Segment Information

6 Months Ended

Dec. 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 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.

In January 2024, we announced a change in our organizational structure and have re-aligned our reporting structure under two reportable segments: Pharmaceutical and Specialty Solutions segment and Global Medical Products and Distribution segment. All remaining operating segments that are not significant enough to require separate reportable segment disclosures are included in Other. The following indicates the changes in our reporting structure effective January 1, 2024:

•Pharmaceutical and Specialty Solutions segment: This reportable segment will comprise all businesses formerly within our Pharmaceutical segment except Nuclear and Precision Health Solutions.

•Global Medical Products and Distribution segment: This reportable segment will comprise all businesses formerly within our Medical segment except at-Home Solutions and OptiFreight Logistics.

•Other: This will consist of the remaining operating segments, Nuclear and Precision Health Solutions, at-Home Solutions and OptiFreight Logistics.

Revenue

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

	Three Months Ended December 31,
(in millions)	2023		2022
Pharmaceutical and Specialty Pharmaceutical Distribution and Services (1)	$	53,190	$	47,391
Nuclear and Precision Health Solutions	330		282
Pharmaceutical segment revenue	53,520		47,673
Medical Products and Distribution (2)	3,167		3,099
Cardinal Health at-Home Solutions	761		698
Medical segment revenue	3,928		3,797
Total segment revenue	57,448		51,470
Corporate (3)	(3)		(1)
Total revenue	$	57,445	$	51,469

	Six Months Ended December 31,
(in millions)	2023		2022
Pharmaceutical and Specialty Pharmaceutical Distribution and Services (1)	$	103,872	$	92,938
Nuclear and Precision Health Solutions	654		563
Pharmaceutical segment revenue	104,526		93,501
Medical Products and Distribution (2)	6,243		6,239
Cardinal Health at-Home Solutions	1,445		1,336
Medical segment revenue	7,688		7,575
Total segment revenue	112,214		101,076
Corporate (3)	(6)		(4)
Total revenue	$	112,208	$	101,072

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

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

(3)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 December 31,
(in millions)	2023		2022
United States	$	56,241	$	50,333
International	1,207		1,137
Total segment revenue	57,448		51,470
Corporate (1)	(3)		(1)
Total revenue	$	57,445	$	51,469

	Six Months Ended December 31,
(in millions)	2023		2022
United States	$	109,798	$	98,810
International	2,416		2,266
Total segment revenue	112,214		101,076
Corporate (1)	(6)		(4)
Total revenue	$	112,208	$	101,072

(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);

•state opioid assessment related to prior fiscal years;

•shareholder cooperation agreement costs;

•restructuring and employee severance;

•amortization and other acquisition-related costs;

•impairments and (gain)/loss on disposal of assets, net; in connection with goodwill impairment testing for the Medical Unit as discussed further in Note 4, we recognized cumulative pre-tax goodwill impairment charges of $581 million and $863 million during the six months ended December 31, 2023 and $709 million during the three months ended December 31, 2022;

•litigation (recoveries)/charges, net;

•other (income)/expense, net;

•interest expense, net;

•loss on early extinguishment of debt;

•provision for/(benefit from) income taxes

In addition, certain investment spending, certain portions of enterprise-wide incentive compensation and other spending are not allocated to the segments. Investment spending generally includes the first-year spend for certain projects that require incremental investments in the form of additional operating expenses. Because approval for these projects is dependent on executive management, we retain these expenses at Corporate. Investment spending within Corporate was $14 million and $5 million for the three months ended December 31, 2023 and 2022, respectively, and $20 million and $11 million for the six months ended December 31, 2023 and 2022, respectively.

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

	Three Months Ended December 31,
(in millions)	2023		2022
Pharmaceutical	$	518	$	464
Medical	71		17
Total segment profit	589		481
Corporate	(107)		(600)
Total operating earnings/(loss)	$	482	$	(119)

	Six Months Ended December 31,
(in millions)	2023		2022
Pharmaceutical	$	1,025	$	895
Medical	142		9
Total segment profit	1,167		904
Corporate	(699)		(886)
Total operating earnings/(loss)	$	468	$	18

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

(in millions)	December 31, 2023		June 30, 2023
Pharmaceutical	$	31,018	$	28,077
Medical	9,817		10,130
Corporate	5,738		5,210
Total assets	$	46,573	$	43,417