder of fiscal 2023 and beyond could result in additional goodwill impairments.

 5 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

MD&A Overview

Shareholder Cooperation Agreement

In September 2022, we entered into a Cooperation Agreement (the "Cooperation Agreement") with Elliott Associates, L.P. and Elliott International, L.P. (together, "Elliott") under which our Board of Directors (the "Board"), among other things, (1) appointed four new independent directors, including a representative from Elliott, and (2) formed an advisory Business Review Committee of the Board, which is tasked with undertaking a comprehensive review of our strategy, portfolio, capital-allocation framework and operations. In May 2023, we extended the term of the Cooperation Agreement until the later of July 15, 2024 or until Elliott's representative ceases to serve on, or resigns from, the Board. In connection with this extension, the Board has extended the term of the Business Review Committee until July 15, 2024.

The evaluation and implementation of any actions recommended by the Business Review Committee and the Board may impact our financial position and results of operations during the remainder of fiscal 2023 and beyond. In addition, during the nine months ended March 31, 2023, we incurred $8 million of expenses related to the negotiation and finalization of the Cooperation Agreement and other consulting expenses. We have incurred, and expect to continue to incur additional legal, consulting and other expenses related to the Cooperation Agreement and the activities of the Business Review Committee. See "Risk Factors" section for additional detail related to risks associated with the Cooperation Agreement.

Pharmaceutical Segment Generics Program

The performance of our Pharmaceutical segment generics program positively impacted the year-over-year comparison of Pharmaceutical segment profit during the three and nine months ended March 31, 2023. The Pharmaceutical segment generics program includes, among other things, the impact of generic pharmaceutical product launches, customer volumes, pricing changes, the Red Oak Sourcing, LLC venture ("Red Oak Sourcing") with CVS Health Corporation ("CVS Health") and generic pharmaceutical contract manufacturing and sourcing costs. During the nine months ended March 31, 2023, generic pharmaceutical contract manufacturing inventory-related charges adversely impacted the performance of our generics program.

The frequency, timing, magnitude and profit impact of generic pharmaceutical customer volumes, pricing changes, customer contract renewals, generic pharmaceutical manufacturer pricing changes and generic pharmaceutical contract manufacturing and sourcing costs all impact Pharmaceutical segment profit and are subject to risks and uncertainties. These risks and uncertainties may impact Pharmaceutical segment profit and consolidated operating earnings during the remainder of fiscal 2023.

 6 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

MD&A Results of Operations

Results of Operations

Revenue

	Three Months Ended March 31,						Nine Months Ended March 31,
(in millions)	2023		2022		Change		2023		2022		Change
Pharmaceutical	$	46,809	$	40,957	14	%	$	140,310	$	122,154	15	%
Medical	3,684		3,884		(5)	%	11,259		12,118		(7)	%
Total segment revenue	50,493		44,841		13	%	151,569		134,272		13	%
Corporate	(6)		(5)		N.M.		(10)		(11)		N.M.
Total revenue	$	50,487	$	44,836	13	%	$	151,559	$	134,261	13	%

Pharmaceutical Segment

Pharmaceutical segment revenue increased during the three and nine months ended March 31, 2023 due to branded and specialty pharmaceutical sales growth, which increased revenue by $5.8 billion and $17.9 billion, respectively, primarily from existing customers. During the nine months ended March 31, 2023, pharmaceutical sales growth from net new customers also contributed to increased revenue.

Medical Segment

Medical segment revenue decreased during the three months ended March 31, 2023 primarily due to an adverse impact of PPE volumes and pricing within products and distribution.

Medical segment revenue decreased during the nine months ended March 31, 2023 primarily due to lower sales within products and distribution, which includes an adverse impact from PPE volumes and pricing, and was partially offset by sales growth in at-Home Solutions.

Cost of Products Sold

Cost of products sold for the three and nine months ended March 31, 2023 increased 13 percent to $48.7 billion and $146.5 billion, respectively, compared to the prior-year periods due to the factors affecting the changes in revenue and gross margin.

 7 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

MD&A Results of Operations

Gross Margin

	Three Months Ended March 31,						Nine Months Ended March 31,
(in millions)	2023		2022		Change		2023		2022		Change
Gross margin	$	1,785	$	1,682	6	%	$	5,062	$	4,940	2	%

Gross margin increased during the three and nine months ended March 31, 2023 primarily due to the Pharmaceutical segment, which included the performance of our generics program and a higher contribution from branded and specialty pharmaceutical products. The increase in gross margin due to the Pharmaceutical segment during the nine months ended March 31, 2023 was partially offset by the performance of products and distribution within the Medical segment, primarily driven by lower volumes and unfavorable product sales mix.

Gross margin rate declined 21 basis points and 34 basis points during the three and nine months ended March 31, 2023, respectively, mainly due to changes in overall product mix, primarily driven by increased pharmaceutical distribution branded sales, which have a dilutive impact on our overall gross margin rate.

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

	Three Months Ended March 31,						Nine Months Ended March 31,
(in millions)	2023		2022		Change		2023		2022		Change
SG&A expenses	$	1,179	$	1,137	4	%	$	3,567	$	3,402	5	%

During the three and nine months ended March 31, 2023, SG&A expenses increased primarily due to inflationary impacts, primarily related to increased transportation and labor costs, and higher operating expenses (which were partially offset by the beneficial impact of enterprise-wide cost-savings measures).

During the nine months ended March 31, 2023, we incurred $8 million of expenses primarily related to the finalization of the Cooperation Agreement. See "Significant Developments in Fiscal 2023 and Trends" section in this MD&A for additional detail related to the Cooperation Agreement.

During the nine months ended March 31, 2023, we recorded $6 million of income to reduce our accrual for the assessment on prescription opioid medications that were sold or distributed in New York state in calendar year 2018 to the amount invoiced. See Note 6 of the "Notes to Condensed Consolidated Financial Statements" for additional information.

 8 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

MD&A Results of Operations

Segment Profit

We evaluate segment performance based on segment profit, among other measures. See Note 12 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)	2023		2022		Change		2023		2022		Change
Pharmaceutical	$	600	$	487	23	%	$	1,495	$	1,319	13	%
Medical	20		59		(66)	%	29		232		(88)	%
Total segment profit	620		546		14	%	1,524		1,551		(2)	%
Corporate	(48)		(643)		N.M.		(934)		(2,183)		N.M.
Total consolidated operating earnings/(loss)	$	572	$	(97)	N.M.		$	590	$	(632)	N.M.

Pharmaceutical Segment Profit

Pharmaceutical segment profit increased during the three and nine months ended March 31, 2023 primarily due to the performance of our generics program and an increased contribution from branded and specialty pharmaceutical products.

Medical Segment Profit

Medical segment profit decreased during the three and nine months ended March 31, 2023 primarily due to the performance of products and distribution, largely driven by lower volumes and unfavorable product sales mix. Medical segment profit during the nine months ended March 31, 2023 was also unfavorably affected by net inflationary impacts.

Corporate

The changes in Corporate during the three and nine months ended March 31, 2023 were due to the factors discussed in the "Other Components of Consolidated Operating Earnings/(Loss)" section that follows.

 9 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

MD&A Results of Operations

Other Components of Consolidated Operating Earnings/(Loss)

In addition to revenue, gross margin and SG&A expenses discussed previously, consolidated operating earnings/(loss) were impacted by the following:

	Three Months Ended March 31,				Nine Months Ended March 31,
(in millions)	2023		2022		2023		2022
Restructuring and employee severance	$	16	$	31	$	62	$	56
Amortization and other acquisition-related costs	74		79		216		237
Impairments and (gain)/loss on disposal of assets, net	20		471		883		1,764
Litigation (recoveries)/charges, net	(76)		61		(256)		113

Restructuring and Employee Severance

Restructuring and employee severance costs during the three and nine months ended March 31, 2023 were primarily related to the implementation of certain enterprise-wide cost-savings measures and the divestiture of the Cordis business. During the three and nine months ended March 31, 2022, restructuring also included facility exit costs related to decreasing our overall office space.

Amortization and Other Acquisition-Related Costs

Amortization of acquisition-related intangible assets was $69 million and $78 million for the three months ended March 31, 2023 and 2022, respectively, and $211 million and $235 million for the nine months ended March 31, 2023 and 2022, respectively.

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

We recognized $863 million of pre-tax non-cash goodwill impairment charges related to our Medical segment during the nine months ended March 31, 2023, and $474 million and $1.8 billion during the three and nine months ended March 31, 2022, respectively, as discussed further in the "Critical Accounting Policies and Sensitive Accounting Estimates" section of this MD&A and Note 4 of the "Notes to Condensed Consolidated Financial Statements."

Litigation (Recoveries)/Charges, Net

We recognized income of $71 million and $95 million during the three and nine months ended March 31, 2023, respectively, primarily related to a reduction of the reserve for the estimated settlement and defense costs for the Cordis OptEase and TrapEase inferior vena cava ("IVC") product liability due to the execution of certain settlement agreements. During the three and nine months ended March 31, 2022, we recognized estimated losses and legal defense costs associated with the IVC filter product liability claims of $24 million and $63 million, respectively. See Note 6 of the "Notes to Condensed Consolidated Financial Statements" for additional information.

During the nine months ended March 31, 2023, we recognized income of $93 million due to net proceeds from the settlement of a shareholder derivative litigation matter as described further in the "Legal Proceedings" section.

We recognized income for net recoveries in class action antitrust lawsuits in which we were a class member or plaintiff of $66 million and $17 million during the nine months ended March 31, 2023 and 2022, respectively.

During the three and nine months ended March 31, 2022, we incurred a one-time contingent attorney fee of $18 million related to the finalization of the Settlement Agreement resulting in the settlement of the vast majority of opioid lawsuits filed by state and local governmental entities. Due to the unique nature and significance of the Settlement Agreement, and the one-time, contingent nature of the fee, this related fee was included in litigation (recoveries)/charges, net.

Earnings/(Loss) Before Income Taxes

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

	Three Months Ended March 31,						Nine Months Ended March 31,
(in millions)	2023		2022		Change		2023		2022		Change
Other (income)/expense, net	$	—	$	3	N.M.		$	(5)	$	(14)	N.M.
Interest expense, net	28		38		(26)	%	78		115		(32)	%
Loss on early extinguishment of debt	—		—		N.M.		—		10		N.M.
(Gain)/loss on sale of equity interest in naviHealth	—		(1)		N.M.		—		(2)		N.M.

 10 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

MD&A Results of Operations

Interest Expense, Net

During the three and nine months ended March 31, 2023, interest expense decreased by 26 percent and 32 percent, respectively, primarily due to increased interest income from cash and equivalents.

Loss on Early Extinguishment of Debt

During the nine months ended March 31, 2022, we recognized a $10 million loss in connection with the debt redemption as described further in Note 5 of the “Notes to Condensed Consolidated Financial Statements.”

Provision for Income Taxes

The effective tax rate was 36.3 percent and (916.5) percent during the three months ended March 31, 2023 and 2022, respectively, and 36.7 percent and (44.4) percent during the nine months ended March 31, 2023 and 2022, respectively. These tax rates reflect the impact of the tax effects of goodwill impairment charges recognized during the three and nine months ended March 31, 2023 and 2022.

Tax Effects of Goodwill Impairment Charges

During the nine months ended March 31, 2023, we recognized cumulative pre-tax goodwill impairment charges of $863 million related to the Medical Unit. The net tax benefit related to these charges is $68 million for fiscal 2023.

Unless an item is considered discrete because it is unusual or infrequent, the tax impact of the item is included in our estimated annual effective tax rate. When items are recognized through our estimated annual effective tax rate, we apply our estimated annual effective tax rate to the earnings/(loss) before income taxes for the year-to-date period to compute our impact from income taxes for the current quarter and year-to-date period. The tax impacts of discrete items are recognized in their entirety in the period in which they occur.

The tax effect of the goodwill impairment charges recorded during the nine months ended March 31, 2023 was included in our estimated annual effective tax rate because it was not considered unusual or infrequent, given that we recorded goodwill impairments in prior fiscal years. The impact of the non-deductible goodwill increased the estimated annual effective tax rate for fiscal 2023. Applying the higher tax rate to the pre-tax income for the nine months ended March 31, 2023 resulted in recognizing an incremental interim tax expense of approximately $74 million, which impacted the provision for income taxes in the condensed consolidated statements of earnings/(loss) during the three months ended March 31, 2023 and prepaid expenses and other assets in the condensed consolidated balance sheet at March 31, 2023. The incremental interim tax benefit recognized during the nine months ended March 31, 2023 was $66 million and will reverse in the fourth quarter of fiscal 2023.

 11 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

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 and cash requirements; tax payments; current and projected debt service requirements, upcoming debt maturities, dividends and share repurchases; and known opioid litigation settlement payments. 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 $4.0 billion at March 31, 2023 compared to $4.7 billion at June 30, 2022.

During the nine months ended March 31, 2023, net cash provided by operating activities was $2.0 billion, which includes the impact of our second annual payment of $372 million related to the Settlement Agreement. For additional information, see "Opioid Litigation Settlement Agreement" section below. In addition, we deployed cash of $1.5 billion for share repurchases, $571 million for debt repayments, $399 million for cash dividends and $264 million for capital expenditures.

At March 31, 2023, our cash and equivalents were held in cash depository accounts with major banks or invested in high quality, short-term liquid investments.

Changes in working capital, which impact operating cash flow, can vary significantly depending on factors such as the timing of customer payments, inventory purchases, payments to vendors and tax payments in the regular course of business, as well as fluctuating working capital needs driven by customer and product mix.

The cash and equivalents balance at March 31, 2023 includes $689 million of cash held by subsidiaries outside of the United States.

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, 2023 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. During the nine months ended March 31, 2023, under our commercial paper program and our committed receivables program, we had maximum combined total daily amounts outstanding of $445 million and average combined daily amount outstanding of $4 million. At March 31, 2023, we had no amounts outstanding under our commercial paper program, revolving credit facility, or our committed receivables sales facility.

In February 2023, we extended our revolving credit facility through February 25, 2028. In September 2022, we renewed our committed receivables sales facility program through Cardinal Health Funding, LLC ("CHF") through September 30, 2025.

Our revolving credit and committed receivables sales facilities require us to maintain a consolidated net leverage ratio of no more than 3.75-to-1. As of March 31, 2023, we were in compliance with this financial covenant.

Long-Term Debt and Other Short-Term Borrowings

At March 31, 2023 and June 30, 2022, we had total long-term obligations, including the current portion and other short-term borrowings, of $4.7 billion and $5.3 billion, respectively. In March 2023, we repaid $550 million 3.2% Notes due 2023 at maturity with available cash.

 12 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

MD&A Liquidity and Capital Resources

Capital Deployment

Opioid Litigation Settlement Agreement

We had $5.85 billion accrued at March 31, 2023 related to certain opioid litigation, as further described within Note 6 of the "Notes to Condensed Consolidated Financial Statements." We expect the majority of the remaining payment amounts to be spread over the next 17 years. The effective date of the Settlement Agreement was April 2, 2022. During the nine months ended March 31, 2023, we made our second annual payment of $372 million under the Settlement Agreement. We expect to make subsequent annual payments under the Settlement Agreement every July for the remainder of the 18-year term of the Settlement Agreement. The amounts of these future payments may differ from the payments that we have already made.

Capital Expenditures

Capital expenditures during the nine months ended March 31, 2023 and 2022 were $264 million and $223 million, respectively.

Dividends

On each of May 10, 2022, August 10, 2022, November 8, 2022 and February 10, 2023, our Board of Directors approved a quarterly dividend of $0.4957 per share, or $1.98 per share on an annualized basis, which were paid on July 15, 2022, October 17, 2022, January 15, 2023 and April 15, 2023 to shareholders of record on July 1, 2022, October 3, 2022, January 3, 2023 and April 3, 2023, respectively.

Share Repurchases

During the nine months ended March 31, 2023, we repurchased $1.5 billion of our common shares, in the aggregate, under accelerated share repurchase ("ASR") programs. We funded the ASR programs with available cash. See Note 10 of the "Notes to Condensed Consolidated Financial Statements" for additional information.

On November 4, 2021, our Board of Directors approved a new $3.0 billion share repurchase program, which will expire on December 31, 2024. As of March 31, 2023, we have $1.2 billion authorized for share repurchases remaining under this program.

 13 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

MD&A Other Items

Other Items

The MD&A in our 2022 Form 10-K addresses our contractual obligations and cash requirements, as of and for the fiscal year ended June 30, 2022. There have been no subsequent material changes outside 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 sheet at June 30, 2022. This discussion and analysis should be read in conjunction with the Critical Accounting Policies and Sensitive Accounting Estimates included in our 2022 Form 10-K and our Form 10-Q for the quarters ended September 30, 2022 and December 31, 2022.

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, including due to the risks discussed in "Risk Factors" and other risks discussed in our 2022 Form 10-K and our other filings with the SEC since June 30, 2022.

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).

Our reporting units are: Pharmaceutical operating segment (excluding our Nuclear and Precision Health Solutions division); Nuclear and Precision Health Solutions division; Medical operating segment (excluding our Cardinal Health at-Home Solutions division) (“Medical Unit”); and Cardinal Health at-Home Solutions division.

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

Due to changes in our long-term financial plan assumptions made during the three months ended March 31, 2023, we elected to bypass the qualitative assessment and perform quantitative goodwill impairment testing for the Medical Unit. We concluded that there was no impairment of goodwill at March 31, 2023, as the estimated fair value of the Medical Unit exceeded its carrying value by approximately 4 percent, primarily driven by a lower discount rate as described below.

We performed quantitative goodwill impairment testing for the Medical Unit at December 31, 2022 and September 30, 2022, which resulted in pre-tax goodwill impairment charges of $709 million and $154 million, respectively. The impairment charge recognized in the second quarter was driven by certain reductions in our long-term financial plan assumptions, and the impairment charge recognized in the first quarter was driven by an increase in the discount rate primarily due to an increase in the risk-free interest rate. The cumulative pre-tax goodwill impairment charges of $863 million were recognized in impairments and (gain)/loss on disposal of assets, net in our condensed consolidated statements of earnings/(loss) for the nine months ended March 31, 2023.

Our determinations of the estimated fair value of the Medical Unit at March 31, 2023, December 31, 2022 and September 30, 2022 were based on a combination of the income-based approach (using a terminal growth rate of 2 percent), and the market-based approaches. For the income-based approach, we used discount rates of 10 percent, 10.5 percent and 10.5 percent for each quarter, respectively. Additionally, we assigned a weighting of 80 percent to the discounted cash flow method, 10 percent to the guideline public company method, and 10 percent to the guideline transaction method. The decrease in the discount rate for the interim testing performed at March 31, 2023 was primarily due to a decrease in the risk-free interest rate.

 14 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

MD&A Other Items

While we consider the assumptions used in our determination of the estimated fair value of the Medical Unit to be reasonable and appropriate, they are complex and subjective, and additional adverse changes in one key assumption or a combination of key assumptions during fiscal 2023 may significantly affect future estimates. These assumptions include, among other things, a failure to meet expected earnings or other financial plans, including the execution of key initiatives related to optimizing and growing sales of Cardinal Health branded medical products, increasing growth in certain strategic divisions within our Medical segment, and driving simplification efforts and cost optimization projects, or unanticipated events and circumstances, such as changes in assumptions about the duration and magnitude of increased supply chain and commodities costs and our efforts to mitigate such impact, including price increases or surcharges; further disruptions in the supply chain; manufacturing cost inefficiencies resulting from lower than anticipated sales volume; estimated demand and selling prices for PPE; an increase in the discount rate; a decrease in the terminal growth rate; increases in tax rates; or a significant change in industry or economic trends.

Adverse changes in key assumptions may result in a decline in fair value below the carrying value in the future and therefore, an impairment of our Medical Unit goodwill in future periods, which could adversely affect our results of operations. For example, if we were to increase the discount rate by a hypothetical 0.5 percent to 10.5 percent or decrease the terminal growth rate by a hypothetical 1.7 percent to 0.3 percent, the carrying value would have exceeded the fair value of the Medical Unit by approximately 1 percent.

During the three months ended March 31, 2022 and December 31, 2021, we performed quantitative goodwill impairment testing for the Medical Unit. This quantitative testing resulted in the carrying amount of the Medical Unit exceeding the fair value, resulting in pre-tax impairment charges of $474 million and $1.3 billion recorded during the three months ended March 31, 2022 and December 31, 2021, respectively. Refer to our 2022 Form 10-K for additional detail.

 15 Cardinal Health | Q3 Fiscal 2023 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. We did not recognize any LIFO charges or credits during the periods presented.

•Surgical gown recall costs or income includes inventory write-offs and certain remediation and supply disruption costs, net of related insurance recoveries, arising from the January 2020 recall of select Association for the Advancement of Medical Instrumentation ("AAMI") Level 3 surgical gowns and voluntary field actions (a recall of some packs and a corrective action allowing overlabeling of other packs) for Presource Procedure Packs containing affected gowns. Income from surgical gown recall costs represents insurance recoveries of these certain costs. We have excluded these costs from our non-GAAP metrics to allow investors to better understand the underlying operating results of the business and to facilitate comparison of our current financial results to our historical financial results and to our peer group companies’ financial results.

•State opioid assessments related to prior fiscal years is the portion of state assessments for prescription opioid medications that were sold or distributed in periods prior to the period in which the expense is incurred. This portion is excluded from non-GAAP financial measures because it is retrospectively applied to sales in prior fiscal years and inclusion would obscure analysis of the current fiscal year results of our underlying, ongoing business. Additionally, while states' laws may require us to make payments on an ongoing basis, the portion of the assessment related to sales in prior periods are contemplated to be one-time, nonrecurring items. Income from state opioid assessments related to prior fiscal years represents reversals of accruals due to changes in estimates or when the underlying assessments were invalidated by a Court or reimbursed by manufacturers.

•Shareholder cooperation agreement costs includes costs such as legal, consulting and other expenses incurred in relation to the agreement (the "Cooperation Agreement") entered into among Elliott Associates, L.P., Elliott International, L.P. (together, "Elliott") and Cardinal Health, including costs incurred to negotiate and finalize the Cooperation Agreement and costs incurred by the new Business Review Committee of the Board of Directors, which was formed under this Cooperation Agreement. We have excluded these costs from our non-GAAP metrics because they do not occur in or reflect the ordinary course of our ongoing business operations and may obscure analysis of trends and financial performance.

•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

 16 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

Explanation and Reconciliation of Non-GAAP Financial Measures

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, net 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. During fiscal 2022, we incurred a one-time contingent attorneys' fee of $18 million related to the finalization of the settlement agreement (the “Settlement Agreement”) resulting in the settlement of the vast majority of opioid lawsuits filed by state and local governmental entities. Due to the unique nature and significance of the Settlement Agreement, and the one-time, contingent nature of the fee, this fee was included in litigation recoveries or charges, net. Additionally, during fiscal 2022 our Pharmaceutical segment profit was positively impacted by a $16 million judgment for lost profits. This judgment was the result of an ordinary course intellectual property rights claim and, therefore, is not adjusted in calculating the litigation recoveries or charges, net adjustment. During fiscal 2021, we incurred a tax benefit related to a carryback of a net operating loss. Some pre-tax amounts, which contributed to this loss, relate to litigation charges. As a result, we allocated substantially all of the tax benefit to litigation charges.

•Loss on early 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.

•(Gain)/Loss on sale of equity interest in naviHealth was incurred in connection with the sale of our remaining equity interest in naviHealth in fiscal 2020. The equity interest was retained in connection with the initial sale of our majority interest in naviHealth during fiscal 2019. We exclude this significant gain because gains or losses on investments of this magnitude do not typically occur in the normal course of business and are similar in nature to a gain or loss from a divestiture of a majority interest, which we exclude from non-GAAP results. The gain on the initial sale of our majority interest in naviHealth in fiscal 2019 was also excluded from our non-GAAP measures.

The tax effect for each of the items listed above 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 report are determined by dividing the difference between current-period results and prior-period results by prior-period results.

Non-GAAP operating earnings: operating earnings/(loss) excluding (1) LIFO charges/(credits), (2) surgical gown recall costs/(income), (3) state opioid assessment related to prior fiscal years, (4) shareholder cooperation agreement costs, (5) restructuring and employee severance, (6) amortization and other acquisition-related costs, (7) impairments and (gain)/loss on disposal of assets, net and (8) litigation (recoveries)/charges, net.

Non-GAAP earnings before income taxes: earnings/(loss) before income taxes excluding (1) LIFO charges/(credits), (2) surgical gown recall costs/(income), (3) state opioid assessment related to prior fiscal years, (4) shareholder cooperation agreement costs, (5) restructuring and employee severance, (6) amortization and other acquisition-related costs, (7) impairments and (gain)/loss on disposal of assets, net, (8) litigation (recoveries)/charges, net, (9) loss on early extinguishment of debt and (10) (gain)/loss on sale of equity interest in naviHealth.

Non-GAAP net earnings attributable to Cardinal Health, Inc.: net earnings/(loss) attributable to Cardinal Health, Inc. excluding (1) LIFO charges/(credits), (2) surgical gown recall costs/(income), (3) state opioid assessment related to prior fiscal years, (4) shareholder cooperation agreement costs, (5) restructuring and employee severance, (6) amortization and other acquisition-related costs, (7) impairments and (gain)/loss on disposal of assets, net, (8) litigation (recoveries)/charges, net, (9) loss on early extinguishment of debt and (10) (gain)/loss on sale of equity interest in naviHealth, each net of tax.

 17 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

Explanation and Reconciliation of Non-GAAP Financial Measures

Non-GAAP effective tax rate: provision for income taxes adjusted for the tax impacts of (1) LIFO charges/(credits), (2) surgical gown recall costs/(income), (3) state opioid assessment related to prior fiscal years, (4) shareholder cooperation agreement costs, (5) restructuring and employee severance, (6) amortization and other acquisition-related costs, (7) impairments and (gain)/loss on disposal of assets, net, (8) litigation (recoveries)/charges, net, (9) loss on early extinguishment of debt and (10) (gain)/loss on sale of equity interest in naviHealth divided by (earnings before income taxes adjusted for the ten items above).

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

 18 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

Explanation and Reconciliation of Non-GAAP Financial Measures

GAAP to Non-GAAP Reconciliation

(in millions, except per common share amounts)	Operating Earnings/(Loss)		Operating Earnings Growth Rate		Earnings/(Loss) Before Income Taxes		Provision for Income Taxes		Net Earnings/(Loss)1		Net Earnings1 Growth Rate		Diluted EPS1,2		Diluted EPS1 Growth Rate
	Three Months Ended March 31, 2023
GAAP	$	572	N.M.		$	544	$	197	$	345	N.M.		$	1.34	N.M.
Restructuring and employee severance	16				16		4		12				0.05
Amortization and other acquisition-related costs	74				74		19		55				0.21
Impairments and (gain)/loss on disposal of assets, net 3	20				20		(69)		89				0.35
Litigation (recoveries)/charges, net	(76)				(76)		(22)		(54)				(0.21)
Non-GAAP	$	606	11	%	$	578	$	129	$	447	11	%	$	1.74	20	%
	Three Months Ended March 31, 2022
GAAP	$	(97)	N.M.		$	(137)	$	1,253	$	(1,391)	N.M.		$	(5.05)	N.M.
Restructuring and employee severance	31				31		8		23				0.08
Amortization and other acquisition-related costs	79				79		20		59				0.21
Impairments and (gain)/loss on disposal of assets, net 3	471				471		(1,189)		1,660				6.03
Litigation (recoveries)/charges, net 4	61				61		10		51				0.18
(Gain)/Loss on sale of equity interest in naviHealth	—				(1)		—		(1)				—
Non-GAAP	$	545	(21)	%	$	504	$	101	$	402	(11)	%	$	1.45	(5)	%
	Nine Months Ended March 31, 2023
GAAP	$	590	N.M.		$	517	$	189	$	325	N.M.		$	1.23	N.M.
State opioid assessment related to prior fiscal years	(6)				(6)		(2)		(4)				0.02
Shareholder cooperation agreement costs	8				8		2		6				(0.02)
Restructuring and employee severance	62				62		14		48				0.18
Amortization and other acquisition-related costs	216				216		56		160				0.61
Impairments and (gain)/loss on disposal of assets, net 3	883				883		138		745				2.82
Litigation (recoveries)/charges, net	(256)				(256)		(98)		(158)				(0.60)
Non-GAAP	$	1,497	(3)	%	$	1,424	$	299	$	1,122	(1)	%	$	4.24	6	%
	Nine Months Ended March 31, 2022
GAAP	$	(632)	N.M.		$	(741)	$	328	$	(1,071)	N.M.		$	(3.82)	N.M.
Surgical gown recall costs/(income)	1				1		—		1				—
Restructuring and employee severance	56				56		14		42				0.15
Amortization and other acquisition-related costs	237				237		61		176				0.63
Impairments and (gain)/loss on disposal of assets, net 3	1,764				1,764		(119)		1,883				6.71
Litigation (recoveries)/charges, net 4,5	113				113		19		94				0.33
Loss on early extinguishment of debt	—				10		3		7				0.03
(Gain)/Loss on sale of equity interest in naviHealth	—				(2)		—		(2)				—
Non-GAAP	$	1,540	(20)	%	$	1,438	$	306	$	1,131	(20)	%	$	4.01	(16)	%

 19 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

Explanation and Reconciliation of Non-GAAP Financial Measures

1    Attributable to Cardinal Health, Inc.

2    For the three and nine months ended March 31, 2022, GAAP diluted EPS and the EPS impact from the GAAP to non-GAAP per share reconciling items are calculated using a weighted average of 275 million and 281 million common shares, respectively, which excludes potentially dilutive securities from the denominator due to their anti-dilutive effects resulting from our GAAP net loss for the periods. For the three and nine months ended March 31, 2022, non-GAAP diluted EPS is calculated using a weighted average of 277 million and 282 million common shares, respectively, which includes potentially dilutive shares.

3    Impairments and (gain)/loss on disposal of assets, net included pre-tax goodwill impairment charges related to the Medical segment of $863 million recorded during the nine months ended March 31, 2023. For fiscal 2023, the estimated net tax benefit related to the impairments is $68 million and is included in the annual effective tax rate. As a result, the amount of tax expense recognized increased approximately by an incremental $74 million during the three months ended March 31, 2023. The incremental interim tax benefit recognized during the nine months ended March 31, 2023 was $66 million and will reverse in the fourth quarter of the fiscal year.

During the three and nine months ended March 31, 2022, impairments and (gain)/loss on disposal of assets, net included pre-tax goodwill impairment charges of $474 million and $1.8 billion, respectively, related to the Medical segment. For fiscal 2022, the estimated net tax benefit related to the impairment was $126 million and was included in the annual effective tax rate. As a result, the amount of tax expense recognized during the three and nine months ended March 31, 2022 increased approximately by an incremental $1.2 billion and $180 million, respectively, and lowered the provision for income taxes during the fourth quarter of fiscal 2022 by approximately $180 million.

4    Litigation (recoveries)/charges, net includes a one-time contingent attorney fee of $18 million recorded during the three and nine months ended March 31, 2022 related to the finalization of the settlement agreement (the "Settlement Agreement") resulting in the settlement of the vast majority of opioid lawsuits filed by state and local governmental entities. Due to the unique nature and significance of the Settlement Agreement, and the one-time, contingent nature of the fee, this related fee was included in litigation (recoveries)/charges, net.

5    Litigation (recoveries)/charges, net for the nine months ended March 31, 2022 does not include a $16 million judgement for lost profits related to an ordinary course intellectual property claim, which positively impacted Pharmaceutical segment profit.

.

The sum of the components and certain computations may reflect rounding adjustments.

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

 20 Cardinal Health | Q3 Fiscal 2023 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 2022 Form 10-K since the end of fiscal 2022 through March 31, 2023.

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 of March 31, 2023. Based on this evaluation, our principal executive officer and principal financial officer have concluded that as of March 31, 2023, 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, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 21 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

Other

Legal Proceedings

In addition to the proceeding described below, the legal proceedings described in Note 6 of the "Notes to Condensed Consolidated Financial Statements" are incorporated in this "Legal Proceedings" section by reference.

Between June 2019 and January 2020, three purported shareholders filed actions on behalf of Cardinal Health, Inc. in the U.S. District Court for the Southern District of Ohio against certain current and former members of our Board of Directors alleging that the defendants breached their fiduciary duties by failing to effectively monitor Cardinal Health's distribution of controlled substances and approving certain payments of executive compensation. In January, 2020, the court consolidated these derivative cases under the caption In re Cardinal Health, Inc. Derivative Litigation and in March 2020, plaintiffs filed an amended complaint.

In December 2021, the parties reached an agreement in principle to settle this matter and in October 2022, the court entered an order approving the settlement and dismissing the case. This settlement does not include any admission of liability. Under the settlement, in December 2022, Cardinal Health's director and officer liability insurance carriers, on behalf of the defendants, paid Cardinal Health $124 million, less approximately $31 million in attorneys' fees and expenses awarded by the court to plaintiffs' counsel.

 22 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

Other

Risk Factors

You should carefully consider the information in this Form 10-Q, including the Risk Factors below, and the risk factors discussed in "Risk Factors" and other risks discussed in our 2022 Form 10-K, our Form 10-Q for the quarter ended December 31, 2022 and September 30, 2022, and our other filings with the SEC since June 30, 2022. 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.

Our business could be affected by activist shareholders.

In September 2022, we entered into a Cooperation Agreement (the "Cooperation Agreement") with Elliott Associates, L.P. and Elliott International, L.P. (together, "Elliott") under which our Board of Directors, among other things, (1) appointed four new independent directors, including a representative from Elliott , and (2) formed an advisory Business Review Committee of the Board, which is tasked with undertaking a comprehensive review of our strategy, portfolio, capital-allocation framework and operations. In May 2023, we extended the term of the Cooperation Agreement until the later of July 15, 2024 or until Elliott's representative ceases to serve on, or resigns from, our Board of Directors.

The Cooperation Agreement may create unintended consequences, such as creating uncertainty about our management, operations or future strategic direction, which could result in the loss of future business opportunities or negatively impact our ability to attract and retain qualified talent. Additionally, implementing any actions recommended by the Business Review Committee and the Board may be costly and time-consuming, may be disruptive to our ongoing business operations and may ultimately be unsuccessful.

It is possible that activist shareholders may, among other things, attempt to effect additional changes and exert influence over our Board of Directors and management or initiate a proxy contest, which may disrupt our operations by diverting the attention of management and the Board and be costly and time-consuming. Any such proxy contests, actions or requests, or the mere public presence of activist shareholders, may cause the market price for our shares to experience volatility, which could be significant.

We could be subject to adverse changes in the tax laws or additional challenges to our tax positions.

We are a large multinational corporation with operations in the United States and many foreign countries. As a result, we are subject to the tax laws of many jurisdictions.

From time to time, proposals are made in the United States and other jurisdictions in which we operate that could adversely affect our tax positions, effective tax rate or tax payments. Specific initiatives that may impact us include possible increases in U.S. or foreign corporate income tax rates or other changes in tax law to raise revenue, the repeal of the LIFO (last-in, first-out) method of inventory accounting for income tax purposes, the establishment or increase in taxation at the U.S. state level on the basis of gross revenues, recommendations of the base erosion and profit shifting project undertaken by the Organization for Economic Cooperation and Development and the European Commission’s investigation

into illegal state aid. In August 2022, the U.S. federal government enacted the Inflation Reduction Act, which imposed a 15 percent corporate minimum tax on certain large corporations and a 1 percent tax on share repurchases after December 31, 2022. These provisions may adversely impact our financial position and results of operations.

Additionally, in connection with the accruals taken in connection with opioid-related lawsuits in fiscal years 2021 and 2020, we recorded net tax benefits of $228 million and $488 million, respectively, reflecting our current assessment of the estimated future deductibility of the amount that may be paid. We have made reasonable estimates and recorded amounts based on management's judgment and our current understanding of the U.S. Tax Cuts and Jobs Act ("Tax Act"); however, these estimates require significant judgment, and it is possible that they could be subject to challenges by the U.S. Internal Revenue Service ("IRS").

The U.S. tax law governing deductibility was changed by the Tax Act. The taxing authorities could challenge our interpretation of the Tax Act or the estimates and assumptions used to assess the future deductibility of these benefits, or tax law could change again. We also regularly review these estimates and assumptions from time to time and adjust our accruals based on our review, resulting in changes in our tax provision/(benefit). The actual amount of tax benefit related to uncertain tax positions may differ materially from these estimates. See Note 7 of the "Notes to Condensed Consolidated Financial Statements" for more information regarding these matters.

In fiscal year 2021, our provision for income taxes reflected a $424 million benefit from the tax benefits of a self-insurance pre-tax net operating loss carryback under the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. Also, as a result of this net operating loss carryback, we received a U.S. federal income tax refund of $966 million. In connection with this net operating loss carryback, certain industry participants, including us, received a letter from the U.S. House of Representatives’ Committee on Oversight and Reform questioning, among other things, our plans to take tax deductions for opioid-related losses, including our use of the net operating loss carryback provisions under the CARES Act and deductibility under the Tax Act. We responded to the letter. It is possible that the IRS could challenge our tax position with respect to this self-insurance loss. If these initiatives are successful, our effective tax rate could be adversely impacted. Additionally, laws governing insurance coverage vary by state and

 23 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

Other

some state courts have interpreted laws and insurance policies in ways that may impact our self-insurance loss, which could negatively impact our financial position.

We file income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and various foreign jurisdictions. Tax laws are complex and subject to varying interpretations. With few exceptions, we are subject to audit by taxing authorities for fiscal years 2015 through the current fiscal year. Proposed adjustments in ongoing audits may adversely affect our effective tax rate or tax payments.

 24 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

Other

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 (2,3)		Total Number of Shares Purchased as Part of Publicly Announced Programs (2,3,4)	Approximate Dollar Value of Shares That May Yet be Purchased Under the Program (4) (in millions)
January 2023	614,596	$	81.40	614,248	$	1,493
February 2023	2,596,570	77.03		2,596,391	1,293
March 2023	639,115	78.25		638,930	1,243
Total	3,850,281	$	77.93	3,849,569	$	1,243

(1)Reflects 348, 179 and 185 common shares purchased in January, February, and March 2023, respectively, through a rabbi trust as investments of participants in our Deferred Compensation Plan.

(2)On February 6, 2023, we entered into an accelerated share repurchase ("ASR") program to purchase common shares for an aggregate purchase price of $250 million and received an initial delivery of 2.6 million common shares using a reference price of $77.03. The ASR program concluded on February 28, 2023 at a volume weighted average price per common share of $77.27 resulting in a final delivery of 0.6 million common shares. See Note 10 of the "Notes to Condensed Consolidated Financial Statements" for additional information.

(3)On November 17, 2022, we entered into an ASR program to purchase common shares for an aggregate purchase price of $250 million and received an initial delivery of 2.6 million common shares using a reference price of $76.58. The ASR program concluded on January 13, 2023 at a volume weighted average price per common share of $77.50 resulting in a final delivery of 0.6 million common shares. See Note 10 of the "Notes to Condensed Consolidated Financial Statements" for additional information.

(4)On November 4, 2021, our Board of Directors approved a new $3.0 billion share repurchase program, which will expire on December 31, 2024. As of March 31, 2023, we have $1.2 billion authorized for share repurchases remaining under this program.

 25 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

Financial Statements

Condensed Consolidated Statements of Earnings/(Loss)

(Unaudited)

	Three Months Ended March 31,				Nine Months Ended March 31,
(in millions, except per common share amounts)	2023		2022		2023		2022
Revenue	$	50,487	$	44,836	$	151,559	$	134,261
Cost of products sold	48,702		43,154		146,497		129,321
Gross margin	1,785		1,682		5,062		4,940
Operating expenses:
Distribution, selling, general and administrative expenses	1,179		1,137		3,567		3,402
Restructuring and employee severance	16		31		62		56
Amortization and other acquisition-related costs	74		79		216		237
Impairments and (gain)/loss on disposal of assets, net	20		471		883		1,764
Litigation (recoveries)/charges, net	(76)		61		(256)		113
Operating earnings/(loss)	572		(97)		590		(632)
Other (income)/expense, net	—		3		(5)		(14)
Interest expense, net	28		38		78		115
Loss on early extinguishment of debt	—		—		—		10
(Gain)/loss on sale of equity interest in naviHealth	—		(1)		—		(2)
Earnings/(loss) before income taxes	544		(137)		517		(741)
Provision for income taxes	197		1,253		189		328
Net earnings/(loss)	347		(1,390)		328		(1,069)
Less: Net earnings attributable to noncontrolling interests	(2)		(1)		(3)		(2)
Net earnings/(loss) attributable to Cardinal Health, Inc.	$	345	$	(1,391)	$	325	$	(1,071)
Earnings/(Loss) per common share attributable to Cardinal Health, Inc.:
Basic	$	1.35	$	(5.05)	$	1.24	$	(3.82)
Diluted	1.34		(5.05)		1.23		(3.82)
Weighted-average number of common shares outstanding:
Basic	256		275		263		281
Diluted	258		275		264		281
Cash dividends declared per common share	$	0.4957	$	0.4908	$	1.4871	$	1.4724

See notes to condensed consolidated financial statements.

 26 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

Financial Statements

Condensed Consolidated Statements of Comprehensive Income/(Loss)

(Unaudited)

	Three Months Ended March 31,				Nine Months Ended March 31,
(in millions)	2023		2022		2023		2022
Net earnings/(loss)	$	347	$	(1,390)	$	328	$	(1,069)
Other comprehensive income/(loss):
Foreign currency translation adjustments and other	4		(4)		(34)		(47)
Net unrealized gain on derivative instruments, net of tax	—		12		6		4
Total other comprehensive income/(loss), net of tax	4		8		(28)		(43)
Total comprehensive income/(loss)	351		(1,382)		300		(1,112)
Less: comprehensive income attributable to noncontrolling interests	(2)		(1)		(3)		(2)
Total comprehensive income/(loss) attributable to Cardinal Health, Inc.	$	349	$	(1,383)	$	297	$	(1,114)

See notes to condensed consolidated financial statements.

 27 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

Financial Statements

Condensed Consolidated Balance Sheets

(in millions)	March 31, 2023		June 30, 2022
	(Unaudited)
Assets
Current assets:
Cash and equivalents	$	3,990	$	4,717
Trade receivables, net	10,992		10,561
Inventories, net	16,620		15,636
Prepaid expenses and other	1,895		2,021
Total current assets	33,497		32,935
Property and equipment, net	2,362		2,361
Goodwill and other intangibles, net	6,567		7,629
Other assets	951		953
Total assets	$	43,377	$	43,878
Liabilities and Shareholders’ Deficit
Current liabilities:
Accounts payable	$	29,601	$	27,128
Current portion of long-term obligations and other short-term borrowings	26		580
Other accrued liabilities	2,876		2,842
Total current liabilities	32,503		30,550
Long-term obligations, less current portion	4,708		4,735
Deferred income taxes and other liabilities	8,384		9,299
Shareholders’ deficit:
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, 2023 and June 30, 2022	2,818		2,813
Accumulated deficit	(342)		(280)
Common shares in treasury, at cost: 72 million shares and 54 million shares at March 31, 2023 and June 30, 2022, respectively	(4,554)		(3,128)
Accumulated other comprehensive loss	(142)		(114)
Total Cardinal Health, Inc. shareholders' deficit	(2,220)		(709)
Noncontrolling interests	2		3
Total shareholders’ deficit	(2,218)		(706)
Total liabilities and shareholders’ deficit	$	43,377	$	43,878

See notes to condensed consolidated financial statements.

 28 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

Financial Statements

Condensed Consolidated Statements of Shareholders'

Equity/(Deficit)

(Unaudited)

	Common Shares			Retained Earnings/ (Accumulated Deficit)		Treasury Shares			Accumulated Other Comprehensive Loss		Noncontrolling Interests		Total Shareholders’ Equity/(Deficit)
(in millions)	Shares Issued	Amount				Shares	Amount
	Three Months Ended March 31, 2023
Balance at December 31, 2022	327	$	2,747	$	(560)	(68)	$	(4,254)	$	(146)	$	1	$	(2,212)
Net earnings				345							2		347
Other comprehensive income, net of tax									4				4
Employee stock plans activity, net of shares withheld for employee taxes	—	21				—	3						24
Share repurchase program activity		50				(4)	(303)						(253)
Dividends declared				(128)									(128)
Other				1							(1)		—
Balance at March 31, 2023	327	$	2,818	$	(342)	(72)	$	(4,554)	$	(142)	$	2	$	(2,218)

	Three Months Ended March 31, 2022
Balance at December 31, 2021	327	$	2,721	$	1,245	(50)	$	(2,883)	$	(85)	$	4	$	1,002
Net earnings/(loss)				(1,391)							1		(1,390)
Other comprehensive income, net of tax									8				8
Employee stock plans activity, net of shares withheld for employee taxes	—	20					3						23
Share repurchase program activity		20				(4)	(220)						(200)
Dividends declared				(135)									(135)
Other											(1)		(1)
Balance at March 31, 2022	327	$	2,761	$	(281)	(54)	$	(3,100)	$	(77)	$	4	$	(693)

	Nine Months Ended March 31, 2023
Balance at June 30, 2022	327	$	2,813	$	(280)	(54)	$	(3,128)	$	(114)	$	3	$	(706)
Net earnings				325							3		328
Other comprehensive loss, net of tax									(28)				(28)
Purchase of noncontrolling interests											(2)		(2)
Employee stock plans activity, net of shares withheld for employee taxes		5				2	77						82
Share repurchase program activity						(20)	(1,503)						(1,503)
Dividends declared				(388)									(388)
Other				1							(2)		(1)
Balance at March 31, 2023	327	$	2,818	$	(342)	(72)	$	(4,554)	$	(142)	$	2	$	(2,218)

	Nine Months Ended March 31, 2022
Balance at June 30, 2021	327	$	2,806	$	1,205	(36)	$	(2,186)	$	(34)	$	3	$	1,794
Net earnings/(loss)				(1,071)							2		(1,069)
Other comprehensive loss, net of tax									(43)				(43)
Employee stock plans activity, net of shares withheld for employee taxes	—	(5)				1	46						41
Share repurchase program activity		(40)				(19)	(960)						(1,000)
Dividends declared				(415)									(415)
Other											(1)		(1)
Balance at March 31, 2022	327	$	2,761	$	(281)	(54)	$	(3,100)	$	(77)	$	4	$	(693)

See notes to condensed consolidated financial statements.

 29 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

Financial Statements

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended March 31,
(in millions)	2023		2022
Cash flows from operating activities:
Net earnings/(loss)	$	328	$	(1,069)
Adjustments to reconcile net earnings/(loss) to net cash provided by operating activities:
Depreciation and amortization	516		513
Impairments and (gain)/loss on disposal of assets, net	883		1,764
Impairments and loss on sale of other investments	—		3
(Gain)/loss on sale of equity interest in naviHealth	—		(2)
Loss on early extinguishment of debt	—		10
Share-based compensation	69		65
Provision for bad debts	79		46
Change in operating assets and liabilities, net of effects from acquisitions and divestitures:
Increase in trade receivables	(510)		(1,193)
Increase in inventories	(1,012)		(922)
Increase in accounts payable	2,473		1,121
Other accrued liabilities and operating items, net	(845)		(206)
Net cash provided by operating activities	1,981		130
Cash flows from investing activities:
Proceeds from divestitures, net of cash sold	—		923
Acquisition of subsidiaries, net of cash acquired	(10)		—
Additions to property and equipment	(264)		(223)
Proceeds from disposal of property and equipment	2		11
Purchases of investments	(6)		(38)
Proceeds from investments	1		27
Proceeds from net investment hedge terminations	29		71
Net cash provided by/(used in) investing activities	(248)		771
Cash flows from financing activities:
Reduction of long-term obligations	(571)		(597)
Net tax proceeds/(withholdings) from share-based compensation	11		(26)
Dividends on common shares	(399)		(425)
Purchase of treasury shares	(1,500)		(1,000)
Net cash used in financing activities	(2,459)		(2,048)
Effect of exchange rate changes on cash and equivalents	(1)		(13)
Cash and equivalents reclassified from assets held for sale	—		109
Net decrease in cash and equivalents	(727)		(1,051)
Cash and equivalents at beginning of period	4,717		3,407
Cash and equivalents at end of period	$	3,990	$	2,356

See notes to condensed consolidated financial statements.

 30 Cardinal Health | Q3 Fiscal 2023 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 consolidated subsidiaries, and all significant intercompany transactions and amounts have been eliminated. The results of businesses acquired or disposed of are included in the condensed consolidated financial statements from the date of the acquisition or up to the date of disposal, respectively.

References to "we," "our," and similar pronouns in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 (this "Form 10-Q") refer to Cardinal Health, Inc. and its majority-owned or consolidated subsidiaries unless the context requires otherwise.

Our fiscal year ends on June 30. References to fiscal 2023 and 2022 in these condensed consolidated financial statements are to the fiscal years ending or ended June 30, 2023 and June 30, 2022, 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, judgments 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. In addition, financial results presented for this fiscal 2023 interim period are not necessarily indicative of the results that may be expected for the full fiscal year ending June 30, 2023. 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, 2022 (our "2022 Form 10-K").

Recently Issued Financial Accounting Standards

Not Yet Adopted

We assess the adoption impacts of recently issued accounting standards by the Financial Accounting Standards Board ("FASB") on our condensed consolidated financial statements as well as material updates to previous assessments, if any, from our fiscal 2022 Form 10-K. There were no accounting standards issued in fiscal 2023 that will have a material impact on our condensed consolidated financial statements.

Recently Adopted Financial Accounting Standards

There were no new material accounting standards adopted during the nine months ended March 31, 2023.

2. Divestitures

In August 2021, we sold the Cordis business to Hellman & Friedman for proceeds of $923 million, net of cash transferred, and we retained certain working capital accounts. Cardinal Health also retained product liability associated with lawsuits and claims related to the Cordis OptEase and TrapEase inferior vena cava ("IVC") filter products in the U.S. and Canada, as well as authority for these matters discussed in Note 6. The Cordis business operated within our Medical segment.

 31 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

Notes to Financial Statements

3. Restructuring and Employee Severance

The following table summarizes restructuring and employee severance:

	Three Months Ended March 31,
(in millions)	2023		2022
Employee-related	$	3	$	12
Facility exit and other	13		19
Total restructuring and employee severance	$	16	$	31

	Nine Months Ended March 31,
(in millions)	2023		2022
Employee-related	$	32	$	22
Facility exit and other	30		34
Total restructuring and employee severance	$	62	$	56

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. Facility exit and other costs primarily consist of project consulting fees, accelerated depreciation, professional, project management and other service fees to support divestitures, costs associated with vacant facilities, and certain other divestiture-related costs.

Restructuring and employee severance costs during the three and nine months ended March 31, 2023 and March 31, 2022 were primarily related to the implementation of certain enterprise-wide cost-savings measures and the divestiture of the Cordis business. During the three and nine months ended March 31, 2022, restructuring also included costs related to decreasing our overall office space.

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, 2022	$	56	$	10	$	66
Additions	29		8		37
Payments and other adjustments	(36)		(15)		(51)
Balance at March 31, 2023	$	49	$	3	$	52

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 (1)		Total
Balance at June 30, 2022	$	2,673	$	3,182	$	5,855
Goodwill acquired, net of purchase price adjustments	—		13		13
Foreign currency translation adjustments and other	—		(5)		(5)
Goodwill impairment	—		(863)		(863)
Balance at March 31, 2023	$	2,673	$	2,327	$	5,000

(1)At March 31, 2023 and June 30, 2022, the Medical segment accumulated goodwill impairment loss was $4.4 billion and $3.5 billion, respectively.

Due to changes in our long-term financial plan assumptions made during the three months ended March 31, 2023, we elected to bypass the qualitative assessment and perform quantitative goodwill impairment testing for the Medical Unit. The fair value of the reporting unit was estimated to be approximately 4 percent in excess of its carrying value, primarily driven by a lower discount rate as described below.

We performed quantitative goodwill impairment testing for the Medical Unit at December 31, 2022 and September 30, 2022, which resulted in pre-tax goodwill impairment charges of $709 million and $154 million, respectively. The impairment charge recognized in the second quarter was driven by certain reductions in our long-term financial plan assumptions, and the impairment charge recognized in the first quarter was driven by an increase in the discount rate primarily due to an increase in the risk-free interest rate. The cumulative pre-tax goodwill impairment charges of $863 million were recognized in impairments and (gain)/loss on disposal of assets, net in our condensed consolidated statements of earnings/(loss) for the nine months ended March 31, 2023.

Our determinations of the estimated fair value of the Medical Unit at March 31, 2023, December 31, 2022 and September 30, 2022 were based on a combination of the income-based approach (using a terminal growth rate of 2 percent), and the market-based approaches. For the income-based approach, we used discount rates of 10 percent, 10.5 percent and 10.5 percent for each quarter, respectively. The decrease in the discount rate for the interim testing performed at March 31, 2023 was primarily due to a decrease in the risk-free interest rate. Additionally, we assigned a weighting of 80 percent to the discounted cash flow method, 10 percent to the guideline public company method, and 10 percent to the guideline transaction method. Our fair value estimates utilize significant unobservable inputs and thus represent Level 3 fair value measurements.

During the three months ended March 31, 2022 and December 31, 2021, we performed quantitative goodwill impairment testing for the Medical Unit. This quantitative testing resulted in the carrying

 32 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

Notes to Financial Statements

amount of the Medical Unit exceeding the fair value, resulting in a pre-tax impairment charges of $474 million and $1.3 billion recorded during the three months ended March 31, 2022 and December 31, 2021, respectively.

Other Intangible Assets

The following tables summarize other intangible assets by class at:

	March 31, 2023
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible		Weighted- Average Remaining Amortization Period (Years)
Indefinite-life intangibles:
Trademarks and patents	$	11	$	—	$	11	N/A
Total indefinite-life intangibles	11		—		11		N/A
Definite-life intangibles:
Customer relationships	3,235		2,267		968		10
Trademarks, trade names and patents	550		376		174		9
Developed technology and other	1,037		623		414		9
Total definite-life intangibles	4,822		3,266		1,556		10
Total other intangible assets	$	4,833	$	3,266	$	1,567	N/A

	June 30, 2022
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible
Indefinite-life intangibles:
Trademarks and patents	$	11	$	—	$	11
Total indefinite-life intangibles	11		—		11
Definite-life intangibles:
Customer relationships	3,272		2,165		1,107
Trademarks, trade names and patents	552		360		192
Developed technology and other	1,038		574		464
Total definite-life intangibles	4,862		3,099		1,763
Total other intangible assets	$	4,873	$	3,099	$	1,774

Total amortization of intangible assets was $69 million and $78 million for the three months ended March 31, 2023 and 2022, respectively, and $211 million and $235 million for the nine months ended March 31, 2023 and 2022, respectively. Estimated annual amortization of intangible assets for the remainder of fiscal 2023 through 2027 is as follows: $71 million, $261 million, $236 million, $209 million and $177 million.

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

Long-Term Debt

We had total long-term obligations, including the current portion and other short-term borrowings, of $4.7 billion and $5.3 billion for March 31, 2023 and June 30, 2022, respectively. All the notes 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 notes are effectively subordinated to the liabilities of our subsidiaries, including trade payables of $29.6 billion and $27.1 billion at March 31, 2023 and June 30, 2022, respectively.

During the three months ended March 31, 2023, we repaid the full principal of the $550 million 3.2% Notes due 2023 at maturity with available cash.

During the nine months ended March 31, 2022, we redeemed all outstanding $572 million principal amount of 2.616% Notes due June 2022 at a redemption price equal to 100% of the principal amount and accrued but unpaid interest, plus the make-whole premium applicable to the notes. In connection with this redemption, we recorded a $10 million loss on early extinguishment of debt. The early redemption was funded with available cash.

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. During the nine months ended March 31, 2023, under our commercial paper program and our committed receivables program, we had maximum combined total daily amounts outstanding of $445 million and average combined daily amount outstanding of $4 million. At March 31, 2023, we had no amounts outstanding under our commercial paper program, revolving credit facility or our committed receivables sales facility.

In February 2023, we extended our $2.0 billion revolving credit facility through February 25, 2028. In September 2022, we renewed our committed receivables sales facility program through Cardinal Health Funding, LLC (“CHF”) through September 30, 2025. 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,

 33 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

Notes to Financial Statements

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.

Our revolving credit and committed receivables sales facilities require us to maintain a consolidated net leverage ratio of no more than 3.75-to-1. As of March 31, 2023, we were in compliance with this financial covenant.

6. Commitments, Contingent Liabilities and Litigation

Commitments

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

In July 2014, we established Red Oak Sourcing, LLC ("Red Oak Sourcing"), a U.S.-based generic pharmaceutical sourcing venture with CVS Health for an initial term of 10 years. Red Oak Sourcing negotiates generic pharmaceutical supply contracts on behalf of its participants. In August 2021, we amended our agreement to extend the term through June 2029. We are required to make quarterly payments to CVS Health for the term of the arrangement.

Contingencies

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 share of the total morphine milligram equivalents sold or distributed in New York during the applicable calendar year, beginning in 2017. Subsequently, New York passed a new statute that modified the assessment going forward and limited the OSA to two years (2017 and 2018).

We accrue contingencies if it is probable that a liability has been incurred and the amount can be estimated. In the second quarter of fiscal year 2022, we paid the State of New York $20 million, our portion of the assessment for calendar year 2017. At June 30, 2022, we had an accrual of $20 million, which represented our estimate of our portion of the assessment for calendar year 2018. During the nine months ended March 31, 2023, we recorded $6 million of income to reduce this accrual to the invoiced amount for the calendar year 2018 assessment and we paid $7 million, resulting in an accrual of $7 million at March 31, 2023.

Legal Proceedings

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

From time to time, we determine that products we source, 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 have led to product recalls, costs to repair or replace affected products, temporary interruptions in product sales, product liability claims and lawsuits and can lead to action by regulators. Even absent an identified regulatory or quality issue or product recall, we can become subject to product liability claims and lawsuits.

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 directly or indirectly lead to the assertion of claims or the commencement of legal proceedings against us or result in sanctions.

We have been 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.

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, net in our condensed consolidated statements of earnings/(loss); however, losses and recoveries of lost profits from disputes that occur in the ordinary course of business are included within segment profit. For example, in the second quarter of fiscal year 2022, our

 34 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

Notes to Financial Statements

Pharmaceutical segment profit was positively impacted by a $16 million judgment for lost profits related to an ordinary course intellectual property rights claim.

Opioid Lawsuits and Investigations

States & Political Subdivisions

National Settlement

As previously disclosed, in February 2022, we along with two other national distributors (collectively, the "Distributors") independently approved a settlement and settlement agreement (the "Settlement Agreement") to settle the vast majority of opioid lawsuits and claims brought by states and political subdivisions. This Settlement Agreement became effective on April 2, 2022. In May and June 2022, the Distributors reached agreements with the States of Washington and Oklahoma, respectively, to resolve the opioid-related claims of those states and their political subdivisions. Under these agreements, Cardinal Health agreed to pay approximately $160 million to the State of Washington and its participating subdivisions and approximately $95 million to the State of Oklahoma and its participating subdivisions. These amounts are consistent with the amounts that would have been allocated to Washington and Oklahoma under the Settlement Agreement. Each of Washington and Oklahoma is now subject to the Settlement Agreement.

In addition to the Distributors, parties to the Settlement Agreement include 48 states, the District of Columbia and 5 U.S. territories. Over 99 percent of political subdivisions (by population as calculated under the Settlement Agreement) that had brought opioid-related suits against us have chosen to join the Settlement Agreement or have had their claims addressed by state legislation.

Under the Settlement Agreement, we agreed to pay up to approximately $6.3 billion over 18 years. The Settlement Agreement also includes injunctive relief terms related to distributors’ controlled substance anti-diversion programs. For more information on the terms of the Settlement Agreement, refer to our 2022 Form 10-K. As a result of the Settlement Agreement, most lawsuits brought against us by states and other political subdivisions have been dismissed. We continue to engage in resolution discussions with certain non-participating political subdivisions, including the Attorney General for the State of Alabama, and we intend to defend ourselves vigorously against all remaining lawsuits.

During the nine months ended March 31, 2023, we made our second annual payment of $372 million under the Settlement Agreement. In total, we have $5.85 billion accrued at March 31, 2023, of which $437 million is included in other accrued liabilities and the remainder is included in deferred income taxes and other liabilities in our condensed consolidated balance sheets.

Because loss contingencies are inherently unpredictable and unfavorable developments or resolutions can occur, the assessment is highly subjective and requires judgments about future events. We regularly review these opioid litigation matters to determine whether our accrual is adequate. The amount of

ultimate loss may differ materially from this accrual, whether as a result of settlement discussions, a judicial decision or verdict or otherwise, but we are not able to estimate a range of reasonably possible additional losses for these matters. We continue to strongly dispute the allegations made in these lawsuits and none of these agreements is an admission of liability or wrongdoing.

Other Settlements

West Virginia subdivisions and Native American tribes were not a part of the national settlement, and we had separate negotiations with these groups. A bench trial before a federal judge in West Virginia in a case brought by Cabell County and City of Huntington against the Distributors concluded in July 2021. In July 2022, a judgment in favor of the Distributors was entered. In July 2022, the Distributors reached an agreement to settle the opioid-related claims of the majority of the remaining West Virginia subdivisions. Under this agreement, we have agreed to pay eligible West Virginia subdivisions up to approximately $124 million over an eleven-year period. This agreement became effective in October 2022 when all participating subdivisions dismissed their cases.

In October 2022, we executed a final settlement agreement with the Native American Tribes, pursuant to which we will pay up to approximately $136 million over five years. In connection with this settlement, the court entered dismissals for the Native American tribes' cases.

Department of Justice Investigations

We have received federal grand jury subpoenas issued in connection with investigations being conducted by the U.S. Attorney's Office for the Eastern District of New York and the Fraud Section of the U.S. Department of Justice ("DOJ"). We have also received civil requests for information from other DOJ offices. We believe that these investigations concern operation of our anti-diversion program, our anti-diversion policies and procedures, and distribution of certain controlled substances. We are cooperating with these investigations. We are unable to predict the outcome of any of these investigations.

Private Plaintiffs

The Settlement Agreement does not address claims by private parties, which includes unions and other health and welfare funds, hospital systems and other healthcare providers, businesses and individuals alleging personal injury. Private parties had brought approximately 457 lawsuits as of April 28, 2023. Of these, 107 are purported class actions. The causes of action asserted by these plaintiffs are similar to those asserted by public plaintiffs.

A trial in a case involving 21 plaintiffs began in state court in Georgia in January 2023 and concluded in March 2023 with a verdict for the company and other defendants on all claims. The plaintiffs' motion for a new trial is pending. A trial involving eight hospital plaintiffs is scheduled to begin in Alabama in July 2023. We are vigorously defending ourselves in all of these matters; however, trials are inherently unpredictable and it is possible that an unfavorable outcome in these matters, individually or in the aggregate, could have a negative impact on our financial results.

 35 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

Notes to Financial Statements

Insurance Litigation

We are involved in ongoing legal proceedings with insurers related their obligations to reimburse us for defense and indemnity costs in connection with the lawsuits described above. In the nine months ended March 31, 2023, we received approximately $10 million in insurance recoveries related to these matters; however, we have not recorded a receivable for any additional recoveries as of March 31, 2023.

Cordis IVC Filter Matters

Product Liability Lawsuits

We have been named as a defendant in approximately 453 product liability lawsuits coordinated in Alameda County Superior Court in California involving claims by approximately 5,171 plaintiffs that allege personal injuries associated with the use of IVC filter products. These lawsuits sought a variety of remedies, including unspecified monetary damages. The divestiture of the Cordis business did not include product liability related to the IVC filters in the U.S. and Canada, which we retained.

In April 2023, we executed a settlement agreement that, if certain conditions are satisfied, will resolve approximately 4,376 claims for $275 million. This settlement agreement is subject to certain conditions, including certain opt-in thresholds. Between May and September 2023, we will make settlement payments totaling $275 million into a qualified settlement fund, which will be disbursed to the plaintiffs if required conditions are satisfied. Since July 2021, we have also entered into other agreements to settle approximately 2,881 product liability claims. These settlements will not resolve all IVC filter product liability claims and we will continue to vigorously defend ourselves in the remaining lawsuits.

Additionally, in August 2021, the Attorney General for the State of New Mexico filed an action against certain IVC filter manufacturers, including us, alleging claims under New Mexico's Unfair Practices Act, Medicaid Fraud Act and Fraud Against Taxpayers Act. The allegations are similar to those made in the product liability lawsuits.

We recognized income of $71 million and $95 million during the three and nine months ended March 31, 2023, respectively, primarily related to a reduction of the reserve for the estimated settlement and defense costs for these matters due to the execution of the settlements noted above. At March 31, 2023, we had a total of $385 million accrued for losses and legal defense costs, related to the IVC filter product liability lawsuits in our condensed consolidated balance sheets.

Shareholder Securities Litigation

In August 2019, the Louisiana Sheriffs' Pension & Relief Fund filed a purported class action complaint against Cardinal Health and certain current and former officers and employees in the United States District Court for the Southern District of Ohio purportedly on behalf of all purchasers of our common shares between March 2015 and May 2018. In June 2020, the court appointed 1199 SEIU Health Care Employees Pension Fund as lead plaintiff and a

consolidated amended complaint was filed in September 2020. The amended complaint alleges that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by making misrepresentations and omissions related to the acquisition and integration of the Cordis business and inventory and supply chain problems within the Cordis business, and seeks to recover unspecified damages and equitable relief for the alleged misstatements and omissions. The complaint also alleges that one of the individual defendants violated Section 20A of the Exchange Act because he sold shares of Cardinal Health stock during the time period. In February 2023, we reached an agreement in principle with the plaintiffs to settle this matter for $109 million, subject to final approval by the court. The court granted its preliminary approval in April 2023 and will conduct a final hearing in September 2023. If the settlement is approved, our insurance carriers will pay $109 million to the plaintiffs.

Other Civil Litigation

Generic Pharmaceutical Pricing Antitrust Litigation

In December 2019, pharmaceutical distributors including us were added as defendants in a civil class action lawsuit filed by indirect purchasers of generic drugs, such as hospitals and retail pharmacies. The indirect purchaser case is part of a multidistrict litigation consisting of multiple individual class action matters consolidated in the Eastern District of Pennsylvania. The indirect purchaser plaintiffs allege that pharmaceutical distributors encouraged manufacturers to increase prices, provided anti-competitive pricing information to manufacturers and improperly engaged in customer allocation. In May 2020, the court granted our motion to dismiss. In July 2022, the indirect purchasers filed an amended complaint and in August 2022, we filed a motion to dismiss the intended complaint. We are vigorously defending ourselves in this matter.

Antitrust Litigation Proceeds

In October 2022, we received net cash proceeds resulting from the settlement of a lawsuit in which we were a class member or plaintiff of $66 million, which was recognized in litigation (recoveries)/charges, net, during the nine months ended March 31, 2023.

Shareholder Derivative Litigation

Between June 2019 and January 2020, three purported shareholders filed actions on behalf of Cardinal Health, Inc. in the U.S. District Court for the Southern District of Ohio against certain current and former members of our Board of Directors alleging that the defendants breached their fiduciary duties by failing to effectively monitor Cardinal Health's distribution of controlled substances and approving certain payments of executive compensation. In January 2020, the court consolidated these derivative cases under the caption In re Cardinal Health, Inc. Derivative Litigation and in March 2020, plaintiffs filed an amended complaint.

 36 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

Notes to Financial Statements

In October 2022, the court entered an order approving the settlement agreement reached between the parties and dismissing the case. The settlement does not include any admission of liability. Under this settlement, in December 2022, Cardinal Health's director and officer liability insurance carriers, on behalf of the defendants, paid Cardinal Health $124 million, less approximately $31 million in attorneys' fees and expenses awarded by the court to plaintiffs' counsel. Cardinal Health received net cash proceeds resulting from this settlement of $93 million, which was recognized in litigation (recoveries)/charges, net, during the nine months ended March 31, 2023.

7. Income Taxes

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

Effective Tax Rate

During the three and nine months ended March 31, 2023, the effective tax rate was 36.3 percent and 36.7 percent, respectively, and reflects any impact of the tax effects of the goodwill impairment charges recognized during the three and nine months ended March 31, 2023.

During the three and nine months ended March 31, 2022, the effective tax rate was (916.5) percent and (44.4) percent, respectively, and reflects the impact of the tax effect of the goodwill impairment charges recognized during the three and nine months ended March 31, 2022.

Tax Effects of Goodwill Impairment Charges

During the nine months ended March 31, 2023, we recognized pre-tax goodwill impairment charges of $863 million related to the Medical Unit. The net tax benefit related to these charges is $68 million for fiscal 2023.

Unless an item is considered discrete because it is unusual or infrequent, the tax impact of the item is included in our estimated annual effective tax rate. When items are recognized through our estimated annual effective tax rate, we apply our estimated annual effective tax rate to the earnings/(loss) before income taxes for the year-to-date period to compute our impact from income taxes for the current quarter and year-to-date period. The tax impacts of discrete items are recognized in their entirety in the period in which they occur.

The tax effect of the goodwill impairment charges during the nine months ended March 31, 2023 was included in our estimated annual effective tax rate because it was not considered unusual or infrequent, given that we recorded goodwill impairments in prior fiscal years. The impact of the non-deductible goodwill increased the estimated annual effective tax rate for fiscal 2023. Applying the higher tax rate to the pre-tax income for the nine months ended March 31, 2023 resulted in recognizing an incremental interim tax expense of approximately $74 million, which impacted the

provision for income taxes in the condensed consolidated statements of earnings/(loss) during the three months ended March 31, 2023 and prepaid expenses and other assets in the condensed consolidated balance sheet at March 31, 2023. The incremental interim tax benefit recognized during the nine months ended March 31, 2023 was $66 million and will reverse in the fourth quarter of fiscal 2023.

Unrecognized Tax Benefits

We had $1.1 billion and $943 million of unrecognized tax benefits, at March 31, 2023 and June 30, 2022, respectively. The March 31, 2023 and June 30, 2022 balances include $897 million and $858 million of unrecognized tax benefits, respectively, that if recognized, would have an impact on the effective tax rate.

At March 31, 2023 and June 30, 2022, we had $61 million and $48 million, respectively, accrued for the payment of interest and penalties related to unrecognized tax benefits, which we recognize in the provision for income taxes in the condensed consolidated statements of earnings/(loss). 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 IRS and other 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 up to $125 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 2015 through the current fiscal year.

We are a party to a tax matters agreement with CareFusion Corporation ("CareFusion"), a subsidiary of 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 $80 million and $75 million at

 37 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

Notes to Financial Statements

March 31, 2023 and June 30, 2022, respectively, and is included in other assets in the condensed consolidated balance sheets.

8. Fair Value Measurements

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

	March 31, 2023
(in millions)	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	1,302	$	—	$	—	$	1,302
Other investments (1)	95		—		—		95
Liabilities:
Forward contracts (2)	—		(52)		—		(52)

	June 30, 2022
(in millions)	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	2,425	$	—	$	—	$	2,425
Other investments (1)	97		—		—		97
Forward contracts (2)	—		15		—		15

(1)The other investments balance includes investments in mutual funds, which 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, and net investment hedges 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 prepaid expenses and other, other assets, other accrued liabilities, and deferred income taxes and other liabilities within the condensed consolidated balance sheets.

9. 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 current 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 on our fixed-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 earnings and cash flow volatility associated with foreign exchange rate changes 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, net in the condensed consolidated statements of earnings/(loss). For the three and nine months ended March 31, 2023 and 2022, 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, 2023 and 2022, we entered into pay-floating interest rate swaps with total notional amounts of $200 million and $300 million, respectively. These swaps have been designated as fair value hedges of our fixed rate debt and are included in deferred income taxes and other liabilities in the condensed consolidated balance sheets.

 38 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

Notes to Financial Statements

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 accumulated other comprehensive loss 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.

Pre-tax gains recognized in other comprehensive income/(loss) were $2 million and $1 million for the three months ended March 31, 2023 and 2022, respectively, and $4 million for both the nine months ended March 31, 2023 and 2022. Gains recognized in accumulated other comprehensive loss and reclassified into earnings were $4 million and immaterial for the three months ended March 31, 2023 and 2022, respectively, and were $8 million and immaterial for the nine months ended March 31, 2023 and 2022, respectively. Gains currently included within accumulated other comprehensive loss associated with our cash flow hedges to be reclassified into net earnings within the next 12 months are $7 million.

Net Investment Hedges

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

During the three months ended March 31, 2023, we entered into ¥19 billion ($150 million) cross-currency swaps maturing in September 2025, ¥19 billion ($150 million) cross-currency swaps maturing in June 2027, €100 million ($107 million) cross-currency swaps maturing in March 2025 and €100 million ($107 million) cross-currency swaps maturing in March 2026.

During the three months ended March 31, 2023, we terminated the ¥48 billion ($400 million) cross-currency swaps entered into in March 2022 and the €200 million ($233 million) cross-currency swap entered into in September 2018 and received net settlements of $10 million and $19 million in cash, respectively, recorded in proceeds from net investment hedge terminations in our condensed consolidated statements of cash flows.

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.

Pre-tax gain and loss from net investment hedges recorded in the foreign currency translation component of accumulated other

comprehensive loss was an immaterial loss and a $22 million gain during the three months ended March 31, 2023 and 2022, respectively, and a $21 million loss and a $44 million gain during the nine months ended March 31, 2023 and 2022, respectively. Gains recognized in interest expense, net in the condensed consolidated statements of earnings/(loss) for the portion of the net investment hedges excluded from the assessment of hedge effectiveness were $4 million and $5 million during the three months ended March 31, 2023 and 2022, respectively, and $12 million and $16 million during the nine months ended March 31, 2023 and 2022, respectively.

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)/expense, net. We recorded an immaterial loss and a $4 million loss during the three months ended March 31, 2023 and 2022, respectively, and a $3 million loss and an immaterial loss during the nine months ended March 31, 2023 and 2022, respectively. The principal currencies managed through foreign currency contracts are Canadian dollar, Euro, Chinese renminbi, Indian rupee and Thai baht.

Fair Value of Financial Instruments

The carrying amounts of cash and equivalents, trade receivables, accounts payable and other accrued liabilities at March 31, 2023 and June 30, 2022 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, 2023		June 30, 2022
Estimated fair value	$	4,466	$	5,049
Carrying amount	4,734		5,315

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.

10. Shareholders' Equity/(Deficit)

We repurchased $1.5 billion and $1.0 billion of our common shares, in the aggregate, through share repurchase programs during the nine months ended March 31, 2023 and 2022,

 39 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

Notes to Financial Statements

respectively. We funded the repurchases with available cash. The common shares repurchased are held in treasury to be used for general corporate purposes.

During the three months ended March 31, 2023, we entered into an accelerated share repurchase ("ASR") program to repurchase common shares for an aggregate purchase price of $250 million. We received an initial delivery of 2.6 million common shares using a reference price of $77.03. The program concluded on February 28, 2023 at a volume weighted average price per common share of $77.27 resulting in a final delivery of 0.6 million common shares.

During the three months ended December 31, 2022, we entered into an ASR program to repurchase common shares for an aggregate purchase price of $250 million. We received an initial delivery of 2.6 million common shares using a reference price of $76.58. The program concluded on January 13, 2023 at a volume weighted average price per common share of $77.50 resulting in a final delivery of 0.6 million common shares.

During the three months ended September 30, 2022, we entered into an ASR program to repurchase common shares for an aggregate purchase price of $1.0 billion. We received an initial delivery of 12.0 million common shares using a reference price of $66.74. The program concluded on December 23, 2022 at a volume weighted average price per common share of $73.36 resulting in a final delivery of 1.6 million common shares.

During the three months ended March 31, 2022, we entered into an ASR program to repurchase common shares for an aggregate purchase price of $200 million. We received an initial delivery of 3.0 million common shares using a reference price of $54.01. The program concluded on April 18, 2022 at a volume weighted average price per common share of $56.02 resulting in a final delivery of 0.6 million common shares.

During the three months ended December 31, 2021, we entered into an ASR program to repurchase common shares for an aggregate purchase price of $300 million. We received an initial delivery of 4.8 million common shares using a reference price of $50.30. The program concluded on January 31, 2022 at a volume weighted average price per common share of $49.39 resulting in a final delivery of 1.3 million common shares.

During the three months ended September 30, 2021, we entered into an ASR program to repurchase common shares for an aggregate purchase price of $500 million. We received an initial delivery of 7.8 million common shares using a reference price of $51.53. The program concluded on October 4, 2021 at a volume weighted average price per common share of $51.10 resulting in a final delivery of 2.0 million common shares.

Accumulated Other Comprehensive Loss

The following tables summarize 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 Loss
Balance at June 30, 2022	$	(102)	$	(12)	$	(114)
Other comprehensive loss, before reclassifications	(34)		15		(19)
Amounts reclassified to earnings	—		(9)		(9)
Total other comprehensive loss attributable to Cardinal Health, Inc. net of tax benefit of $5 million	(34)		6		(28)
Balance at March 31, 2023	$	(136)	$	(6)	$	(142)

(in millions)	Foreign Currency Translation Adjustments		Unrealized Gain/(Loss) on Derivatives, net of tax		Accumulated Other Comprehensive Loss
Balance at June 30, 2021	$	(46)	$	12	$	(34)
Other comprehensive loss, before reclassifications	(47)		9		(38)
Amounts reclassified to earnings	—		(5)		(5)
Total other comprehensive loss attributable to Cardinal Health, Inc. net of tax benefit of $6 million	(47)		4		(43)
Balance at March 31, 2022	$	(93)	$	16	$	(77)

11. Earnings/(Loss) Per Share Attributable to Cardinal Health, Inc.

The following table reconciles the number of common shares used to compute basic and diluted earnings/(loss) per share attributable to Cardinal Health, Inc.:

	Three Months Ended March 31,
(in millions)	2023	2022
Weighted-average common shares–basic	256	275
Effect of dilutive securities:
Employee stock options, restricted share units and performance share units	2	—
Weighted-average common shares–diluted	258	275

 40 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

Notes to Financial Statements

	Nine Months Ended March 31,
(in millions)	2023	2022
Weighted-average common shares–basic	263	281
Effect of dilutive securities:
Employee stock options, restricted share units and performance share units	1	—
Weighted-average common shares–diluted	264	281

The potentially dilutive employee stock options, restricted share units and performance share units that were antidilutive were 2 million for both the three and nine months ended March 31, 2023.

The potentially dilutive employee stock options, restricted share units and performance share units that were antidilutive were 5 million for both the three and nine months ended March 31, 2022. For the three and nine months ended March 31, 2022, there were 2 million and 1 million potentially dilutive employee stock options, restricted share units and performance share units not included in the computation of diluted loss per common share attributable to Cardinal Health, Inc. because their effect would have been antidilutive as a result of the net loss during those periods.

12. 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.

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; provides pharmacy management services to hospitals and operates a limited number of pharmacies, including pharmacies in community health centers; operates nuclear pharmacies and radiopharmaceutical manufacturing facilities; and connects pharmacists, payers and pharmaceutical companies and delivers health solutions for medication therapy management, digital patient engagement and telepharmacy; 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 medical, surgical and laboratory products known as 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. This

segment also distributes medical products to patients' homes in the United States through our Cardinal Health at-Home Solutions division.

Revenue

The following tables present revenue for each reportable segment and disaggregated revenue within our two reportable segments and Corporate:

	Three Months Ended March 31,
(in millions)	2023		2022
Pharmaceutical Distribution and Specialty Solutions (1) (2)	$	46,497	$	40,723
Nuclear and Precision Health Solutions (3)	312		234
Pharmaceutical segment revenue	46,809		40,957
Medical distribution and products (4)	3,034		3,283
Cardinal Health at-Home Solutions	650		601
Medical segment revenue	3,684		3,884
Total segment revenue	50,493		44,841
Corporate (5)	(6)		(5)
Total revenue	$	50,487	$	44,836

	Nine Months Ended March 31,
(in millions)	2023		2022
Pharmaceutical Distribution and Specialty Solutions (1) (2)	$	139,435	$	121,501
Nuclear and Precision Health Solutions (3)	875		653
Pharmaceutical segment revenue	140,310		122,154
Medical distribution and products (4)	9,273		10,296
Cardinal Health at-Home Solutions	1,986		1,822
Medical segment revenue	11,259		12,118
Total segment revenue	151,569		134,272
Corporate (5)	(10)		(11)
Total revenue	$	151,559	$	134,261

(1)Products and services offered by our Specialty Solutions division are referred to as “specialty pharmaceutical products and services."

(2)Comprised of all Pharmaceutical segment businesses except for Nuclear and Precision Health Solutions division.

(3)Increase from prior year relates to new product launches and changes in revenue recognition presentation from agent to principal for certain customer contracts.

(4)Comprised of all Medical segment businesses except for Cardinal Health at-Home Solutions division.

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

 41 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

Notes to Financial Statements

The following tables present revenue by geographic area:

	Three Months Ended March 31,
(in millions)	2023		2022
United States	$	49,326	$	43,710
International	1,167		1,131
Total segment revenue	50,493		44,841
Corporate (1)	(6)		(5)
Total revenue	$	50,487	$	44,836

	Nine Months Ended March 31,
(in millions)	2023		2022
United States	$	148,136	$	130,933
International	3,433		3,339
Total segment revenue	151,569		134,272
Corporate (1)	(10)		(11)
Total revenue	$	151,559	$	134,261

(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 expenses for shared functions, 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 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);

•surgical gown recall costs/(income);

•shareholder cooperation agreement costs;

•state opioid assessment related to prior fiscal years;

•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 Medical Unit as discussed further in Note 4, we recognized cumulative goodwill impairment charges of $863 million during the nine months ended March 31, 2023;

•litigation (recoveries)/charges, net;

•other (income)/expense, net;

•interest expense, net;

•loss on early extinguishment of debt;

•(gain)/loss on sale of equity interest in naviHealth; or

•provision for 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 $9 million and $20 million for the three months ended March 31, 2023 and 2022, and $20 million and $38 million for the nine months ended March 31, 2023 and 2022, respectively.

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

	Three Months Ended March 31,
(in millions)	2023		2022
Pharmaceutical (1)	$	600	$	487
Medical	20		59
Total segment profit	620		546
Corporate	(48)		(643)
Total operating earnings/(loss)	$	572	$	(97)

	Nine Months Ended March 31,
(in millions)	2023		2022
Pharmaceutical (1)	$	1,495	$	1,319
Medical	29		232
Total segment profit	1,524		1,551
Corporate	(934)		(2,183)
Total operating earnings/(loss)	$	590	$	(632)

(1)Pharmaceutical segment profit includes opioid-related litigation defense and compliance costs, but does not include a one-time contingent attorney fee of $18 million incurred during the three and nine months ended March 31, 2022 related to the finalization of the Settlement Agreement. Due to the unique nature and significance of the Settlement Agreement, and the one-time, contingent nature of the fee, this related fee was included in litigation (recoveries)/charges, net in the condensed consolidated statements of earnings/(loss). Additionally, pharmaceutical segment profit during the nine months ended March 31, 2022 was positively impacted by a $16 million judgment for lost profits related to an ordinary course intellectual property rights claim.

 42 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

Notes to Financial Statements

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

(in millions)	March 31, 2023		June 30, 2022
Pharmaceutical	$	27,954	$	26,409
Medical (1)	10,544		11,632
Corporate	4,879		5,837
Total assets	$	43,377	$	43,878

(1)Medical reflects cumulative $863 million goodwill impairment charges recorded in connection with the interim goodwill impairment testing for the Medical Unit during the nine months ended March 31, 2023.

13. 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)	2023		2022
Restricted share unit expense	$	17	$	18
Performance share unit expense	4		5
Total share-based compensation	$	21	$	23

	Nine Months Ended March 31,
(in millions)	2023		2022
Restricted share unit expense	$	49	$	53
Performance share unit expense	20		12
Total share-based compensation	$	69	$	65

The total tax benefit related to share-based compensation was $3 million for both the three months ended March 31, 2023 and 2022, and $9 million for both the nine months ended March 31, 2023 and 2022.

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, 2022	2.7	$	46.03
Granted	1.3	70.26
Vested	(1.3)	50.03
Canceled and forfeited	(0.5)	58.30
Nonvested at March 31, 2023	2.2	$	57.14

At March 31, 2023, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested restricted share units

not yet recognized was $87 million, which is expected to be recognized over a weighted-average period of two years.

Performance Share Units

Performance share units vest over a 3-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 234 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, 2022	1.2	$	54.32
Granted	0.6	70.52
Vested	(0.4)	59.04
Canceled and forfeited	(0.3)	65.59
Nonvested at March 31, 2023	1.1	$	76.24

At March 31, 2023, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested performance share units not yet recognized was $39 million, which is expected to be recognized over a weighted-average period of two years if performance goals are achieved.

 43 Cardinal Health | Q3 Fiscal 2023 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, as amended (incorporated by reference to Exhibit 3.2 to Cardinal Health’s Quarterly Report on Form 10-Q filed on November 9, 2021, File No. 1-11373)
10.1	Third Amended and Restated Five-Year Credit Agreement, dated as of February 27, 2023 (incorporated by reference to Exhibit 10.1 to Cardinal Health's Current Report on Form 8-K filed on March 2, 2023, 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.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File - formatted in Inline XBRL (included as Exhibit 101)

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 we post news releases, SEC filings and certain other information on its website.

 44 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

Form 10-Q Cross Reference Index

Form 10-Q Cross Reference Index

Item Number		Page
	Part I. Financial Information
Item 1	Financial Statements	26
Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	2
Item 3	Quantitative and Qualitative Disclosures about Market Risk	21
Item 4	Controls and Procedures	21
	Part II. Other Information
Item 1	Legal Proceedings	22
Item 1A	Risk Factors	23
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 3	Defaults Upon Senior Securities	N/A
Item 4	Mine Safety Disclosures	N/A
Item 5	Other Information	N/A
Item 6	Exhibits	44
	Signatures	46

N/A Not applicable

 45 Cardinal Health | Q3 Fiscal 2023 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 4, 2023	/s/ JASON M. HOLLAR
		Jason M. Hollar
		Chief Executive Officer
		/s/ AARON E. ALT
		Aaron E. Alt
		Chief Financial Officer

 46 Cardinal Health | Q3 Fiscal 2023 Form 10-Q

EX-31.1

Exhibit 31.1

I, Jason M. Hollar, 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 4, 2023

/s/ JASON M. HOLLAR

Jason M. Hollar

Chief Executive Officer

EX-31.2

Exhibit 31.2

I, Aaron E. Alt, 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 4, 2023

/s/ AARON E. ALT

Aaron E. Alt

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

Jason M. Hollar, Chief Executive Officer of Cardinal Health, Inc. (the “Company”) and Aaron E. Alt, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, that:

(1)the Periodic Report on Form 10-Q for the quarter ended March 31, 2023 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 4, 2023

/s/ JASON M. HOLLAR

Jason M. Hollar

Chief Executive Officer

/s/ AARON E. ALT

Aaron E. Alt

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 our Annual Report on Form 10-K for the fiscal year ended June 30, 2022 (the “2022 Form 10-K”), and our quarterly reports on Form 10-Q, including this one, 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 and demand for generic pharmaceuticals;

•significantly 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 and the possibility that we may not successfully offset or mitigate these increases;

•uncertainties relating to the timing, frequency and profitability of generic pharmaceutical launches or other components of our pharmaceutical generics program;

•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 and where a part of our compensation is based on branded pharmaceutical price appreciation, changes in the magnitude of such price appreciation;

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

•continuing risks associated with the resolution and defense of the lawsuits and investigations in which we have been or will be named relating to the distribution of prescription opioid pain medication, including the investigations by the Department of Justice which we believe concern our anti-diversion program, our anti-diversion policies and procedures and our distribution of certain controlled substances;

•risks associated with the national settlement agreement to resolve the vast majority of opioid-related claims brought by states and other governmental entities, including the risk that the implementation and maintenance of the required changes to distributors' controlled substance anti-diversion programs may result in unforeseen costs or operational challenges and the risk that if we fail to or are alleged to have failed to comply with the terms of the settlement agreement, we could incur monetary or other penalties or result in additional lawsuits being filed against us;

•potential damage to our reputation, adverse operational impacts or other effects that may result from the national opioid epidemic, the allegations that have been made about our role in such epidemic and the ongoing unfavorable publicity surrounding the lawsuits and investigations against us;

•risks associated with the tax benefit from our self-insurance loss claims, including risks associated with the letter certain industry participants, including us, received from the U.S. House of Representatives' Committee on Oversight and Reform questioning, among other things, our plans to take tax deductions for opioid-related losses, including the net operating loss carryback provisions under the CARES Act and deductibility under the Tax Act;

•risks associated with our Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services, including the risk that failure to comply with the requirements set forth therein could result in monetary or other penalties;

•the possibility of additional adverse impacts to our financial results from enacted and proposed state taxes or other assessments on the sale or distribution of opioid medications;

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

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

•costs or claims resulting from quality issues, whether related to the manufacture of some of our sterile surgical gowns or pre-filled syringes, or other 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 recalls, remediation efforts, and related product liability claims and lawsuits, including class action lawsuits;

•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;

•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;

•uncertainties related to our Medical segment's Cardinal Health Brand products, including our ability to manage cost, infrastructure and to retain margin or improve its 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;

•uncertainties with respect to our cost-savings initiatives or IT infrastructure activities, including the ability to achieve the expected benefits from such initiatives, the risk that we could incur unexpected charges, and the risk that we may fail to retain key personnel;

•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 or maintaining requisite regulatory consents, whether our own or third parties', or approvals associated with those activities;

•manufacturing disruptions, whether due to regulatory action, including regulatory action to reduce Ethylene Oxide emissions, 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 associated with industry reliance on ethylene oxide ("EtO") to sterilize certain medical products that we manufacture or distribute, including the possibility that regulatory actions to reduce EtO emissions could become more widespread, which may result in increased costs or supply shortages; and risks that the lawsuits against us alleging personal injury resulting from EtO exposure could become more widespread;

•the possibility that we could be subject to adverse changes in the tax laws or challenges to our tax positions, including the possibility that the corporate tax rate in the U.S. could be increased;

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

•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 pharmaceutical manufacturers' restriction of sales under the 340B drug pricing program to contract pharmacies, which may adversely impact our customers;

•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 or with our ability to meet contractual obligations of key customer or supplier relationships, or changes in customer mix;

•risks arising from changes in U.S. or foreign tax laws and unfavorable challenges to our tax positions and payments to settle these challenges, which may adversely affect our effective tax rate or tax payments;

•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, proposals related to prescription drug pricing transparency 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;

•uncertainties arising as a result of the Supreme Court decision on Dobbs vs. Jackson, including uncertainties associated with states' proposed and adopted laws which may impact our ability to distribute or store certain pharmaceutical products and the risk that we could incur unforeseen costs to comply with these new laws in various jurisdictions;

•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;

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

•continuing 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 risk that we may not effectively implement and maintain data governance structures across businesses to allow us to access and interpret our data, which could put us at a competitive disadvantage relative to our peers;

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

•the possibility that our business performance or internal control over financial reporting may be adversely impacted if we are not successful at attracting, retaining and developing talent;

•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;

•risks associated with the importation of products or source materials used in products that we manufacture or distribute, including risks associated with our country-of-origin determinations and the possibility that we could experience supply disruptions as a result of the Uyghur Forced Labor Prevention Act;

•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;

•risks associated with the divestiture of the Cordis business, including the risk that the costs associated with exit or disposal activities could ultimately be greater than we currently expect or that we could incur greater stranded costs than expected;

•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;

•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;

•uncertainties with respect to U.S. or international trade policies, tariffs, excise or border taxes and their impact on our ability to source products or materials that we need to conduct our business;

•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;

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

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

•certain risks arising from the ongoing COVID-19 pandemic; and

•other factors described in the “Risk Factors” section of the 2022 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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Cover Page - shares	9 Months Ended
	Mar. 31, 2023	Apr. 30, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Entity File Number	1-11373
Entity Registrant Name	Cardinal Health, Inc.
Entity Central Index Key	0000721371
Current Fiscal Year End Date	--06-30
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Incorporation, State or Country Code	OH
Entity Tax Identification Number	31-0958666
Entity Address, Address Line One	7000 Cardinal Place
Entity Address, City or Town	Dublin
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	43017
City Area Code	614
Local Phone Number	757-5000
Title of 12(b) Security	Common shares (without par value)
Trading Symbol	CAH
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		254,600,182

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Condensed Consolidated Statements of Earnings - USD ($) shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
Income Statement [Abstract]
Revenue	$ 50,487	$ 44,836	$ 151,559	$ 134,261
Cost of products sold	48,702	43,154	146,497	129,321
Gross margin	1,785	1,682	5,062	4,940
Operating expenses:
Distribution, selling, general and administrative expenses	1,179	1,137	3,567	3,402
Restructuring and employee severance	16	31	62	56
Amortization and other acquisition-related costs	74	79	216	237
Impairments and (gain)/loss on disposal of assets, net	20	471	883	1,764
Litigation (recoveries)/charges, net	(76)	61	(256)	113
Operating earnings/(loss)	572	(97)	590	(632)
Other (income)/expense, net	0	3	(5)	(14)
Interest expense, net	28	38	78	115
Loss on early extinguishment of debt	0	0	0	10
(Gain)/loss on sale of equity interest in naviHealth	0	(1)	0	(2)
Earnings/(loss) before income taxes	544	(137)	517	(741)
Provision for income taxes	197	1,253	189	328
Net earnings/(loss)	347	(1,390)	328	(1,069)
Less: Net earnings attributable to noncontrolling interests	(2)	(1)	(3)	(2)
Net earnings/(loss) attributable to Cardinal Health, Inc.	$ 345	$ (1,391)	$ 325	$ (1,071)
Earnings/(Loss) per common share attributable to Cardinal Health, Inc.:
Basic (in shares)	$ 1.35	$ (5.05)	$ 1.24	$ (3.82)
Diluted (in shares)	$ 1.34	$ (5.05)	$ 1.23	$ (3.82)
Weighted-average number of common shares outstanding:
Basic (in shares)	256	275	263	281
Diluted (in shares)	258	275	264	281
Cash dividends declared per common share	$ 0.4957	$ 0.4908	$ 1.4871	$ 1.4724

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Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
Statement of Comprehensive Income [Abstract]
Net earnings/(loss)	$ 347	$ (1,390)	$ 328	$ (1,069)
Other comprehensive income/(loss):
Foreign currency translation adjustments and other	4	(4)	(34)	(47)
Net unrealized gain on derivative instruments, net of tax	0	12	6	4
Total other comprehensive income/(loss), net of tax	4	8	(28)	(43)
Total comprehensive income/(loss)	351	(1,382)	300	(1,112)
Less: Net earnings attributable to noncontrolling interests	(2)	(1)	(3)	(2)
Total comprehensive income attributable to Cardinal Health, Inc.	$ 349	$ (1,383)	$ 297	$ (1,114)

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Condensed Consolidated Balance Sheets - USD ($) shares in Thousands, $ in Millions	Mar. 31, 2023	Jun. 30, 2022
Current assets:
Cash and equivalents	$ 3,990	$ 4,717
Trade receivables, net	10,992	10,561
Inventories, net	16,620	15,636
Prepaid expenses and other	1,895	2,021
Total current assets	33,497	32,935
Property and equipment, net	2,362	2,361
Goodwill and other intangibles, net	6,567	7,629
Other assets	951	953
Total assets	43,377	43,878
Current liabilities:
Accounts payable	29,601	27,128
Current portion of long-term obligations and other short-term borrowings	26	580
Other accrued liabilities	2,876	2,842
Total current liabilities	32,503	30,550
Long-term obligations, less current portion	4,708	4,735
Deferred income taxes and other liabilities	8,384	9,299
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, 2023 and June 30, 2022	2,818	2,813
Accumulated deficit	(342)	(280)
Common shares in treasury, at cost: 72 million shares and 54 million shares at March 31, 2023 and June 30, 2022, respectively	(4,554)	(3,128)
Accumulated other comprehensive loss	(142)	(114)
Total Cardinal Health, Inc. shareholders' deficit	(2,220)	(709)
Noncontrolling interests	2	3
Total shareholders’ deficit	(2,218)	(706)
Total liabilities and shareholders’ deficit	$ 43,377	$ 43,878
Preferred shares, authorized	500	500
Preferred shares, issued	0	0
Common shares, authorized	755,000	755,000
Common shares, issued	327,000	327,000
Common shares in treasury	72,000	54,000

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Condensed Consolidated Balance Sheets (Parenthetical) - shares shares in Thousands	Mar. 31, 2023	Jun. 30, 2022
Statement of Financial Position [Abstract]
Preferred shares, authorized	500	500
Preferred shares, issued	0	0
Common shares, authorized	755,000	755,000
Common shares, issued	327,000	327,000
Common shares in treasury	72,000	54,000

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Condensed Consolidated Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Millions	Total	Common Stock	Retained Earnings	Treasury Stock, Common	Accumulated Other Comprehensive Income/(Loss)	Noncontrolling Interest
Common shares in treasury				36,000
Balance at beginning of period (in shares) at Jun. 30, 2021		327,000
Balance at beginning of period at Jun. 30, 2021	$ 1,794	$ 2,806	$ 1,205		$ (34)	$ 3
Treasury, balance at beginning of period (in shares) at Jun. 30, 2021				(36,000)
Treasury, balance at beginning of period at Jun. 30, 2021				$ (2,186)
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	(1,069)					2
Net Income (Loss) Attributable to Parent	(1,071)
Other Comprehensive Income (Loss), Net of Tax	(43)
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	(43)				(43)
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture		0		1,000
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture	41	$ (5)		$ 46
Purchase of treasury shares	(1,000)	$ 40		$ (1,000)
Treasury shares acquired (in shares)				(19,000)
Dividends	(415)		(415)
Stockholders' Equity, Other Shares
Other	1					1
Balance at end of period (in shares) at Mar. 31, 2022		327,000
Balance at end of period at Mar. 31, 2022	(693)	$ 2,761	(281)		(77)	4
Treasury, balance at end of period (in shares) at Mar. 31, 2022				(54,000)
Treasury, balance at end of period at Mar. 31, 2022				$ (3,100)
Treasury Stock, Value, Acquired, Cost Method	(1,000)			$ (960)
Common shares in treasury				50,000
Balance at beginning of period (in shares) at Dec. 31, 2021		327,000
Balance at beginning of period at Dec. 31, 2021	1,002	$ 2,721	1,245		(85)	4
Treasury, balance at beginning of period (in shares) at Dec. 31, 2021				(50,000)
Treasury, balance at beginning of period at Dec. 31, 2021				$ (2,883)
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	(1,390)					1
Net Income (Loss) Attributable to Parent	(1,391)
Other Comprehensive Income (Loss), Net of Tax	8
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	8				8
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture		0
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture	23	$ 20		$ 3
Purchase of treasury shares		(20)
Treasury shares acquired (in shares)				(4,000)
Dividends	(135)		(135)
Stockholders' Equity, Other Shares
Other	1					1
Balance at end of period (in shares) at Mar. 31, 2022		327,000
Balance at end of period at Mar. 31, 2022	(693)	$ 2,761	(281)		(77)	4
Treasury, balance at end of period (in shares) at Mar. 31, 2022				(54,000)
Treasury, balance at end of period at Mar. 31, 2022				$ (3,100)
Treasury Stock, Value, Acquired, Cost Method	$ (200)			$ (220)
Common shares in treasury				54,000
Common shares in treasury	54,000			(54,000)
Balance at beginning of period (in shares) at Jun. 30, 2022	327,000	327,000
Balance at beginning of period at Jun. 30, 2022	$ (706)	$ 2,813	(280)		(114)	3
Treasury, balance at beginning of period (in shares) at Jun. 30, 2022	(54,000)			54,000
Treasury, balance at beginning of period at Jun. 30, 2022	$ (3,128)			$ 3,128
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	328					3
Net Income (Loss) Attributable to Parent	325
Other Comprehensive Income (Loss), Net of Tax	(28)
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	$ (28)				(28)
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture	2,000
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture	$ 82	$ 5		77
Purchase of treasury shares	(1,500)			$ (1,500)
Treasury shares acquired (in shares)				(20,000)
Dividends	(388)		(388)
Stockholders' Equity, Other Shares
Other	$ 1		(1)			2
Balance at end of period (in shares) at Mar. 31, 2023	327,000	327,000
Balance at end of period at Mar. 31, 2023	$ (2,218)	$ 2,818	(342)		(142)	2
Treasury, balance at end of period (in shares) at Mar. 31, 2023	(72,000)			(72,000)
Treasury, balance at end of period at Mar. 31, 2023	$ (4,554)			$ (4,554)
Treasury Stock, Value, Acquired, Cost Method	(1,503)			$ (1,503)
Treasury shares acquired, average price per share (in usd per share)	(2)					(2)
Common shares in treasury				(68,000)
Balance at beginning of period (in shares) at Dec. 31, 2022		327,000
Balance at beginning of period at Dec. 31, 2022	(2,212)	$ 2,747	(560)		(146)	1
Treasury, balance at beginning of period (in shares) at Dec. 31, 2022				68,000
Treasury, balance at beginning of period at Dec. 31, 2022				$ 4,254
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	347					2
Net Income (Loss) Attributable to Parent	345
Other Comprehensive Income (Loss), Net of Tax	4
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	4
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture		0		0
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture	24	$ 21		$ 3
Purchase of treasury shares		(50)
Treasury shares acquired (in shares)				(4,000)
Dividends	(128)		(128)
Stockholders' Equity, Other Shares
Other	$ 0		1			(1)
Balance at end of period (in shares) at Mar. 31, 2023	327,000	327,000
Balance at end of period at Mar. 31, 2023	$ (2,218)	$ 2,818	$ (342)		$ (142)	$ 2
Treasury, balance at end of period (in shares) at Mar. 31, 2023	(72,000)			(72,000)
Treasury, balance at end of period at Mar. 31, 2023	$ (4,554)			$ (4,554)
Treasury Stock, Value, Acquired, Cost Method	$ (253)			$ (303)
Common shares in treasury	72,000			72,000

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions	9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flows from operating activities:
Net earnings/(loss)	$ 328	$ (1,069)
Adjustments to reconcile net earnings/(loss) to net cash provided by operating activities:
Depreciation and amortization	516	513
Impairments and (gain)/loss on disposal of assets, net	883	1,764
Impairments and loss on sale of other investments	0	3
(Gain)/loss on sale of equity interest in naviHealth	0	(2)
Loss on early extinguishment of debt	0	10
Share-based compensation	69	65
Provision for bad debts	79	46
Change in operating assets and liabilities, net of effects from acquisitions and divestitures:
Increase in trade receivables	(510)	(1,193)
Increase in inventories	(1,012)	(922)
Increase in accounts payable	2,473	1,121
Other accrued liabilities and operating items, net	(845)	(206)
Net cash provided by operating activities	1,981	130
Cash flows from investing activities:
Proceeds from divestitures, net of cash sold	0	923
Acquisition of subsidiaries, net of cash acquired	10	0
Additions to property and equipment	(264)	(223)
Proceeds from disposal of property and equipment	2	11
Purchases of investments	(6)	(38)
Proceeds from investments	1	27
Proceeds from net investment hedge terminations	29	71
Net cash provided by/(used in) investing activities	(248)	771
Cash flows from financing activities:
Reduction of long-term obligations	(571)	(597)
Net tax proceeds/(withholdings) from share-based compensation	11	(26)
Dividends on common shares	(399)	(425)
Purchase of treasury shares	(1,500)	(1,000)
Net cash used in financing activities	(2,459)	(2,048)
Effect of Exchange Rate on Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Continuing Operations	(1)	(13)
Cash and equivalents reclassified from/(to) assets held for sale	0	109
Net decrease in cash and equivalents	(727)	(1,051)
Cash and equivalents at beginning of period	4,717	3,407
Cash and equivalents at end of period	$ 3,990	$ 2,356

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Basis of Presentation and Summary of Significant Accounting Policies

9 Months Ended

Mar. 31, 2023

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 consolidated subsidiaries, and all significant intercompany transactions and amounts have been eliminated. The results of businesses acquired or disposed of are included in the condensed consolidated financial statements from the date of the acquisition or up to the date of disposal, respectively.

References to "we," "our," and similar pronouns in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 (this "Form 10-Q") refer to Cardinal Health, Inc. and its majority-owned or consolidated subsidiaries unless the context requires otherwise.

Our fiscal year ends on June 30. References to fiscal 2023 and 2022 in these condensed consolidated financial statements are to the fiscal years ending or ended June 30, 2023 and June 30, 2022, 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, judgments 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. In addition, financial results presented for this fiscal 2023 interim period are not necessarily indicative of the results that may be expected for the full fiscal year ending June 30, 2023. 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, 2022 (our "2022 Form 10-K").

Recently Issued Financial Accounting Standards

Not Yet Adopted

We assess the adoption impacts of recently issued accounting standards by the Financial Accounting Standards Board ("FASB") on our condensed consolidated financial statements as well as material updates to previous assessments, if any, from our fiscal 2022 Form 10-K. There were no accounting standards issued in fiscal 2023 that will have a material impact on our condensed consolidated financial statements.

Recently Adopted Financial Accounting Standards

There were no new material accounting standards adopted during the nine months ended March 31, 2023.

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Divestitures

9 Months Ended

Mar. 31, 2023

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure

2. Divestitures

In August 2021, we sold the Cordis business to Hellman & Friedman for proceeds of $923 million, net of cash transferred, and we retained certain working capital accounts. Cardinal Health also retained product liability associated with lawsuits and claims related to the Cordis OptEase and TrapEase inferior vena cava ("IVC") filter products in the U.S. and Canada, as well as authority for these matters discussed in Note 6. The Cordis business operated within our Medical segment.

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Restructuring and Employee Severance

9 Months Ended

Mar. 31, 2023

Restructuring Charges [Abstract]

Restructuring and Employee Severance

3. Restructuring and Employee Severance

The following table summarizes restructuring and employee severance:

	Three Months Ended March 31,
(in millions)	2023		2022
Employee-related	$	3	$	12
Facility exit and other	13		19
Total restructuring and employee severance	$	16	$	31

	Nine Months Ended March 31,
(in millions)	2023		2022
Employee-related	$	32	$	22
Facility exit and other	30		34
Total restructuring and employee severance	$	62	$	56

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. Facility exit and other costs primarily consist of project consulting fees, accelerated depreciation, professional, project management and other service fees to support divestitures, costs associated with vacant facilities, and certain other divestiture-related costs.

Restructuring and employee severance costs during the three and nine months ended March 31, 2023 and March 31, 2022 were primarily related to the implementation of certain enterprise-wide cost-savings measures and the divestiture of the Cordis business. During the three and nine months ended March 31, 2022, restructuring also included costs related to decreasing our overall office space.

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, 2022	$	56	$	10	$	66
Additions	29		8		37
Payments and other adjustments	(36)		(15)		(51)
Balance at March 31, 2023	$	49	$	3	$	52

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Goodwill and Other Intangible Assets

9 Months Ended

Mar. 31, 2023

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 (1)		Total
Balance at June 30, 2022	$	2,673	$	3,182	$	5,855
Goodwill acquired, net of purchase price adjustments	—		13		13
Foreign currency translation adjustments and other	—		(5)		(5)
Goodwill impairment	—		(863)		(863)
Balance at March 31, 2023	$	2,673	$	2,327	$	5,000

(1)At March 31, 2023 and June 30, 2022, the Medical segment accumulated goodwill impairment loss was $4.4 billion and $3.5 billion, respectively.

Due to changes in our long-term financial plan assumptions made during the three months ended March 31, 2023, we elected to bypass the qualitative assessment and perform quantitative goodwill impairment testing for the Medical Unit. The fair value of the reporting unit was estimated to be approximately 4 percent in excess of its carrying value, primarily driven by a lower discount rate as described below.

We performed quantitative goodwill impairment testing for the Medical Unit at December 31, 2022 and September 30, 2022, which resulted in pre-tax goodwill impairment charges of $709 million and $154 million, respectively. The impairment charge recognized in the second quarter was driven by certain reductions in our long-term financial plan assumptions, and the impairment charge recognized in the first quarter was driven by an increase in the discount rate primarily due to an increase in the risk-free interest rate. The cumulative pre-tax goodwill impairment charges of $863 million were recognized in impairments and (gain)/loss on disposal of assets, net in our condensed consolidated statements of earnings/(loss) for the nine months ended March 31, 2023.

Our determinations of the estimated fair value of the Medical Unit at March 31, 2023, December 31, 2022 and September 30, 2022 were based on a combination of the income-based approach (using a terminal growth rate of 2 percent), and the market-based approaches. For the income-based approach, we used discount rates of 10 percent, 10.5 percent and 10.5 percent for each quarter, respectively. The decrease in the discount rate for the interim testing performed at March 31, 2023 was primarily due to a decrease in the risk-free interest rate. Additionally, we assigned a weighting of 80 percent to the discounted cash flow method, 10 percent to the guideline public company method, and 10 percent to the guideline transaction method. Our fair value estimates utilize significant unobservable inputs and thus represent Level 3 fair value measurements.

During the three months ended March 31, 2022 and December 31, 2021, we performed quantitative goodwill impairment testing for the Medical Unit. This quantitative testing resulted in the carrying

amount of the Medical Unit exceeding the fair value, resulting in a pre-tax impairment charges of $474 million and $1.3 billion recorded during the three months ended March 31, 2022 and December 31, 2021, respectively.

Other Intangible Assets

The following tables summarize other intangible assets by class at:

	March 31, 2023
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible		Weighted- Average Remaining Amortization Period (Years)
Indefinite-life intangibles:
Trademarks and patents	$	11	$	—	$	11	N/A
Total indefinite-life intangibles	11		—		11		N/A
Definite-life intangibles:
Customer relationships	3,235		2,267		968		10
Trademarks, trade names and patents	550		376		174		9
Developed technology and other	1,037		623		414		9
Total definite-life intangibles	4,822		3,266		1,556		10
Total other intangible assets	$	4,833	$	3,266	$	1,567	N/A

	June 30, 2022
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible
Indefinite-life intangibles:
Trademarks and patents	$	11	$	—	$	11
Total indefinite-life intangibles	11		—		11
Definite-life intangibles:
Customer relationships	3,272		2,165		1,107
Trademarks, trade names and patents	552		360		192
Developed technology and other	1,038		574		464
Total definite-life intangibles	4,862		3,099		1,763
Total other intangible assets	$	4,873	$	3,099	$	1,774

Total amortization of intangible assets was $69 million and $78 million for the three months ended March 31, 2023 and 2022, respectively, and $211 million and $235 million for the nine months ended March 31, 2023 and 2022, respectively. Estimated annual amortization of intangible assets for the remainder of fiscal 2023 through 2027 is as follows: $71 million, $261 million, $236 million, $209 million and $177 million.

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Long-Term Obligations and Other Short-Term Borrowings

9 Months Ended

Mar. 31, 2023

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

Long-Term Obligations and Other Short-Term Borrowings

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

Long-Term Debt

We had total long-term obligations, including the current portion and other short-term borrowings, of $4.7 billion and $5.3 billion for March 31, 2023 and June 30, 2022, respectively. All the notes 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 notes are effectively subordinated to the liabilities of our subsidiaries, including trade payables of $29.6 billion and $27.1 billion at March 31, 2023 and June 30, 2022, respectively.

During the three months ended March 31, 2023, we repaid the full principal of the $550 million 3.2% Notes due 2023 at maturity with available cash.

During the nine months ended March 31, 2022, we redeemed all outstanding $572 million principal amount of 2.616% Notes due June 2022 at a redemption price equal to 100% of the principal amount and accrued but unpaid interest, plus the make-whole premium applicable to the notes. In connection with this redemption, we recorded a $10 million loss on early extinguishment of debt. The early redemption was funded with available cash.

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. During the nine months ended March 31, 2023, under our commercial paper program and our committed receivables program, we had maximum combined total daily amounts outstanding of $445 million and average combined daily amount outstanding of $4 million. At March 31, 2023, we had no amounts outstanding under our commercial paper program, revolving credit facility or our committed receivables sales facility.

In February 2023, we extended our $2.0 billion revolving credit facility through February 25, 2028. In September 2022, we renewed our committed receivables sales facility program through Cardinal Health Funding, LLC (“CHF”) through September 30, 2025. 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. Our revolving credit and committed receivables sales facilities require us to maintain a consolidated net leverage ratio of no more than 3.75-to-1. As of March 31, 2023, we were in compliance with this financial covenant.

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Commitments, Contingent Liabilities and Litigation

9 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments, Contingent Liabilities and Litigation

6. Commitments, Contingent Liabilities and Litigation

Commitments

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

In July 2014, we established Red Oak Sourcing, LLC ("Red Oak Sourcing"), a U.S.-based generic pharmaceutical sourcing venture with CVS Health for an initial term of 10 years. Red Oak Sourcing negotiates generic pharmaceutical supply contracts on behalf of its participants. In August 2021, we amended our agreement to extend the term through June 2029. We are required to make quarterly payments to CVS Health for the term of the arrangement.

Contingencies

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 share of the total morphine milligram equivalents sold or distributed in New York during the applicable calendar year, beginning in 2017. Subsequently, New York passed a new statute that modified the assessment going forward and limited the OSA to two years (2017 and 2018).

We accrue contingencies if it is probable that a liability has been incurred and the amount can be estimated. In the second quarter of fiscal year 2022, we paid the State of New York $20 million, our portion of the assessment for calendar year 2017. At June 30, 2022, we had an accrual of $20 million, which represented our estimate of our portion of the assessment for calendar year 2018. During the nine months ended March 31, 2023, we recorded $6 million of income to reduce this accrual to the invoiced amount for the calendar year 2018 assessment and we paid $7 million, resulting in an accrual of $7 million at March 31, 2023.

Legal Proceedings

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

From time to time, we determine that products we source, 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 have led to product recalls, costs to repair or replace affected products, temporary interruptions in product sales, product liability claims and lawsuits and can lead to action by regulators. Even absent an identified regulatory or quality issue or product recall, we can become subject to product liability claims and lawsuits.

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 directly or indirectly lead to the assertion of claims or the commencement of legal proceedings against us or result in sanctions.

We have been 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.

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, net in our condensed consolidated statements of earnings/(loss); however, losses and recoveries of lost profits from disputes that occur in the ordinary course of business are included within segment profit. For example, in the second quarter of fiscal year 2022, our

Pharmaceutical segment profit was positively impacted by a $16 million judgment for lost profits related to an ordinary course intellectual property rights claim.

Opioid Lawsuits and Investigations

States & Political Subdivisions

National Settlement

As previously disclosed, in February 2022, we along with two other national distributors (collectively, the "Distributors") independently approved a settlement and settlement agreement (the "Settlement Agreement") to settle the vast majority of opioid lawsuits and claims brought by states and political subdivisions. This Settlement Agreement became effective on April 2, 2022. In May and June 2022, the Distributors reached agreements with the States of Washington and Oklahoma, respectively, to resolve the opioid-related claims of those states and their political subdivisions. Under these agreements, Cardinal Health agreed to pay approximately $160 million to the State of Washington and its participating subdivisions and approximately $95 million to the State of Oklahoma and its participating subdivisions. These amounts are consistent with the amounts that would have been allocated to Washington and Oklahoma under the Settlement Agreement. Each of Washington and Oklahoma is now subject to the Settlement Agreement.

In addition to the Distributors, parties to the Settlement Agreement include 48 states, the District of Columbia and 5 U.S. territories. Over 99 percent of political subdivisions (by population as calculated under the Settlement Agreement) that had brought opioid-related suits against us have chosen to join the Settlement Agreement or have had their claims addressed by state legislation.

Under the Settlement Agreement, we agreed to pay up to approximately $6.3 billion over 18 years. The Settlement Agreement also includes injunctive relief terms related to distributors’ controlled substance anti-diversion programs. For more information on the terms of the Settlement Agreement, refer to our 2022 Form 10-K. As a result of the Settlement Agreement, most lawsuits brought against us by states and other political subdivisions have been dismissed. We continue to engage in resolution discussions with certain non-participating political subdivisions, including the Attorney General for the State of Alabama, and we intend to defend ourselves vigorously against all remaining lawsuits.

During the nine months ended March 31, 2023, we made our second annual payment of $372 million under the Settlement Agreement. In total, we have $5.85 billion accrued at March 31, 2023, of which $437 million is included in other accrued liabilities and the remainder is included in deferred income taxes and other liabilities in our condensed consolidated balance sheets.

Because loss contingencies are inherently unpredictable and unfavorable developments or resolutions can occur, the assessment is highly subjective and requires judgments about future events. We regularly review these opioid litigation matters to determine whether our accrual is adequate. The amount of

ultimate loss may differ materially from this accrual, whether as a result of settlement discussions, a judicial decision or verdict or otherwise, but we are not able to estimate a range of reasonably possible additional losses for these matters. We continue to strongly dispute the allegations made in these lawsuits and none of these agreements is an admission of liability or wrongdoing.

Other Settlements

West Virginia subdivisions and Native American tribes were not a part of the national settlement, and we had separate negotiations with these groups. A bench trial before a federal judge in West Virginia in a case brought by Cabell County and City of Huntington against the Distributors concluded in July 2021. In July 2022, a judgment in favor of the Distributors was entered. In July 2022, the Distributors reached an agreement to settle the opioid-related claims of the majority of the remaining West Virginia subdivisions. Under this agreement, we have agreed to pay eligible West Virginia subdivisions up to approximately $124 million over an eleven-year period. This agreement became effective in October 2022 when all participating subdivisions dismissed their cases.

In October 2022, we executed a final settlement agreement with the Native American Tribes, pursuant to which we will pay up to approximately $136 million over five years. In connection with this settlement, the court entered dismissals for the Native American tribes' cases.

Department of Justice Investigations

We have received federal grand jury subpoenas issued in connection with investigations being conducted by the U.S. Attorney's Office for the Eastern District of New York and the Fraud Section of the U.S. Department of Justice ("DOJ"). We have also received civil requests for information from other DOJ offices. We believe that these investigations concern operation of our anti-diversion program, our anti-diversion policies and procedures, and distribution of certain controlled substances. We are cooperating with these investigations. We are unable to predict the outcome of any of these investigations.

Private Plaintiffs

The Settlement Agreement does not address claims by private parties, which includes unions and other health and welfare funds, hospital systems and other healthcare providers, businesses and individuals alleging personal injury. Private parties had brought approximately 457 lawsuits as of April 28, 2023. Of these, 107 are purported class actions. The causes of action asserted by these plaintiffs are similar to those asserted by public plaintiffs.

A trial in a case involving 21 plaintiffs began in state court in Georgia in January 2023 and concluded in March 2023 with a verdict for the company and other defendants on all claims. The plaintiffs' motion for a new trial is pending. A trial involving eight hospital plaintiffs is scheduled to begin in Alabama in July 2023. We are vigorously defending ourselves in all of these matters; however, trials are inherently unpredictable and it is possible that an unfavorable outcome in these matters, individually or in the aggregate, could have a negative impact on our financial results.

Insurance Litigation

We are involved in ongoing legal proceedings with insurers related their obligations to reimburse us for defense and indemnity costs in connection with the lawsuits described above. In the nine months ended March 31, 2023, we received approximately $10 million in insurance recoveries related to these matters; however, we have not recorded a receivable for any additional recoveries as of March 31, 2023.

Cordis IVC Filter Matters

Product Liability Lawsuits

We have been named as a defendant in approximately 453 product liability lawsuits coordinated in Alameda County Superior Court in California involving claims by approximately 5,171 plaintiffs that allege personal injuries associated with the use of IVC filter products. These lawsuits sought a variety of remedies, including unspecified monetary damages. The divestiture of the Cordis business did not include product liability related to the IVC filters in the U.S. and Canada, which we retained.

In April 2023, we executed a settlement agreement that, if certain conditions are satisfied, will resolve approximately 4,376 claims for $275 million. This settlement agreement is subject to certain conditions, including certain opt-in thresholds. Between May and September 2023, we will make settlement payments totaling $275 million into a qualified settlement fund, which will be disbursed to the plaintiffs if required conditions are satisfied. Since July 2021, we have also entered into other agreements to settle approximately 2,881 product liability claims. These settlements will not resolve all IVC filter product liability claims and we will continue to vigorously defend ourselves in the remaining lawsuits.

Additionally, in August 2021, the Attorney General for the State of New Mexico filed an action against certain IVC filter manufacturers, including us, alleging claims under New Mexico's Unfair Practices Act, Medicaid Fraud Act and Fraud Against Taxpayers Act. The allegations are similar to those made in the product liability lawsuits.

We recognized income of $71 million and $95 million during the three and nine months ended March 31, 2023, respectively, primarily related to a reduction of the reserve for the estimated settlement and defense costs for these matters due to the execution of the settlements noted above. At March 31, 2023, we had a total of $385 million accrued for losses and legal defense costs, related to the IVC filter product liability lawsuits in our condensed consolidated balance sheets.

Shareholder Securities Litigation

In August 2019, the Louisiana Sheriffs' Pension & Relief Fund filed a purported class action complaint against Cardinal Health and certain current and former officers and employees in the United States District Court for the Southern District of Ohio purportedly on behalf of all purchasers of our common shares between March 2015 and May 2018. In June 2020, the court appointed 1199 SEIU Health Care Employees Pension Fund as lead plaintiff and a

consolidated amended complaint was filed in September 2020. The amended complaint alleges that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by making misrepresentations and omissions related to the acquisition and integration of the Cordis business and inventory and supply chain problems within the Cordis business, and seeks to recover unspecified damages and equitable relief for the alleged misstatements and omissions. The complaint also alleges that one of the individual defendants violated Section 20A of the Exchange Act because he sold shares of Cardinal Health stock during the time period. In February 2023, we reached an agreement in principle with the plaintiffs to settle this matter for $109 million, subject to final approval by the court. The court granted its preliminary approval in April 2023 and will conduct a final hearing in September 2023. If the settlement is approved, our insurance carriers will pay $109 million to the plaintiffs.

Other Civil Litigation

Generic Pharmaceutical Pricing Antitrust Litigation

In December 2019, pharmaceutical distributors including us were added as defendants in a civil class action lawsuit filed by indirect purchasers of generic drugs, such as hospitals and retail pharmacies. The indirect purchaser case is part of a multidistrict litigation consisting of multiple individual class action matters consolidated in the Eastern District of Pennsylvania. The indirect purchaser plaintiffs allege that pharmaceutical distributors encouraged manufacturers to increase prices, provided anti-competitive pricing information to manufacturers and improperly engaged in customer allocation. In May 2020, the court granted our motion to dismiss. In July 2022, the indirect purchasers filed an amended complaint and in August 2022, we filed a motion to dismiss the intended complaint. We are vigorously defending ourselves in this matter.

Antitrust Litigation Proceeds

In October 2022, we received net cash proceeds resulting from the settlement of a lawsuit in which we were a class member or plaintiff of $66 million, which was recognized in litigation (recoveries)/charges, net, during the nine months ended March 31, 2023.

Shareholder Derivative Litigation

Between June 2019 and January 2020, three purported shareholders filed actions on behalf of Cardinal Health, Inc. in the U.S. District Court for the Southern District of Ohio against certain current and former members of our Board of Directors alleging that the defendants breached their fiduciary duties by failing to effectively monitor Cardinal Health's distribution of controlled substances and approving certain payments of executive compensation. In January 2020, the court consolidated these derivative cases under the caption In re Cardinal Health, Inc. Derivative Litigation and in March 2020, plaintiffs filed an amended complaint.

In October 2022, the court entered an order approving the settlement agreement reached between the parties and dismissing the case. The settlement does not include any admission of liability. Under this settlement, in December 2022, Cardinal Health's director and officer liability insurance carriers, on behalf of the defendants, paid Cardinal Health $124 million, less approximately $31 million in attorneys' fees and expenses awarded by the court to plaintiffs' counsel. Cardinal Health received net cash proceeds resulting from this settlement of $93 million, which was recognized in litigation (recoveries)/charges, net, during the nine months ended March 31, 2023.

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Income Taxes

9 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

7. Income Taxes

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

Effective Tax Rate

During the three and nine months ended March 31, 2023, the effective tax rate was 36.3 percent and 36.7 percent, respectively, and reflects any impact of the tax effects of the goodwill impairment charges recognized during the three and nine months ended March 31, 2023.

During the three and nine months ended March 31, 2022, the effective tax rate was (916.5) percent and (44.4) percent, respectively, and reflects the impact of the tax effect of the goodwill impairment charges recognized during the three and nine months ended March 31, 2022.

Tax Effects of Goodwill Impairment Charges

During the nine months ended March 31, 2023, we recognized pre-tax goodwill impairment charges of $863 million related to the Medical Unit. The net tax benefit related to these charges is $68 million for fiscal 2023.

Unless an item is considered discrete because it is unusual or infrequent, the tax impact of the item is included in our estimated annual effective tax rate. When items are recognized through our estimated annual effective tax rate, we apply our estimated annual effective tax rate to the earnings/(loss) before income taxes for the year-to-date period to compute our impact from income taxes for the current quarter and year-to-date period. The tax impacts of discrete items are recognized in their entirety in the period in which they occur.

The tax effect of the goodwill impairment charges during the nine months ended March 31, 2023 was included in our estimated annual effective tax rate because it was not considered unusual or infrequent, given that we recorded goodwill impairments in prior fiscal years. The impact of the non-deductible goodwill increased the estimated annual effective tax rate for fiscal 2023. Applying the higher tax rate to the pre-tax income for the nine months ended March 31, 2023 resulted in recognizing an incremental interim tax expense of approximately $74 million, which impacted the

provision for income taxes in the condensed consolidated statements of earnings/(loss) during the three months ended March 31, 2023 and prepaid expenses and other assets in the condensed consolidated balance sheet at March 31, 2023. The incremental interim tax benefit recognized during the nine months ended March 31, 2023 was $66 million and will reverse in the fourth quarter of fiscal 2023.

Unrecognized Tax Benefits

We had $1.1 billion and $943 million of unrecognized tax benefits, at March 31, 2023 and June 30, 2022, respectively. The March 31, 2023 and June 30, 2022 balances include $897 million and $858 million of unrecognized tax benefits, respectively, that if recognized, would have an impact on the effective tax rate.

At March 31, 2023 and June 30, 2022, we had $61 million and $48 million, respectively, accrued for the payment of interest and penalties related to unrecognized tax benefits, which we recognize in the provision for income taxes in the condensed consolidated statements of earnings/(loss). 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 IRS and other 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 up to $125 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 2015 through the current fiscal year.

We are a party to a tax matters agreement with CareFusion Corporation ("CareFusion"), a subsidiary of 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 $80 million and $75 million at

March 31, 2023 and June 30, 2022, respectively, and is included in other assets in the condensed consolidated balance sheets.

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Fair Value Measurements

9 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Fair Value Disclosures

8. Fair Value Measurements

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

	March 31, 2023
(in millions)	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	1,302	$	—	$	—	$	1,302
Other investments (1)	95		—		—		95
Liabilities:
Forward contracts (2)	—		(52)		—		(52)

	June 30, 2022
(in millions)	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	2,425	$	—	$	—	$	2,425
Other investments (1)	97		—		—		97
Forward contracts (2)	—		15		—		15

(1)The other investments balance includes investments in mutual funds, which 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, and net investment hedges 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 prepaid expenses and other, other assets, other accrued liabilities, and deferred income taxes and other liabilities within the condensed consolidated balance sheets.

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Financial Instruments

9 Months Ended

Mar. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Financial Instruments

9. 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 current 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 on our fixed-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 earnings and cash flow volatility associated with foreign exchange rate changes 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, net in the condensed consolidated statements of earnings/(loss). For the three and nine months ended March 31, 2023 and 2022, 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, 2023 and 2022, we entered into pay-floating interest rate swaps with total notional amounts of $200 million and $300 million, respectively. These swaps have been designated as fair value hedges of our fixed rate debt and are included in deferred income taxes and other liabilities in the condensed consolidated balance sheets.

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 accumulated other comprehensive loss 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.

Pre-tax gains recognized in other comprehensive income/(loss) were $2 million and $1 million for the three months ended March 31, 2023 and 2022, respectively, and $4 million for both the nine months ended March 31, 2023 and 2022. Gains recognized in accumulated other comprehensive loss and reclassified into earnings were $4 million and immaterial for the three months ended March 31, 2023 and 2022, respectively, and were $8 million and immaterial for the nine months ended March 31, 2023 and 2022, respectively. Gains currently included within accumulated other comprehensive loss associated with our cash flow hedges to be reclassified into net earnings within the next 12 months are $7 million.

Net Investment Hedges

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

During the three months ended March 31, 2023, we entered into ¥19 billion ($150 million) cross-currency swaps maturing in September 2025, ¥19 billion ($150 million) cross-currency swaps maturing in June 2027, €100 million ($107 million) cross-currency swaps maturing in March 2025 and €100 million ($107 million) cross-currency swaps maturing in March 2026.

During the three months ended March 31, 2023, we terminated the ¥48 billion ($400 million) cross-currency swaps entered into in March 2022 and the €200 million ($233 million) cross-currency swap entered into in September 2018 and received net settlements of $10 million and $19 million in cash, respectively, recorded in proceeds from net investment hedge terminations in our condensed consolidated statements of cash flows.

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.

Pre-tax gain and loss from net investment hedges recorded in the foreign currency translation component of accumulated other

comprehensive loss was an immaterial loss and a $22 million gain during the three months ended March 31, 2023 and 2022, respectively, and a $21 million loss and a $44 million gain during the nine months ended March 31, 2023 and 2022, respectively. Gains recognized in interest expense, net in the condensed consolidated statements of earnings/(loss) for the portion of the net investment hedges excluded from the assessment of hedge effectiveness were $4 million and $5 million during the three months ended March 31, 2023 and 2022, respectively, and $12 million and $16 million during the nine months ended March 31, 2023 and 2022, respectively.

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)/expense, net. We recorded an immaterial loss and a $4 million loss during the three months ended March 31, 2023 and 2022, respectively, and a $3 million loss and an immaterial loss during the nine months ended March 31, 2023 and 2022, respectively. The principal currencies managed through foreign currency contracts are Canadian dollar, Euro, Chinese renminbi, Indian rupee and Thai baht.

Fair Value of Financial Instruments

The carrying amounts of cash and equivalents, trade receivables, accounts payable and other accrued liabilities at March 31, 2023 and June 30, 2022 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, 2023		June 30, 2022
Estimated fair value	$	4,466	$	5,049
Carrying amount	4,734		5,315

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, 2023

Equity [Abstract]

Shareholders' Equity

10. Shareholders' Equity/(Deficit)

We repurchased $1.5 billion and $1.0 billion of our common shares, in the aggregate, through share repurchase programs during the nine months ended March 31, 2023 and 2022,

respectively. We funded the repurchases with available cash. The common shares repurchased are held in treasury to be used for general corporate purposes.

During the three months ended March 31, 2023, we entered into an accelerated share repurchase ("ASR") program to repurchase common shares for an aggregate purchase price of $250 million. We received an initial delivery of 2.6 million common shares using a reference price of $77.03. The program concluded on February 28, 2023 at a volume weighted average price per common share of $77.27 resulting in a final delivery of 0.6 million common shares.

During the three months ended December 31, 2022, we entered into an ASR program to repurchase common shares for an aggregate purchase price of $250 million. We received an initial delivery of 2.6 million common shares using a reference price of $76.58. The program concluded on January 13, 2023 at a volume weighted average price per common share of $77.50 resulting in a final delivery of 0.6 million common shares.

During the three months ended September 30, 2022, we entered into an ASR program to repurchase common shares for an aggregate purchase price of $1.0 billion. We received an initial delivery of 12.0 million common shares using a reference price of $66.74. The program concluded on December 23, 2022 at a volume weighted average price per common share of $73.36 resulting in a final delivery of 1.6 million common shares.

During the three months ended March 31, 2022, we entered into an ASR program to repurchase common shares for an aggregate purchase price of $200 million. We received an initial delivery of 3.0 million common shares using a reference price of $54.01. The program concluded on April 18, 2022 at a volume weighted average price per common share of $56.02 resulting in a final delivery of 0.6 million common shares.

During the three months ended December 31, 2021, we entered into an ASR program to repurchase common shares for an aggregate purchase price of $300 million. We received an initial delivery of 4.8 million common shares using a reference price of $50.30. The program concluded on January 31, 2022 at a volume weighted average price per common share of $49.39 resulting in a final delivery of 1.3 million common shares.

During the three months ended September 30, 2021, we entered into an ASR program to repurchase common shares for an aggregate purchase price of $500 million. We received an initial delivery of 7.8 million common shares using a reference price of $51.53. The program concluded on October 4, 2021 at a volume weighted average price per common share of $51.10 resulting in a final delivery of 2.0 million common shares.

Accumulated Other Comprehensive Loss

The following tables summarize 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 Loss
Balance at June 30, 2022	$	(102)	$	(12)	$	(114)
Other comprehensive loss, before reclassifications	(34)		15		(19)
Amounts reclassified to earnings	—		(9)		(9)
Total other comprehensive loss attributable to Cardinal Health, Inc. net of tax benefit of $5 million	(34)		6		(28)
Balance at March 31, 2023	$	(136)	$	(6)	$	(142)

(in millions)	Foreign Currency Translation Adjustments		Unrealized Gain/(Loss) on Derivatives, net of tax		Accumulated Other Comprehensive Loss
Balance at June 30, 2021	$	(46)	$	12	$	(34)
Other comprehensive loss, before reclassifications	(47)		9		(38)
Amounts reclassified to earnings	—		(5)		(5)
Total other comprehensive loss attributable to Cardinal Health, Inc. net of tax benefit of $6 million	(47)		4		(43)
Balance at March 31, 2022	$	(93)	$	16	$	(77)

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Earnings Per Share Attributable to Cardinal Health, Inc.

9 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

11. Earnings/(Loss) Per Share Attributable to Cardinal Health, Inc.

The following table reconciles the number of common shares used to compute basic and diluted earnings/(loss) per share attributable to Cardinal Health, Inc.:

	Three Months Ended March 31,
(in millions)	2023	2022
Weighted-average common shares–basic	256	275
Effect of dilutive securities:
Employee stock options, restricted share units and performance share units	2	—
Weighted-average common shares–diluted	258	275

	Nine Months Ended March 31,
(in millions)	2023	2022
Weighted-average common shares–basic	263	281
Effect of dilutive securities:
Employee stock options, restricted share units and performance share units	1	—
Weighted-average common shares–diluted	264	281

The potentially dilutive employee stock options, restricted share units and performance share units that were antidilutive were 2 million for both the three and nine months ended March 31, 2023.

The potentially dilutive employee stock options, restricted share units and performance share units that were antidilutive were 5 million for both the three and nine months ended March 31, 2022. For the three and nine months ended March 31, 2022, there were 2 million and 1 million potentially dilutive employee stock options, restricted share units and performance share units not included in the computation of diluted loss per common share attributable to Cardinal Health, Inc. because their effect would have been antidilutive as a result of the net loss during those periods.

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Segment Information

9 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Segment Information

12. 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.

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; provides pharmacy management services to hospitals and operates a limited number of pharmacies, including pharmacies in community health centers; operates nuclear pharmacies and radiopharmaceutical manufacturing facilities; and connects pharmacists, payers and pharmaceutical companies and delivers health solutions for medication therapy management, digital patient engagement and telepharmacy; 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 medical, surgical and laboratory products known as 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. This

segment also distributes medical products to patients' homes in the United States through our Cardinal Health at-Home Solutions division.

Revenue

The following tables present revenue for each reportable segment and disaggregated revenue within our two reportable segments and Corporate:

	Three Months Ended March 31,
(in millions)	2023		2022
Pharmaceutical Distribution and Specialty Solutions (1) (2)	$	46,497	$	40,723
Nuclear and Precision Health Solutions (3)	312		234
Pharmaceutical segment revenue	46,809		40,957
Medical distribution and products (4)	3,034		3,283
Cardinal Health at-Home Solutions	650		601
Medical segment revenue	3,684		3,884
Total segment revenue	50,493		44,841
Corporate (5)	(6)		(5)
Total revenue	$	50,487	$	44,836

	Nine Months Ended March 31,
(in millions)	2023		2022
Pharmaceutical Distribution and Specialty Solutions (1) (2)	$	139,435	$	121,501
Nuclear and Precision Health Solutions (3)	875		653
Pharmaceutical segment revenue	140,310		122,154
Medical distribution and products (4)	9,273		10,296
Cardinal Health at-Home Solutions	1,986		1,822
Medical segment revenue	11,259		12,118
Total segment revenue	151,569		134,272
Corporate (5)	(10)		(11)
Total revenue	$	151,559	$	134,261

(1)Products and services offered by our Specialty Solutions division are referred to as “specialty pharmaceutical products and services."

(2)Comprised of all Pharmaceutical segment businesses except for Nuclear and Precision Health Solutions division.

(3)Increase from prior year relates to new product launches and changes in revenue recognition presentation from agent to principal for certain customer contracts.

(4)Comprised of all Medical segment businesses except for Cardinal Health at-Home Solutions division.

(5)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)	2023		2022
United States	$	49,326	$	43,710
International	1,167		1,131
Total segment revenue	50,493		44,841
Corporate (1)	(6)		(5)
Total revenue	$	50,487	$	44,836

	Nine Months Ended March 31,
(in millions)	2023		2022
United States	$	148,136	$	130,933
International	3,433		3,339
Total segment revenue	151,569		134,272
Corporate (1)	(10)		(11)
Total revenue	$	151,559	$	134,261

(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 expenses for shared functions, 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 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);

•surgical gown recall costs/(income);

•shareholder cooperation agreement costs;

•state opioid assessment related to prior fiscal years;

•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 Medical Unit as discussed further in Note 4, we recognized cumulative goodwill impairment charges of $863 million during the nine months ended March 31, 2023;

•litigation (recoveries)/charges, net;

•other (income)/expense, net;

•interest expense, net;

•loss on early extinguishment of debt;

•(gain)/loss on sale of equity interest in naviHealth; or

•provision for 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 $9 million and $20 million for the three months ended March 31, 2023 and 2022, and $20 million and $38 million for the nine months ended March 31, 2023 and 2022, respectively.

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

	Three Months Ended March 31,
(in millions)	2023		2022
Pharmaceutical (1)	$	600	$	487
Medical	20		59
Total segment profit	620		546
Corporate	(48)		(643)
Total operating earnings/(loss)	$	572	$	(97)

	Nine Months Ended March 31,
(in millions)	2023		2022
Pharmaceutical (1)	$	1,495	$	1,319
Medical	29		232
Total segment profit	1,524		1,551
Corporate	(934)		(2,183)
Total operating earnings/(loss)	$	590	$	(632)

(1)Pharmaceutical segment profit includes opioid-related litigation defense and compliance costs, but does not include a one-time contingent attorney fee of $18 million incurred during the three and nine months ended March 31, 2022 related to the finalization of the Settlement Agreement. Due to the unique nature and significance of the Settlement Agreement, and the one-time, contingent nature of the fee, this related fee was included in litigation (recoveries)/charges, net in the condensed consolidated statements of earnings/(loss). Additionally, pharmaceutical segment profit during the nine months ended March 31, 2022 was positively impacted by a $16 million judgment for lost profits related to an ordinary course intellectual property rights claim.

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

(in millions)	March 31, 2023		June 30, 2022
Pharmaceutical	$	27,954	$	26,409
Medical (1)	10,544		11,632
Corporate	4,879		5,837
Total assets	$	43,377	$	43,878

(1)Medical reflects cumulative $863 million goodwill impairment charges recorded in connection with the interim goodwill impairment testing for the Medical Unit during the nine months ended March 31, 2023.

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Share-Based Compensation

3 Months Ended

Mar. 31, 2022

Share-Based Payment Arrangement [Abstract]

Share-Based Compensation

13. 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)	2023		2022
Restricted share unit expense	$	17	$	18
Performance share unit expense	4		5
Total share-based compensation	$	21	$	23

	Nine Months Ended March 31,
(in millions)	2023		2022
Restricted share unit expense	$	49	$	53
Performance share unit expense	20		12
Total share-based compensation	$	69	$	65

The total tax benefit related to share-based compensation was $3 million for both the three months ended March 31, 2023 and 2022, and $9 million for both the nine months ended March 31, 2023 and 2022.

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, 2022	2.7	$	46.03
Granted	1.3	70.26
Vested	(1.3)	50.03
Canceled and forfeited	(0.5)	58.30
Nonvested at March 31, 2023	2.2	$	57.14

At March 31, 2023, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested restricted share units

not yet recognized was $87 million, which is expected to be recognized over a weighted-average period of two years.

Performance Share Units

Performance share units vest over a 3-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 234 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, 2022	1.2	$	54.32
Granted	0.6	70.52
Vested	(0.4)	59.04
Canceled and forfeited	(0.3)	65.59
Nonvested at March 31, 2023	1.1	$	76.24

At March 31, 2023, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested performance share units not yet recognized was $39 million, which is expected to be recognized over a weighted-average period of two years if performance goals are achieved.

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

9 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Recent Financial Accounting Standards

Recently Issued Financial Accounting Standards

Not Yet Adopted

We assess the adoption impacts of recently issued accounting standards by the Financial Accounting Standards Board ("FASB") on our condensed consolidated financial statements as well as material updates to previous assessments, if any, from our fiscal 2022 Form 10-K. There were no accounting standards issued in fiscal 2023 that will have a material impact on our condensed consolidated financial statements.

Recently Adopted Financial Accounting Standards

There were no new material accounting standards adopted during the nine months ended March 31, 2023.

Basis of Presentation

Basis of Presentation

Our condensed consolidated financial statements include the accounts of all majority-owned or consolidated subsidiaries, and all significant intercompany transactions and amounts have been eliminated. The results of businesses acquired or disposed of are included in the condensed consolidated financial statements from the date of the acquisition or up to the date of disposal, respectively.

References to "we," "our," and similar pronouns in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 (this "Form 10-Q") refer to Cardinal Health, Inc. and its majority-owned or consolidated subsidiaries unless the context requires otherwise.

Our fiscal year ends on June 30. References to fiscal 2023 and 2022 in these condensed consolidated financial statements are to the fiscal years ending or ended June 30, 2023 and June 30, 2022, 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, judgments 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. In addition, financial results presented for this fiscal 2023 interim period are not necessarily indicative of the results that may be expected for the full fiscal year ending June 30, 2023. 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, 2022 (our "2022 Form 10-K").

Recently Issued Financial Accounting Standards

Not Yet Adopted

We assess the adoption impacts of recently issued accounting standards by the Financial Accounting Standards Board ("FASB") on our condensed consolidated financial statements as well as material updates to previous assessments, if any, from our fiscal 2022 Form 10-K. There were no accounting standards issued in fiscal 2023 that will have a material impact on our condensed consolidated financial statements.

Recently Adopted Financial Accounting Standards

There were no new material accounting standards adopted during the nine months ended March 31, 2023.

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Restructuring and Employee Severance (Tables)

9 Months Ended

Mar. 31, 2023

Restructuring Charges [Abstract]

Summary of Restructuring and Employee Severance

The following table summarizes restructuring and employee severance:

	Three Months Ended March 31,
(in millions)	2023		2022
Employee-related	$	3	$	12
Facility exit and other	13		19
Total restructuring and employee severance	$	16	$	31

	Nine Months Ended March 31,
(in millions)	2023		2022
Employee-related	$	32	$	22
Facility exit and other	30		34
Total restructuring and employee severance	$	62	$	56

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, 2022	$	56	$	10	$	66
Additions	29		8		37
Payments and other adjustments	(36)		(15)		(51)
Balance at March 31, 2023	$	49	$	3	$	52

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Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Mar. 31, 2023

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 (1)		Total
Balance at June 30, 2022	$	2,673	$	3,182	$	5,855
Goodwill acquired, net of purchase price adjustments	—		13		13
Foreign currency translation adjustments and other	—		(5)		(5)
Goodwill impairment	—		(863)		(863)
Balance at March 31, 2023	$	2,673	$	2,327	$	5,000

(1)At March 31, 2023 and June 30, 2022, the Medical segment accumulated goodwill impairment loss was $4.4 billion and $3.5 billion, respectively.

Schedule of Finite-Lived Intangible Assets

The following tables summarize other intangible assets by class at:

	March 31, 2023
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible		Weighted- Average Remaining Amortization Period (Years)
Indefinite-life intangibles:
Trademarks and patents	$	11	$	—	$	11	N/A
Total indefinite-life intangibles	11		—		11		N/A
Definite-life intangibles:
Customer relationships	3,235		2,267		968		10
Trademarks, trade names and patents	550		376		174		9
Developed technology and other	1,037		623		414		9
Total definite-life intangibles	4,822		3,266		1,556		10
Total other intangible assets	$	4,833	$	3,266	$	1,567	N/A

	June 30, 2022
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible
Indefinite-life intangibles:
Trademarks and patents	$	11	$	—	$	11
Total indefinite-life intangibles	11		—		11
Definite-life intangibles:
Customer relationships	3,272		2,165		1,107
Trademarks, trade names and patents	552		360		192
Developed technology and other	1,038		574		464
Total definite-life intangibles	4,862		3,099		1,763
Total other intangible assets	$	4,873	$	3,099	$	1,774

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Fair Value Measurements (Tables)

9 Months Ended

Mar. 31, 2023

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, 2023
(in millions)	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	1,302	$	—	$	—	$	1,302
Other investments (1)	95		—		—		95
Liabilities:
Forward contracts (2)	—		(52)		—		(52)

	June 30, 2022
(in millions)	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	2,425	$	—	$	—	$	2,425
Other investments (1)	97		—		—		97
Forward contracts (2)	—		15		—		15

(1)The other investments balance includes investments in mutual funds, which 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, and net investment hedges 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 prepaid expenses and other, other assets, other accrued liabilities, and deferred income taxes and other liabilities within the condensed consolidated balance sheets.

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Financial Instruments (Tables)

9 Months Ended

Mar. 31, 2023

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, 2023		June 30, 2022
Estimated fair value	$	4,466	$	5,049
Carrying amount	4,734		5,315

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Shareholders' Equity (Tables)

9 Months Ended

Mar. 31, 2023

Equity [Abstract]

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

The following tables summarize 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 Loss
Balance at June 30, 2022	$	(102)	$	(12)	$	(114)
Other comprehensive loss, before reclassifications	(34)		15		(19)
Amounts reclassified to earnings	—		(9)		(9)
Total other comprehensive loss attributable to Cardinal Health, Inc. net of tax benefit of $5 million	(34)		6		(28)
Balance at March 31, 2023	$	(136)	$	(6)	$	(142)

(in millions)	Foreign Currency Translation Adjustments		Unrealized Gain/(Loss) on Derivatives, net of tax		Accumulated Other Comprehensive Loss
Balance at June 30, 2021	$	(46)	$	12	$	(34)
Other comprehensive loss, before reclassifications	(47)		9		(38)
Amounts reclassified to earnings	—		(5)		(5)
Total other comprehensive loss attributable to Cardinal Health, Inc. net of tax benefit of $6 million	(47)		4		(43)
Balance at March 31, 2022	$	(93)	$	16	$	(77)

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

9 Months Ended

Mar. 31, 2023

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/(loss) per share attributable to Cardinal Health, Inc.:

	Three Months Ended March 31,
(in millions)	2023	2022
Weighted-average common shares–basic	256	275
Effect of dilutive securities:
Employee stock options, restricted share units and performance share units	2	—
Weighted-average common shares–diluted	258	275

	Nine Months Ended March 31,
(in millions)	2023	2022
Weighted-average common shares–basic	263	281
Effect of dilutive securities:
Employee stock options, restricted share units and performance share units	1	—
Weighted-average common shares–diluted	264	281

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Segment Information (Tables)

9 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Disaggregation of Revenue [Table Text Block]

	Three Months Ended March 31,
(in millions)	2023		2022
Pharmaceutical Distribution and Specialty Solutions (1) (2)	$	46,497	$	40,723
Nuclear and Precision Health Solutions (3)	312		234
Pharmaceutical segment revenue	46,809		40,957
Medical distribution and products (4)	3,034		3,283
Cardinal Health at-Home Solutions	650		601
Medical segment revenue	3,684		3,884
Total segment revenue	50,493		44,841
Corporate (5)	(6)		(5)
Total revenue	$	50,487	$	44,836

	Nine Months Ended March 31,
(in millions)	2023		2022
Pharmaceutical Distribution and Specialty Solutions (1) (2)	$	139,435	$	121,501
Nuclear and Precision Health Solutions (3)	875		653
Pharmaceutical segment revenue	140,310		122,154
Medical distribution and products (4)	9,273		10,296
Cardinal Health at-Home Solutions	1,986		1,822
Medical segment revenue	11,259		12,118
Total segment revenue	151,569		134,272
Corporate (5)	(10)		(11)
Total revenue	$	151,559	$	134,261

(1)Products and services offered by our Specialty Solutions division are referred to as “specialty pharmaceutical products and services."

(2)Comprised of all Pharmaceutical segment businesses except for Nuclear and Precision Health Solutions division.

(3)Increase from prior year relates to new product launches and changes in revenue recognition presentation from agent to principal for certain customer contracts.

(4)Comprised of all Medical segment businesses except for Cardinal Health at-Home Solutions division.

(5)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 tables present revenue by geographic area:

	Three Months Ended March 31,
(in millions)	2023		2022
United States	$	49,326	$	43,710
International	1,167		1,131
Total segment revenue	50,493		44,841
Corporate (1)	(6)		(5)
Total revenue	$	50,487	$	44,836

	Nine Months Ended March 31,
(in millions)	2023		2022
United States	$	148,136	$	130,933
International	3,433		3,339
Total segment revenue	151,569		134,272
Corporate (1)	(10)		(11)
Total revenue	$	151,559	$	134,261

(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 tables present segment profit by reportable segment and Corporate:

	Three Months Ended March 31,
(in millions)	2023		2022
Pharmaceutical (1)	$	600	$	487
Medical	20		59
Total segment profit	620		546
Corporate	(48)		(643)
Total operating earnings/(loss)	$	572	$	(97)

	Nine Months Ended March 31,
(in millions)	2023		2022
Pharmaceutical (1)	$	1,495	$	1,319
Medical	29		232
Total segment profit	1,524		1,551
Corporate	(934)		(2,183)
Total operating earnings/(loss)	$	590	$	(632)

(1)Pharmaceutical segment profit includes opioid-related litigation defense and compliance costs, but does not include a one-time contingent attorney fee of $18 million incurred during the three and nine months ended March 31, 2022 related to the finalization of the Settlement Agreement. Due to the unique nature and significance of the Settlement Agreement, and the one-time, contingent nature of the fee, this related fee was included in litigation (recoveries)/charges, net in the condensed consolidated statements of earnings/(loss). Additionally, pharmaceutical segment profit during the nine months ended March 31, 2022 was positively impacted by a $16 million judgment for lost profits related to an ordinary course intellectual property rights claim.

Assets by Reportable Segment

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

(in millions)	March 31, 2023		June 30, 2022
Pharmaceutical	$	27,954	$	26,409
Medical (1)	10,544		11,632
Corporate	4,879		5,837
Total assets	$	43,377	$	43,878

(1)Medical reflects cumulative $863 million goodwill impairment charges recorded in connection with the interim goodwill impairment testing for the Medical Unit during the nine months ended March 31, 2023.

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Share-Based Compensation (Tables)

9 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [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)	2023		2022
Restricted share unit expense	$	17	$	18
Performance share unit expense	4		5
Total share-based compensation	$	21	$	23

	Nine Months Ended March 31,
(in millions)	2023		2022
Restricted share unit expense	$	49	$	53
Performance share unit expense	20		12
Total share-based compensation	$	69	$	65

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, 2022	2.7	$	46.03
Granted	1.3	70.26
Vested	(1.3)	50.03
Canceled and forfeited	(0.5)	58.30
Nonvested at March 31, 2023	2.2	$	57.14

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, 2022	1.2	$	54.32
Granted	0.6	70.52
Vested	(0.4)	59.04
Canceled and forfeited	(0.3)	65.59
Nonvested at March 31, 2023	1.1	$	76.24

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Discontinued Operations and Disposal Groups (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2021	Mar. 31, 2023	Mar. 31, 2022
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from divestitures, net of cash sold		$ 0	$ 923
Cordis Divestiture
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from divestitures, net of cash sold	$ 923

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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, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
Restructuring Charges [Abstract]
Employee-related costs	$ 3	$ 12	$ 32	$ 22
Facility Exit and Other Costs	13	19	30	34
Total restructuring and employee severance	$ 16	$ 31	$ 62	$ 56

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Restructuring and Employee Severance (Liabilities Associated with Restructuring and Employee Severance Activities) (Details) $ in Millions	9 Months Ended
	Mar. 31, 2023 USD ($)
Restructuring Reserve [Roll Forward]
Beginning Balance	$ 66
Additions	37
Payments and other adjustments	(51)
Ending Balance	52
Employee- Related Costs
Restructuring Reserve [Roll Forward]
Beginning Balance	56
Additions	29
Payments and other adjustments	(36)
Ending Balance	49
Facility Exit and Other Costs
Restructuring Reserve [Roll Forward]
Beginning Balance	10
Additions	8
Payments and other adjustments	(15)
Ending Balance	$ 3

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Restructuring and Employee Severance Narative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
Restructuring Cost and Reserve [Line Items]
Employee-related costs	$ 3	$ 12	$ 32	$ 22
Facility Exit and Other Costs	$ 13	$ 19	$ 30	$ 34

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Goodwill and Other Intangible Assets (Schedule of Goodwill by Reportable Segment) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Dec. 31, 2022	Sep. 30, 2022	Mar. 31, 2023	Jun. 30, 2022
Goodwill [Roll Forward]
Beginning balance		$ 5,855	$ 5,855
Goodwill acquired, net of purchase price adjustments			13
Foreign currency translation adjustments and other			5
Goodwill impairment			863
Ending balance			5,000
Pharmaceutical
Goodwill [Roll Forward]
Beginning balance		2,673	2,673
Goodwill acquired, net of purchase price adjustments			0
Foreign currency translation adjustments and other			0
Goodwill impairment			0
Ending balance			2,673
Medical
Goodwill [Roll Forward]
Beginning balance		3,182	3,182
Goodwill acquired, net of purchase price adjustments			13
Foreign currency translation adjustments and other			5
Goodwill impairment	$ 709	$ 154	863
Ending balance			2,327
Goodwill, Impaired, Accumulated Impairment Loss			$ 4,400	$ 3,500

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Goodwill and Other Intangible Assets (Schedule of Intangible Assets) (Details) - USD ($) $ in Millions	Mar. 31, 2023	Jun. 30, 2022
Indefinite-lived Intangible Assets [Line Items]
Net Intangible	$ 11	$ 11
Finite-Lived Intangible Assets [Line Items]
Gross Intangible	4,822	4,862
Accumulated Amortization	3,266	3,099
Net Intangible	$ 1,556	1,763
Weighted- Average Remaining Amortization Period (Years)	10 years
Gross Intangible, Total other intangible assets	$ 4,833	4,873
Net Intangible, Total other intangible assets	1,567	1,774
Trademarks and patents
Indefinite-lived Intangible Assets [Line Items]
Net Intangible	11	11
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Intangible	3,235	3,272
Accumulated Amortization	2,267	2,165
Net Intangible	$ 968	1,107
Weighted- Average Remaining Amortization Period (Years)	10 years
Trademarks, trade names and patents
Finite-Lived Intangible Assets [Line Items]
Gross Intangible	$ 550	552
Accumulated Amortization	376	360
Net Intangible	$ 174	192
Weighted- Average Remaining Amortization Period (Years)	9 years
Developed technology and other
Finite-Lived Intangible Assets [Line Items]
Gross Intangible	$ 1,037	1,038
Accumulated Amortization	623	574
Net Intangible	$ 414	$ 464
Weighted- Average Remaining Amortization Period (Years)	9 years

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Goodwill and Other Intangible Assets (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended					9 Months Ended
	Mar. 31, 2023	Dec. 31, 2022	Sep. 30, 2022	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2023	Mar. 31, 2022	Jun. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization of intangible assets	$ 69			$ 78		$ 211	$ 235
Estimated annual amortization of intangible assets - Remainder of Fiscal Year	71					71
Estimated annual amortization of intangible assets - Year One	261					261
Estimated annual amortization of intangible assets - Year Two	236					236
Estimated annual amortization of intangible assets - Year Three	209					209
Estimated annual amortization of intangible assets - Year Four	177					177
Goodwill [Line Items]
Goodwill	5,000					5,000		$ 5,855
Goodwill impairment						863
Medical
Goodwill [Line Items]
Goodwill	$ 2,327					2,327		$ 3,182
Goodwill impairment		$ 709	$ 154			863
Medical Unit
Goodwill [Line Items]
Goodwill impairment				$ 474	$ 1,300
Medical Unit
Goodwill [Line Items]
Goodwill impairment						$ 863
Discount Rate, Fair Value Input	10.00%	10.50%	10.50%			10.00%
Terminal Growth Rate, Fair Value Input	2.00%	2.00%	2.00%			2.00%
Reporting Unit, Percentage of Fair Value in Excess of Carrying Amount	4.00%					4.00%

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Long-Term Obligations and Other Short-Term Borrowings (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022	Jun. 30, 2022
Debt Instrument [Line Items]
Total Long-Term and Short-Term Obligations	$ 4,700		$ 4,700		$ 5,300
Accounts Payable	29,600		29,600		$ 27,100
Gain (Loss) on Extinguishment of Debt	0	$ 0	0	$ 10
Commercial Paper [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	2,000		2,000
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	2,000		2,000
Short Term Credit Facilities Member
Debt Instrument [Line Items]
Other Short-term Borrowings	0		0
2.616% Notes due 2022 [Member]
Debt Instrument [Line Items]
Notes Payable Repurchased				572
Gain (Loss) on Extinguishment of Debt				$ 10
3.2% Notes due 2023
Debt Instrument [Line Items]
Repayments of Notes Payable	550
Committed Receivables Sales Facility Program [Member] | Short Term Credit Facilities Member
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 1,000		$ 1,000

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Long-Term Obligations and Other Short-Term Borrowings Summary of Debt (Details) - USD ($) $ in Millions	9 Months Ended
	Mar. 31, 2023	Jun. 30, 2022
Debt Instrument [Line Items]
Total Long-Term and Short-Term Obligations	$ 4,700	$ 5,300
Long-term Debt and Lease Obligation, Current	26	580
Long-term Debt and Lease Obligation	4,708	$ 4,735
Line of Credit Facility, Average Outstanding Amount	4
Committed Receivables Sales Facility Program [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Amount Outstanding During Period	$ 445

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Commitments, Contingent Liabilities and Litigation (Details) $ in Thousands					3 Months Ended			5 Months Ended	9 Months Ended		22 Months Ended
	Jul. 01, 2023 plaintiff	Apr. 30, 2023 lawsuit	Apr. 28, 2023 lawsuit plaintiff	Jul. 31, 2014	Mar. 31, 2023 USD ($) plaintiff	Mar. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Sep. 30, 2023 USD ($)	Mar. 31, 2023 USD ($)	Mar. 31, 2022 USD ($)	Apr. 28, 2023 lawsuit	Jan. 31, 2023 numberOfUSTerritories states	Oct. 31, 2022 USD ($)	Jul. 31, 2022 USD ($)	Jun. 30, 2022 USD ($)	Apr. 30, 2018 USD ($)
Loss Contingencies [Line Items]
Gain (Loss) Related to Litigation Settlement					$ 76,000	$ (61,000)			$ 256,000	$ (113,000)
Income from Settlements of Class Action Lawsuits									66,000
Pharmaceutical
Loss Contingencies [Line Items]
Judgment for lost profits							$ 16,000
Product Liability Lawsuits | Subsequent Event
Loss Contingencies [Line Items]
Loss Contingency, Pending Claims, Number | lawsuit			453								453
Product Liability Lawsuits | Subsequent Event | IVC April 2023 Agreement
Loss Contingencies [Line Items]
Loss Contingency, Claims Settled, Number | lawsuit		4,376
Product Liability Lawsuits | Subsequent Event | Other Agreements [Member]
Loss Contingencies [Line Items]
Loss Contingency, Claims Settled, Number | lawsuit											2,881
Product Liability Lawsuits | Minimum
Loss Contingencies [Line Items]
Loss Contingency Accrual					385,000				385,000
Total Opioid Litigation [Member]
Loss Contingencies [Line Items]
Loss Contingency, Estimate of Possible Loss					6,300,000				6,300,000
Settling States | states												48
Settling U.S Territories | numberOfUSTerritories												5
Estimated Litigation Liability					5,850,000				5,850,000
Estimated Litigation Liability, Current					437,000				437,000
New York Opioid Stewardship Act [Member]
Loss Contingencies [Line Items]
Aggregate Annual Assessment																$ 100,000
Loss Contingency Accrual, Payments							$ 20,000		7,000
Loss Contingency Accrual					$ 7,000				7,000						$ 20,000
Loss Contingency Accrual, Period Increase (Decrease)									6,000
Opioid Lawsuits [Member]
Loss Contingencies [Line Items]
Payments for Legal Settlements									372,000
Insurance Recoveries									10,000
Opioid Lawsuits [Member] | WEST VIRGINIA
Loss Contingencies [Line Items]
Loss Contingency, Estimate of Possible Loss														$ 124,000
Opioid Lawsuits [Member] | WASHINGTON
Loss Contingencies [Line Items]
Loss Contingency, Estimate of Possible Loss															160,000
Opioid Lawsuits [Member] | OKLAHOMA
Loss Contingencies [Line Items]
Loss Contingency, Estimate of Possible Loss															$ 95,000
Opioid Lawsuits [Member] | Native American tribes
Loss Contingencies [Line Items]
Loss Contingency, Estimate of Possible Loss													$ 136,000
Opioid Lawsuits [Member] | Private Parties [Member] | Subsequent Event
Loss Contingencies [Line Items]
Loss Contingency, Lawsuits, Number | lawsuit			457								457
Opioid Lawsuits [Member] | Private Parties [Member] | GEORGIA
Loss Contingencies [Line Items]
Loss Contingency, Number of Plaintiffs | plaintiff					21
Opioid Lawsuits [Member] | Private Parties [Member] | ALABAMA | Subsequent Event
Loss Contingencies [Line Items]
Loss Contingency, Number of Plaintiffs | plaintiff	8
Opioid Lawsuits [Member] | Class Action Lawsuits [Member] | Private Parties [Member] | Subsequent Event
Loss Contingencies [Line Items]
Loss Contingency, Lawsuits, Number | lawsuit			107								107
Product Liability Lawsuits
Loss Contingencies [Line Items]
Product Liability Accrual, Period Expense					$ (71,000)				(95,000)
Product Liability Lawsuits | IVC April 2023 Agreement
Loss Contingencies [Line Items]
Loss Contingency, Estimate of Possible Loss					275,000				275,000
Product Liability Lawsuits | Subsequent Event | IVC April 2023 Agreement
Loss Contingencies [Line Items]
Payments for Legal Settlements								$ 275,000
Product Liability Lawsuits | Alameda County [Member] | Subsequent Event
Loss Contingencies [Line Items]
Loss Contingency, Number of Plaintiffs | plaintiff			5,171
Shareholder Derivative Litigation [Member]
Loss Contingencies [Line Items]
Gross Insurance Settlement Before Attorney Fees									124,000
Legal Fees									31,000
Proceeds from Insurance Settlement, Operating Activities									$ 93,000
Shareholder Securities Litigation [Member]
Loss Contingencies [Line Items]
Insurance Recoveries					109,000
Gain (Loss) Related to Litigation Settlement					$ 109,000
CVS Health
Loss Contingencies [Line Items]
Long-term Purchase Commitment, Period				10 years

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Income Taxes (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended			9 Months Ended		12 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Taxes
Effective Income Tax Rate Reconciliation, Percent		36.30%	(916.50%)	36.70%	(44.40%)
Goodwill impairment				$ 863
Income Tax Expense (Benefit)		$ 197	$ 1,253	189	$ 328
Unrecognized tax benefits		1,100		1,100			$ 943
Unrecognized tax benefits that would impact effective tax rate		897		897			858
Unrecognized tax benefits, interest and penalties accrued		61		61			48
Medical Unit
Income Taxes
Goodwill impairment				863
Medical Unit Goodwill Impairment [Member]
Income Taxes
Income Tax Expense (Benefit)		74
Forecast [Member] | Medical Unit Goodwill Impairment [Member]
Income Taxes
Income Tax Expense (Benefit)						$ (68)
Forecast [Member] | Medical Unit Goodwill Impairment [Member] | Subsequent Event
Income Taxes
Income Tax Expense (Benefit)	$ 66
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		125		125
CareFusion [Member]
Income Taxes
Indemnification Receivable		$ 80		$ 80			$ 75

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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, 2023	Jun. 30, 2022
Assets:
Cash equivalents	$ 1,302	$ 2,425
Other investments	95	97
Forward Contract	(52)	15
Liabilities:
Forward Contract	(52)	15
Level 1
Assets:
Cash equivalents	1,302	2,425
Other investments	95	97
Forward Contract	0	0
Liabilities:
Forward Contract	0	0
Level 2
Assets:
Cash equivalents	0	0
Other investments	0	0
Forward Contract	(52)	15
Liabilities:
Forward Contract	(52)	15
Level 3
Assets:
Cash equivalents	0	0
Other investments	0	0
Forward Contract	0	0
Liabilities:
Forward Contract	$ 0	$ 0

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Financial Instruments (Narrative) (Details) € in Millions, ¥ in Millions, $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Mar. 31, 2023 USD ($)	Mar. 31, 2022 USD ($)	Mar. 31, 2023 USD ($)	Mar. 31, 2022 USD ($)	Mar. 31, 2024 USD ($)	Mar. 31, 2023 JPY (¥)	Mar. 31, 2023 EUR (€)
Derivative [Line Items]
Change in Unrealized Gain (Loss) on Fair Value Hedging Instruments	$ 0	$ 0	$ 0	$ 0
Proceeds from net investment hedge terminations			29	71
Effective March 2022
Derivative [Line Items]
Proceeds from net investment hedge terminations	10
Effective September 2018
Derivative [Line Items]
Proceeds from net investment hedge terminations	19
Cash Flow Hedging [Member]
Derivative [Line Items]
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification and Tax	2	1	4	4
Foreign Exchange Contract [Member]
Derivative [Line Items]
Other Comprehensive Income (Loss), Net Investment Hedge, Gain (Loss), before Reclassification and Tax		22	21	44
Interest Income (Expense), Nonoperating, Net	4	5	12	16
Cash Flow Hedging [Member] | Foreign Exchange Contract [Member]
Derivative [Line Items]
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net	4		8
Cash Flow Hedging [Member] | Foreign Exchange Contract [Member] | Forecast [Member] | Subsequent Event
Derivative [Line Items]
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net					$ 7
Designated as Hedging Instrument | Fair Value Hedging | Interest Rate Swap
Derivative [Line Items]
Derivative Liability, Notional Amount	200	300	200	$ 300
Designated as Hedging Instrument | Net Investment Hedging [Member] | Currency Swap [Member] | Effective March 2022
Derivative [Line Items]
Derivatives, Hedge Discontinuances, Termination of Hedging Instrument, Notional Amount	400		400			¥ 48,000
Designated as Hedging Instrument | Net Investment Hedging [Member] | Currency Swap [Member] | Effective September 2018
Derivative [Line Items]
Derivatives, Hedge Discontinuances, Termination of Hedging Instrument, Notional Amount	233		233				€ 200
Designated as Hedging Instrument | Net Investment Hedging [Member] | Currency Swap [Member] | September 2025
Derivative [Line Items]
Derivative Asset, Notional Amount	150		150			19,000
Designated as Hedging Instrument | Net Investment Hedging [Member] | Currency Swap [Member] | June 2027
Derivative [Line Items]
Derivative Asset, Notional Amount	150		150			¥ 19,000
Designated as Hedging Instrument | Net Investment Hedging [Member] | Currency Swap [Member] | March 2025
Derivative [Line Items]
Derivative Liability, Notional Amount	107		107				100
Designated as Hedging Instrument | Net Investment Hedging [Member] | Currency Swap [Member] | March 2026
Derivative [Line Items]
Derivative Liability, Notional Amount	$ 107		107				€ 100
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		$ (4)	$ (3)

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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, 2023	Jun. 30, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount of Long-Term and other Short-Term Borrowings	$ 4,734	$ 5,315
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Estimated fair value	$ 4,466	$ 5,049

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Shareholders' Equity (Narrative) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions							2 Months Ended	3 Months Ended								4 Months Ended		6 Months Ended	9 Months Ended
	Feb. 28, 2023	Jan. 13, 2023	Dec. 23, 2022	Apr. 18, 2022	Jan. 31, 2022	Oct. 04, 2021	Feb. 28, 2023	Mar. 31, 2023	Jan. 13, 2023	Dec. 31, 2022	Sep. 30, 2022	Mar. 31, 2022	Dec. 31, 2021	Oct. 14, 2021	Sep. 30, 2021	Apr. 18, 2022	Jan. 31, 2022	Dec. 23, 2022	Mar. 31, 2023	Mar. 31, 2022
Class of Stock [Line Items]
Purchase of treasury shares																			$ 1,500	$ 1,000
$250 million share repurchase program [Member]
Class of Stock [Line Items]
Purchase of treasury shares										$ 250
$1 billion share repurchase program
Class of Stock [Line Items]
Purchase of treasury shares											$ 1,000
$300 million share repurchase program
Class of Stock [Line Items]
Purchase of treasury shares													$ 300
$500 million share repurchase program [Domain]
Class of Stock [Line Items]
Purchase of treasury shares															$ 500
$200 million
Class of Stock [Line Items]
Purchase of treasury shares												$ 200
Treasury Stock, Common
Class of Stock [Line Items]
Purchase of treasury shares																			$ 1,500	$ 1,000
Treasury Stock, Shares, Acquired								(4.0)				(4.0)							(20.0)	(19.0)
Treasury Stock, Common | $250 million share repurchase program [Member]
Class of Stock [Line Items]
Treasury Stock, Shares, Acquired	(0.6)	(0.6)								(2.6)									(2.6)
Treasury shares acquired, average price per share (in usd per share)							$ 77.27		$ 77.50	$ 76.58									$ 77.03
Treasury Stock, Common | $1 billion share repurchase program
Class of Stock [Line Items]
Treasury Stock, Shares, Acquired			(1.6)								(12.0)
Treasury shares acquired, average price per share (in usd per share)											$ 66.74							$ 73.36
Treasury Stock, Common | $300 million share repurchase program
Class of Stock [Line Items]
Treasury Stock, Shares, Acquired					(1.3)								(4.8)
Treasury shares acquired, average price per share (in usd per share)													$ 50.30				$ 49.39
Treasury Stock, Common | $500 million share repurchase program [Domain]
Class of Stock [Line Items]
Treasury Stock, Shares, Acquired						(2.0)									(7.8)
Treasury shares acquired, average price per share (in usd per share)														$ 51.10	$ 51.53
Treasury Stock, Common | $200 million
Class of Stock [Line Items]
Treasury Stock, Shares, Acquired				(0.6)								(3.0)
Treasury shares acquired, average price per share (in usd per share)												$ 54.01				$ 56.02

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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, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
AOCI, Net of Tax [Roll Forward]
Balance at beginning of period	$ (2,212)	$ 1,002	$ (706)	$ 1,794
Other Comprehensive Income (Loss), Tax			5	6
Total other comprehensive income/(loss), net of tax	4	8	(28)	(43)
Balance at end of period	(2,218)	(693)	(2,218)	(693)
Foreign Currency Translation Adjustments
AOCI, Net of Tax [Roll Forward]
Balance at beginning of period			(102)	(46)
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax			(34)	(47)
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax			0	0
Total other comprehensive income/(loss), net of tax			(34)	(47)
Balance at end of period	(136)	(93)	(136)	(93)
Unrealized Gain/(Loss) on Derivatives, net of tax
AOCI, Net of Tax [Roll Forward]
Balance at beginning of period			(12)	12
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax			15	9
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax			(9)	(5)
Total other comprehensive income/(loss), net of tax			6	4
Balance at end of period	(6)	16	(6)	16
Accumulated Other Comprehensive Loss
AOCI, Net of Tax [Roll Forward]
Balance at beginning of period			(114)	(34)
Total other comprehensive income/(loss), net of tax			(28)	(43)
Balance at end of period	(142)	(77)	(142)	(77)
AOCI Attributable to Parent
AOCI, Net of Tax [Roll Forward]
Balance at beginning of period	(146)	(85)	(114)	(34)
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax			(19)	(38)
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax			(9)	(5)
Balance at end of period	$ (142)	$ (77)	$ (142)	$ (77)

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Earnings Per Share Attributable to Cardinal Health, Inc. (Narrative) (Details) shares in Millions, Reportable_Segments in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2023 shares	Mar. 31, 2022 Reportable_Segments shares	Mar. 31, 2023 shares	Mar. 31, 2022 Reportable_Segments shares
Earnings Per Share [Abstract]
Potentially dilutive employee stock options, restricted share units and performance share units that were antidilutive (in shares) | shares	2	5	2	5
Shares that would be antidilutive as a result of net loss | Reportable_Segments		2		1

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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, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
Earnings Per Share [Abstract]
Weighted-average common shares–basic (in shares)	256	275	263	281
Effect of dilutive securities:
Employee stock options, restricted share units, and performance share units (in shares)	2	0	1	0
Weighted-average common shares–diluted (in shares)	258	275	264	281

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Segment Information (Narrative) (Details) $ in Millions	3 Months Ended				9 Months Ended
	Mar. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)	Sep. 30, 2022 USD ($)	Mar. 31, 2022 USD ($)	Mar. 31, 2023 USD ($) segment	Mar. 31, 2022 USD ($)
Segment Reporting Information [Line Items]
Loss Related to Litigation Settlement	$ (76)			$ 61	$ (256)	$ 113
Project costs on investment and other spending	9			20	$ 20	38
Number of reportable segments | segment					2
Number of operating segments | segment					2
Goodwill impairment					$ 863
Number of operating segments | segment					2
Number of reportable segments | segment					2
Project costs on investment and other spending	$ 9			$ 20	$ 20	$ 38
Medical Unit
Segment Reporting Information [Line Items]
Goodwill impairment					863
Medical
Segment Reporting Information [Line Items]
Goodwill impairment		$ 709	$ 154		$ 863

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Segment Information (Revenue by Reportable Segment) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
Segment Reporting Information [Line Items]
Total revenue	$ 50,487	$ 44,836	$ 151,559	$ 134,261
Operating Segments
Segment Reporting Information [Line Items]
Total revenue	50,493	44,841	151,569	134,272
Operating Segments | Pharmaceutical
Segment Reporting Information [Line Items]
Total revenue	46,809	40,957	140,310	122,154
Operating Segments | Medical
Segment Reporting Information [Line Items]
Total revenue	3,684	3,884	11,259	12,118
Corporate
Segment Reporting Information [Line Items]
Total revenue	(6)	(5)	(10)	(11)
Pharmaceutical Distribution and Specialty [Member] | Operating Segments | Pharmaceutical
Segment Reporting Information [Line Items]
Total revenue	46,497	40,723	139,435	121,501
Nuclear Precision Health Services [Member] | Operating Segments | Pharmaceutical
Segment Reporting Information [Line Items]
Total revenue	312	234	875	653
Medical distribution and products [Member] | Operating Segments | Medical
Segment Reporting Information [Line Items]
Total revenue	3,034	3,283	9,273	10,296
Cardinal Health At Home [Member] | Operating Segments | Medical
Segment Reporting Information [Line Items]
Total revenue	$ 650	$ 601	$ 1,986	$ 1,822

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Segment Information (Segment Profit by Reportable Segment) (Details) - USD ($) $ in Millions	3 Months Ended			9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2023	Mar. 31, 2022
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total operating earnings	$ 572	$ (97)		$ 590	$ (632)
Contingent Attorney Fee		18			18
Pharmaceutical
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Judgment for lost profits			$ 16
Operating Segments
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total operating earnings	620	546		1,524	1,551
Operating Segments | Pharmaceutical
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total operating earnings	600	487		1,495	1,319
Operating Segments | Medical
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total operating earnings	20	59		29	232
Corporate
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total operating earnings	$ (48)	$ (643)		$ (934)	$ (2,183)

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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, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
Segment Revenue from External Customers by Geographic Area [Line Items]
Revenue	$ 50,487	$ 44,836	$ 151,559	$ 134,261
UNITED STATES
Segment Revenue from External Customers by Geographic Area [Line Items]
Revenue	49,326	43,710	148,136	130,933
Non-US [Member]
Segment Revenue from External Customers by Geographic Area [Line Items]
Revenue	1,167	1,131	3,433	3,339
Operating Segments
Segment Revenue from External Customers by Geographic Area [Line Items]
Revenue	50,493	44,841	151,569	134,272
Corporate
Segment Revenue from External Customers by Geographic Area [Line Items]
Revenue	$ (6)	$ (5)	$ (10)	$ (11)

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Segment Information (Assets by Reportable Segment) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Dec. 31, 2022	Sep. 30, 2022	Mar. 31, 2023	Jun. 30, 2022
Segment Reporting Information [Line Items]
Total assets			$ 43,377	$ 43,878
Goodwill impairment			863
Medical Unit
Segment Reporting Information [Line Items]
Goodwill impairment			863
Pharmaceutical
Segment Reporting Information [Line Items]
Goodwill impairment			0
Medical
Segment Reporting Information [Line Items]
Goodwill impairment	$ 709	$ 154	863
Operating Segments | Pharmaceutical
Segment Reporting Information [Line Items]
Total assets			27,954	26,409
Operating Segments | Medical
Segment Reporting Information [Line Items]
Total assets			10,544	11,632
Corporate
Segment Reporting Information [Line Items]
Total assets			$ 4,879	$ 5,837

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Share-Based Compensation (Narrative) (Details) $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2023 USD ($)	Mar. 31, 2022 USD ($)	Mar. 31, 2023 USD ($)	Mar. 31, 2022 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Tax benefit related to share-based compensation	$ 3	$ 3	$ 9	$ 9
Restricted Share Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period (in years)			3 years
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount	87		$ 87
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition			2 years
Performance Share Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting Period in years for Shares			3
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount	$ 39		$ 39
Share-based Payment Arrangement, Nonvested Award, 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)			234.00%

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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, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation	$ 21	$ 23	$ 69	$ 65
Restricted Share Unit
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation	17	18	49	53
Performance Share Unit
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation	$ 4	$ 5	$ 20	$ 12

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Share-Based Compensation (Schedule of All Transactions Related to Restricted Share Units Under the Plans) (Details) - Restricted Share Units $ / shares in Units, shares in Millions, $ in Millions	9 Months Ended
	Mar. 31, 2023 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition	2 years
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $	$ 87
Restricted Share Units
Nonvested at beginning of period (in shares) | shares	2.7
Granted (in shares) | shares	1.3
Vested (in shares) | shares	(1.3)
Canceled and forfeited (in shares) | shares	(0.5)
Nonvested at end of period (in shares) | shares	2.2
Weighted-Average Grant Date Fair Value per Share
Nonvested at beginning of period (in usd per share) | $ / shares	$ 46.03
Granted (in usd per share) | $ / shares	70.26
Vested (in usd per share) | $ / shares	50.03
Canceled and forfeited (in usd per share) | $ / shares	58.30
Nonvested at end of period (in usd per share) | $ / shares	$ 57.14

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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, 2023 USD ($) $ / shares shares
Performance Share Units
Nonvested at beginning of period (in shares) | shares	1.2
Granted (in shares) | shares	0.6
Vested (in shares) | shares	(0.4)
Canceled and forfeited (in shares) | shares	(0.3)
Nonvested at end of period (in shares) | shares	1.1
Weighted-Average Grant Date Fair Value per Share
Nonvested at beginning of period (in usd per share) | $ / shares	$ 54.32
Granted (in usd per share) | $ / shares	70.52
Vested (in usd per share) | $ / shares	59.04
Canceled and forfeited (in usd per share) | $ / shares	65.59
Nonvested at end of period (in usd per share) | $ / shares	$ 76.24
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $	$ 39
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition	2 years