Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Dec. 31, 2014 | Jan. 27, 2015 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Dec-14 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | cah | |
Entity Registrant Name | CARDINAL HEALTH INC | |
Entity Central Index Key | 721371 | |
Current Fiscal Year End Date | -24 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 330,130,751 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Earnings (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Income Statement [Abstract] | ||||
Revenue | $25,537 | $22,240 | $49,607 | $46,763 |
Cost of products sold | 24,083 | 20,895 | 46,813 | 44,155 |
Gross margin | 1,454 | 1,345 | 2,794 | 2,608 |
Operating expenses: | ||||
Distribution, selling, general and administrative expenses | 815 | 766 | 1,590 | 1,497 |
Restructuring and employee severance | 7 | 10 | 26 | 20 |
Amortization and other acquisition-related costs | 60 | 56 | 112 | 105 |
Impairments and (gain)/loss on disposal of assets, net | -18 | 9 | -18 | 9 |
Litigation (recoveries)/charges, net | 44 | -15 | 72 | -13 |
Operating earnings | 546 | 519 | 1,012 | 990 |
Other income, net | -1 | -6 | -4 | -10 |
Interest expense, net | 36 | 33 | 70 | 66 |
Loss on extinguishment of debt | 60 | 0 | 60 | 0 |
Earnings before income taxes and discontinued operations | 451 | 492 | 886 | 934 |
Provision for income taxes | 162 | 217 | 331 | 320 |
Earnings from continuing operations | 289 | 275 | 555 | 614 |
Earnings from discontinued operations, net of tax | 0 | 3 | 0 | 3 |
Net earnings | $289 | $278 | $555 | $617 |
Basic earnings per common share: | ||||
Continuing operations | $0.87 | $0.80 | $1.66 | $1.80 |
Discontinued operations | $0 | $0.01 | $0 | $0.01 |
Net basic earnings per common share | $0.87 | $0.81 | $1.66 | $1.81 |
Diluted earnings per common share: | ||||
Continuing operations | $0.86 | $0.79 | $1.65 | $1.78 |
Discontinued operations | $0 | $0.01 | $0 | $0.01 |
Net diluted earnings per common share | $0.86 | $0.80 | $1.65 | $1.79 |
Weighted-average number of common shares outstanding: | ||||
Basic | 331 | 342 | 333 | 341 |
Diluted | 334 | 346 | 337 | 345 |
Cash dividends declared per common share | $0.34 | $0.30 | $0.69 | $0.61 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Net earnings | $289 | $278 | $555 | $617 |
Other comprehensive income/(loss): | ||||
Net change in foreign currency translation adjustments | -40 | 4 | -64 | 28 |
Net unrealized gain/(loss) on derivative instruments, net of tax | -9 | 3 | -9 | 3 |
Total other comprehensive income/(loss), net of tax | -49 | 7 | -73 | 31 |
Total comprehensive income | $240 | $285 | $482 | $648 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Jun. 30, 2014 |
In Millions, unless otherwise specified | ||
Current assets: | ||
Cash and equivalents | $2,881 | $2,865 |
Trade receivables, net | 5,653 | 5,380 |
Inventories, net | 9,408 | 8,266 |
Prepaid expenses and other | 1,213 | 1,428 |
Total current assets | 19,155 | 17,939 |
Property and equipment, net | 1,415 | 1,459 |
Goodwill and other intangibles, net | 5,876 | 5,870 |
Other assets | 802 | 765 |
Total assets | 27,248 | 26,033 |
Current liabilities: | ||
Accounts payable | 13,602 | 12,149 |
Current portion of long-term obligations and other short-term borrowings | 270 | 801 |
Other accrued liabilities | 2,158 | 2,165 |
Total current liabilities | 16,030 | 15,115 |
Long-term obligations, less current portion | 3,706 | 3,171 |
Deferred income taxes and other liabilities | 1,412 | 1,346 |
Preferred shares, without par value: | ||
Authorized-500 thousand shares, Issued-none | 0 | 0 |
Common shares, without par value: | ||
Authorized-755 million shares, Issued-364 million shares at December 31, 2014 and June 30, 2014 | 2,973 | 2,980 |
Retained earnings | 5,100 | 4,774 |
Common shares in treasury, at cost: 34 million shares and 27 million shares at December 31, 2014 and June 30, 2014, respectively | -1,970 | -1,423 |
Accumulated other comprehensive income/(loss) | -3 | 70 |
Total shareholders' equity | 6,100 | 6,401 |
Total liabilities and shareholders' equity | $27,248 | $26,033 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Jun. 30, 2014 |
In Millions, unless otherwise specified | ||
Preferred shares, No Par Value | ||
Preferred shares, Authorized | 0.5 | 0.5 |
Preferred shares, Issued | 0 | 0 |
Common shares, No Par Value | ||
Common shares, Authorized | 755 | 755 |
Common shares, Issued | 364 | 364 |
Common shares in treasury | 0 | 27 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (USD $) | 6 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Cash flows from operating activities: | ||
Net earnings | $555 | $617 |
Earnings from discontinued operations, net of tax | 0 | 3 |
Earnings from continuing operations | 555 | 614 |
Adjustments to reconcile earnings from continuing operations to net cash provided by operating activities: | ||
Depreciation and amortization | 220 | 234 |
Loss on extinguishment of debt | 60 | 0 |
Gain on sale of other investments | -5 | 0 |
Impairments and (gain)/loss on disposal of assets, net | -18 | 9 |
Share-based compensation | 53 | 48 |
Provision for bad debts | 26 | 29 |
Change in operating assets and liabilities, net of effects from acquisitions: | ||
Decrease/(increase) in trade receivables | -291 | 1,420 |
Increase in inventories | -1,137 | -100 |
Increase/(decrease) in accounts payable | 1,438 | -1,088 |
Other accrued liabilities and operating items, net | 113 | -178 |
Net cash provided by operating activities | 1,014 | 988 |
Cash flows from investing activities: | ||
Acquisition of subsidiaries, net of cash acquired | -86 | -50 |
Additions to property and equipment | -83 | -90 |
Purchase of available-for-sale securities and other investments | -107 | 0 |
Proceeds from sale of available-for-sale securities and other investments | 107 | 0 |
Proceeds from maturities of available-for-sale securities | 16 | 0 |
Proceeds from divestitures and disposal of held for sale assets | 53 | 0 |
Net cash used in investing activities | -100 | -140 |
Cash flows from financing activities: | ||
Net change in short-term borrowings | -18 | 73 |
Reduction of long-term obligations | -1,220 | -1 |
Proceeds from long-term obligations, net of issuance costs | 1,182 | 0 |
Net proceeds from issuance of common shares | 35 | 139 |
Tax proceeds from share-based compensation | 42 | 39 |
Dividends on common shares | -233 | -208 |
Purchase of treasury shares | -686 | -50 |
Net cash used in financing activities | -898 | -8 |
Net increase in cash and equivalents | 16 | 840 |
Cash and equivalents at beginning of period | 2,865 | 1,901 |
Cash and equivalents at end of period | $2,881 | $2,741 |
Acquisitions
Acquisitions | 6 Months Ended |
Dec. 31, 2014 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions |
While we have completed acquisitions during the six months ended December 31, 2014, the pro forma results of operations and the results of operations for acquired businesses since the acquisition dates have not been separately disclosed because the effects were not significant compared to the consolidated financial statements, individually or in the aggregate. | |
AccessClosure | |
On May 9, 2014, we completed the acquisition of Access Closure, Inc. ("AccessClosure") for $320 million in an all-cash transaction. We funded the acquisition with cash on hand. The acquisition of AccessClosure, a manufacturer and distributor of extravascular closure devices, expands the Medical segment's portfolio of self-manufactured products. The assessment of fair value for AccessClosure is preliminary and is based on information that was available at the time the condensed consolidated financial statements were prepared. |
Basis_of_Presentation_and_Summ
Basis of Presentation and Summary of Significant Accounting Policies | 6 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies |
Basis of Presentation | |
Our condensed consolidated financial statements include the accounts of all majority-owned or controlled subsidiaries, and all significant intercompany transactions and amounts have been eliminated. To conform to the current year presentation, certain prior year amounts have been reclassified. References to "we," "our" and similar pronouns in this Quarterly Report on Form 10-Q for the quarter ended December 31, 2014 (this "Form 10-Q") refer to Cardinal Health, Inc. and its majority-owned or controlled subsidiaries unless the context requires otherwise. The results of businesses acquired or disposed of are included in the condensed consolidated financial statements from the effective date of the acquisition or up to the date of disposal, 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 all of the information and disclosures required by accounting principles generally accepted in the United States ("GAAP") for interim financial reporting. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect amounts reported in the condensed consolidated financial statements and accompanying notes. Actual amounts may differ from these estimated amounts. In addition, operating results presented for this fiscal 2015 interim period are not necessarily indicative of the results that may be expected for the full fiscal year ending June 30, 2015. | |
These condensed consolidated financial statements are unaudited and are presented pursuant to the rules and regulations of the SEC. Accordingly, the condensed consolidated financial statements included in this Form 10-Q 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, 2014 (the "2014 Form 10-K"). 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. | |
Recent Financial Accounting Standards | |
In August 2014, the Financial Accounting Standards Board ("FASB") issued amended accounting guidance related to uncertainties about an entity’s ability to continue as a going concern. This guidance requires management to evaluate whether there is substantial doubt about a company’s ability to continue as a going concern. This amendment will be effective for us in the fourth quarter of fiscal 2017, with early adoption permitted. We do not expect the adoption of this guidance to impact our financial statement disclosures. | |
In May 2014, the FASB issued amended accounting guidance related to revenue recognition. This guidance is based on the principle that revenue is recognized in an amount that reflects the consideration to which an entity expects to be entitled in exchange for the transfer of goods or services to customers. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. This amendment will be effective for us in the first quarter of fiscal 2018. We are continuing to evaluate the options for adoption and the impact on our financial position and results of operations. | |
In July 2013, the FASB issued amended accounting guidance related to the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. This guidance requires an entity to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, unless certain conditions exists. We adopted this guidance in the first quarter of fiscal 2015. The adoption of this guidance did not impact our financial position or results of operations. | |
In March 2013, the FASB issued amended accounting guidance related to a parent company's accounting for the cumulative translation adjustment upon derecognition of certain subsidiaries or group of assets within a foreign entity or of an investment in a foreign entity. The amended guidance requires the release of any cumulative translation adjustment into net income only upon complete or substantially complete liquidation of a controlling interest in a subsidiary or a group of assets within a foreign entity. Also, it requires the release of all or a pro rata portion of the cumulative translation adjustment to net income in the case of sale of an equity method investment that is a foreign entity. We adopted this amended guidance in the first quarter of fiscal 2015. The adoption of this guidance did not impact our financial position or results of operations. |
Restructuring_and_Employee_Sev
Restructuring and Employee Severance | 6 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Restructuring Charges [Abstract] | ||||||||||||
Restructuring and Employee Severance | Restructuring and Employee Severance | |||||||||||
The following tables summarize restructuring and employee severance costs related to our restructuring activities: | ||||||||||||
Three Months Ended December 31 | ||||||||||||
(in millions) | 2014 | 2013 | ||||||||||
Employee-related costs (1) | $ | 5 | $ | 4 | ||||||||
Facility exit and other costs (2) | 2 | 6 | ||||||||||
Total restructuring and employee severance | $ | 7 | $ | 10 | ||||||||
Six Months Ended December 31 | ||||||||||||
(in millions) | 2014 | 2013 | ||||||||||
Employee-related costs (1) | $ | 21 | $ | 8 | ||||||||
Facility exit and other costs (2) | 5 | 12 | ||||||||||
Total restructuring and employee severance | $ | 26 | $ | 20 | ||||||||
-1 | Employee-related costs primarily consist of termination benefits provided to employees who have been involuntarily terminated and duplicate payroll costs during transition periods. | |||||||||||
-2 | Facility exit and other costs primarily consist of lease termination costs, accelerated depreciation, equipment relocation costs, project consulting fees and costs associated with restructuring our delivery of information technology infrastructure services. | |||||||||||
The majority of restructuring costs incurred during the three and six months ended December 31, 2014 and 2013 related to restructuring activities within our Medical segment. | ||||||||||||
In connection with a restructuring plan within our Medical segment announced on January 30, 2013, we completed the sale of our property in Waukegan, Illinois during the three months ended December 31, 2014, which resulted in a $1 million loss on disposal of held for sale assets. | ||||||||||||
The following table summarizes activity related to liabilities associated with restructuring and employee severance: | ||||||||||||
(in millions) | Employee- | Facility Exit | Total | |||||||||
Related Costs | and Other Costs | |||||||||||
Balance at June 30, 2014 | $ | 24 | $ | — | $ | 24 | ||||||
Additions | 18 | 1 | 19 | |||||||||
Payments and other adjustments | (18 | ) | — | (18 | ) | |||||||
Balance at December 31, 2014 | $ | 24 | $ | 1 | $ | 25 | ||||||
Goodwill_and_Other_Intangible_
Goodwill and Other Intangible Assets | 6 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets | |||||||||||
Goodwill | ||||||||||||
The following table summarizes the changes in the carrying amount of goodwill, by segment and in total: | ||||||||||||
(in millions) | Pharmaceutical | Medical | Total | |||||||||
Balance at June 30, 2014 | $ | 2,158 | $ | 2,720 | $ | 4,878 | ||||||
Goodwill acquired, net of purchase price adjustments | 21 | 50 | 71 | |||||||||
Foreign currency translation adjustments and other | — | (20 | ) | (20 | ) | |||||||
Balance at December 31, 2014 | $ | 2,179 | $ | 2,750 | $ | 4,929 | ||||||
Other Intangible Assets | ||||||||||||
Other intangible assets are amortized over periods ranging from one to twenty years. The following tables summarize other intangible assets by class at: | ||||||||||||
December 31, 2014 | ||||||||||||
(in millions) | Gross | Accumulated | Net | |||||||||
Intangible | Amortization | Intangible | ||||||||||
Indefinite-life intangibles: | ||||||||||||
Trademarks and other | $ | 14 | $ | — | $ | 14 | ||||||
Total indefinite-life intangibles | 14 | — | 14 | |||||||||
Definite-life intangibles: | ||||||||||||
Customer relationships | 1,041 | 434 | 607 | |||||||||
Trademarks, trade names and patents | 225 | 79 | 146 | |||||||||
Developed technology and other | 295 | 115 | 180 | |||||||||
Total definite-life intangibles | 1,561 | 628 | 933 | |||||||||
Total other intangible assets | $ | 1,575 | $ | 628 | $ | 947 | ||||||
June 30, 2014 | ||||||||||||
(in millions) | Gross | Accumulated | Net | |||||||||
Intangible | Amortization | Intangible | ||||||||||
Indefinite-life intangibles: | ||||||||||||
Trademarks and other | $ | 14 | $ | — | $ | 14 | ||||||
Total indefinite-life intangibles | 14 | — | 14 | |||||||||
Definite-life intangibles: | ||||||||||||
Customer relationships | 1,043 | 388 | 655 | |||||||||
Trademarks, trade names and patents | 213 | 69 | 144 | |||||||||
Developed technology and other | 258 | 79 | 179 | |||||||||
Total definite-life intangibles | 1,514 | 536 | 978 | |||||||||
Total other intangible assets | $ | 1,528 | $ | 536 | $ | 992 | ||||||
Total amortization of intangible assets was $47 million and $46 million for the three months ended December 31, 2014 and 2013, respectively, and $92 million for both the six months ended December 31, 2014 and 2013. Estimated annual amortization of intangible assets for the remainder of fiscal 2015 through 2019 is as follows: $94 million, $176 million, $167 million, $124 million and $76 million. |
AvailableforSale_Securities
Available-for-Sale Securities | 6 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Investments, Debt and Equity Securities [Abstract] | ||||||||
Available-for-Sale Securities Disclosure | Available-for-Sale Securities | |||||||
We invest in marketable securities, which are classified as available-for-sale and are carried at fair value in the condensed consolidated balance sheets. We held the following investments in marketable securities at fair value at: | ||||||||
(in millions) | December 31, 2014 | June 30, 2014 | ||||||
Current available-for-sale securities: | ||||||||
Commercial paper | $ | 14 | $ | 4 | ||||
Treasury bills | — | 85 | ||||||
International bonds | 1 | 1 | ||||||
Corporate bonds | 5 | 3 | ||||||
U.S. agency bonds | 25 | — | ||||||
U.S. agency mortgage-backed securities | 6 | — | ||||||
Total current available-for-sale securities | 51 | 93 | ||||||
Long-term available-for-sale securities: | ||||||||
Corporate bonds | 9 | 5 | ||||||
U.S. agency bonds | 7 | 2 | ||||||
U.S. agency mortgage-backed securities | 21 | — | ||||||
Total long-term available-for-sale securities | 37 | 7 | ||||||
Total available-for-sale securities | $ | 88 | $ | 100 | ||||
Gross unrealized gains and losses were immaterial at December 31, 2014. During the three and six months ended December 31, 2014, gross realized gains and losses were immaterial and we did not recognize any other-than-temporary impairments. At December 31, 2014, the weighted-average effective maturity of our current and long-term investments was approximately 9 months and 16 months, respectively. |
LongTerm_Obligations_and_Other
Long-Term Obligations and Other Short-Term Borrowings | 6 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Debt Disclosure [Abstract] | ||||||||
Debt Disclosure | Long-Term Obligations and Other Short-Term Borrowings | |||||||
Long-Term Debt | ||||||||
In a registered debt offering in November 2014, we sold $450 million aggregate principal amount of 2.4% Notes that mature on November 15, 2019, $400 million aggregate principal amount of 3.5% Notes that mature on November 15, 2024 and $350 million aggregate principal amount of 4.5% Notes that mature on November 15, 2044 (collectively, the "Notes"). The Notes are unsecured obligations and rank equally in right of payment with all of our existing and future unsecured and unsubordinated indebtedness. | ||||||||
The Notes require us to offer to purchase the Notes at 101% of the principal amount plus accrued and unpaid interest if we undergo a change of control, as defined in the Notes, and if the Notes receive specified ratings below investment grade by each of Standard & Poor's Ratings Services, Moody's Investors Service, Inc. and Fitch Ratings. | ||||||||
In December 2014, we used the net proceeds from the offering, together with cash on hand, to redeem all of the outstanding 4.0% Notes due 2015, 5.8% Notes due 2016, 5.85% Notes due 2017 and 6.0% Notes due 2017 at a redemption price equal to 100% of the principal amount and any accrued but unpaid interest, plus the make-whole premium applicable to each series of notes. As a result of the redemption, we incurred a loss on the extinguishment of debt of $60 million ($37 million, net of tax), which included a make-whole premium of $80 million, write-off of $2 million of unamortized debt issuance costs and an offsetting $22 million fair value adjustment to the respective debt related to previously terminated interest rate swaps. | ||||||||
The following table summarizes long-term obligations and other short-term borrowings: | ||||||||
(in millions) | December 31, 2014 | June 30, 2014 | ||||||
1.7% Notes due 2018 | $ | 401 | $ | 401 | ||||
1.9% Notes due 2017 | 250 | 251 | ||||||
2.4% Notes due 2019 | 449 | — | ||||||
3.2% Notes due 2022 | 249 | 248 | ||||||
3.2% Notes due 2023 | 549 | 549 | ||||||
3.5% Notes due 2024 | 398 | — | ||||||
4.0% Notes due 2015 | — | 513 | ||||||
4.5% Notes due 2044 | 345 | — | ||||||
4.6% Notes due 2043 | 349 | 349 | ||||||
4.625% Notes due 2020 | 525 | 525 | ||||||
5.8% Notes due 2016 | — | 301 | ||||||
5.85% Notes due 2017 | — | 158 | ||||||
6.0% Notes due 2017 | — | 197 | ||||||
7.0% Debentures due 2026 | 124 | 124 | ||||||
7.8% Debentures due 2016 | 37 | 37 | ||||||
Other obligations | 300 | 319 | ||||||
Total | $ | 3,976 | $ | 3,972 | ||||
Less: current portion of long-term obligations and other short-term borrowings | 270 | 801 | ||||||
Long-term obligations, less current portion | $ | 3,706 | $ | 3,171 | ||||
Maturities of long-term obligations and other short-term borrowings for the remainder of fiscal 2015 through 2019 and thereafter are as follows: $270 million, $22 million, $289 million, $402 million, $1 million, and $2,992 million. | ||||||||
Other Financing Arrangements | ||||||||
On November 3, 2014, we renewed our committed receivables sales facility program through Cardinal Health Funding, LLC ("CHF") until November 3, 2017 and increased the size of the facility from $700 million to $950 million. CHF was organized for the sole purpose of buying receivables and selling undivided interests in those receivables to third-party purchasers. Although consolidated in accordance with GAAP, CHF is a separate legal entity from Cardinal Health 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. We had no outstanding balance under the committed receivable sales facility program at December 31, 2014 and June 30, 2014, except for standby letters of credit of $41 million at both December 31, 2014 and June 30, 2014. |
Income_Taxes
Income Taxes | 6 Months Ended |
Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes |
Fluctuations in our provision for income taxes as a percentage of pretax earnings (“effective tax rate”) are due to changes in international and U.S. state effective tax rates resulting from our business mix and discrete items. | |
During the three months ended December 31, 2014, the effective tax rate of 36.0 percent was unfavorably impacted by 3.0 percentage points ($13 million) due to nondeductibility of litigation charges and favorably impacted by 3.1 percentage points ($14 million) related to a previously unrecognized tax benefit for a loss carryback from fiscal 2007. | |
During the six months ended December 31, 2014, the effective tax rate of 37.4 percent was unfavorably impacted by 1.4 percentage points ($12 million) due to the remeasurement of unrecognized tax benefits and 2.7 percentage points ($24 million) due to nondeductibility of litigation charges, partially offset by 1.6 percentage points ($14 million) due to adjusting deferred tax assets and related valuation allowances for the impact of Puerto Rico tax law changes enacted during the period and 1.6 percentage points ($14 million) related to a previously unrecognized tax benefit for a loss carryback from fiscal 2007. | |
During the three months ended December 31, 2013, the effective tax rate of 44.1 percent was impacted by net unfavorable discrete items of $38 million, which increased the rate by 7.7 percentage points. The discrete items include the unfavorable impact of remeasurement of unrecognized tax benefits ($56 million) as a result of proposed assessments of additional tax. | |
During the six months ended December 31, 2013, the effective tax rate of 34.2 percent was impacted by net favorable discrete items of $23 million, which reduced the rate by 2.4 percentage points. The discrete items include the favorable impact of the settlement of federal and state tax controversies ($67 million) and the unfavorable impact of remeasurement of unrecognized tax benefits ($56 million). | |
We had $525 million and $510 million of unrecognized tax benefits at December 31, 2014 and June 30, 2014, respectively. The December 31, 2014 and June 30, 2014 balances include $333 million and $322 million, respectively, of unrecognized tax benefits that, if recognized, would have an impact on the effective tax rate. The remaining unrecognized tax benefits relate to tax positions for which ultimate deductibility is highly certain but for which there is uncertainty as to the timing of such deductibility. Recognition of these tax benefits would not affect our effective tax rate. We include the full amount of unrecognized tax benefits in deferred income taxes and other liabilities in the condensed consolidated balance sheets. | |
We recognize accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes. At December 31, 2014 and June 30, 2014, we had $155 million and $143 million, respectively, accrued for the payment of interest and penalties. 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, including proposed assessments of additional tax, possible settlement of audit issues, reassessment of existing unrecognized tax benefits or the expiration of applicable statutes of limitations. We estimate that the range of the possible change in unrecognized tax benefits within the next 12 months is a net decrease of approximately zero to $180 million, exclusive of penalties and interest. | |
We file income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and various foreign jurisdictions. We are subject to audit by the IRS for fiscal years 2006 through the current fiscal year. We are generally subject to audit by taxing authorities in various U.S. state and foreign jurisdictions for fiscal years 2003 through the current fiscal year. | |
The IRS is currently conducting audits of fiscal years 2006 through 2010, and our transfer pricing arrangements continue to be under consideration as part of these audits. While the IRS has made and could make proposed adjustments to our transfer pricing arrangements or other matters, we are defending our reported tax positions, and have accounted for the unrecognized tax benefits associated with our tax positions. | |
We are a party to a tax matters agreement with CareFusion Corporation ("CareFusion"), under which 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 $214 million and $210 million at December 31, 2014 and June 30, 2014, respectively, and is included in other assets in the condensed consolidated balance sheets. |
Commitments_Contingent_Liabili
Commitments, Contingent Liabilities and Litigation | 6 Months Ended |
Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, contingent liabilities and litigation | Commitments, Contingent Liabilities and Litigation |
Commitments | |
Generic Sourcing Venture With CVS Health Corporation | |
In July 2014, we established Red Oak Sourcing, LLC ("Red Oak Sourcing"), a U.S.-based generic pharmaceutical sourcing entity with CVS Health Corporation (“CVS”) with an initial term of 10 years. Both companies have contributed sourcing and supply chain expertise to the 50/50 generic sourcing venture and have committed to source generic pharmaceuticals through arrangements negotiated by it. Red Oak Sourcing negotiates generic pharmaceutical supply contracts on behalf of both companies, but does not own products or hold inventory on behalf of either company. We are required to pay 39 quarterly payments of $25.6 million to CVS which commenced in October 2014. In addition, only if certain milestones are achieved, we are required to pay additional predetermined amounts to CVS beginning in fiscal 2016. Beginning in the three months ended December 31, 2014, the $25.6 million payment is being expensed quarterly over the remaining term of the sourcing venture. | |
Legal Proceedings | |
We become involved from time to time in disputes, litigation and regulatory matters incidental to our business. | |
We may be named from time to time in qui tam actions, which are initiated by private third parties purporting to act on behalf of federal or state governments, that allege that false claims have been submitted or have been caused to be submitted for payment by the government. 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 on behalf of the government. | |
From time to time, we receive subpoenas or requests for information from various government agencies relating to our business or to the business of a customer, supplier or other industry participant. The responses to these subpoenas and requests for information sometimes require considerable time and effort, and can result in us incurring considerable costs. Such subpoenas and requests also can lead to the assertion of claims or the commencement of legal proceedings against us, which can result in substantial settlements. | |
In addition, we occasionally may suspect that products we manufacture, market or distribute do not meet product specifications, published standards or regulatory requirements. In such circumstances, we investigate and take appropriate corrective action. Such actions can lead to product recalls, costs to repair or replace affected products, temporary interruptions in product sales and action by regulators. | |
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. While we have accrued for certain matters as described below at our best estimate of the amount of possible loss, the amount of ultimate loss may differ from these estimates. | |
With respect to the matters described below, we are unable to estimate a range of reasonably possible loss for matters for which there is no accrual, since damages or fines have not been specified or the proceedings are at stages where significant uncertainty exists as to legal or factual issues and as to whether such matters will proceed to trial. We do not believe, based on currently available information, that the outcomes of these matters will have a material adverse effect on our financial position, results of operations or cash flows, though the outcome of one or more of these matters could be material to our results of operations for a particular period. | |
We recognize income from the favorable outcome of litigation when we receive the associated cash or assets. | |
We recognize estimated loss contingencies for litigation and regulatory matters and income from favorable resolution of litigation in litigation (recoveries)/charges, net in our condensed consolidated statements of earnings. | |
DEA Investigation and Related Matters | |
In February 2012, the U.S. Drug Enforcement Administration (the "DEA") issued an order to show cause and immediate suspension of our Lakeland, Florida distribution center's registration to distribute controlled substances, asserting that we failed to maintain required controls against the diversion of controlled substances. In May 2012, we entered into a settlement agreement with the DEA that resolved the administrative aspects of the DEA's action but did not resolve potential liability for civil fines in Florida or elsewhere for the conduct covered by the settlement agreement. In that regard, we are continuing to engage in discussions with several offices of the U.S. Department of Justice (the "DOJ"), including discussions regarding a possible settlement. We incurred litigation charges of $7 million and $34 million for this matter during the three and six months ended December 31, 2014, respectively. Our total accrual for this matter at December 31, 2014 is $34 million and is included in other accrued liabilities in the condensed consolidated balance sheet. | |
State of West Virginia vs. Cardinal Health, Inc. | |
In June 2012, the West Virginia Attorney General filed complaints, which have been amended, against 13 pharmaceutical wholesale distributors, including us, in the Circuit Court of Boone County, West Virginia alleging, among other things, that the distributors failed to maintain effective controls to guard against diversion of controlled substances in West Virginia, failed to report suspicious orders of controlled substances in accordance with the West Virginia Uniform Controlled Substances Act and were negligent in distributing controlled substances to pharmacies that serve individuals who abuse controlled substances. In addition to injunctive and other equitable relief, the complaints seek monetary damages and the creation of a court-supervised fund, to be financed by the defendants in these actions, for a medical monitoring program focused on prescription drug abuse. We are vigorously defending ourselves in this matter. | |
FTC Investigation | |
The Federal Trade Commission (“FTC”) has been investigating supplier arrangements involving our Nuclear Pharmacy Services division primarily focused on the period between 2003 and 2008. We have been providing information to and cooperating with the FTC on this matter. Additionally, we have begun discussions with the FTC staff regarding a possible settlement of this matter, which would include, among other things, a payment to the government. We incurred a litigation charge of $27 million for this matter during the three months ended December 31, 2014, which represents the amount we believe we will pay if we are able to settle this matter and is included in other accrued liabilities in the condensed consolidated balance sheet. | |
Qui Tam Action | |
Our Cardinal Health at Home division was named as a defendant in an amended qui tam complaint that was filed in November 2014 in the U.S. District Court for the District of Massachusetts against several manufacturers and distributors of ostomy and continence care products. The complaint seeks damages and penalties on behalf of the United States for alleged violations of the federal healthcare fraud and abuse laws, Medicare regulations and the federal False Claims Act in connection with the marketing and sale of these products. The DOJ has not yet determined whether to intervene in this qui tam action and is currently conducting an investigation of this matter. We are providing information to the DOJ in connection with its investigation. | |
Antitrust Litigation Proceeds | |
We recognized income resulting from settlements of class action antitrust claims in which we were a class member of $16 million during both the three and six months ended December 31, 2013. |
Fair_Value_Measurements
Fair Value Measurements | 6 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract] | ||||||||||||||||
Fair Value Measurements | Fair Value Measurements | |||||||||||||||
The following tables present the fair values for assets measured on a recurring basis at: | ||||||||||||||||
December 31, 2014 | ||||||||||||||||
(in millions) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Cash equivalents (1) | $ | 212 | $ | — | $ | — | $ | 212 | ||||||||
Forward contracts (2) | — | — | — | — | ||||||||||||
Available-for-sale securities (3) | — | 88 | — | 88 | ||||||||||||
Other investments (4) | 112 | — | — | 112 | ||||||||||||
Total | $ | 324 | $ | 88 | $ | — | $ | 412 | ||||||||
June 30, 2014 | ||||||||||||||||
(in millions) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Cash equivalents (1) | $ | 740 | $ | — | $ | — | $ | 740 | ||||||||
Forward contracts (2) | — | 10 | — | 10 | ||||||||||||
Available-for-sale securities (3) | — | 100 | — | 100 | ||||||||||||
Other investments (4) | 106 | — | — | 106 | ||||||||||||
Total | $ | 846 | $ | 110 | $ | — | $ | 956 | ||||||||
-1 | Cash equivalents are comprised of highly liquid investments purchased with a maturity of three months or less. The carrying value of these cash equivalents approximates fair value due to their short-term maturities. | |||||||||||||||
-2 | The fair value of interest rate swaps, foreign currency contracts and commodity contracts is determined based on the present value of expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Observable Level 2 inputs are used to determine the present value of expected future cash flows. The fair value of these derivative contracts, which are subject to master netting arrangements under certain circumstances, is presented on a gross basis in the condensed consolidated balance sheets. | |||||||||||||||
-3 | We invest in marketable securities, which are classified as available-for-sale and are carried at fair value in the condensed consolidated balance sheets. Observable Level 2 inputs such as quoted prices for similar securities, interest rate spreads, yield curves and credit risk are used to determine the fair value. See Note 5 for additional information regarding available-for-sale securities. | |||||||||||||||
-4 | The other investments balance includes investments in mutual funds, which are used to offset fluctuations in deferred compensation liabilities. These mutual funds primarily invest in the equity securities of companies with large market capitalization and high quality fixed income debt securities. The fair value of these investments is determined using quoted market prices. |
Financial_Instruments
Financial Instruments | 6 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||
Financial Instruments | 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. Our derivative and hedging programs are consistent with those described in the 2014 Form 10-K. | ||||||||
During the three months ended September 30, 2014, we entered into forward interest rate swaps with a total notional amount of $50 million to hedge probable, but not firmly committed, future transactions associated with our debt. | ||||||||
During the three months ended December 31, 2014, we entered into pay-floating interest rate swaps with total notional amounts of $450 million in connection with the debt issuance described in Note 6. These swaps have been designated fair value hedges of our fixed rate date and are included in other assets in the condensed consolidated balance sheet. | ||||||||
In December 2014, we terminated notional amounts of $875 million of pay-floating interest rate swaps in connection with the debt redemption described in Note 6. These swaps were previously designated as fair value hedges. | ||||||||
During the six months ended December 31, 2013, we entered into pay-floating interest rate swaps with total notional amounts of $300 million. These swaps have been designated as fair value hedges of our fixed rate debt and are included in other assets in the condensed consolidated balance sheets. | ||||||||
Fair Value of Financial Instruments | ||||||||
The carrying amounts of cash and equivalents, trade receivables, net, accounts payable and other accrued liabilities at December 31, 2014 and June 30, 2014 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) | December 31, | June 30, | ||||||
2014 | 2014 | |||||||
Estimated fair value | $ | 4,089 | $ | 4,115 | ||||
Carrying amount | 3,976 | 3,972 | ||||||
The estimated 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. |
Shareholders_Equity
Shareholders' Equity | 6 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Equity [Abstract] | ||||||||||||
Shareholders' Equity | Shareholders' Equity | |||||||||||
Share Repurchases | ||||||||||||
During the six months ended December 31, 2014, we repurchased 9.1 million common shares having an aggregate cost of $684 million. The average price paid per common share was $75.00. | ||||||||||||
During the six months ended December 31, 2013, we repurchased 1.0 million common shares having an aggregate cost of $50 million. The average price paid per common share was $51.65. | ||||||||||||
We funded the repurchases with available cash. The common shares repurchased are held in treasury to be used for general corporate purposes. | ||||||||||||
Accumulated Other Comprehensive Income | ||||||||||||
The following table summarizes the changes in the balance of accumulated other comprehensive income by component and in total: | ||||||||||||
(in millions) | Foreign | Unrealized | Accumulated Other | |||||||||
Currency | Gain/(Loss) on | Comprehensive | ||||||||||
Translation | Derivatives, | Income/(Loss) | ||||||||||
Adjustments | net of tax | |||||||||||
Balance at June 30, 2014 | $ | 63 | $ | 7 | $ | 70 | ||||||
Other comprehensive loss, net of tax before reclassifications | (64 | ) | (9 | ) | (73 | ) | ||||||
Amounts reclassified to earnings | — | — | — | |||||||||
Total other comprehensive loss, net of tax of $5 million | (64 | ) | (9 | ) | (73 | ) | ||||||
Balance at December 31, 2014 | $ | (1 | ) | $ | (2 | ) | $ | (3 | ) | |||
Activity related to realized and unrealized gains and losses on available-for-sale securities as described in Note 5, was immaterial during the three and six months ended December 31, 2014. |
Earnings_Per_Share
Earnings Per Share | 6 Months Ended | |||||
Dec. 31, 2014 | ||||||
Earnings Per Share [Abstract] | ||||||
Earnings Per Share | Earnings Per Share | |||||
The following tables reconcile the number of common shares used to compute basic and diluted earnings per share: | ||||||
Three Months Ended December 31 | ||||||
(in millions) | 2014 | 2013 | ||||
Weighted-average common shares–basic | 331 | 342 | ||||
Effect of dilutive securities: | ||||||
Employee stock options, restricted share units and performance share units | 3 | 4 | ||||
Weighted-average common shares–diluted | 334 | 346 | ||||
Six Months Ended December 31 | ||||||
(in millions) | 2014 | 2013 | ||||
Weighted-average common shares–basic | 333 | 341 | ||||
Effect of dilutive securities: | ||||||
Employee stock options, restricted share units and performance share units | 4 | 4 | ||||
Weighted-average common shares–diluted | 337 | 345 | ||||
The potentially dilutive employee stock options, restricted share units and performance share units that were antidilutive were 1 million and zero for the three months ended December 31, 2014 and 2013, respectively, and 1 million and 2 million for the six months ended December 31, 2014 and 2013, respectively. |
Segment_Information
Segment Information | 6 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Segment Reporting [Abstract] | |||||||||
Segment Information | Segment Information | [1] | |||||||
Our operations are principally managed on a products and services basis and are comprised of two operating segments, which are the same as our reportable segments: Pharmaceutical and Medical. The factors for determining the reportable segments include the manner in which management evaluates our performance for purposes of allocating resources and assessing performance combined with the nature of the individual business activities. | |||||||||
The following tables present revenue for each reportable segment and Corporate: | |||||||||
Three Months Ended December 31 | |||||||||
(in millions) | 2014 | 2013 | |||||||
Pharmaceutical | $ | 22,627 | $ | 19,443 | |||||
Medical | 2,914 | 2,799 | |||||||
Total segment revenue | 25,541 | 22,242 | |||||||
Corporate (1) | (4 | ) | (2 | ) | |||||
Total revenue | $ | 25,537 | $ | 22,240 | |||||
Six Months Ended December 31 | |||||||||
(in millions) | 2014 | 2013 | |||||||
Pharmaceutical (2) | $ | 43,836 | $ | 41,256 | |||||
Medical | 5,766 | 5,511 | |||||||
Total segment revenue | 49,602 | 46,767 | |||||||
Corporate (1) | 5 | (4 | ) | ||||||
Total revenue | $ | 49,607 | $ | 46,763 | |||||
-1 | Corporate revenue consists of the elimination of inter-segment revenue and other revenue not allocated to the segments. | ||||||||
-2 | Our pharmaceutical distribution contract with Walgreen Co. expired on August 31, 2013. | ||||||||
We evaluate segment performance based upon segment profit, among other measures. Segment profit is segment revenue, less segment cost of products sold, less segment SG&A expenses. Segment SG&A expenses include share-based compensation expense as well as allocated corporate expenses for shared functions, including corporate management, corporate finance, financial and customer care shared services, human resources, information technology and legal. Corporate expenses are allocated to the segments based upon headcount, level of benefit provided and other ratable allocation methodologies. | |||||||||
We do not allocate the following items to our segments: restructuring and employee severance; amortization and other acquisition-related costs; impairments and (gain)/loss on disposal of assets; litigation (recoveries)/charges; other income, net; interest expense, net; loss on extinguishment of debt; and, provision for income taxes. In addition, certain investment and other spending are not allocated to the segments. Investment spending generally includes the first-year spend for certain projects that require incremental investments in the form of additional operating expenses. We encourage our segments and corporate functions to identify investment projects that will promote innovation and provide future returns. As approval decisions for such projects are dependent upon executive management, the expenses for such projects are often retained at Corporate. Investment spending within Corporate was $4 million and $6 million for the three months ended December 31, 2014 and 2013, respectively, and $6 million and $10 million for the six months ended December 31, 2014 and 2013, respectively. | |||||||||
The following tables present segment profit by reportable segment and Corporate: | |||||||||
Three Months Ended December 31 | |||||||||
(in millions) | 2014 | 2013 | |||||||
Pharmaceutical | $ | 542 | $ | 482 | |||||
Medical | 115 | 131 | |||||||
Total segment profit | 657 | 613 | |||||||
Corporate | (111 | ) | (94 | ) | |||||
Total operating earnings | $ | 546 | $ | 519 | |||||
Six Months Ended December 31 | |||||||||
(in millions) | 2014 | 2013 | |||||||
Pharmaceutical | $ | 992 | $ | 916 | |||||
Medical | 229 | 238 | |||||||
Total segment profit | 1,221 | 1,154 | |||||||
Corporate | (209 | ) | (164 | ) | |||||
Total operating earnings | $ | 1,012 | $ | 990 | |||||
[1] | Facility exit and other costs primarily consist of lease termination costs, accelerated depreciation, equipment relocation costs, project consulting fees and costs associated with restructuring our delivery of information technology infrastructure services. |
ShareBased_Compensation
Share-Based Compensation | 6 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||
Disclosure of Compensation Related Costs, Share-based Payments | Share-Based Compensation | |||||||
Share-Based Compensation Plans | ||||||||
We maintain stock incentive plans (collectively, the “Plans”) for the benefit of certain of our officers, directors and employees. | ||||||||
The following tables provide total share-based compensation expense by type of award: | ||||||||
Three Months Ended December 31 | ||||||||
(in millions) | 2014 | 2013 | ||||||
Restricted share unit expense | $ | 18 | $ | 15 | ||||
Employee stock option expense | 5 | 5 | ||||||
Performance share unit expense | 5 | 4 | ||||||
Total share-based compensation | $ | 28 | $ | 24 | ||||
Six Months Ended December 31 | ||||||||
(in millions) | 2014 | 2013 | ||||||
Restricted share unit expense | $ | 34 | $ | 31 | ||||
Employee stock option expense | 10 | 10 | ||||||
Performance share unit expense | 9 | 7 | ||||||
Total share-based compensation | $ | 53 | $ | 48 | ||||
The total tax benefit related to share-based compensation was $9 million and $8 million for the three months ended December 31, 2014 and 2013, respectively, and $18 million and $17 million for the six months ended December 31, 2014 and 2013, respectively. | ||||||||
Stock Options | ||||||||
Employee stock options granted under the Plans generally vest in equal annual installments over three years and are exercisable for periods ranging from seven to ten years from the grant date. All stock options are exercisable at a price equal to the market value of the common shares underlying the option on the grant date. | ||||||||
The following table summarizes all stock option transactions under the Plans: | ||||||||
(in millions, except per share amounts) | Stock | Weighted-Average | ||||||
Options | Exercise Price per | |||||||
Common Share | ||||||||
Outstanding at June 30, 2014 | 10 | $ | 39.16 | |||||
Granted | 1 | 71.57 | ||||||
Exercised | (2 | ) | 39.05 | |||||
Canceled and forfeited | — | — | ||||||
Outstanding at December 31, 2014 | 9 | $ | 44.28 | |||||
Exercisable at December 31, 2014 | 5 | $ | 35.91 | |||||
At December 31, 2014, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested stock options not yet recognized was $33 million, which is expected to be recognized over a weighted-average period of two years. The following table provides additional data related to stock option activity: | ||||||||
(in millions, except contractual lives) | December 31, 2014 | June 30, 2014 | ||||||
Aggregate intrinsic value of outstanding options at period end | $ | 329 | $ | 282 | ||||
Aggregate intrinsic value of exercisable options at period end | $ | 246 | $ | 185 | ||||
Weighted-average remaining contractual life of outstanding options (in years) | 6 | 6 | ||||||
Weighted-average remaining contractual life of exercisable options (in years) | 5 | 4 | ||||||
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, 2014 | 3 | $ | 45.65 | |||||
Granted | 1 | 71.89 | ||||||
Vested | (1 | ) | 44.41 | |||||
Canceled and forfeited | — | — | ||||||
Nonvested at December 31, 2014 | 3 | $ | 56.83 | |||||
At December 31, 2014, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested restricted share units not yet recognized was $112 million, which is expected to be recognized over a weighted-average period of two years. | ||||||||
Performance Share Units | ||||||||
Performance share units vest over a three-year performance period based on achievement of specific performance goals. Based on the extent to which the targets are achieved, vested shares may range from zero to 200 percent of the target award amount. Performance share units accrue cash dividend equivalents that are payable upon vesting of the awards. | ||||||||
The following table summarizes all transactions related to performance share units under the Plans (based on target award amounts): | ||||||||
(in millions, except per share amounts) | Performance | Weighted-Average | ||||||
Share Units | Grant Date Fair | |||||||
Value per Share | ||||||||
Nonvested at June 30, 2014 | 0.9 | $ | 44.41 | |||||
Granted | 0.2 | 66.78 | ||||||
Vested (1) | (0.2 | ) | 41.59 | |||||
Canceled and forfeited | — | — | ||||||
Nonvested at December 31, 2014 | 0.9 | $ | 50.61 | |||||
-1 | Vested based on achievement of 120 percent of the target performance goal. | |||||||
At December 31, 2014, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested performance share units not yet recognized was $21 million, which is expected to be recognized over a weighted-average period of two years. |
Basis_of_Presentation_and_Summ1
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Basis of Presentation, Policy | Basis of Presentation |
Our condensed consolidated financial statements include the accounts of all majority-owned or controlled subsidiaries, and all significant intercompany transactions and amounts have been eliminated. To conform to the current year presentation, certain prior year amounts have been reclassified. References to "we," "our" and similar pronouns in this Quarterly Report on Form 10-Q for the quarter ended December 31, 2014 (this "Form 10-Q") refer to Cardinal Health, Inc. and its majority-owned or controlled subsidiaries unless the context requires otherwise. The results of businesses acquired or disposed of are included in the condensed consolidated financial statements from the effective date of the acquisition or up to the date of disposal, 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 all of the information and disclosures required by accounting principles generally accepted in the United States ("GAAP") for interim financial reporting. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect amounts reported in the condensed consolidated financial statements and accompanying notes. Actual amounts may differ from these estimated amounts. In addition, operating results presented for this fiscal 2015 interim period are not necessarily indicative of the results that may be expected for the full fiscal year ending June 30, 2015. | |
These condensed consolidated financial statements are unaudited and are presented pursuant to the rules and regulations of the SEC. Accordingly, the condensed consolidated financial statements included in this Form 10-Q 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, 2014 (the "2014 Form 10-K"). 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. | |
Recent Financial Accounting Standards, Policy | Recent Financial Accounting Standards |
In August 2014, the Financial Accounting Standards Board ("FASB") issued amended accounting guidance related to uncertainties about an entity’s ability to continue as a going concern. This guidance requires management to evaluate whether there is substantial doubt about a company’s ability to continue as a going concern. This amendment will be effective for us in the fourth quarter of fiscal 2017, with early adoption permitted. We do not expect the adoption of this guidance to impact our financial statement disclosures. | |
In May 2014, the FASB issued amended accounting guidance related to revenue recognition. This guidance is based on the principle that revenue is recognized in an amount that reflects the consideration to which an entity expects to be entitled in exchange for the transfer of goods or services to customers. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. This amendment will be effective for us in the first quarter of fiscal 2018. We are continuing to evaluate the options for adoption and the impact on our financial position and results of operations. | |
In July 2013, the FASB issued amended accounting guidance related to the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. This guidance requires an entity to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, unless certain conditions exists. We adopted this guidance in the first quarter of fiscal 2015. The adoption of this guidance did not impact our financial position or results of operations. | |
In March 2013, the FASB issued amended accounting guidance related to a parent company's accounting for the cumulative translation adjustment upon derecognition of certain subsidiaries or group of assets within a foreign entity or of an investment in a foreign entity. The amended guidance requires the release of any cumulative translation adjustment into net income only upon complete or substantially complete liquidation of a controlling interest in a subsidiary or a group of assets within a foreign entity. Also, it requires the release of all or a pro rata portion of the cumulative translation adjustment to net income in the case of sale of an equity method investment that is a foreign entity. We adopted this amended guidance in the first quarter of fiscal 2015. The adoption of this guidance did not impact our financial position or results of operations. |
Restructuring_and_Employee_Sev1
Restructuring and Employee Severance (Tables) | 6 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Restructuring Charges [Abstract] | ||||||||||||
Summary of restructuring and employee severance relating to restructuring activity | The following tables summarize restructuring and employee severance costs related to our restructuring activities: | |||||||||||
Three Months Ended December 31 | ||||||||||||
(in millions) | 2014 | 2013 | ||||||||||
Employee-related costs (1) | $ | 5 | $ | 4 | ||||||||
Facility exit and other costs (2) | 2 | 6 | ||||||||||
Total restructuring and employee severance | $ | 7 | $ | 10 | ||||||||
Six Months Ended December 31 | ||||||||||||
(in millions) | 2014 | 2013 | ||||||||||
Employee-related costs (1) | $ | 21 | $ | 8 | ||||||||
Facility exit and other costs (2) | 5 | 12 | ||||||||||
Total restructuring and employee severance | $ | 26 | $ | 20 | ||||||||
-1 | Employee-related costs primarily consist of termination benefits provided to employees who have been involuntarily terminated and duplicate payroll costs during transition periods. | |||||||||||
-2 | Facility exit and other costs primarily consist of lease termination costs, accelerated depreciation, equipment relocation costs, project consulting fees and costs associated with restructuring our delivery of information technology infrastructure services. | |||||||||||
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- | Facility Exit | Total | |||||||||
Related Costs | and Other Costs | |||||||||||
Balance at June 30, 2014 | $ | 24 | $ | — | $ | 24 | ||||||
Additions | 18 | 1 | 19 | |||||||||
Payments and other adjustments | (18 | ) | — | (18 | ) | |||||||
Balance at December 31, 2014 | $ | 24 | $ | 1 | $ | 25 | ||||||
Goodwill_and_Other_Intangible_1
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||
Schedule of Goodwill by Reportable Segment | The following table summarizes the changes in the carrying amount of goodwill, by segment and in total: | |||||||||||
(in millions) | Pharmaceutical | Medical | Total | |||||||||
Balance at June 30, 2014 | $ | 2,158 | $ | 2,720 | $ | 4,878 | ||||||
Goodwill acquired, net of purchase price adjustments | 21 | 50 | 71 | |||||||||
Foreign currency translation adjustments and other | — | (20 | ) | (20 | ) | |||||||
Balance at December 31, 2014 | $ | 2,179 | $ | 2,750 | $ | 4,929 | ||||||
Schedule of Intangible Assets | The following tables summarize other intangible assets by class at: | |||||||||||
December 31, 2014 | ||||||||||||
(in millions) | Gross | Accumulated | Net | |||||||||
Intangible | Amortization | Intangible | ||||||||||
Indefinite-life intangibles: | ||||||||||||
Trademarks and other | $ | 14 | $ | — | $ | 14 | ||||||
Total indefinite-life intangibles | 14 | — | 14 | |||||||||
Definite-life intangibles: | ||||||||||||
Customer relationships | 1,041 | 434 | 607 | |||||||||
Trademarks, trade names and patents | 225 | 79 | 146 | |||||||||
Developed technology and other | 295 | 115 | 180 | |||||||||
Total definite-life intangibles | 1,561 | 628 | 933 | |||||||||
Total other intangible assets | $ | 1,575 | $ | 628 | $ | 947 | ||||||
June 30, 2014 | ||||||||||||
(in millions) | Gross | Accumulated | Net | |||||||||
Intangible | Amortization | Intangible | ||||||||||
Indefinite-life intangibles: | ||||||||||||
Trademarks and other | $ | 14 | $ | — | $ | 14 | ||||||
Total indefinite-life intangibles | 14 | — | 14 | |||||||||
Definite-life intangibles: | ||||||||||||
Customer relationships | 1,043 | 388 | 655 | |||||||||
Trademarks, trade names and patents | 213 | 69 | 144 | |||||||||
Developed technology and other | 258 | 79 | 179 | |||||||||
Total definite-life intangibles | 1,514 | 536 | 978 | |||||||||
Total other intangible assets | $ | 1,528 | $ | 536 | $ | 992 | ||||||
AvailableforSale_Securities_Ta
Available-for-Sale Securities (Tables) | 6 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Investments, Debt and Equity Securities [Abstract] | ||||||||
Available-for-sale Securities | We held the following investments in marketable securities at fair value at: | |||||||
(in millions) | December 31, 2014 | June 30, 2014 | ||||||
Current available-for-sale securities: | ||||||||
Commercial paper | $ | 14 | $ | 4 | ||||
Treasury bills | — | 85 | ||||||
International bonds | 1 | 1 | ||||||
Corporate bonds | 5 | 3 | ||||||
U.S. agency bonds | 25 | — | ||||||
U.S. agency mortgage-backed securities | 6 | — | ||||||
Total current available-for-sale securities | 51 | 93 | ||||||
Long-term available-for-sale securities: | ||||||||
Corporate bonds | 9 | 5 | ||||||
U.S. agency bonds | 7 | 2 | ||||||
U.S. agency mortgage-backed securities | 21 | — | ||||||
Total long-term available-for-sale securities | 37 | 7 | ||||||
Total available-for-sale securities | $ | 88 | $ | 100 | ||||
LongTerm_Obligations_and_Other1
Long-Term Obligations and Other Short-Term Borrowings (Tables) | 6 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Debt Disclosure [Abstract] | ||||||||
Schedule of Debt | The following table summarizes long-term obligations and other short-term borrowings: | |||||||
(in millions) | December 31, 2014 | June 30, 2014 | ||||||
1.7% Notes due 2018 | $ | 401 | $ | 401 | ||||
1.9% Notes due 2017 | 250 | 251 | ||||||
2.4% Notes due 2019 | 449 | — | ||||||
3.2% Notes due 2022 | 249 | 248 | ||||||
3.2% Notes due 2023 | 549 | 549 | ||||||
3.5% Notes due 2024 | 398 | — | ||||||
4.0% Notes due 2015 | — | 513 | ||||||
4.5% Notes due 2044 | 345 | — | ||||||
4.6% Notes due 2043 | 349 | 349 | ||||||
4.625% Notes due 2020 | 525 | 525 | ||||||
5.8% Notes due 2016 | — | 301 | ||||||
5.85% Notes due 2017 | — | 158 | ||||||
6.0% Notes due 2017 | — | 197 | ||||||
7.0% Debentures due 2026 | 124 | 124 | ||||||
7.8% Debentures due 2016 | 37 | 37 | ||||||
Other obligations | 300 | 319 | ||||||
Total | $ | 3,976 | $ | 3,972 | ||||
Less: current portion of long-term obligations and other short-term borrowings | 270 | 801 | ||||||
Long-term obligations, less current portion | $ | 3,706 | $ | 3,171 | ||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 6 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract] | ||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis | The following tables present the fair values for assets measured on a recurring basis at: | |||||||||||||||
December 31, 2014 | ||||||||||||||||
(in millions) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Cash equivalents (1) | $ | 212 | $ | — | $ | — | $ | 212 | ||||||||
Forward contracts (2) | — | — | — | — | ||||||||||||
Available-for-sale securities (3) | — | 88 | — | 88 | ||||||||||||
Other investments (4) | 112 | — | — | 112 | ||||||||||||
Total | $ | 324 | $ | 88 | $ | — | $ | 412 | ||||||||
June 30, 2014 | ||||||||||||||||
(in millions) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Cash equivalents (1) | $ | 740 | $ | — | $ | — | $ | 740 | ||||||||
Forward contracts (2) | — | 10 | — | 10 | ||||||||||||
Available-for-sale securities (3) | — | 100 | — | 100 | ||||||||||||
Other investments (4) | 106 | — | — | 106 | ||||||||||||
Total | $ | 846 | $ | 110 | $ | — | $ | 956 | ||||||||
-1 | Cash equivalents are comprised of highly liquid investments purchased with a maturity of three months or less. The carrying value of these cash equivalents approximates fair value due to their short-term maturities. | |||||||||||||||
-2 | The fair value of interest rate swaps, foreign currency contracts and commodity contracts is determined based on the present value of expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Observable Level 2 inputs are used to determine the present value of expected future cash flows. The fair value of these derivative contracts, which are subject to master netting arrangements under certain circumstances, is presented on a gross basis in the condensed consolidated balance sheets. | |||||||||||||||
-3 | We invest in marketable securities, which are classified as available-for-sale and are carried at fair value in the condensed consolidated balance sheets. Observable Level 2 inputs such as quoted prices for similar securities, interest rate spreads, yield curves and credit risk are used to determine the fair value. See Note 5 for additional information regarding available-for-sale securities. | |||||||||||||||
-4 | The other investments balance includes investments in mutual funds, which are used to offset fluctuations in deferred compensation liabilities. These mutual funds primarily invest in the equity securities of companies with large market capitalization and high quality fixed income debt securities. The fair value of these investments is determined using quoted market prices. |
Financial_Instruments_Tables
Financial Instruments (Tables) | 6 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||
Summary of the estimated fair value of our long-term obligations and other short-term borrowings compared to the respective carrying amounts | 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) | December 31, | June 30, | ||||||
2014 | 2014 | |||||||
Estimated fair value | $ | 4,089 | $ | 4,115 | ||||
Carrying amount | 3,976 | 3,972 | ||||||
Shareholders_Equity_Tables
Shareholders' Equity (Tables) | 6 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Equity [Abstract] | ||||||||||||
Schedule of the changes in the balance of accumulated other comprehensive income by component and in total | The following table summarizes the changes in the balance of accumulated other comprehensive income by component and in total: | |||||||||||
(in millions) | Foreign | Unrealized | Accumulated Other | |||||||||
Currency | Gain/(Loss) on | Comprehensive | ||||||||||
Translation | Derivatives, | Income/(Loss) | ||||||||||
Adjustments | net of tax | |||||||||||
Balance at June 30, 2014 | $ | 63 | $ | 7 | $ | 70 | ||||||
Other comprehensive loss, net of tax before reclassifications | (64 | ) | (9 | ) | (73 | ) | ||||||
Amounts reclassified to earnings | — | — | — | |||||||||
Total other comprehensive loss, net of tax of $5 million | (64 | ) | (9 | ) | (73 | ) | ||||||
Balance at December 31, 2014 | $ | (1 | ) | $ | (2 | ) | $ | (3 | ) |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 6 Months Ended | |||||
Dec. 31, 2014 | ||||||
Earnings Per Share [Abstract] | ||||||
Reconciliation of common shares used to compute basic and diluted earnings per share | ||||||
Six Months Ended December 31 | ||||||
(in millions) | 2014 | 2013 | ||||
Weighted-average common shares–basic | 333 | 341 | ||||
Effect of dilutive securities: | ||||||
Employee stock options, restricted share units and performance share units | 4 | 4 | ||||
Weighted-average common shares–diluted | 337 | 345 | ||||
The following tables reconcile the number of common shares used to compute basic and diluted earnings per share: | ||||||
Three Months Ended December 31 | ||||||
(in millions) | 2014 | 2013 | ||||
Weighted-average common shares–basic | 331 | 342 | ||||
Effect of dilutive securities: | ||||||
Employee stock options, restricted share units and performance share units | 3 | 4 | ||||
Weighted-average common shares–diluted | 334 | 346 | ||||
Segment_Information_Tables
Segment Information (Tables) | 6 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Segment Reporting [Abstract] | |||||||||
Revenue by Reportable Segment | The following tables present revenue for each reportable segment and Corporate: | [1] | |||||||
Three Months Ended December 31 | |||||||||
(in millions) | 2014 | 2013 | |||||||
Pharmaceutical | $ | 22,627 | $ | 19,443 | |||||
Medical | 2,914 | 2,799 | |||||||
Total segment revenue | 25,541 | 22,242 | |||||||
Corporate (1) | (4 | ) | (2 | ) | |||||
Total revenue | $ | 25,537 | $ | 22,240 | |||||
Six Months Ended December 31 | |||||||||
(in millions) | 2014 | 2013 | |||||||
Pharmaceutical (2) | $ | 43,836 | $ | 41,256 | |||||
Medical | 5,766 | 5,511 | |||||||
Total segment revenue | 49,602 | 46,767 | |||||||
Corporate (1) | 5 | (4 | ) | ||||||
Total revenue | $ | 49,607 | $ | 46,763 | |||||
-1 | Corporate revenue consists of the elimination of inter-segment revenue and other revenue not allocated to the segments. | ||||||||
-2 | Our pharmaceutical distribution contract with Walgreen Co. expired on August 31, 2013. | ||||||||
Segment Profit by Reportable Segment | The following tables present segment profit by reportable segment and Corporate: | [1] | |||||||
Three Months Ended December 31 | |||||||||
(in millions) | 2014 | 2013 | |||||||
Pharmaceutical | $ | 542 | $ | 482 | |||||
Medical | 115 | 131 | |||||||
Total segment profit | 657 | 613 | |||||||
Corporate | (111 | ) | (94 | ) | |||||
Total operating earnings | $ | 546 | $ | 519 | |||||
Six Months Ended December 31 | |||||||||
(in millions) | 2014 | 2013 | |||||||
Pharmaceutical | $ | 992 | $ | 916 | |||||
Medical | 229 | 238 | |||||||
Total segment profit | 1,221 | 1,154 | |||||||
Corporate | (209 | ) | (164 | ) | |||||
Total operating earnings | $ | 1,012 | $ | 990 | |||||
[1] | Facility exit and other costs primarily consist of lease termination costs, accelerated depreciation, equipment relocation costs, project consulting fees and costs associated with restructuring our delivery of information technology infrastructure services. |
ShareBased_Compensation_Tables
Share-Based Compensation (Tables) | 6 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||
Schedule of total share-based compensation expense by type of award | The following tables provide total share-based compensation expense by type of award: | |||||||
Three Months Ended December 31 | ||||||||
(in millions) | 2014 | 2013 | ||||||
Restricted share unit expense | $ | 18 | $ | 15 | ||||
Employee stock option expense | 5 | 5 | ||||||
Performance share unit expense | 5 | 4 | ||||||
Total share-based compensation | $ | 28 | $ | 24 | ||||
Six Months Ended December 31 | ||||||||
(in millions) | 2014 | 2013 | ||||||
Restricted share unit expense | $ | 34 | $ | 31 | ||||
Employee stock option expense | 10 | 10 | ||||||
Performance share unit expense | 9 | 7 | ||||||
Total share-based compensation | $ | 53 | $ | 48 | ||||
Schedule of all stock option transactions under the Plans | The following table summarizes all stock option transactions under the Plans: | |||||||
(in millions, except per share amounts) | Stock | Weighted-Average | ||||||
Options | Exercise Price per | |||||||
Common Share | ||||||||
Outstanding at June 30, 2014 | 10 | $ | 39.16 | |||||
Granted | 1 | 71.57 | ||||||
Exercised | (2 | ) | 39.05 | |||||
Canceled and forfeited | — | — | ||||||
Outstanding at December 31, 2014 | 9 | $ | 44.28 | |||||
Exercisable at December 31, 2014 | 5 | $ | 35.91 | |||||
Schedule of additional data related to stock option activity | The following table provides additional data related to stock option activity: | |||||||
(in millions, except contractual lives) | December 31, 2014 | June 30, 2014 | ||||||
Aggregate intrinsic value of outstanding options at period end | $ | 329 | $ | 282 | ||||
Aggregate intrinsic value of exercisable options at period end | $ | 246 | $ | 185 | ||||
Weighted-average remaining contractual life of outstanding options (in years) | 6 | 6 | ||||||
Weighted-average remaining contractual life of exercisable options (in years) | 5 | 4 | ||||||
Schedule of all 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, 2014 | 3 | $ | 45.65 | |||||
Granted | 1 | 71.89 | ||||||
Vested | (1 | ) | 44.41 | |||||
Canceled and forfeited | — | — | ||||||
Nonvested at December 31, 2014 | 3 | $ | 56.83 | |||||
Schedule of all 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 | Weighted-Average | ||||||
Share Units | Grant Date Fair | |||||||
Value per Share | ||||||||
Nonvested at June 30, 2014 | 0.9 | $ | 44.41 | |||||
Granted | 0.2 | 66.78 | ||||||
Vested (1) | (0.2 | ) | 41.59 | |||||
Canceled and forfeited | — | — | ||||||
Nonvested at December 31, 2014 | 0.9 | $ | 50.61 | |||||
-1 | Vested based on achievement of 120 percent of the target performance goal. |
Acquisitions_Narrative_Details
Acquisitions (Narrative) (Details) (USD $) | 6 Months Ended | 0 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | 9-May-14 |
Business Acquisition | |||
Payments to Acquire Businesses, Net of Cash Acquired | $86 | $50 | |
AccessClosure | |||
Business Acquisition | |||
Business Acquisition, Effective Date of Acquisition | 9-May-14 | ||
Payments to Acquire Businesses, Net of Cash Acquired | $320 |
Restructuring_and_Employee_Sev2
Restructuring and Employee Severance (Narrative) (Details) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2013 |
Restructuring Cost and Reserve [Line Items] | |||||
Loss on disposal of held for sale assets | $18 | ($9) | $18 | ($9) | |
Fiscal 2013 Medical Restructuring [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Activities, Initiation Date | 30-Jan-13 | ||||
Waukegan, Illinois Property [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Loss on disposal of held for sale assets | $1 |
Restructuring_and_Employee_Sev3
Restructuring and Employee Severance (Activity Related to Restructuring and Employee Severance Costs) (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | ||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Gain (Loss) on Sale of Assets and Asset Impairment Charges | $18 | ($9) | $18 | ($9) | ||||
Employee-related costs | 5 | [1] | 4 | [1] | 21 | [1] | 8 | [1] |
Facility exit and other costs | 2 | [2] | 6 | [2] | 5 | [2] | 12 | [2] |
Total restructuring and employee severance | $7 | $10 | $26 | $20 | ||||
[1] | Employee-related costs primarily consist of termination benefits provided to employees who have been involuntarily terminated and duplicate payroll costs during transition periods. | |||||||
[2] | Facility exit and other costs primarily consist of lease termination costs, accelerated depreciation, equipment relocation costs, project consulting fees and costs associated with restructuring our delivery of information technology infrastructure services. |
Restructuring_and_Employee_Sev4
Restructuring and Employee Severance (Liabilities Associated with Restructuring and Employee Severance Activities) (Details) (USD $) | 6 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 |
Employee-Related Costs | |
Restructuring Reserve | |
Beginning Balance | $24 |
Additions to restructuring reserve | 18 |
Payments and other adjustments | -18 |
Ending Balance | 24 |
Facility Exit and Other Costs | |
Restructuring Reserve | |
Beginning Balance | 0 |
Additions to restructuring reserve | 1 |
Payments and other adjustments | 0 |
Ending Balance | 1 |
Total | |
Restructuring Reserve | |
Beginning Balance | 24 |
Additions to restructuring reserve | 19 |
Payments and other adjustments | -18 |
Ending Balance | $25 |
Goodwill_and_Other_Intangible_2
Goodwill and Other Intangible Assets (Narrative) (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Goodwill and Intangible Assets | ||||
Amortization of Intangible Assets | $47 | $46 | $92 | $92 |
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | 94 | 94 | ||
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 176 | 176 | ||
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 167 | 167 | ||
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 124 | 124 | ||
Finite-Lived Intangible Assets, Amortization Expense, Year Five | $76 | $76 | ||
Minimum | ||||
Goodwill and Intangible Assets | ||||
Finite-Lived Intangible Asset, Useful Life | 1 year | |||
Maximum | ||||
Goodwill and Intangible Assets | ||||
Finite-Lived Intangible Asset, Useful Life | 20 years |
Goodwill_and_Other_Intangible_3
Goodwill and Other Intangible Assets (Schedule of Goodwill by Reportable Segment) (Details) (USD $) | 6 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 |
Goodwill | |
Beginning Balance | $4,878 |
Goodwill acquired, net of purchase price adjustments | 71 |
Foreign currency translation adjustments and other | -20 |
Ending Balance | 4,929 |
Pharmaceutical | |
Goodwill | |
Beginning Balance | 2,158 |
Goodwill acquired, net of purchase price adjustments | 21 |
Foreign currency translation adjustments and other | 0 |
Ending Balance | 2,179 |
Medical | |
Goodwill | |
Beginning Balance | 2,720 |
Goodwill acquired, net of purchase price adjustments | 50 |
Foreign currency translation adjustments and other | -20 |
Ending Balance | $2,750 |
Goodwill_and_Other_Intangible_4
Goodwill and Other Intangible Assets (Schedule of Intangible Assets) (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2014 |
Amortization of Intangible Assets | $47 | $46 | $92 | $92 | |
Indefinite-life intangibles: | |||||
Indefinite-Lived Intangible Assets, Gross | 14 | 14 | 14 | ||
Indefinite-Lived Intangible Assets, Accumulated Amortization | 0 | 0 | 0 | ||
Indefinite-Lived Intangible Assets (Excluding Goodwill) | 14 | 14 | 14 | ||
Definite-life intangibles: | |||||
Finite-Lived Intangible Assets, Gross | 1,561 | 1,561 | 1,514 | ||
Finite-Lived Intangible Assets, Accumulated Amortization | 628 | 628 | 536 | ||
Finite-Lived Intangible Assets, Net | 933 | 933 | 978 | ||
Total Intangibles, Gross | 1,575 | 1,575 | 1,528 | ||
Total Intangibles, Accumulated Amortization | 628 | 628 | 536 | ||
Intangible Assets, Net (Excluding Goodwill) | 947 | 947 | 992 | ||
Customer relationships | |||||
Definite-life intangibles: | |||||
Finite-Lived Intangible Assets, Gross | 1,041 | 1,041 | 1,043 | ||
Finite-Lived Intangible Assets, Accumulated Amortization | 434 | 434 | 388 | ||
Finite-Lived Intangible Assets, Net | 607 | 607 | 655 | ||
Trademarks, trade names and patents | |||||
Definite-life intangibles: | |||||
Finite-Lived Intangible Assets, Gross | 225 | 225 | 213 | ||
Finite-Lived Intangible Assets, Accumulated Amortization | 79 | 79 | 69 | ||
Finite-Lived Intangible Assets, Net | 146 | 146 | 144 | ||
Developed technology and other | |||||
Definite-life intangibles: | |||||
Finite-Lived Intangible Assets, Gross | 295 | 295 | 258 | ||
Finite-Lived Intangible Assets, Accumulated Amortization | 115 | 115 | 79 | ||
Finite-Lived Intangible Assets, Net | 180 | 180 | 179 | ||
Trademarks and other | |||||
Indefinite-life intangibles: | |||||
Indefinite-Lived Intangible Assets, Gross | 14 | 14 | 14 | ||
Indefinite-Lived Intangible Assets, Accumulated Amortization | 0 | 0 | 0 | ||
Indefinite-Lived Intangible Assets (Excluding Goodwill) | $14 | $14 | $14 |
AvailableforSale_Securities_Na
Available-for-Sale Securities (Narrative) (Details) (USD $) | 6 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 |
Schedule of Available-for-sale Securities [Line Items] | |
Other than Temporary Impairment Losses, Investments, Available-for-sale Securities | $0 |
Short Term | |
Schedule of Available-for-sale Securities [Line Items] | |
Weighted average effective maturity | 9 months |
Long Term | |
Schedule of Available-for-sale Securities [Line Items] | |
Weighted average effective maturity | 16 months |
AvailableforSale_Securities_Sc
Available-for-Sale Securities (Schedule of Available-for-Sale Securities) (Details) (USD $) | Dec. 31, 2014 | Jun. 30, 2014 | ||
In Millions, unless otherwise specified | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Available-for-sale Securities | $88 | [1] | $100 | [1] |
Available-for-sale Securities, Current | 51 | 93 | ||
Available-for-sale Securities, Noncurrent | 37 | 7 | ||
Commercial Paper | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Available-for-sale Securities, Current | 14 | 4 | ||
Treasury bills | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Available-for-sale Securities, Current | 0 | 85 | ||
International bonds | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Available-for-sale Securities, Current | 1 | 1 | ||
Corporate bonds | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Available-for-sale Securities, Current | 5 | 3 | ||
Available-for-sale Securities, Noncurrent | 9 | 5 | ||
U.S. agency bonds | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Available-for-sale Securities, Current | 25 | 0 | ||
Available-for-sale Securities, Noncurrent | 7 | 2 | ||
U.S. agency mortgage-backed securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Available-for-sale Securities, Current | 6 | 0 | ||
Available-for-sale Securities, Noncurrent | $21 | $0 | ||
[1] | We invest in marketable securities, which are classified as available-for-sale and are carried at fair value in the condensed consolidated balance sheets. Observable Level 2 inputs such as quoted prices for similar securities, interest rate spreads, yield curves and credit risk are used to determine the fair value. See Note 5 for additional information regarding available-for-sale securities. |
LongTerm_Obligations_and_Other2
Long-Term Obligations and Other Short-Term Borrowings (Narrative) (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Sep. 30, 2014 |
Debt Instrument | ||||||
Long-term Debt and Capital Lease Obligations, Current | $270 | $270 | $801 | |||
Long-term Debt, Maturities, Repayments of Principal in Year Two | 22 | 22 | ||||
Long-term Debt, Maturities, Repayments of Principal in Year Three | 289 | 289 | ||||
Long-term Debt, Maturities, Repayments of Principal in Year Four | 402 | 402 | ||||
Long-term Debt, Maturities, Repayments of Principal in Year Five | 1 | 1 | ||||
Long-term Debt, Maturities, Repayments of Principal after Year Five | 2,992 | 2,992 | ||||
Debt Instrument, Offering Date | 7-Nov-14 | |||||
Offer As Percentage Of Principal Amount | 101.00% | |||||
Loss on Extinguishment of Debt | -60 | 0 | -60 | 0 | ||
Loss on Extniguishment of Debt, Net of Tax | 37 | |||||
Make-Whole Premium | 80 | |||||
Unamortized debt issuance costs | 2 | |||||
Fair Value adjustment related to previously terminated swaps | 22 | |||||
2.4% Notes due 2019 | ||||||
Debt Instrument | ||||||
Notes Payable | 449 | 449 | 0 | |||
Debt Instrument, Maturity Date | 15-Nov-19 | |||||
Debt Instrument, Face Amount | 450 | 450 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 2.40% | 2.40% | ||||
Offer As Percentage Of Principal Amount | 101.00% | |||||
3.5% Notes due 2024 | ||||||
Debt Instrument | ||||||
Notes Payable | 398 | 398 | 0 | |||
Debt Instrument, Maturity Date | 15-Nov-24 | |||||
Debt Instrument, Face Amount | 400 | 400 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 3.50% | 3.50% | ||||
Offer As Percentage Of Principal Amount | 101.00% | |||||
4.5% Notes due 2044 | ||||||
Debt Instrument | ||||||
Notes Payable | 345 | 345 | 0 | |||
Debt Instrument, Maturity Date | 15-Nov-44 | |||||
Debt Instrument, Face Amount | 350 | 350 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 4.50% | 4.50% | ||||
Offer As Percentage Of Principal Amount | 101.00% | |||||
Committed Receivables Sales Facility Program [Member] | ||||||
Debt Instrument | ||||||
Line of Credit Facility, Effective Date of Increase | 3-Nov-14 | |||||
Line of Credit Facility, Maximum Borrowing Capacity | 950 | 950 | 700 | |||
Line of Credit Facility, Expiration Date | 3-Nov-17 | |||||
Line of Credit Facility, Amount Outstanding | 0 | 0 | ||||
Stand by Letters of Credit Outstanding, Amount | $41 | $41 |
LongTerm_Obligations_and_Other3
Long-Term Obligations and Other Short-Term Borrowings (Summary of Long-Term Obligations and Other Short-Term Borrowings) (Details) (USD $) | Dec. 31, 2014 | Jun. 30, 2014 |
In Millions, unless otherwise specified | ||
Debt Instrument | ||
Other Obligations | $300 | $319 |
Total debt | 3,976 | 3,972 |
Current portion of long-term obligations and other short-term borrowings | 270 | 801 |
Long-term obligations, less current portion | 3,706 | 3,171 |
1.7% Notes due 2018 | ||
Debt Instrument | ||
Notes payable | 401 | 401 |
1.9% Notes due 2017 | ||
Debt Instrument | ||
Notes payable | 250 | 251 |
2.4% Notes due 2019 [Member] [Domain] | ||
Debt Instrument | ||
Notes payable | 449 | 0 |
3.2% Notes due 2022 | ||
Debt Instrument | ||
Notes payable | 249 | 248 |
3.2% Notes due 2023 | ||
Debt Instrument | ||
Notes payable | 549 | 549 |
3.5% Notes due 2024 [Member] | ||
Debt Instrument | ||
Notes payable | 398 | 0 |
4.0% Notes due 2015 | ||
Debt Instrument | ||
Notes payable | 0 | 513 |
4.5% Notes due 2044 [Member] [Member] | ||
Debt Instrument | ||
Notes payable | 345 | 0 |
4.6% Notes due 2043 | ||
Debt Instrument | ||
Notes payable | 349 | 349 |
4.625% Notes due 2020 | ||
Debt Instrument | ||
Notes payable | 525 | 525 |
5.8% Notes due 2016 | ||
Debt Instrument | ||
Notes payable | 0 | 301 |
5.85% Notes due 2017 | ||
Debt Instrument | ||
Notes payable | 0 | 158 |
6.0% Notes due 2017 | ||
Debt Instrument | ||
Notes payable | 0 | 197 |
7.0% Debentures due 2026 | ||
Debt Instrument | ||
Notes payable | 124 | 124 |
7.8% Debentures due 2016 | ||
Debt Instrument | ||
Notes payable | $37 | $37 |
Income_Taxes_Narrative_Details
Income Taxes (Narrative) (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2014 |
Income Taxes | |||||
Effective Income Tax Rate, Continuing Operations | 36.00% | 44.10% | 37.40% | 34.20% | |
Unfavorable/(favorable) impact of nondeductible litigation expense, Amount | $13 | $24 | |||
Unfavorable/(favorable) impact of nondeductible litigation expense, Percent | 3.00% | 2.70% | |||
Unfavorable/(favorable) impact due to remeasurement of unrecognized tax benefits, Amount | 12 | ||||
Unfavorable/(favorable) impact due to remeasurement of unrecognized tax benefits, Percent | 1.40% | ||||
Unfavorable/(favorable) impact of Puerto Rico tax law changes, Amount | -14 | ||||
Unfavorable/(favorable) impact of Puerto Rico tax law changes, Percent | 1.60% | ||||
Net Unfavorable/(Favorable) Discrete Items, Amount | 38 | -23 | |||
Net Unfavorable/(Favorable) Discrete Items, Percent | 7.70% | 2.40% | |||
Unfavorable/(favorable) impact of settlements of federal and state tax controversies, settlements and unusual provisions, Amount | -67 | ||||
Significant Increase/(Decrease) in Unrecognized Tax Benefits is Reasonably Possible, Estimated Range of Change, Lower Bound | 0 | 0 | |||
Significant Increase/(Decrease) in Unrecognized Tax Benefits is Reasonably Possible, Estimated Range of Change, Upper Bound | 180 | 180 | |||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | 155 | 155 | 143 | ||
Amount CareFusion is liable under tax matters agreement in the event amount must be paid to the taxing authority | 214 | 214 | 210 | ||
Unrecognized tax benefits | 525 | 525 | 510 | ||
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 333 | 333 | 322 | ||
Federal | Minimum | |||||
Income Taxes | |||||
Tax years open for examination | 2006 | ||||
Tax years under examination | 2006 | ||||
Federal | Maximum | |||||
Income Taxes | |||||
Tax years open for examination | 2014 | ||||
Tax years under examination | 2010 | ||||
State and Foreign Jurisdiction | Minimum | |||||
Income Taxes | |||||
Tax years open for examination | 2003 | ||||
State and Foreign Jurisdiction | Maximum | |||||
Income Taxes | |||||
Tax years open for examination | 2014 | ||||
Loss carryback from fiscal 2007 | |||||
Income Taxes | |||||
Unrecognized Tax Benefits, Period Increase (Decrease) | -14 | -14 | |||
Unfavorable/(favorable) impact due to remeasurement of unrecognized tax benefits, Percent | 3.10% | 1.60% | |||
Impact of proposed assessment of additional tax | |||||
Income Taxes | |||||
Unrecognized Tax Benefits, Period Increase (Decrease) | $56 | $56 |
Commitments_Contingent_Liabili1
Commitments, Contingent Liabilities and Litigation (Narrative) (Details) (USD $) | 6 Months Ended | 3 Months Ended | 6 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2014 |
Loss Contingencies | |||
Proceeds from Litigation Settlements | $16 | ||
DEA Investigation and Related Matters [Member] | |||
Loss Contingencies | |||
Litigation Charges | 7 | 34 | |
Litigation Accrual | 34 | 34 | |
State of West Virginia vs Cardinal Health, Inc | |||
Loss Contingencies | |||
Loss Contingency, Number of Defendants | 13 | ||
FTC Investigation [Member] | |||
Loss Contingencies | |||
Litigation Charges | 27 | ||
CVS Health Corporation Member [Domain] | |||
Red Oak Sourcing Establishment Date | Jul-14 | ||
Red Oak Sourcing Initial Term | 10 years | ||
Number Of Quarterly Payments To CVS | 39 | ||
Quarterly Payment To CVS | $25.60 | ||
Quarterly Payment To CVS Commencement Date | Oct-14 |
Fair_Value_Measurements_Fair_V
Fair Value Measurements (Fair Value of Assets and Liabilities Measured on a Recurring Basis) (Details) (USD $) | Dec. 31, 2014 | Jun. 30, 2014 | ||
In Millions, unless otherwise specified | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||||
Cash equivalents | $212 | [1] | $740 | [1] |
Forward contracts | 0 | [2] | 10 | [2] |
Available-for-sale securities | 88 | [3] | 100 | [3] |
Other investments | 112 | [4] | 106 | [4] |
Total | 412 | 956 | ||
Fair Value, Inputs, Level 1 | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||||
Cash equivalents | 212 | [1] | 740 | [1] |
Forward contracts | 0 | [2] | 0 | [2] |
Available-for-sale securities | 0 | [3] | 0 | [3] |
Other investments | 112 | [4] | 106 | [4] |
Total | 324 | 846 | ||
Fair Value, Inputs, Level 2 | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||||
Cash equivalents | 0 | [1] | 0 | [1] |
Forward contracts | 0 | [2] | 10 | [2] |
Available-for-sale securities | 88 | [3] | 100 | [3] |
Other investments | 0 | [4] | 0 | [4] |
Total | 88 | 110 | ||
Fair Value, Inputs, Level 3 | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||||
Cash equivalents | 0 | [1] | 0 | [1] |
Forward contracts | 0 | [2] | 0 | [2] |
Available-for-sale securities | 0 | [3] | 0 | [3] |
Other investments | 0 | [4] | 0 | [4] |
Total | $0 | $0 | ||
[1] | Cash equivalents are comprised of highly liquid investments purchased with a maturity of three months or less. The carrying value of these cash equivalents approximates fair value due to their short-term maturities. | |||
[2] | The fair value of interest rate swaps, foreign currency contracts and commodity contracts is determined based on the present value of expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Observable Level 2 inputs are used to determine the present value of expected future cash flows. The fair value of these derivative contracts, which are subject to master netting arrangements under certain circumstances, is presented on a gross basis in the condensed consolidated balance sheets. | |||
[3] | We invest in marketable securities, which are classified as available-for-sale and are carried at fair value in the condensed consolidated balance sheets. Observable Level 2 inputs such as quoted prices for similar securities, interest rate spreads, yield curves and credit risk are used to determine the fair value. See Note 5 for additional information regarding available-for-sale securities. | |||
[4] | The other investments balance includes investments in mutual funds, which are used to offset fluctuations in deferred compensation liabilities. These mutual funds primarily invest in the equity securities of companies with large market capitalization and high quality fixed income debt securities. The fair value of these investments is determined using quoted market prices. |
Financial_Instruments_Narrativ
Financial Instruments (Narrative) (Details) (Designated as Hedging Instrument, Interest Rate Swap, USD $) | Sep. 30, 2014 | Dec. 31, 2014 | Dec. 10, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||||
Cash Flow Hedging | ||||
Derivative [Line Items] | ||||
Derivative, Notional Amount | $50 | |||
Fair Value Hedging [Member] | ||||
Derivative [Line Items] | ||||
Derivative, Notional Amount | $450 | $875 | $300 |
Financial_Instruments_Summary_
Financial Instruments (Summary of Estimated Fair Value of Our Long-Term Obligations and Other Short-Term Borrowings) (Details) (USD $) | Dec. 31, 2014 | Jun. 30, 2014 |
In Millions, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Amount | $3,976 | $3,972 |
Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated fair value | $4,089 | $4,115 |
Shareholders_Equity_Narrative_
Shareholders' Equity (Narrative) (Details) (Treasury Shares, USD $) | 6 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Treasury Shares | ||
Treasury shares acquired (using Cost Method), Shares | 9.1 | 1 |
Treasury shares acquired (using Cost Method), Value | $684 | $50 |
Treasury Stock Acquired, Average Cost Per Share | $75 | $51.65 |
Shareholders_Equity_Schedule_o
Shareholders' Equity (Schedule of the changes in the balance in accumulated other comprehensive income by component and in total) (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Rollforward] | ||||
Accumulated other comprehensive income/(loss) at Beginning of Period | $70 | |||
Other comprehensive loss, net of tax before reclassifications | -73 | |||
Amounts reclassified to earnings | 0 | |||
Other comprehensive loss, Foreign currency transaction and translation adjustment, Net of tax | -40 | 4 | -64 | 28 |
Other comprehensive loss, Derivatives qualifying as hedges, Net of tax | -9 | 3 | -9 | 3 |
Total other comprehensive loss, net of tax | -49 | 7 | -73 | 31 |
Accumulated other comprehensive income/(loss) at End of Period | -3 | -3 | ||
Other Comprehensive Income (Loss), Tax | 5 | |||
Foreign Currency Translation Adjustments | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Rollforward] | ||||
Accumulated other comprehensive income/(loss) at Beginning of Period | 63 | |||
Other comprehensive loss, net of tax before reclassifications | -64 | |||
Amounts reclassified to earnings | 0 | |||
Other comprehensive loss, Foreign currency transaction and translation adjustment, Net of tax | -64 | |||
Accumulated other comprehensive income/(loss) at End of Period | -1 | -1 | ||
Unrealized Gain/(Loss) on Derivatives, net of tax | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Rollforward] | ||||
Accumulated other comprehensive income/(loss) at Beginning of Period | 7 | |||
Other comprehensive loss, net of tax before reclassifications | -9 | |||
Amounts reclassified to earnings | 0 | |||
Other comprehensive loss, Derivatives qualifying as hedges, Net of tax | -9 | |||
Accumulated other comprehensive income/(loss) at End of Period | ($2) | ($2) |
Earnings_Per_Share_Narrative_D
Earnings Per Share (Narrative) (Details) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Earnings Per Share [Abstract] | ||||
Potentially dilutive employee stock options, restricted share units and performance share units that were anitdilutive | 1 | 0 | 1 | 2 |
Earnings_Per_Share_Reconciliat
Earnings Per Share (Reconciliation of Common Shares Used to Compute Basic and Diluted EPS) (Details) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Earnings Per Share [Abstract] | ||||
Weighted-average common shares-basic | 331 | 342 | 333 | 341 |
Effect of dilutive securities: | ||||
Employee stock options, restricted share units and performance share units | 3 | 4 | 4 | 4 |
Weighted-average common shares-diluted | 334 | 346 | 337 | 345 |
Segment_Information_Narrative_
Segment Information (Narrative) (Details) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2014 |
Segment Reporting [Abstract] | |||||
Number of Operating Segments | 2 | 2 | |||
Number of Reportable Segments | 2 | 2 | |||
Project Costs On Investment And Other Spending | $4 | $6 | $6 | $10 |
Segment_Information_Revenue_by
Segment Information (Revenue by Reportable Segment) (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | ||||
Segment Reporting Information | ||||||||
Revenue | $25,537 | $22,240 | $49,607 | $46,763 | ||||
Pharmaceutical | ||||||||
Segment Reporting Information | ||||||||
Revenue | 22,627 | 19,443 | 43,836 | [1] | 41,256 | [1] | ||
Medical | ||||||||
Segment Reporting Information | ||||||||
Revenue | 2,914 | 2,799 | 5,766 | 5,511 | ||||
Reportable Segments | ||||||||
Segment Reporting Information | ||||||||
Revenue | 25,541 | 22,242 | 49,602 | 46,767 | ||||
Corporate | ||||||||
Segment Reporting Information | ||||||||
Revenue | ($4) | [2] | ($2) | [2] | $5 | [2] | ($4) | [2] |
Walgreen Co | Pharmaceutical | ||||||||
Segment Reporting Information | ||||||||
Contract expiration date | 31-Aug-13 | |||||||
[1] | Our pharmaceutical distribution contract with Walgreen Co. expired on AugustB 31, 2013. | |||||||
[2] | Corporate revenue consists of the elimination of inter-segment revenue and other revenue not allocated to the segments. |
Segment_Information_Segment_Pr
Segment Information (Segment Profit by Reportable Segment) (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Operating earnings | $546 | $519 | $1,012 | $990 |
Pharmaceutical | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Operating earnings | 542 | 482 | 992 | 916 |
Medical | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Operating earnings | 115 | 131 | 229 | 238 |
Reportable Segments | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Operating earnings | 657 | 613 | 1,221 | 1,154 |
Corporate | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Operating earnings | ($111) | ($94) | ($209) | ($164) |
ShareBased_Compensation_Narrat
Share-Based Compensation (Narrative) (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense | $9 | $8 | $18 | $17 |
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period, in years | 3 years | |||
Total compensation cost, net of estimated forfeitures, related to unvested awards not yet recognized, pre-tax | 33 | 33 | ||
Weighted-average period over which award cost is expected to be recognized (in years) | 2 years | |||
Stock Options | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Exercisable period of plans, in years | 7 years | |||
Stock Options | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Exercisable period of plans, in years | 10 years | |||
Restricted Share Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period, in years | 3 years | |||
Total compensation cost, net of estimated forfeitures, related to unvested awards not yet recognized, pre-tax | 112 | 112 | ||
Weighted-average period over which award cost is expected to be recognized (in years) | 2 years | |||
Performance Share Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period, in years | 3 years | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 120.00% | |||
Total compensation cost, net of estimated forfeitures, related to unvested awards not yet recognized, pre-tax | $21 | $21 | ||
Weighted-average period over which award cost is expected to be recognized (in years) | 2 years | |||
Performance Share Units | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 0.00% | |||
Performance Share Units | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 200.00% |
ShareBased_Compensation_Schedu
Share-Based Compensation (Schedule of Total Share-Based Compensation Expense by Type of Award) (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Share-based compensation expense | $28 | $24 | $53 | $48 |
Restricted Share Units | ||||
Share-based compensation expense | 18 | 15 | 34 | 31 |
Stock Options | ||||
Share-based compensation expense | 5 | 5 | 10 | 10 |
Performance Share Units | ||||
Share-based compensation expense | $5 | $4 | $9 | $7 |
ShareBased_Compensation_Schedu1
Share-Based Compensation (Schedule of All Stock Option Transactions Under the Plans) (Details) (USD $) | 6 Months Ended |
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Stock Options Outstanding at Beginning of Period | 10 |
Stock Options Outstanding, Granted | 1 |
Stock Options Outstanding, Exercised | -2 |
Stock Options Outstanding, Canceled and forfeited | 0 |
Stock Options Outstanding at End of Period | 9 |
Stock Options Outstanding, Exercisable at End of Period | 5 |
Share Based Compensation Arrangement By Share Based Payment Award Options Outstanding Weighted-Average Exercise Price [Roll Forward] | |
Weighted-Average Exercise Price Per Common Share, Outstanding at Beginning of Period | $39.16 |
Weighted-Average Exercise Price Per Common Share, Granted | $71.57 |
Weighted-Average Exercise Price Per Common Share, Exercised | $39.05 |
Weighted-Average Exercise Price Per Common Share, Canceled and forfeited | $0 |
Weighted-Average Exercise Price Per Common Share, Outstanding at End of Period | $44.28 |
Weighted-Average Exercise Price Per Common Share, Exercisable at End of Period | $35.91 |
ShareBased_Compensation_Schedu2
Share-Based Compensation (Schedule of Additional Data Related to Stock Option Activity) (Details) (Stock Options, USD $) | 6 Months Ended | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 | Jun. 30, 2014 |
Stock Options | ||
Aggregate intrinsic value of outstanding options at period end, Stock Options | $329 | $282 |
Aggregate intrinsic value of exercisable options at period end, Stock Options | $246 | $185 |
Weighted-average remaining contractual life of outstanding options | 6 years | 6 years |
Weighted-average remaining contractual life of exercisable options | 5 years | 4 years |
ShareBased_Compensation_Schedu3
Share-Based Compensation (Schedule of All Transactions Related to Restricted Share Units Under the Plans) (Details) (Restricted Share Units, USD $) | 6 Months Ended |
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 |
Restricted Share Units | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Nonvested at Beginning of Period | 3 |
Granted | 1 |
Vested | -1 |
Canceled and forfeited | 0 |
Nonvested at End of Period | 3 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted-Average Grant Date Fair Value [Roll Forward] | |
Weighted-Average Grant Date Fair Value Per Share, Nonvested at Beginning of Period | $45.65 |
Weighted-Average Grant Date Fair Value Per Share, Granted | $71.89 |
Weighted-Average Grant Date Fair Value Per Share, Vested | $44.41 |
Weighted-Average Grant Date Fair Value Per Share, Canceled and forfeited | $0 |
Weighted-Average Grant Date Fair Value Per Share, Nonvested at End of Period | $56.83 |
ShareBased_Compensation_Schedu4
Share-Based Compensation (Schedule of all Transactions Related to Performance Share Units Under the Plans) (Details) (Performance Share Units, USD $) | 6 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | |
Performance Share Units | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 120.00% | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Nonvested at Beginning of Period | 0.9 | |
Granted | 0.2 | |
Vested | -0.2 | [1] |
Canceled and forfeited | 0 | |
Nonvested at End of Period | 0.9 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted-Average Grant Date Fair Value [Roll Forward] | ||
Weighted-Average Grant Date Fair Value Per Share, Nonvested at Beginning of Period | $44.41 | |
Weighted-Average Grant Date Fair Value Per Share, Granted | $66.78 | |
Weighted-Average Grant Date Fair Value Per Share, Vested | $41.59 | |
Weighted-Average Grant Date Fair Value Per Share, Canceled and forfeited | $0 | |
Weighted-Average Grant Date Fair Value Per Share, Nonvested at End of Period | $50.61 | |
[1] | Vested based on achievement of 120 percent of the target performance goal. |