Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Mar. 31, 2018 | Apr. 30, 2018 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | cah | |
Entity Registrant Name | CARDINAL HEALTH INC | |
Entity Central Index Key | 721,371 | |
Current Fiscal Year End Date | --06-30 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 310,685,049 |
Consolidated Statements of Earn
Consolidated Statements of Earnings - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue | $ 33,633 | $ 31,821 | $ 101,460 | $ 97,010 |
Cost of products sold | 31,720 | 30,093 | 96,014 | 92,089 |
Gross margin | 1,913 | 1,728 | 5,446 | 4,921 |
Operating expenses: | ||||
Distribution, selling, general and administrative expenses | 1,132 | 960 | 3,325 | 2,792 |
Restructuring and employee severance | 2 | 15 | 155 | 31 |
Amortization and other acquisition-related costs | 175 | 128 | 543 | 365 |
Impairments and (gain)/loss on disposal of assets, net | (6) | 2 | 62 | 15 |
Litigation (recoveries)/charges, net | 64 | 18 | 155 | 37 |
Operating earnings | 546 | 605 | 1,206 | 1,681 |
Other (income)/expense, net | (2) | (5) | (6) | (2) |
Interest expense, net | 84 | 46 | 251 | 134 |
Loss on Extinguishment of Debt | 0 | 0 | 2 | 0 |
Earnings before income taxes | 464 | 564 | 959 | 1,549 |
Provision for/(benefit from) income taxes | 209 | 182 | (466) | 533 |
Net earnings | 255 | 382 | 1,425 | 1,016 |
Net earnings attributable to noncontrolling interests | 0 | (1) | (3) | (2) |
Net earnings attributable to Cardinal Health, Inc. | $ 255 | $ 381 | $ 1,422 | $ 1,014 |
Earnings per common share attributable to Cardinal Health, Inc.: | ||||
Basic (in shares) | $ 0.81 | $ 1.21 | $ 4.52 | $ 3.19 |
Diluted (in shares) | $ 0.81 | $ 1.20 | $ 4.50 | $ 3.17 |
Weighted-average number of common shares outstanding: | ||||
Basic (in shares) | 313 | 316 | 314 | 318 |
Diluted (in shares) | 315 | 318 | 316 | 320 |
Cash dividends declared per common share | $ 0.4624 | $ 0.4489 | $ 1.3872 | $ 1.3467 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Net earnings | $ 255 | $ 382 | $ 1,425 | $ 1,016 |
Other comprehensive income/(loss): | ||||
Foreign currency translation adjustments and other | 110 | 33 | 141 | (47) |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Net of Tax | (23) | 0 | (23) | 0 |
Net unrealized gain/(loss) on derivative instruments, net of tax | 3 | 2 | 2 | 27 |
Total other comprehensive income/(loss), net of tax | 90 | 35 | 120 | (20) |
Total comprehensive income | 345 | 417 | 1,545 | 996 |
Net Income (Loss) Attributable to Noncontrolling Interest | 0 | 1 | 3 | 2 |
Total comprehensive income attributable to Cardinal Health, Inc. | $ 345 | $ 416 | $ 1,542 | $ 994 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2018 | Jun. 30, 2017 |
Current assets: | ||
Cash and equivalents | $ 2,175 | $ 6,879 |
Trade receivables, net | 7,671 | 8,048 |
Inventories, net | 11,962 | 11,301 |
Prepaid expenses and other | 1,705 | 2,117 |
Total current assets | 23,513 | 28,345 |
Property and equipment, net | 2,521 | 1,879 |
Goodwill and other intangibles, net | 14,299 | 9,207 |
Other assets | 698 | 681 |
Total assets | 41,031 | 40,112 |
Current liabilities: | ||
Accounts payable | 18,741 | 17,906 |
Current portion of long-term obligations and other short-term borrowings | 551 | 1,327 |
Other accrued liabilities | 2,135 | 1,988 |
Total current liabilities | 21,427 | 21,221 |
Long-term obligations, less current portion | 9,027 | 9,068 |
Deferred income taxes and other liabilities | 3,027 | 2,877 |
Redeemable noncontrolling interests | 12 | 118 |
Preferred shares, without par value: | ||
Authorized—500 thousand shares, Issued—none | 0 | 0 |
Common shares, without par value: | ||
Authorized—755 million shares, Issued—327 million shares at March 31, 2018 and June 30, 2017, respectively | 2,710 | 2,697 |
Retained earnings | 5,958 | 4,967 |
Common shares in treasury, at cost: 16 million shares and 11 million shares at March 31, 2018 and June 30, 2017, respectively | (1,126) | (731) |
Accumulated other comprehensive loss | (5) | (125) |
Total Cardinal Health, Inc. shareholders' equity | 7,537 | 6,808 |
Noncontrolling interests | 1 | 20 |
Total shareholders’ equity | 7,538 | 6,828 |
Total liabilities, redeemable noncontrolling interests and shareholders’ equity | $ 41,031 | $ 40,112 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - shares | Mar. 31, 2018 | Jun. 30, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred shares, authorized | 500,000 | 500,000 |
Preferred shares, issued | 0 | 0 |
Common shares, authorized | 755,000,000 | 755,000,000 |
Common shares, issued | 327,000,000 | 364,000,000 |
Common shares in treasury | 11,000,000 | 42,000,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net earnings | $ 1,425 | $ 1,016 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 779 | 525 |
Loss on Extinguishment of Debt | 2 | 0 |
Loss on Sale of Investments | 6 | 4 |
Impairments and (gain)/loss on disposal of assets, net | 62 | 15 |
Share-based compensation | (64) | (73) |
Provision for bad debts | 76 | 46 |
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability | (2) | 0 |
Change in operating assets and liabilities, net of effects from acquisitions and divestitures: | ||
Increase in trade receivables | (632) | (107) |
Increase in inventories | (865) | (1,010) |
Increase in accounts payable | 1,635 | 225 |
Other accrued liabilities and operating items, net | (336) | (327) |
Net cash provided by operating activities | 2,214 | 460 |
Cash flows from investing activities: | ||
Acquisition of subsidiaries, net of cash acquired | (6,142) | (113) |
Additions to property and equipment | (246) | (293) |
Purchase of available-for-sale securities and other investments | (7) | (188) |
Proceeds from sale of available-for-sale securities and other investments | 65 | 115 |
Proceeds from maturities of available-for-sale securities | 0 | 49 |
Proceeds from divestitures and disposal of property and equipment and held for sale assets | 862 | 1 |
Net cash used in investing activities | (5,468) | (429) |
Payment for Contingent Consideration Liability, Financing Activities | 22 | 3 |
Cash flows from financing activities: | ||
Net change in short-term borrowings | (50) | 25 |
Purchase of noncontrolling interests | (106) | (12) |
Proceeds from Issuance of Long-term Debt and Capital Securities, Net | 3 | 0 |
Reduction of long-term obligations | (403) | (60) |
Proceeds from interest rate swap terminations | 0 | 14 |
Net proceeds/(tax withholdings) from share-based compensation | (3) | 20 |
Excess tax benefits from share-based compensation | 0 | 37 |
Dividends on common shares | (436) | (435) |
Payments for Repurchase of Common Stock | (450) | (600) |
Net cash used in financing activities | (1,467) | (1,014) |
Effect of exchange rates changes on cash and equivalents | 17 | (5) |
Net decrease in cash and equivalents | (4,704) | (988) |
Cash and equivalents at beginning of period | 6,879 | 2,356 |
Cash and equivalents at end of period | $ 2,175 | $ 1,368 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | 1. Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation Our condensed consolidated financial statements include the accounts of all majority-owned or controlled subsidiaries, and all significant intercompany transactions and amounts have been eliminated. References to "we," "our," and similar pronouns in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 (this "Form 10-Q") refer to Cardinal Health, Inc. and its majority-owned or controlled subsidiaries unless the context requires otherwise. Our fiscal year ends on June 30. References to fiscal 2018 and 2017 in these condensed consolidated financial statements are to the fiscal years ending or ended June 30, 2018 and June 30, 2017 , respectively. Our condensed consolidated financial statements have been prepared in accordance with the U.S. Securities and Exchange Commission ("SEC") instructions to Quarterly Reports on Form 10-Q and include the information and disclosures required by accounting principles generally accepted in the United States ("GAAP") for interim financial reporting. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect amounts reported in the condensed consolidated financial statements and accompanying notes. Actual amounts may differ from these estimated amounts. In our opinion, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included. Except as disclosed elsewhere in this Form 10-Q, all such adjustments are of a normal and recurring nature. In addition, financial results presented for this fiscal 2018 interim period are not necessarily indicative of the results that may be expected for the full fiscal year ending June 30, 2018 . These condensed consolidated financial statements are unaudited and, accordingly, should be read in conjunction with the audited consolidated financial statements and related notes contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2017 (the " 2017 Form 10-K"). Recent Financial Accounting Standards In March 2018, the Financial Accounting Standards Board (the "FASB") issued amended accounting guidance to codify guidance pursuant to SEC staff accounting bulletin 118 (“SAB 118”), which was issued in connection with the Tax Cuts and Jobs Act (the “Tax Act”) of December 2017. The guidance allows companies to use provisional estimates to record the effects of the Tax Act and also provides a measurement period (not to exceed one year from the date of enactment) to complete the accounting for the impacts of the Tax Act. We adopted this guidance in the second quarter of fiscal 2018 when it was initially issued as SAB 118. We are still completing our accounting for the tax effects of the Tax Act because all the necessary information is not currently available, prepared, or analyzed. As such, we have made reasonable estimates of the effects of the Tax Act on our financial results. As we complete our analysis of the accounting for the tax effects of enactment of the Tax Act, we may record additional provisional amounts or adjustments to provisional amounts as discrete items in future periods. See Note 8 for additional information regarding income taxes. In August 2017, the FASB issued accounting guidance which is intended to improve and simplify accounting rules around hedge accounting. The guidance will be effective for us in the first quarter of fiscal 2020 and early adoption is permitted. We are currently evaluating the impact of this standard on our consolidated financial statements. In January 2017, the FASB issued amended accounting guidance that simplifies the accounting for goodwill impairment by eliminating the step of measuring a goodwill impairment by estimating the implied fair value of goodwill. Instead, goodwill impairment will be measured as the amount by which the reporting unit's carrying value exceeds its fair value, limited to the carrying value of goodwill. We adopted this guidance in the second quarter of fiscal 2018. The adoption did not have an impact on our condensed consolidated financial statements. In March 2016, the FASB issued amended accounting guidance that changed the accounting for certain aspects of share-based compensation to employees. The guidance requires all income tax effects of share-based awards to be recognized in the statement of earnings as awards vest or are settled. Additionally, the guidance increases the amount employers can withhold in shares to cover employee income taxes without requiring liability classification and allows a policy election for accounting for forfeitures. The primary impact of adoption is the recognition of excess tax benefits in the statement of earnings on a prospective basis, rather than as a component of equity. The impact on the presentation in the condensed consolidated statement of cash flows is also prospective. We adopted this guidance in the first quarter of fiscal 2018. The impact of adoption on the provision for/(benefit from) income taxes on our condensed consolidated statement of earnings was immaterial. The inclusion of excess tax benefits and deficiencies as a component of our income tax expense will increase volatility within our provision for/(benefit from) income taxes as the amount of excess tax benefits or deficiencies from share- based compensation awards depends on our stock price at the date the awards vest or settle. In February 2016, the FASB issued amended accounting guidance that requires lessees to recognize most leases on the balance sheet as a lease liability and corresponding right-of-use asset. The guidance also requires disclosures that meet the objective of enabling financial statement users to assess the amount, timing, and uncertainty of cash flows arising from leases. This guidance will be effective for us in the first quarter of fiscal 2020, with early adoption permitted. The majority of our lease spend relates to certain real estate with the remaining lease spend primarily related to equipment. We are continuing to evaluate the impact of this standard on our consolidated financial statements and the methods of adoption. In May 2014, the FASB issued amended accounting guidance related to revenue recognition which is effective for us in the first quarter of fiscal 2019. 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. The FASB also subsequently issued several amendments to the standard, including clarification on principal versus agent considerations, performance obligations and licensing, and certain scope improvements and practical expedients. During fiscal 2018 we have made significant progress on our evaluation and assessment of the amended revenue recognition guidance. Our revenue is primarily distribution revenue, which we recognize at a point in time when title transfers to customers and we have no further obligation to provide services related to such merchandise. Although our preliminary assessment is subject to change prior to our adoption of the amended guidance in the first quarter of fiscal 2019, we generally anticipate that the timing of recognition of distribution revenue will be substantially unchanged under the amended guidance and we do not expect the adoption of the amended accounting guidance to have a material impact on our consolidated financial statements. During the remainder of fiscal 2018 we will implement any additional required changes to processes to meet the new accounting, reporting and disclosure requirements, conclude the update of our internal controls and policies, and finalize our method of adoption. |
Acquisitions
Acquisitions | 9 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | 2. Acquisitions Patient Recovery Business On July 29, 2017, we acquired the Patient Care, Deep Vein Thrombosis, and Nutritional Insufficiency businesses (the "Patient Recovery Business") from Medtronic plc for $6.1 billion in cash. The Patient Recovery Business manufactures 23 categories of medical products sold into multiple healthcare channels, and includes numerous industry-leading brands, such as Curity, Kendall, Dover, Argyle and Kangaroo. The acquisition further expanded the Medical segment's portfolio of self-manufactured products. We closed the Patient Recovery Business acquisition in 28 principal countries on July 29, 2017, and acquired control of, for GAAP purposes, and the rights to the net economic benefit from the entire Patient Recovery Business in the remaining countries at the closing. We are in the process of transitioning legal ownership in the remaining non-principal countries, which we expect to complete by the end of calendar 2018. The results for the entire Patient Recovery Business in all countries are included in the condensed consolidated financial statements beginning July 29, 2017. We funded the acquisition through $4.5 billion in new long-term debt, existing cash and borrowings under our existing credit arrangements. Transaction and integration costs associated with the acquisition of the Patient Recovery business were $25 million and $85 million during the three and nine months ended March 31, 2018 , respectively, and are included in amortization and other acquisition-related costs in the condensed consolidated statements of earnings. Fair Value of Assets Acquired and Liabilities Assumed The allocation of the purchase price for the acquisition of the Patient Recovery Business is not yet finalized and is subject to adjustment as we complete the valuation analysis for this acquisition. The valuation of identifiable intangible assets utilizes significant unobservable inputs and thus represents a Level 3 nonrecurring fair value measurement. The estimated fair value of the identifiable intangible assets was determined using income-based approaches, which includes market participant expectations of the cash flows that an asset could generate over its economic life, discounted back to present value using an appropriate rate of return. The weighted- average discount rate used to arrive at the present value of the identifiable intangible assets was 8.2 percent , and considers the inherent risk of each intangible asset relative to the internal rate of return and weighted-average cost of capital. The following table summarizes the estimated fair value of the assets acquired and liabilities assumed as of the acquisition date for the Patient Recovery Business: (in millions) Patient Recovery Business Identifiable intangible assets: Customer relationships (1) $ 1,733 Trade names (2) 187 Developed technology and other (3) 732 Total identifiable intangible assets acquired 2,652 Cash and equivalents 22 Inventories 426 Prepaid expenses and other 252 Property and equipment, net 756 Other accrued liabilities (307 ) Deferred income taxes and other liabilities (865 ) Total identifiable net assets acquired/(liabilities assumed) 2,936 Goodwill 3,144 Total net assets acquired $ 6,080 (1) The range of useful lives for customer relationships is 10 to 18 years. (2) The useful life of trade names is 15 years. (3) The useful life of developed technology is 15 years. |
Restructuring and Employee Seve
Restructuring and Employee Severance | 9 Months Ended |
Mar. 31, 2018 | |
Restructuring Charges [Abstract] | |
Restructuring and Employee Severance | 3. Restructuring and Employee Severance The following table summarizes restructuring and employee severance costs: Three Months Ended March 31, (in millions) 2018 2017 Employee-related costs (1) $ (1 ) $ 14 Facility exit and other costs (2) 3 1 Total restructuring and employee severance $ 2 $ 15 Nine Months Ended March 31, (in millions) 2018 2017 Employee-related costs (1) $ 18 $ 27 Facility exit and other costs (2) 137 4 Total restructuring and employee severance $ 155 $ 31 (1) Employee-related costs primarily consist of termination benefits provided to employees who have been involuntarily terminated, duplicate payroll costs during transition periods and changes to related estimates. (2) Facility exit and other costs primarily consist of product distribution and lease contract termination costs, accelerated depreciation, equipment relocation costs, project consulting fees and costs associated with restructuring our delivery of information technology infrastructure services. In September 2017, we entered into an agreement to transition the distribution of our Medical segment's surgeon gloves in certain international markets from a third-party distribution arrangement to a direct distribution model. The costs with this restructuring include $125 million , on a pre-tax basis, in contract termination costs. These costs are reflected in facility exit and other costs in the condensed consolidated statement of earnings during the nine months ended March 31, 2018 . We paid $65 million of the contract termination fee during November 2017 and we paid the remaining $60 million of the contract termination fee in January 2018. The following table summarizes activity related to liabilities associated with restructuring and employee severance: (in millions) Employee- Related Costs Facility Exit and Other Costs Total Balance at June 30, 2017 $ 41 $ — $ 41 Additions 8 131 139 Payments and other adjustments (31 ) (127 ) (158 ) Balance at March 31, 2018 $ 18 $ 4 $ 22 |
Divestitures
Divestitures | 9 Months Ended |
Mar. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Assets Held for Sale | 4. Divestitures In November 2017, we signed a definitive agreement with Shanghai Pharmaceuticals Holding Co., Ltd. to sell our pharmaceutical and medical products distribution business in China ("China distribution business") for gross proceeds of $1.2 billion . The transaction closed on February 1, 2018 for net proceeds of $861 million after adjusting for third party indebtedness and preliminary transaction adjustments. The net proceeds are not reflective of tax obligations due in connection with the sale, for which we have recorded a liability of $57 million . The purchase price is subject to adjustment based on working capital requirements as set forth in the definitive agreement, which would impact the loss related to this divestiture. We determined that the sale of the China distribution business does not meet the criteria to be classified as discontinued operations. The China distribution business primarily operated within our Pharmaceutical segment, and a smaller portion operated within our Medical segment. During the nine months ended March 31, 2018, we recognized a net loss of $60 million related to this divestiture. This loss is comprised of the $67 million disposal group write-down recognized during the six months ended December 31, 2017, offset by a $7 million gain recognized during the three months ended March 31, 2018 resulting from fluctuations in working capital, debt and foreign currency from December 31, 2017 to the date of close. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | 5. 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, 2017 $ 2,939 $ 4,282 $ 7,221 Goodwill acquired, net of purchase price adjustments 1 3,194 3,195 Foreign currency translation adjustments and other 28 55 83 Goodwill divested with the sale of our China distribution business (347 ) (54 ) (401 ) Balance at March 31, 2018 $ 2,621 $ 7,477 $ 10,098 The increase in the Medical segment goodwill is primarily due to the Patient Recovery Business acquisition. Goodwill recognized in connection with the Patient Recovery Business acquisition primarily represents the expected benefits from certain synergies of integrating the business, the existing workforce of the acquired entity, and the expected growth from new customers. During the nine months ended March 31, 2018, goodwill was reduced by $401 million in connection with the sale of our China distribution business, discussed further in Note 4 . Other Intangible Assets The following tables summarize other intangible assets by class at: March 31, 2018 (in millions) Gross Intangible Accumulated Amortization Net Intangible Weighted- Average Remaining Amortization Period (Years) Indefinite-life intangibles: IPR&D, trademarks and other $ 62 $ — $ 62 N/A Total indefinite-life intangibles 62 — 62 N/A Definite-life intangibles: Customer relationships 3,625 1,162 2,463 15 Trademarks, trade names and patents 684 237 447 15 Developed technology and other 1,669 440 1,229 12 Total definite-life intangibles 5,978 1,839 4,139 14 Total other intangible assets $ 6,040 $ 1,839 $ 4,201 N/A June 30, 2017 (in millions) Gross Intangible Accumulated Amortization Net Intangible Indefinite-life intangibles: IPR&D, trademarks and other $ 61 $ — $ 61 Total indefinite-life intangibles 61 — 61 Definite-life intangibles: Customer relationships 1,966 967 999 Trademarks, trade names and patents 509 195 314 Developed technology and other 916 304 612 Total definite-life intangibles 3,391 1,466 1,925 Total other intangible assets $ 3,452 $ 1,466 $ 1,986 The increase in definite-life intangibles is primarily due to the Patient Recovery Business acquisition. Total amortization of intangible assets was $148 million and $96 million for the three months ended March 31, 2018 and 2017 , respectively, and $435 million and $291 million for the nine months ended March 31, 2018 and 2017 , respectively. For acquisitions closed on or before March 31, 2018 , estimated annual amortization of intangible assets for the remainder of fiscal 2018 through 2022 is as follows: $139 million , $554 million , $523 million , $451 million and $418 million . During the nine months ended March 31, 2018, other intangible assets were reduced by $62 million in connection with the sale of our China distribution business, discussed further in Note 4 . |
Available-for-Sale Securities
Available-for-Sale Securities | 9 Months Ended |
Mar. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Available-for-Sale Securities | 6. 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) March 31, 2018 June 30, 2017 Current available-for-sale securities: Treasury bills $ — $ 25 International bonds — 3 Corporate bonds — 30 U.S. agency bonds — 3 Asset-backed securities — 3 International equity securities — 1 Total available-for-sale securities $ — $ 65 In July 2017, we liquidated our marketable securities. There were no unrealized gains or losses at March 31, 2018 , and gross unrealized gains and losses were immaterial at June 30, 2017 . During the nine months ended March 31, 2018 and 2017, gross realized gains and losses were immaterial and we did not recognize any other-than-temporary impairments. |
Long-Term Obligations and Other
Long-Term Obligations and Other Short-Term Borrowings | 9 Months Ended |
Mar. 31, 2018 | |
Long-Term Obligations and Other Short-Term Borrowings [Abstract] | |
Debt Disclosure [Text Block] | 7. Long-Term Obligations and Other Short-Term Borrowings Long-Term Debt At March 31, 2018 and June 30, 2017 , we had total long term obligations, including the current portion and other short-term borrowings, of $9.6 billion and $10.4 billion , respectively. All the notes represent unsecured obligations of Cardinal Health, Inc. and rank equally in right of payment with all of our existing and future unsecured and unsubordinated indebtedness. Interest is paid pursuant to the terms of the obligations. These notes are effectively subordinated to the liabilities of our subsidiaries, including trade payables of $18.7 billion . In June 2017, we issued additional debt with the aggregate principal amount of $5.2 billion to fund a portion of the acquisition of the Patient Recovery Business, to redeem the $400 million 1.7% Notes due 2018 and for general corporate purposes. The notes issued in June 2017 were 1.948% Notes due 2019, 2.616% Notes due 2022, 3.079% Notes due 2024, 3.410% Notes due 2027, 4.368% Notes due 2047, and floating rate Notes due 2022. Other Financing Arrangements In addition to cash and equivalents and operating cash flow, other sources of liquidity include a $2.0 billion commercial paper program, which is backed by a $2.0 billion revolving credit facility and a $1.0 billion committed receivables sales facility program. At March 31, 2018 , we had nothing outstanding under the commercial paper program and no amounts outstanding under the revolving credit facility and committed receivables sales facility program. In November 2016, we renewed our committed receivables sales facility program through Cardinal Health Funding, LLC (“CHF”) through November 1, 2019. CHF was organized for the sole purpose of buying receivables and selling undivided interests in those receivables to third-party purchasers. Although consolidated with Cardinal Health, Inc. in accordance with GAAP, CHF is a separate legal entity from Cardinal Health, Inc. and from our subsidiary that sells receivables to CHF. CHF is designed to be a special purpose, bankruptcy-remote entity whose assets are available solely to satisfy the claims of its creditors. |
Income Taxes
Income Taxes | 9 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 8. Income Taxes Fluctuations in our provision for/(benefit from) income taxes as a percentage of pretax earnings (“effective tax rate”) are generally due to changes in international and U.S. state effective tax rates resulting from our business mix and discrete items. U.S. Tax Cuts and Jobs Act On December 22, 2017, the United States enacted the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code that affect our fiscal year 2018 financial results in two primary ways. First, effective as of January 1, 2018, the Tax Act reduces the U.S. federal corporate tax rate from 35 percent to 21 percent. Second, it requires companies to pay a one-time U.S. repatriation tax on certain undistributed earnings of foreign subsidiaries. Because our fiscal year ends in June, we have a blended U.S. Federal statutory tax rate for fiscal 2018 of 28.1 percent under the Tax Act. The Tax Act also establishes new tax provisions that will affect us beginning July 1, 2018 including, (1) eliminating the U.S. manufacturing deduction; (2) establishing new limitations on deductible interest expense and certain executive compensation; (3) eliminating the corporate alternative minimum tax; (4) creating the base erosion anti-abuse tax; (5) creating a new provision designed to tax global intangible low-tax income (“GILTI”); (6) generally eliminating U.S. federal income taxes on dividends from foreign subsidiaries; and (7) changing rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017. Regarding the new GILTI tax rules, we are allowed to make an accounting policy election to either (1) treat taxes due on future GILTI exclusions in U.S. taxable income as a current period expense when incurred or (2) reflect such portion of the future GILTI exclusions in U.S. taxable income that relate to existing basis differences in our measurement of deferred taxes. Our analysis of the new GILTI rules and how they may impact us is incomplete. Accordingly, we have not made a policy election regarding the treatment of the GILTI tax. Remeasurement of Deferred Tax Assets and Liabilities As a result of the enactment of a lower tax rate, we remeasured our U.S. deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future. While we are still analyzing certain aspects of the Tax Act and refining our calculations, we have recorded a measurement period adjustment to our provisional net benefit of $18 million in the three months ended March 31, 2018, for a total provisional net benefit of $952 million in the nine months ended March 31, 2018, related to this required remeasurement. The provisional estimate is based on currently available information related to deferred tax assets and liabilities which is subject to change as additional information becomes available, prepared, and analyzed. Repatriation Tax on Undistributed Foreign Earnings In connection with the required one-time U.S. repatriation tax on undistributed earnings of foreign subsidiaries, we recorded no additional adjustment during the three months ended March 31, 2018 to the provisional tax expense of $41 million for the nine months ended March 31, 2018. The Tax Act permits the payment of this tax over an eight-year period beginning in fiscal 2019. Though these foreign earnings have been deemed to be repatriated from a U.S. federal tax perspective, we have not yet completed our assessment of the Tax Act on our plans to reinvest foreign earnings and as such have not changed our prior conclusion that the earnings are indefinitely reinvested. The repatriation tax is based on currently available information and technical guidance related to the new tax law. The provisional estimate will be updated when additional information related to undistributed foreign earnings, foreign taxes and foreign cash and equivalents becomes available, prepared and analyzed. Effective Tax Rate During the three months ended March 31, 2018 and 2017 , the effective tax rate was 45.1 percent and 32.3 percent , respectively. The effective tax rate for the three months ended March 31, 2018 was negatively impacted by a reduction in projected Cordis income and its impact on jurisdictional mix encompassing U.S. and international operations, as well as net unfavorable discrete items of $18 million , partially offset by the favorable impact of the lower U.S. federal income tax rate from enactment of the Tax Act. The effective tax rate for the three months ended March 31, 2017 was impacted by net favorable discrete items of $31 million . During the nine months ended March 31, 2018 and 2017 , the effective tax rate was (48.6) percent and 34.4 percent , respectively. The effective tax rate for the nine months ended March 31, 2018 was favorably impacted by the provisional net benefit from enactment of the Tax Act. The provisional net benefit from the Tax Act during the three and nine months ended March 31, 2018 includes the aforementioned remeasurement of our deferred tax assets and liabilities to the new federal statutory rate provisional measurement period adjustment of $18 million and net tax benefit of $952 million , respectively, the benefit from the impact of applying a lower federal tax rate to year-to-date U.S. pre-tax earnings and $41 million provisional tax expense for the one-time repatriation tax applied to our undistributed foreign earnings. Our effective tax rate for the nine months ended March 31, 2018 also includes $57 million of tax expense recognized during the three months ended December 31, 2017 in connection with the sale of our China distribution business. Unrecognized Tax Benefits At March 31, 2018 and June 30, 2017 , we had $426 million and $417 million of unrecognized tax benefits, respectively. The March 31, 2018 and June 30, 2017 balances include $264 million and $268 million of unrecognized tax benefits, respectively, that if recognized, would have an impact on the effective tax rate. At March 31, 2018 and June 30, 2017 , we had $106 million and $99 million , respectively, accrued for the payment of interest and penalties related to unrecognized tax benefits, which we recognize in the provision for/(benefit from) income taxes in the condensed consolidated statements of earnings. These balances are gross amounts before any tax benefits and are included in deferred income taxes and other liabilities in the condensed consolidated balance sheets. It is reasonably possible that there could be a change in the amount of unrecognized tax benefits within the next 12 months due to activities of the U.S. Internal Revenue Service ("IRS") or other taxing authorities, possible settlement of audit issues, reassessment of existing unrecognized tax benefits or the expiration of statutes of limitations. We estimate that the range of the possible change in unrecognized tax benefits within the next 12 months is between zero and a net decrease of $35 million , exclusive of penalties and interest. Other Tax Matters We file income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and various foreign jurisdictions. With few exceptions, we are subject to audit by taxing authorities for fiscal years 2008 through the current fiscal year. We are a party to a tax matters agreement with CareFusion Corporation ("CareFusion"), which has been acquired by Becton, Dickinson and Company. Under the tax matters agreement, CareFusion is obligated to indemnify us for certain tax exposures and transaction taxes prior to our fiscal 2010 spin-off of CareFusion. The indemnification receivable was $148 million and $142 million at March 31, 2018 and June 30, 2017 , respectively, and is included in other assets in the condensed consolidated balance sheets. As a result of the acquisition of the Patient Recovery Business, Medtronic plc is obligated to indemnify us for certain tax exposures and transaction taxes related to periods prior to the acquisition under the purchase agreement. The indemnification receivable was $34 million at March 31, 2018. |
Commitments, Contingent Liabili
Commitments, Contingent Liabilities and Litigation | 9 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Contingent Liabilities and Litigation | 9. Commitments, Contingent Liabilities and Litigation Commitments Generic Sourcing Venture with CVS Health Corporation ("CVS Health") Red Oak Sourcing, LLC ("Red Oak Sourcing") is a U.S.-based generic pharmaceutical sourcing venture with CVS Health for an initial term through June 2024. Red Oak Sourcing negotiates generic pharmaceutical supply contracts on behalf of its participants. Due to the achievement of predetermined milestones, we are required to make quarterly payments of $45.6 million to CVS Health for the initial term. Legal Proceedings We become involved from time to time in disputes, litigation, and regulatory matters. We may be named from time to time in qui tam actions initiated by private third parties. In such actions, the private parties purport to act on behalf of federal or state governments, allege that false claims have been submitted for payment by the government and may receive an award if their claims are successful. After a private party has filed a qui tam action, the government must investigate the private party's claim and determine whether to intervene in and take control over the litigation. These actions may remain under seal while the government makes this determination. If the government declines to intervene, the private party may nonetheless continue to pursue the litigation on his or her own purporting to act on behalf of the government . From time to time, we become aware through employees, internal audits or other parties of possible compliance matters, such as complaints or concerns relating to accounting, internal accounting controls, financial reporting, auditing, or other ethical matters or relating to compliance with laws such as healthcare fraud and abuse, anti-corruption or anti-bribery laws. When we become aware of such possible compliance matters, we investigate internally and take appropriate corrective action. In addition, from time to time, we receive subpoenas or requests for information from various federal or state agencies relating to our business or to the business of a customer, supplier or other industry participants. Internal investigations, subpoenas or requests for information could lead to the assertion of claims or the commencement of legal proceedings against us or result in sanctions. From time to time, we may determine that products we manufacture or market do not meet our specifications, regulatory requirements, or published standards. When we or a regulatory agency identify a potential quality or regulatory issue, we investigate and take appropriate corrective action. Such actions can lead to product recalls, costs to repair or replace affected products, temporary interruptions in product sales, action by regulators and product liability claims and lawsuits, including class actions. Even absent an identified regulatory or quality issue or product recall, we can become subject to product liability claims and lawsuits. We accrue for contingencies related to disputes, litigation and regulatory matters if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Because these matters are inherently unpredictable and unfavorable developments or resolutions can occur, assessing contingencies is highly subjective and requires judgments about future events. We regularly review contingencies to determine whether our accruals and related disclosures are adequate. The amount of ultimate loss may differ from these estimates. We recognize income from the favorable outcome of litigation when we receive the associated cash or assets. We recognize estimated loss contingencies for certain litigation and regulatory matters and income from favorable resolution of litigation in litigation (recoveries)/charges in our condensed consolidated statements of earnings. Opioid Lawsuits Pharmaceutical wholesale distributors, including us, have been named as defendants in hundreds of lawsuits relating to the distribution of prescription opioid pain medications. These lawsuits have been filed in various federal, state, and other courts by a variety of plaintiffs, which are primarily counties, municipalities and political subdivisions from 46 states. Plaintiffs also include four state attorneys general, unions and other health and welfare funds, hospital systems and other healthcare providers. Of these lawsuits, 21 are purported class actions. The lawsuits seek equitable relief and monetary damages based on a variety of legal theories including various common law claims, such as negligence, public nuisance, unjust enrichment as well as violations of controlled substance laws and various other statutes. Many also name pharmaceutical manufacturers, retail pharmacy chains and other entities as defendants. The vast majority of these lawsuits have been filed in U.S. federal court and have been transferred for consolidated pre-trial proceedings in a Multi-District Litigation proceeding in the United States District Court for the Northern District of Ohio. In April 2018, the court, among other things, ordered that motions to dismiss in a number of these lawsuits be briefed from June through August 2018 and that three lawsuits proceed to trial in March 2019 depending on the court's ruling on those motions. As part of these proceedings, we have been discussing with various parties and other stakeholders, including state attorneys general, possible prospective non-monetary injunctive relief and other solutions that we and others in the healthcare system either have already undertaken or may undertake in the future to help alleviate the national opioid epidemic. We are vigorously defending ourselves in all of these opioid lawsuits. Since all of the above-referenced lawsuits are in early stages, we are unable to predict their outcome or estimate a range of reasonably possible losses. In addition, 39 state attorneys general have formed a multi-state task force to investigate the manufacturing, distribution, dispensing and prescribing practices of opioid medications. We have received requests related to this multi-state investigation, as well as civil investigative demands, subpoenas or requests for information from these and other state attorneys general offices. We are cooperating with the offices conducting these investigations. Product Liability Lawsuits As of May 1, 2018, we are named as a defendant in 137 product liability lawsuits filed in Alameda County Superior Court in California involving claims by approximately 1,607 plaintiffs that allege personal injuries associated with the use of Cordis OptEase and TrapEase inferior vena cava (IVC) filter products. Another 16 lawsuits involving similar claims by approximately 17 plaintiffs are pending in other jurisdictions. These lawsuits seek a variety of remedies, including unspecified monetary damages. We are vigorously defending ourselves in these lawsuits. At March 31, 2018, we had a total of $247 million , net of expected insurance recoveries, accrued for losses and legal defense costs related to the Cordis IVC filter lawsuits. While we have recorded accruals based on our assessment of these matters, because these lawsuits are in early stages, we are unable to estimate a range of reasonably possible losses in excess of this accrued amount. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 10. Fair Value Measurements Assets and (liabilities) measured on a recurring basis The following tables present the fair values for assets and (liabilities) measured on a recurring basis at: March 31, 2018 (in millions) Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 548 $ — $ — $ 548 Available-for-sale securities (1) — — — — Other investments (2) 115 — — 115 Liabilities: Forward contracts (3) — (58 ) — (58 ) Contingent consideration (4) — — (14 ) (14 ) June 30, 2017 (in millions) Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 739 $ — $ — $ 739 Available-for-sale securities (1) — 65 — 65 Other investments (2) 116 — — 116 Liabilities: Forward contracts (3) — (21 ) — (21 ) Contingent consideration (4) — — (32 ) (32 ) (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 6 for additional information regarding available-for-sale securities. (2) 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. (3) 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. (4) Contingent consideration represents the obligations incurred in connection with acquisitions. We do not deem the fair value of the contingent consideration obligations under any single acquisition to be significant. The estimate of fair value of the contingent consideration obligations requires subjective assumptions to be made regarding future business results, discount rates, discount periods, and probabilities assigned to various potential business result scenarios and was determined using probability assessments with respect to the likelihood of reaching various targets or of achieving certain milestones. The fair value measurement is based on significant inputs unobservable in the market and thus represents a Level 3 measurement. Changes in current expectations of progress could change the probability of achieving the targets within the measurement periods and result in an increase or decrease in the fair value of the contingent consideration obligation. The following table presents those liabilities measured at fair value on a recurring basis using unobservable inputs (Level 3): (in millions) Contingent Consideration Obligation Balance at June 30, 2017 $ 32 Additions from acquisitions 5 Changes in fair value of contingent consideration (1) (2 ) Payment of contingent consideration (22 ) Balance at March 31, 2018 $ 14 The sum of the components may not equal the total due to rounding. (1) Amount is included in amortization and other acquisition-related costs in the condensed consolidated statements of earnings. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments | 11. Financial Instruments We utilize derivative financial instruments to manage exposure to certain risks related to our ongoing operations. The primary risks managed through the use of derivative instruments include interest rate risk, currency exchange risk and commodity price risk. We do not use derivative instruments for trading or speculative purposes. While the majority of our derivative instruments are designated as hedging instruments, we also enter into derivative instruments that are designed to hedge a risk, but are not designated as hedging instruments. These derivative instruments are adjusted to fair value through earnings at the end of each period. Our derivative and hedging programs are consistent with those described in the 2017 Form 10-K. The amount of ineffectiveness associated with these derivative instruments was immaterial for the three and nine months ended March 31, 2018 and 2017 . During the nine months ended March 31, 2018 and 2017 , we entered into pay-floating interest rate swaps with total notional amounts of $650 million and $100 million , respectively. These swaps have been designated as fair value hedges of our fixed rate debt and are included in other assets in the condensed consolidated balance sheet. During the nine months ended March 31, 2017 , we entered into forward interest rate swaps with a total notional amount of $200 million to hedge probable, but not firmly committed, future transactions associated with our debt. Fair Value of Financial Instruments The carrying amounts of cash and equivalents, trade receivables, accounts payable and other accrued liabilities at March 31, 2018 and June 30, 2017 approximate fair value due to their short-term maturities. The following table summarizes the estimated fair value of our long-term obligations and other short-term borrowings compared to the respective carrying amounts at: (in millions) March 31, 2018 June 30, 2017 Estimated fair value $ 9,576 $ 10,713 Carrying amount 9,578 10,395 The fair value of our long-term obligations and other short-term borrowings is estimated based on either the quoted market prices for the same or similar issues or other inputs derived from available market information, which represents a Level 2 measurement. |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interests | 9 Months Ended |
Mar. 31, 2018 | |
Temporary Equity [Abstract] | |
Redeemable Noncontrolling Interests | 12. Redeemable Noncontrolling Interests In connection with the acquisition of a 71 percent ownership interest in naviHealth during fiscal 2016, we recognized redeemable noncontrolling interest with a fair value of $119 million at the acquisition date. In August 2017, certain third-party noncontrolling interest holders exercised their put right on the noncontrolling interest representing 16 percent of naviHealth with a redemption value of $103 million and a carrying value of $109 million . We settled the put in September and our ownership in naviHealth increased to 98 percent . The following table summarizes activity in redeemable noncontrolling interests: (in millions) Redeemable Noncontrolling Interest Balance at June 30, 2017 $ 118 Net earnings attributable to redeemable noncontrolling interests 2 Net purchase of redeemable noncontrolling interests (103 ) Adjustment of redeemable noncontrolling interests to redemption value (5 ) Balance at March 31, 2018 $ 12 |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Shareholders' Equity | 13. Shareholders' Equity During the nine months ended March 31, 2018 , we repurchased 6.5 million common shares having an aggregate cost of $450 million . The average price paid per share was $68.81 . We funded the repurchases with available cash and short-term borrowings. These repurchases include $300 million purchased under an accelerated share repurchase ("ASR") program, which began on February 14, 2018 and was completed on March 21, 2018. We repurchased 4.3 million shares under the ASR at an average price paid per share of $69.26 . During the nine months ended March 31, 2017 , we repurchased 8.1 million common shares having an aggregate cost of $600 million . The average price paid per common share was $74.08 . We funded the repurchases with available cash. The common shares repurchased are held in treasury to be used for general corporate purposes. During the nine months ended March 31, 2017 , we retired 37 million common shares in treasury. The retirement of these shares had no impact on total shareholders' equity; however, it did impact certain individual components of shareholders' equity as follows: $2.5 billion decrease in common shares in treasury, $302 million decrease in common shares, and $2.2 billion decrease in retained earnings. Accumulated Other Comprehensive Loss The following table summarizes the changes in the balance of accumulated other comprehensive loss by component and in total: (in millions) Foreign Currency Translation Adjustments Unrealized Gain/(Loss) on Derivatives, net of tax Accumulated Other Comprehensive Loss Balance at June 30, 2017 $ (148 ) $ 23 $ (125 ) Other comprehensive income/(loss), before reclassifications 141 2 143 Amounts reclassified to earnings (23 ) — (23 ) Other comprehensive income/(loss), net of tax 118 2 120 Balance at March 31, 2018 $ (30 ) $ 25 $ (5 ) Activity related to realized and unrealized gains and losses on available-for-sale securities, as described in Note 6 , was immaterial during the nine months ended March 31, 2018 . |
Earnings Per Share Attributable
Earnings Per Share Attributable to Cardinal Health, Inc. | 9 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share Attributable to Cardinal Health, Inc. | 14. Earnings Per Share Attributable to Cardinal Health, Inc. The following table reconciles the number of common shares used to compute basic and diluted earnings per share attributable to Cardinal Health, Inc.: Three Months Ended March 31, (in millions) 2018 2017 Weighted-average common shares–basic 313 316 Effect of dilutive securities: Employee stock options, restricted share units and performance share units 2 2 Weighted-average common shares–diluted 315 318 Nine Months Ended March 31, (in millions) 2018 2017 Weighted-average common shares–basic 314 318 Effect of dilutive securities: Employee stock options, restricted share units and performance share units 2 2 Weighted-average common shares–diluted 316 320 The potentially dilutive employee stock options, restricted share units and performance share units that were antidilutive were 5 million and 3 million for the three months ended March 31, 2018 and 2017 , respectively, and 5 million and 3 million for the nine months ended March 31, 2018 and 2017 , respectively. |
Segment Information
Segment Information | 9 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | 15. Segment Information Our operations are principally managed on a products and services basis and are comprised of two operating segments, which are the same as our reportable segments: Pharmaceutical and Medical. The factors for determining the reportable segments include the manner in which management evaluates performance for purposes of allocating resources and assessing performance combined with the nature of the individual business activities. The following table presents revenue for each reportable segment and Corporate: Three Months Ended March 31, (in millions) 2018 2017 Pharmaceutical $ 29,720 $ 28,406 Medical 3,916 3,418 Total segment revenue 33,636 31,824 Corporate (1) (3 ) (3 ) Total revenue $ 33,633 $ 31,821 Nine Months Ended March 31, (in millions) 2018 2017 Pharmaceutical $ 89,786 $ 86,911 Medical 11,684 10,107 Total segment revenue 101,470 97,018 Corporate (1) (10 ) (8 ) Total revenue $ 101,460 $ 97,010 (1) Corporate revenue consists of the elimination of inter-segment revenue and other revenue not allocated to the segments. We evaluate segment performance based on segment profit, among other measures. Segment profit is segment revenue, less segment cost of products sold, less segment distribution, selling, general and administrative ("SG&A") expenses. Segment SG&A expenses include share-based compensation expense as well as allocated corporate expenses for shared functions, including corporate management, corporate finance, financial and customer care shared services, human resources, information technology and legal and compliance. The results attributable to noncontrolling interests are recorded within segment profit. Corporate expenses are allocated to the segments based on headcount, level of benefit provided and other ratable allocation methodologies. We do not allocate the following items to our segments: last-in first-out, or ("LIFO"), inventory charges/(credits); restructuring and employee severance; amortization and other acquisition-related costs; impairments and (gain)/loss on disposal of assets; litigation (recoveries)/charges, net; other income, net; interest expense, net; loss on extinguishment of debt; and provision for/(benefit from) income taxes. In addition, certain investment spending, certain portions of enterprise-wide incentive compensation and other spending are not allocated to the segments. Investment spending generally includes the first-year spend for certain projects that require incremental investments in the form of additional operating expenses. 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 $7 million and $2 million for the three months ended March 31, 2018 and 2017 , respectively, and $17 million and $4 million for the nine months ended March 31, 2018 and 2017 , respectively. The following table presents segment profit by reportable segment and Corporate: Three Months Ended March 31, (in millions) 2018 2017 Pharmaceutical $ 596 $ 611 Medical 199 148 Total segment profit 795 759 Corporate (249 ) (154 ) Total operating earnings $ 546 $ 605 Nine Months Ended March 31, (in millions) 2018 2017 Pharmaceutical $ 1,576 $ 1,682 Medical 548 435 Total segment profit 2,124 2,117 Corporate (918 ) (436 ) Total operating earnings $ 1,206 $ 1,681 The following table presents total assets for each reportable segment and Corporate at: (in millions) March 31, June 30, Pharmaceutical $ 20,573 $ 21,848 Medical 17,746 10,688 Corporate 2,712 7,576 Total assets $ 41,031 $ 40,112 |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | 16. Share-Based Compensation We maintain stock incentive plans (collectively, the “Plans”) for the benefit of certain of our officers, directors and employees. The following table provides total share-based compensation expense by type of award: Three Months Ended March 31, (in millions) 2018 2017 Restricted share unit expense $ 20 $ 18 Employee stock option expense 7 4 Performance share unit expense (4 ) 3 Total share-based compensation $ 24 $ 25 The sum of the components may not equal the total due to rounding. Nine Months Ended March 31, (in millions) 2018 2017 Restricted share unit expense $ 56 $ 53 Employee stock option expense 17 14 Performance share unit expense (9 ) 6 Total share-based compensation $ 64 $ 73 The total tax benefit related to share-based compensation was $8 million and $9 million for the three months ended March 31, 2018 and 2017 , respectively, and $20 million and $25 million for the nine months ended March 31, 2018 and 2017 , respectively. Restricted Share Units Restricted share units granted under the Plans generally vest in equal annual installments over three years . Restricted share units accrue cash dividend equivalents that are payable upon vesting of the awards. The following table summarizes all transactions related to restricted share units under the Plans: (in millions, except per share amounts) Restricted Share Units Weighted-Average Grant Date Fair Value per Share Nonvested at June 30, 2017 2 $ 76.72 Granted 1 66.13 Vested (1 ) 79.23 Canceled and forfeited — — Nonvested at March 31, 2018 2 $ 71.97 At March 31, 2018 , the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested restricted share units not yet recognized was $73 million , which is expected to be recognized over a weighted-average period of two years . Stock Options Employee stock options granted under the Plans generally vest in equal annual installments over three years and are exercisable for ten years from the grant date. All stock options are exercisable at a price equal to the market value of the common shares underlying the option on the grant date. The following table summarizes all stock option transactions under the Plans: (in millions, except per share amounts) Stock Options Weighted-Average Exercise Price per Common Share Outstanding at June 30, 2017 6 $ 63.44 Granted 2 66.44 Exercised (1 ) 43.08 Canceled and forfeited — — Outstanding at March 31, 2018 7 $ 64.82 Exercisable at March 31, 2018 5 $ 59.55 At March 31, 2018 , the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested stock options not yet recognized was $26 million , which is expected to be recognized over a weighted-average period of two years . The following tables provide additional detail related to stock options: (in millions) March 31, 2018 June 30, 2017 Aggregate intrinsic value of outstanding options at period end $ 46 $ 109 Aggregate intrinsic value of exercisable options at period end 46 106 (in years) March 31, 2018 June 30, 2017 Weighted-average remaining contractual life of outstanding options 7 7 Weighted-average remaining contractual life of exercisable options 6 6 Performance Share Units Performance share units vest over a three -year performance period based on achievement of specific performance goals. Based on the extent to which the targets are achieved, vested shares may range from zero to 200 percent of the target award amount. Performance share units accrue cash dividend equivalents that are payable upon vesting of the awards. The following table summarizes all transactions related to performance share units under the Plans (based on target award amounts): (in millions, except per share amounts) Performance Share Units Weighted-Average Grant Date Fair Value per Share Nonvested at June 30, 2017 0.6 $ 77.83 Granted 0.2 66.43 Vested (1) (0.2 ) 71.57 Canceled and forfeited (0.2 ) — Nonvested at March 31, 2018 0.4 $ 66.14 (1) Vested based on achievement of 133 percent of the target performance goal. At March 31, 2018 , the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested performance share units not yet recognized was $9 million , which is expected to be recognized over a weighted-average period of two years if targets are achieved. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 17. Subsequent Events In April 2018, the State of New York passed a budget which included the Opioid Stewardship Act (the “OSA”). The OSA created an aggregate $100 million annual assessment on all manufacturers and distributors licensed to sell or distribute opioids in New York. Each licensed manufacturer and distributor will be required to pay a portion of the assessment based on its ratable share, as determined by the state, of the total morphine milligram equivalents sold or distributed in New York during the applicable calendar year. The initial payment is due on January 1, 2019 for opioids sold or distributed during calendar year 2017. We accrue for contingencies if it is probable that a liability has been incurred and the amount can be reasonably estimated. At this time , we are unable to estimate amounts which we will owe under the OSA for calendar year 2017 or 2018 because the information necessary to determine our share of the assessment is not yet available. |
Basis of Presentation and Sum24
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Our condensed consolidated financial statements include the accounts of all majority-owned or controlled subsidiaries, and all significant intercompany transactions and amounts have been eliminated. References to "we," "our," and similar pronouns in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 (this "Form 10-Q") refer to Cardinal Health, Inc. and its majority-owned or controlled subsidiaries unless the context requires otherwise. Our fiscal year ends on June 30. References to fiscal 2018 and 2017 in these condensed consolidated financial statements are to the fiscal years ending or ended June 30, 2018 and June 30, 2017 , respectively. Our condensed consolidated financial statements have been prepared in accordance with the U.S. Securities and Exchange Commission ("SEC") instructions to Quarterly Reports on Form 10-Q and include the information and disclosures required by accounting principles generally accepted in the United States ("GAAP") for interim financial reporting. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect amounts reported in the condensed consolidated financial statements and accompanying notes. Actual amounts may differ from these estimated amounts. In our opinion, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included. Except as disclosed elsewhere in this Form 10-Q, all such adjustments are of a normal and recurring nature. In addition, financial results presented for this fiscal 2018 interim period are not necessarily indicative of the results that may be expected for the full fiscal year ending June 30, 2018 . These condensed consolidated financial statements are unaudited and, accordingly, should be read in conjunction with the audited consolidated financial statements and related notes contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2017 (the " 2017 Form 10-K"). |
Recent Financial Accounting Standards | Recent Financial Accounting Standards In March 2018, the Financial Accounting Standards Board (the "FASB") issued amended accounting guidance to codify guidance pursuant to SEC staff accounting bulletin 118 (“SAB 118”), which was issued in connection with the Tax Cuts and Jobs Act (the “Tax Act”) of December 2017. The guidance allows companies to use provisional estimates to record the effects of the Tax Act and also provides a measurement period (not to exceed one year from the date of enactment) to complete the accounting for the impacts of the Tax Act. We adopted this guidance in the second quarter of fiscal 2018 when it was initially issued as SAB 118. We are still completing our accounting for the tax effects of the Tax Act because all the necessary information is not currently available, prepared, or analyzed. As such, we have made reasonable estimates of the effects of the Tax Act on our financial results. As we complete our analysis of the accounting for the tax effects of enactment of the Tax Act, we may record additional provisional amounts or adjustments to provisional amounts as discrete items in future periods. See Note 8 for additional information regarding income taxes. In August 2017, the FASB issued accounting guidance which is intended to improve and simplify accounting rules around hedge accounting. The guidance will be effective for us in the first quarter of fiscal 2020 and early adoption is permitted. We are currently evaluating the impact of this standard on our consolidated financial statements. In January 2017, the FASB issued amended accounting guidance that simplifies the accounting for goodwill impairment by eliminating the step of measuring a goodwill impairment by estimating the implied fair value of goodwill. Instead, goodwill impairment will be measured as the amount by which the reporting unit's carrying value exceeds its fair value, limited to the carrying value of goodwill. We adopted this guidance in the second quarter of fiscal 2018. The adoption did not have an impact on our condensed consolidated financial statements. In March 2016, the FASB issued amended accounting guidance that changed the accounting for certain aspects of share-based compensation to employees. The guidance requires all income tax effects of share-based awards to be recognized in the statement of earnings as awards vest or are settled. Additionally, the guidance increases the amount employers can withhold in shares to cover employee income taxes without requiring liability classification and allows a policy election for accounting for forfeitures. The primary impact of adoption is the recognition of excess tax benefits in the statement of earnings on a prospective basis, rather than as a component of equity. The impact on the presentation in the condensed consolidated statement of cash flows is also prospective. We adopted this guidance in the first quarter of fiscal 2018. The impact of adoption on the provision for/(benefit from) income taxes on our condensed consolidated statement of earnings was immaterial. The inclusion of excess tax benefits and deficiencies as a component of our income tax expense will increase volatility within our provision for/(benefit from) income taxes as the amount of excess tax benefits or deficiencies from share- based compensation awards depends on our stock price at the date the awards vest or settle. In February 2016, the FASB issued amended accounting guidance that requires lessees to recognize most leases on the balance sheet as a lease liability and corresponding right-of-use asset. The guidance also requires disclosures that meet the objective of enabling financial statement users to assess the amount, timing, and uncertainty of cash flows arising from leases. This guidance will be effective for us in the first quarter of fiscal 2020, with early adoption permitted. The majority of our lease spend relates to certain real estate with the remaining lease spend primarily related to equipment. We are continuing to evaluate the impact of this standard on our consolidated financial statements and the methods of adoption. In May 2014, the FASB issued amended accounting guidance related to revenue recognition which is effective for us in the first quarter of fiscal 2019. 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. The FASB also subsequently issued several amendments to the standard, including clarification on principal versus agent considerations, performance obligations and licensing, and certain scope improvements and practical expedients. During fiscal 2018 we have made significant progress on our evaluation and assessment of the amended revenue recognition guidance. Our revenue is primarily distribution revenue, which we recognize at a point in time when title transfers to customers and we have no further obligation to provide services related to such merchandise. Although our preliminary assessment is subject to change prior to our adoption of the amended guidance in the first quarter of fiscal 2019, we generally anticipate that the timing of recognition of distribution revenue will be substantially unchanged under the amended guidance and we do not expect the adoption of the amended accounting guidance to have a material impact on our consolidated financial statements. During the remainder of fiscal 2018 we will implement any additional required changes to processes to meet the new accounting, reporting and disclosure requirements, conclude the update of our internal controls and policies, and finalize our method of adoption. |
Restructuring and Employee Se25
Restructuring and Employee Severance (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Restructuring Charges [Abstract] | |
Summary of Restructuring and Employee Severance | The following table summarizes restructuring and employee severance costs: Three Months Ended March 31, (in millions) 2018 2017 Employee-related costs (1) $ (1 ) $ 14 Facility exit and other costs (2) 3 1 Total restructuring and employee severance $ 2 $ 15 Nine Months Ended March 31, (in millions) 2018 2017 Employee-related costs (1) $ 18 $ 27 Facility exit and other costs (2) 137 4 Total restructuring and employee severance $ 155 $ 31 (1) Employee-related costs primarily consist of termination benefits provided to employees who have been involuntarily terminated, duplicate payroll costs during transition periods and changes to related estimates. (2) Facility exit and other costs primarily consist of product distribution and lease contract 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- Related Costs Facility Exit and Other Costs Total Balance at June 30, 2017 $ 41 $ — $ 41 Additions 8 131 139 Payments and other adjustments (31 ) (127 ) (158 ) Balance at March 31, 2018 $ 18 $ 4 $ 22 |
Goodwill and Other Intangible26
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
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, 2017 $ 2,939 $ 4,282 $ 7,221 Goodwill acquired, net of purchase price adjustments 1 3,194 3,195 Foreign currency translation adjustments and other 28 55 83 Goodwill divested with the sale of our China distribution business (347 ) (54 ) (401 ) Balance at March 31, 2018 $ 2,621 $ 7,477 $ 10,098 |
Schedule of Finite-Lived Intangible Assets | The following tables summarize other intangible assets by class at: March 31, 2018 (in millions) Gross Intangible Accumulated Amortization Net Intangible Weighted- Average Remaining Amortization Period (Years) Indefinite-life intangibles: IPR&D, trademarks and other $ 62 $ — $ 62 N/A Total indefinite-life intangibles 62 — 62 N/A Definite-life intangibles: Customer relationships 3,625 1,162 2,463 15 Trademarks, trade names and patents 684 237 447 15 Developed technology and other 1,669 440 1,229 12 Total definite-life intangibles 5,978 1,839 4,139 14 Total other intangible assets $ 6,040 $ 1,839 $ 4,201 N/A June 30, 2017 (in millions) Gross Intangible Accumulated Amortization Net Intangible Indefinite-life intangibles: IPR&D, trademarks and other $ 61 $ — $ 61 Total indefinite-life intangibles 61 — 61 Definite-life intangibles: Customer relationships 1,966 967 999 Trademarks, trade names and patents 509 195 314 Developed technology and other 916 304 612 Total definite-life intangibles 3,391 1,466 1,925 Total other intangible assets $ 3,452 $ 1,466 $ 1,986 |
Schedule of Indefinite-Lived Intangible Assets | The following tables summarize other intangible assets by class at: March 31, 2018 (in millions) Gross Intangible Accumulated Amortization Net Intangible Weighted- Average Remaining Amortization Period (Years) Indefinite-life intangibles: IPR&D, trademarks and other $ 62 $ — $ 62 N/A Total indefinite-life intangibles 62 — 62 N/A Definite-life intangibles: Customer relationships 3,625 1,162 2,463 15 Trademarks, trade names and patents 684 237 447 15 Developed technology and other 1,669 440 1,229 12 Total definite-life intangibles 5,978 1,839 4,139 14 Total other intangible assets $ 6,040 $ 1,839 $ 4,201 N/A June 30, 2017 (in millions) Gross Intangible Accumulated Amortization Net Intangible Indefinite-life intangibles: IPR&D, trademarks and other $ 61 $ — $ 61 Total indefinite-life intangibles 61 — 61 Definite-life intangibles: Customer relationships 1,966 967 999 Trademarks, trade names and patents 509 195 314 Developed technology and other 916 304 612 Total definite-life intangibles 3,391 1,466 1,925 Total other intangible assets $ 3,452 $ 1,466 $ 1,986 |
Available-for-Sale Securities (
Available-for-Sale Securities (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Available-for-sale Securities | We held the following investments in marketable securities at fair value at: (in millions) March 31, 2018 June 30, 2017 Current available-for-sale securities: Treasury bills $ — $ 25 International bonds — 3 Corporate bonds — 30 U.S. agency bonds — 3 Asset-backed securities — 3 International equity securities — 1 Total available-for-sale securities $ — $ 65 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets and Liabilities Measured on Recurring Basis | The following tables present the fair values for assets and (liabilities) measured on a recurring basis at: March 31, 2018 (in millions) Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 548 $ — $ — $ 548 Available-for-sale securities (1) — — — — Other investments (2) 115 — — 115 Liabilities: Forward contracts (3) — (58 ) — (58 ) Contingent consideration (4) — — (14 ) (14 ) June 30, 2017 (in millions) Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 739 $ — $ — $ 739 Available-for-sale securities (1) — 65 — 65 Other investments (2) 116 — — 116 Liabilities: Forward contracts (3) — (21 ) — (21 ) Contingent consideration (4) — — (32 ) (32 ) (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 6 for additional information regarding available-for-sale securities. (2) 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. (3) 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. (4) Contingent consideration represents the obligations incurred in connection with acquisitions. We do not deem the fair value of the contingent consideration obligations under any single acquisition to be significant. The estimate of fair value of the contingent consideration obligations requires subjective assumptions to be made regarding future business results, discount rates, discount periods, and probabilities assigned to various potential business result scenarios and was determined using probability assessments with respect to the likelihood of reaching various targets or of achieving certain milestones. The fair value measurement is based on significant inputs unobservable in the market and thus represents a Level 3 measurement. Changes in current expectations of progress could change the probability of achieving the targets within the measurement periods and result in an increase or decrease in the fair value of the contingent consideration obligation. |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following table presents those liabilities measured at fair value on a recurring basis using unobservable inputs (Level 3): (in millions) Contingent Consideration Obligation Balance at June 30, 2017 $ 32 Additions from acquisitions 5 Changes in fair value of contingent consideration (1) (2 ) Payment of contingent consideration (22 ) Balance at March 31, 2018 $ 14 The sum of the components may not equal the total due to rounding. (1) Amount is included in amortization and other acquisition-related costs in the condensed consolidated statements of earnings. |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Estimated Fair Value of Long-term Obligations and Other Short-term Borrowings Compared to the Respective Carrying Amount | The following table summarizes the estimated fair value of our long-term obligations and other short-term borrowings compared to the respective carrying amounts at: (in millions) March 31, 2018 June 30, 2017 Estimated fair value $ 9,576 $ 10,713 Carrying amount 9,578 10,395 |
Redeemable Noncontrolling Int30
Redeemable Noncontrolling Interests (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Temporary Equity [Abstract] | |
Reconciliation of the Changes in Redeemable Noncontrolling Interests | The following table summarizes activity in redeemable noncontrolling interests: (in millions) Redeemable Noncontrolling Interest Balance at June 30, 2017 $ 118 Net earnings attributable to redeemable noncontrolling interests 2 Net purchase of redeemable noncontrolling interests (103 ) Adjustment of redeemable noncontrolling interests to redemption value (5 ) Balance at March 31, 2018 $ 12 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Schedule of Changes in the Balance of Accumulated Other Comprehensive Loss by Component and in Total | Accumulated Other Comprehensive Loss The following table summarizes the changes in the balance of accumulated other comprehensive loss by component and in total: (in millions) Foreign Currency Translation Adjustments Unrealized Gain/(Loss) on Derivatives, net of tax Accumulated Other Comprehensive Loss Balance at June 30, 2017 $ (148 ) $ 23 $ (125 ) Other comprehensive income/(loss), before reclassifications 141 2 143 Amounts reclassified to earnings (23 ) — (23 ) Other comprehensive income/(loss), net of tax 118 2 120 Balance at March 31, 2018 $ (30 ) $ 25 $ (5 ) |
Earnings Per Share Attributab32
Earnings Per Share Attributable to Cardinal Health, Inc. (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | 14. Earnings Per Share Attributable to Cardinal Health, Inc. The following table reconciles the number of common shares used to compute basic and diluted earnings per share attributable to Cardinal Health, Inc.: Three Months Ended March 31, (in millions) 2018 2017 Weighted-average common shares–basic 313 316 Effect of dilutive securities: Employee stock options, restricted share units and performance share units 2 2 Weighted-average common shares–diluted 315 318 Nine Months Ended March 31, (in millions) 2018 2017 Weighted-average common shares–basic 314 318 Effect of dilutive securities: Employee stock options, restricted share units and performance share units 2 2 Weighted-average common shares–diluted 316 320 The potentially dilutive employee stock options, restricted share units and performance share units that were antidilutive were 5 million and 3 million for the three months ended March 31, 2018 and 2017 , respectively, and 5 million and 3 million for the nine months ended March 31, 2018 and 2017 , respectively. |
Reconciliation of Common Shares Used to Compute Basic and Diluted Earnings Per Share | The following table reconciles the number of common shares used to compute basic and diluted earnings per share attributable to Cardinal Health, Inc.: Three Months Ended March 31, (in millions) 2018 2017 Weighted-average common shares–basic 313 316 Effect of dilutive securities: Employee stock options, restricted share units and performance share units 2 2 Weighted-average common shares–diluted 315 318 Nine Months Ended March 31, (in millions) 2018 2017 Weighted-average common shares–basic 314 318 Effect of dilutive securities: Employee stock options, restricted share units and performance share units 2 2 Weighted-average common shares–diluted 316 320 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | 15. Segment Information Our operations are principally managed on a products and services basis and are comprised of two operating segments, which are the same as our reportable segments: Pharmaceutical and Medical. The factors for determining the reportable segments include the manner in which management evaluates performance for purposes of allocating resources and assessing performance combined with the nature of the individual business activities. The following table presents revenue for each reportable segment and Corporate: Three Months Ended March 31, (in millions) 2018 2017 Pharmaceutical $ 29,720 $ 28,406 Medical 3,916 3,418 Total segment revenue 33,636 31,824 Corporate (1) (3 ) (3 ) Total revenue $ 33,633 $ 31,821 Nine Months Ended March 31, (in millions) 2018 2017 Pharmaceutical $ 89,786 $ 86,911 Medical 11,684 10,107 Total segment revenue 101,470 97,018 Corporate (1) (10 ) (8 ) Total revenue $ 101,460 $ 97,010 (1) Corporate revenue consists of the elimination of inter-segment revenue and other revenue not allocated to the segments. We evaluate segment performance based on segment profit, among other measures. Segment profit is segment revenue, less segment cost of products sold, less segment distribution, selling, general and administrative ("SG&A") expenses. Segment SG&A expenses include share-based compensation expense as well as allocated corporate expenses for shared functions, including corporate management, corporate finance, financial and customer care shared services, human resources, information technology and legal and compliance. The results attributable to noncontrolling interests are recorded within segment profit. Corporate expenses are allocated to the segments based on headcount, level of benefit provided and other ratable allocation methodologies. We do not allocate the following items to our segments: last-in first-out, or ("LIFO"), inventory charges/(credits); restructuring and employee severance; amortization and other acquisition-related costs; impairments and (gain)/loss on disposal of assets; litigation (recoveries)/charges, net; other income, net; interest expense, net; loss on extinguishment of debt; and provision for/(benefit from) income taxes. In addition, certain investment spending, certain portions of enterprise-wide incentive compensation and other spending are not allocated to the segments. Investment spending generally includes the first-year spend for certain projects that require incremental investments in the form of additional operating expenses. 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 $7 million and $2 million for the three months ended March 31, 2018 and 2017 , respectively, and $17 million and $4 million for the nine months ended March 31, 2018 and 2017 , respectively. The following table presents segment profit by reportable segment and Corporate: Three Months Ended March 31, (in millions) 2018 2017 Pharmaceutical $ 596 $ 611 Medical 199 148 Total segment profit 795 759 Corporate (249 ) (154 ) Total operating earnings $ 546 $ 605 Nine Months Ended March 31, (in millions) 2018 2017 Pharmaceutical $ 1,576 $ 1,682 Medical 548 435 Total segment profit 2,124 2,117 Corporate (918 ) (436 ) Total operating earnings $ 1,206 $ 1,681 The following table presents total assets for each reportable segment and Corporate at: (in millions) March 31, June 30, Pharmaceutical $ 20,573 $ 21,848 Medical 17,746 10,688 Corporate 2,712 7,576 Total assets $ 41,031 $ 40,112 |
Revenue by Reportable Segment | The following table presents revenue for each reportable segment and Corporate: Three Months Ended March 31, (in millions) 2018 2017 Pharmaceutical $ 29,720 $ 28,406 Medical 3,916 3,418 Total segment revenue 33,636 31,824 Corporate (1) (3 ) (3 ) Total revenue $ 33,633 $ 31,821 Nine Months Ended March 31, (in millions) 2018 2017 Pharmaceutical $ 89,786 $ 86,911 Medical 11,684 10,107 Total segment revenue 101,470 97,018 Corporate (1) (10 ) (8 ) Total revenue $ 101,460 $ 97,010 (1) Corporate revenue consists of the elimination of inter-segment revenue and other revenue not allocated to the segments. |
Segment Profit by Reportable Segment | The following table presents segment profit by reportable segment and Corporate: Three Months Ended March 31, (in millions) 2018 2017 Pharmaceutical $ 596 $ 611 Medical 199 148 Total segment profit 795 759 Corporate (249 ) (154 ) Total operating earnings $ 546 $ 605 Nine Months Ended March 31, (in millions) 2018 2017 Pharmaceutical $ 1,576 $ 1,682 Medical 548 435 Total segment profit 2,124 2,117 Corporate (918 ) (436 ) Total operating earnings $ 1,206 $ 1,681 |
Assets by Reportable Segment | The following table presents total assets for each reportable segment and Corporate at: (in millions) March 31, June 30, Pharmaceutical $ 20,573 $ 21,848 Medical 17,746 10,688 Corporate 2,712 7,576 Total assets $ 41,031 $ 40,112 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Total Share-based Compensation Expense by Type of Award | The following table provides total share-based compensation expense by type of award: Three Months Ended March 31, (in millions) 2018 2017 Restricted share unit expense $ 20 $ 18 Employee stock option expense 7 4 Performance share unit expense (4 ) 3 Total share-based compensation $ 24 $ 25 The sum of the components may not equal the total due to rounding. Nine Months Ended March 31, (in millions) 2018 2017 Restricted share unit expense $ 56 $ 53 Employee stock option expense 17 14 Performance share unit expense (9 ) 6 Total share-based compensation $ 64 $ 73 |
Schedule of Stock Option Transactions Under the Plans | The following table summarizes all stock option transactions under the Plans: (in millions, except per share amounts) Stock Options Weighted-Average Exercise Price per Common Share Outstanding at June 30, 2017 6 $ 63.44 Granted 2 66.44 Exercised (1 ) 43.08 Canceled and forfeited — — Outstanding at March 31, 2018 7 $ 64.82 Exercisable at March 31, 2018 5 $ 59.55 |
Schedule of Additional Data Related to Stock Option Activity | The following tables provide additional detail related to stock options: (in millions) March 31, 2018 June 30, 2017 Aggregate intrinsic value of outstanding options at period end $ 46 $ 109 Aggregate intrinsic value of exercisable options at period end 46 106 (in years) March 31, 2018 June 30, 2017 Weighted-average remaining contractual life of outstanding options 7 7 Weighted-average remaining contractual life of exercisable options 6 6 |
Schedule of Transactions Related to Restricted Share Units Under the Plans | The following table summarizes all transactions related to restricted share units under the Plans: (in millions, except per share amounts) Restricted Share Units Weighted-Average Grant Date Fair Value per Share Nonvested at June 30, 2017 2 $ 76.72 Granted 1 66.13 Vested (1 ) 79.23 Canceled and forfeited — — Nonvested at March 31, 2018 2 $ 71.97 |
Schedule of Transactions Related to Performance Share Units Under the Plans | The following table summarizes all transactions related to performance share units under the Plans (based on target award amounts): (in millions, except per share amounts) Performance Share Units Weighted-Average Grant Date Fair Value per Share Nonvested at June 30, 2017 0.6 $ 77.83 Granted 0.2 66.43 Vested (1) (0.2 ) 71.57 Canceled and forfeited (0.2 ) — Nonvested at March 31, 2018 0.4 $ 66.14 (1) Vested based on achievement of 133 percent of the target performance goal. |
Acquisitions (Narrative) (Detai
Acquisitions (Narrative) (Details) $ in Millions | Jul. 29, 2017USD ($)categorycountry | Jun. 30, 2017USD ($) | Mar. 31, 2018USD ($) | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) |
Business Acquisition [Line Items] | |||||
Cash paid for acquisitions, net of cash acquired | $ 6,142 | $ 113 | |||
Goodwill | $ 7,221 | $ 10,098 | 10,098 | ||
Goodwill, Acquired During Period | 3,195 | ||||
Patient Recovery Business | |||||
Business Acquisition [Line Items] | |||||
Cash paid for acquisitions, net of cash acquired | $ 6,100 | ||||
Number of Product Categories Manufactured | category | 23 | ||||
Number of principal countries | country | 28 | ||||
Proceeds from Issuance of Debt | $ 4,500 | ||||
Transaction and integration costs | 25 | 85 | |||
Goodwill | $ 3,144 | $ 3,144 | |||
Fair Value, Inputs, Level 3 | Patient Recovery Business | |||||
Business Acquisition [Line Items] | |||||
Fair Value Inputs, Discount Rate | 8.20% |
Acquisitions (Acquisition) (Det
Acquisitions (Acquisition) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Jun. 30, 2017 | |
Business Acquisition [Line Items] | ||
Goodwill | $ 10,098 | $ 7,221 |
Patient Recovery Business | ||
Business Acquisition [Line Items] | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | 2,652 | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents | 22 | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory | 426 | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Prepaid Expense and Other Assets | 252 | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | 756 | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Other | 307 | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities Noncurrent | 865 | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | 2,936 | |
Goodwill | 3,144 | |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | 6,080 | |
Customer relationships | Patient Recovery Business | ||
Business Acquisition [Line Items] | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 1,733 | |
Trade Names [Member] | ||
Business Acquisition [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 15 years | |
Trade Names [Member] | Patient Recovery Business | ||
Business Acquisition [Line Items] | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 187 | |
Developed Technology Rights [Member] | ||
Business Acquisition [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 15 years | |
Developed Technology Rights [Member] | Patient Recovery Business | ||
Business Acquisition [Line Items] | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 732 | |
Minimum | Customer relationships | ||
Business Acquisition [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 10 years | |
Maximum | Customer relationships | ||
Business Acquisition [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 18 years |
Restructuring and Employee Se37
Restructuring and Employee Severance (Activity Related to Restructuring and Employee Severance Costs) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||||
Employee-related costs | $ (1) | $ 14 | $ 18 | $ 27 |
Facility Exit and Other Costs | 3 | 1 | 137 | 4 |
Total restructuring and employee severance | $ 2 | $ 15 | $ 155 | $ 31 |
Restructuring and Employee Se38
Restructuring and Employee Severance (Liabilities Associated with Restructuring and Employee Severance Activities) (Details) $ in Millions | 9 Months Ended |
Mar. 31, 2018USD ($) | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | $ 41 |
Additions | 139 |
Payments and other adjustments | (158) |
Ending Balance | 22 |
Employee- Related Costs | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 41 |
Additions | 8 |
Payments and other adjustments | (31) |
Ending Balance | 18 |
Facility Exit and Other Costs | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 0 |
Additions | 131 |
Payments and other adjustments | (127) |
Ending Balance | $ 4 |
Restructuring and Employee Se39
Restructuring and Employee Severance Narative (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Jan. 31, 2018 | Nov. 30, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||||||
Facility Exit and Other Costs | $ 3 | $ 1 | $ 137 | $ 4 | ||
Cash Paid For Contract Termination | $ 60 | $ 65 | ||||
Medline | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Facility Exit and Other Costs | $ 125 |
Divestitures (Narrative) (Detai
Divestitures (Narrative) (Details) - USD ($) $ in Millions | Feb. 01, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2018 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Sale of business, consideration | $ 1,200 | |||
Proceeds from Divestiture of Businesses | $ 861 | |||
China Business | Disposal Group, Held-for-sale, Not Discontinued Operations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Disposal Group, Including Discontinued Operation, impairment | $ 67 | |||
Provisional tax expense, disposal group | $ 57 | |||
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal | $ 7 | $ (60) |
Goodwill and Other Intangible41
Goodwill and Other Intangible Assets (Schedule of Goodwill by Reportable Segment) (Details) $ in Millions | 9 Months Ended |
Mar. 31, 2018USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 7,221 |
Goodwill acquired, net of purchase price adjustments | 3,195 |
Foreign currency translation adjustments and other | (83) |
Goodwill, Written off Related to Sale of Business Unit | (401) |
Ending balance | 10,098 |
Pharmaceutical | |
Goodwill [Roll Forward] | |
Beginning balance | 2,939 |
Goodwill acquired, net of purchase price adjustments | 1 |
Foreign currency translation adjustments and other | (28) |
Goodwill, Written off Related to Sale of Business Unit | (347) |
Ending balance | 2,621 |
Medical | |
Goodwill [Roll Forward] | |
Beginning balance | 4,282 |
Goodwill acquired, net of purchase price adjustments | 3,194 |
Foreign currency translation adjustments and other | (55) |
Goodwill, Written off Related to Sale of Business Unit | (54) |
Ending balance | $ 7,477 |
Goodwill and Other Intangible42
Goodwill and Other Intangible Assets (Schedule of Intangible Assets) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Mar. 31, 2018 | Jun. 30, 2017 | |
Indefinite-lived Intangible Assets [Line Items] | ||
Net Intangible | $ 62 | $ 61 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Intangible | 5,978 | 3,391 |
Accumulated Amortization | 1,839 | 1,466 |
Net Intangible | $ 4,139 | 1,925 |
Weighted- Average Remaining Amortization Period (Years) | 14 years | |
Gross Intangible, Total other intangible assets | $ 6,040 | 3,452 |
Net Intangible, Total other intangible assets | 4,201 | 1,986 |
IPR&D, trademarks and other | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Net Intangible | 62 | |
IPR&D, trademarks and other | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Net Intangible | 61 | |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Intangible | 3,625 | 1,966 |
Accumulated Amortization | 1,162 | 967 |
Net Intangible | $ 2,463 | 999 |
Weighted- Average Remaining Amortization Period (Years) | 15 years | |
Trademarks, trade names and patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Intangible | $ 684 | 509 |
Accumulated Amortization | 237 | 195 |
Net Intangible | $ 447 | 314 |
Weighted- Average Remaining Amortization Period (Years) | 15 years | |
Developed technology and other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Intangible | $ 1,669 | 916 |
Accumulated Amortization | 440 | 304 |
Net Intangible | $ 1,229 | $ 612 |
Weighted- Average Remaining Amortization Period (Years) | 12 years |
Goodwill and Other Intangible43
Goodwill and Other Intangible Assets (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Reclassified to assets held for sale | $ 401 | |||
Goodwill, Written off Related to Sale of Business Unit | (401) | |||
Other Intangible Assets Reclassified to Assets Held for Sales | $ 62 | |||
Amortization of intangible assets | 148 | $ 96 | 435 | $ 291 |
Finite-Lived Intangible Assets, Amortization Expense, Remainder of Fiscal Year | 139 | 139 | ||
Estimated annual amortization of intangible assets - Year Two | 554 | 554 | ||
Estimated annual amortization of intangible assets - Year Three | 523 | 523 | ||
Estimated annual amortization of intangible assets - Year Four | 451 | 451 | ||
Estimated annual amortization of intangible assets - Year Five | $ 418 | $ 418 |
Available-for-Sale Securities44
Available-for-Sale Securities (Schedule of Available-for-Sale Securities) (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Jun. 30, 2017 |
Schedule of Available-for-sale Securities [Line Items] | ||
Total available-for-sale securities | $ 65 | |
Treasury bills | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Total current available-for-sale securities | $ 0 | 25 |
International bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Total current available-for-sale securities | 0 | 3 |
Corporate bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Total current available-for-sale securities | 0 | 30 |
U.S. agency bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Total current available-for-sale securities | 0 | 3 |
Asset-backed securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Total current available-for-sale securities | 0 | 3 |
International equity securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Total current available-for-sale securities | $ 0 | $ 1 |
Long-Term Obligations and Oth45
Long-Term Obligations and Other Short-Term Borrowings (Details) - USD ($) $ in Millions | 1 Months Ended | |
Jun. 30, 2017 | Mar. 31, 2018 | |
Debt Instrument [Line Items] | ||
Debt and Capital Lease Obligations | $ 10,395 | $ 9,578 |
Accounts payable | 17,906 | 18,741 |
1.7% Notes due fiscal 2018 [Member] | ||
Debt Instrument [Line Items] | ||
Repayments of Debt | 400 | |
Patient Recovery Business | ||
Debt Instrument [Line Items] | ||
Proceeds from Notes Payable | $ 5,200 | |
Short Term Credit Facilities Member | Committed Receivables Sales Facility Program [Member] | ||
Debt Instrument [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | 1,000 | |
Commercial Paper [Member] | Committed Receivables Sales Facility Program [Member] | ||
Debt Instrument [Line Items] | ||
Line of Credit Facility, Fair Value of Amount Outstanding | 0 | |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | 2,000 | |
Revolving Credit Facility [Member] | Committed Receivables Sales Facility Program [Member] | ||
Debt Instrument [Line Items] | ||
Line of Credit Facility, Fair Value of Amount Outstanding | $ 0 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Mar. 31, 2018 | Jun. 30, 2017 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Jun. 30, 2018 | |
Income Taxes | ||||||
Remeasurement Deferred Tax Assets and Liabilities expense (benefit) | $ 18 | |||||
Foreign income, transition tax | $ 41 | |||||
Unrecognized tax benefits | 426 | $ 417 | 426 | |||
Unrecognized tax benefits that would impact effective tax rate | 264 | 268 | 264 | |||
Unrecognized tax benefits, interest and penalties accrued | 106 | 99 | 106 | |||
Amount CareFusion is liable under tax matters agreement in the event amount must be paid to the taxing authority | $ 148 | $ 142 | $ 148 | |||
Effective Income Tax Rate Reconciliation, Percent | 45.10% | 32.30% | (48.60%) | 34.40% | ||
Effective Income Tax Rate Reconciliation, Other Reconciling Items, Amount | $ 18 | $ 31 | ||||
Tax Cuts and Jobs Act of 2017, Change in Tax Rate, Deferred Tax Asset, Income Tax Expense (Benefit) | (18) | $ (952) | ||||
Minimum | ||||||
Income Taxes | ||||||
Estimated range of decrease in unrecognized tax benefits within the next 12 months | 0 | 0 | ||||
Maximum | ||||||
Income Taxes | ||||||
Estimated range of decrease in unrecognized tax benefits within the next 12 months | $ 35 | 35 | ||||
Federal | Minimum | ||||||
Income Taxes | ||||||
Closed tax year | 2,006 | |||||
Tax years open for examination | 2,008 | |||||
Federal | Maximum | ||||||
Income Taxes | ||||||
Closed tax year | 2,007 | |||||
Tax years open for examination | 2,018 | |||||
State and Local | Minimum | ||||||
Income Taxes | ||||||
Tax years open for examination | 2,008 | |||||
State and Local | Maximum | ||||||
Income Taxes | ||||||
Tax years open for examination | 2,018 | |||||
Foreign | Minimum | ||||||
Income Taxes | ||||||
Tax years open for examination | 2,008 | |||||
Foreign | Maximum | ||||||
Income Taxes | ||||||
Tax years open for examination | 2,018 | |||||
Scenario, Forecast | ||||||
Income Taxes | ||||||
Federal statutory rate | 28.10% | |||||
Patient Recovery Business | ||||||
Income Taxes | ||||||
Business Combination, Indemnification Receivable | $ 34 | 34 | ||||
Disposal Group, Held-for-sale, Not Discontinued Operations | China Business | ||||||
Income Taxes | ||||||
Provisional tax expense, disposal group | $ 57 |
Commitments, Contingent Liabi47
Commitments, Contingent Liabilities and Litigation (Details) $ in Millions | Apr. 30, 2018organizationjurisdictionsplaintifflawsuit | Mar. 31, 2018USD ($) |
Loss Contingencies [Line Items] | ||
Loss Contingency, Request for Information | 39 | |
Loss contingency accrual, net of insurance recoveries | $ | $ 247 | |
Subsequent Event | ||
Loss Contingencies [Line Items] | ||
Number of plaintiffs | plaintiff | 1,607 | |
Product Liability Lawsuits | Subsequent Event | ||
Loss Contingencies [Line Items] | ||
Number of lawsuits filed | 16 | |
Number of plaintiffs | organization | 17 | |
CVS Health | ||
Loss Contingencies [Line Items] | ||
Maximum quarterly payment | $ | $ 45.6 | |
Opioid Lawsuits | Subsequent Event | ||
Loss Contingencies [Line Items] | ||
Loss Contingencies, Number of Jurisdictions in Lawsuits | jurisdictions | 46 | |
loss contingency, class action lawsuits | 21 | |
Product Liability Lawsuits | Subsequent Event | ||
Loss Contingencies [Line Items] | ||
Number of lawsuits filed | 137 |
Fair Value Measurements (Fair V
Fair Value Measurements (Fair Value of Assets and Liabilities Measured on a Recurring Basis) (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Jun. 30, 2017 |
Assets: | ||
Total available-for-sale securities | $ 65 | |
Recurring | ||
Assets: | ||
Cash equivalents | $ 548 | 739 |
Forward contracts | (58) | (21) |
Total available-for-sale securities | 0 | 65 |
Other investments | 115 | 116 |
Liabilities: | ||
Contingent Consideration | (14) | (32) |
Recurring | Level 1 | ||
Assets: | ||
Cash equivalents | 548 | 739 |
Forward contracts | 0 | 0 |
Total available-for-sale securities | 0 | 0 |
Other investments | 115 | 116 |
Liabilities: | ||
Contingent Consideration | 0 | 0 |
Recurring | Level 2 | ||
Assets: | ||
Cash equivalents | 0 | 0 |
Forward contracts | (58) | (21) |
Total available-for-sale securities | 0 | 65 |
Other investments | 0 | 0 |
Liabilities: | ||
Contingent Consideration | 0 | 0 |
Recurring | Level 3 | ||
Assets: | ||
Cash equivalents | 0 | 0 |
Forward contracts | 0 | 0 |
Total available-for-sale securities | 0 | 0 |
Other investments | 0 | 0 |
Liabilities: | ||
Contingent Consideration | (14) | $ (32) |
Disposal Group, Held-for-sale, Not Discontinued Operations | China Business | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets held for sale | 2,216 | |
Liabilities related to assets held for sale | $ 1,339 |
Fair Value Measurements (Reconc
Fair Value Measurements (Reconciliation of Liabilities Measured at Fair Value on a Recurring Basis Using Unobservable Inputs (Level 3)) (Details) - Recurring - Contingent Consideration Obligation $ in Millions | 9 Months Ended |
Mar. 31, 2018USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at beginning of period | $ 32 |
Additions from acquisitions | 5 |
Changes in fair value of contingent consideration | (2) |
Payment of contingent consideration | (22) |
Balance at end of period | $ 14 |
Financial Instruments (Narrativ
Financial Instruments (Narrative) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Derivative [Line Items] | ||
Payments for (Proceeds from) Hedge, Financing Activities | $ 0 | $ (14) |
Designated as Hedging Instrument | Fair Value Hedging | Interest Rate Swap | ||
Derivative [Line Items] | ||
Derivative, notional amount | $ 650 | 100 |
Designated as Hedging Instrument | Cash Flow Hedging [Member] | Interest Rate Swap | ||
Derivative [Line Items] | ||
Derivative, notional amount | $ 200 |
Financial Instruments (Summary
Financial Instruments (Summary of Estimated Fair Value of Long-term Obligations and Other Short-term Borrowings) (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Jun. 30, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying amount | $ 9,578 | $ 10,395 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated fair value | $ 9,576 | $ 10,713 |
Redeemable Noncontrolling Int52
Redeemable Noncontrolling Interests (Narrative) (Details) - naviHealth - USD ($) $ in Millions | 9 Months Ended | |
Mar. 31, 2018 | Aug. 26, 2015 | |
Redeemable Noncontrolling Interest [Line Items] | ||
noncontrolling interest, decrease from redemptions or purchase of interests percent | 16.00% | |
Ownership interest (as a percent) | 98.00% | 71.00% |
Redeemable Noncontrolling Interest, Equity, Fair Value | $ 119 | |
Noncontrolling Interest, Decrease from Redemptions or Purchase of Interests | $ 103 | |
Redeemable Noncontrolling Interest, Equity, Redemption Value | $ 109 |
Redeemable Noncontrolling Int53
Redeemable Noncontrolling Interests (Changes in Redeemable Noncontrolling Interests) (Details) $ in Millions | 9 Months Ended |
Mar. 31, 2018USD ($) | |
Increase (Decrease) in Temporary Equity [Roll Forward] | |
Balance at beginning of period | $ 118 |
Balance at end of period | 12 |
naviHealth | |
Increase (Decrease) in Temporary Equity [Roll Forward] | |
Balance at beginning of period | 118 |
Net earnings attributable to redeemable noncontrolling interests | 2 |
Net purchase of redeemable noncontrolling interests | (103) |
Balance at end of period | 12 |
Noncontrolling Interest, Change in Redemption Value | $ (5) |
Shareholders' Equity (Narrative
Shareholders' Equity (Narrative) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Class of Stock [Line Items] | ||||
Payments for Repurchase of Common Stock | $ 450 | $ 600 | ||
Accelerated Share Repurchases, Settlement (Payment) or Receipt | $ 300 | $ 300 | ||
Accelerated Share Repurchases, Cash or Stock Settlement | 4.3 | |||
Accelerated Share Repurchases, Final Price Paid Per Share | $ 69.26 | |||
Treasury Stock, Shares, Retired | 37 | |||
Treasury Stock, Common, Value | $ (2,500) | |||
Common Stock, Shares, Outstanding | 302 | |||
Retained earnings | $ 2,200 | |||
Treasury Shares | ||||
Class of Stock [Line Items] | ||||
Treasury shares acquired (using cost method), shares | 8.1 | 6.5 | ||
Treasury shares acquired, average price per share (in usd per share) | $ 68.81 | $ 74.08 |
Shareholders' Equity (Changes i
Shareholders' Equity (Changes in the Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
AOCI, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | $ 6,828 | |||
Total other comprehensive income/(loss), net of tax | $ 90 | $ 35 | 120 | $ (20) |
Balance at end of period | 7,538 | 7,538 | ||
Foreign Currency Translation Adjustments | ||||
AOCI, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (148) | |||
Other comprehensive income/(loss), before reclassifications | 141 | |||
Amounts reclassified to earnings | (23) | |||
Total other comprehensive income/(loss), net of tax | 118 | |||
Balance at end of period | (30) | (30) | ||
Unrealized Gain/(Loss) on Derivatives, net of tax | ||||
AOCI, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | 23 | |||
Other comprehensive income/(loss), before reclassifications | 2 | |||
Amounts reclassified to earnings | 0 | |||
Total other comprehensive income/(loss), net of tax | 2 | |||
Balance at end of period | 25 | 25 | ||
AOCI Attributable to Parent [Member] | ||||
AOCI, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (125) | |||
Accumulated Other Comprehensive Loss | ||||
AOCI, Net of Tax [Roll Forward] | ||||
Other comprehensive income/(loss), before reclassifications | 143 | |||
Amounts reclassified to earnings | (23) | |||
Total other comprehensive income/(loss), net of tax | 120 | |||
Balance at end of period | $ (5) | $ (5) |
Earnings Per Share Attributab56
Earnings Per Share Attributable to Cardinal Health, Inc. (Narrative) (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share [Abstract] | ||||
Potentially dilutive employee stock options, restricted share units and performance share units that were antidilutive (in shares) | 5 | 3 | 5 | 3 |
Earnings Per Share Attributab57
Earnings Per Share Attributable to Cardinal Health, Inc. (Reconciliation of Common Shares Used to Compute Basic and Diluted EPS) (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share [Abstract] | ||||
Weighted-average common shares–basic (in shares) | 313 | 316 | 314 | 318 |
Effect of dilutive securities: | ||||
Employee stock options, restricted share units, and performance share units (in shares) | 2 | 2 | 2 | 2 |
Weighted-average common shares–diluted (in shares) | 315 | 318 | 316 | 320 |
Segment Information (Narrative)
Segment Information (Narrative) (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Mar. 31, 2018USD ($)segment | Mar. 31, 2017USD ($) | |
Segment Reporting [Abstract] | ||||
Number of operating segments | 2 | |||
Number of reportable segments | 2 | |||
Project costs on investment and other spending | $ | $ 7 | $ 2 | $ 17 | $ 4 |
Segment Information (Revenue by
Segment Information (Revenue by Reportable Segment) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 33,633 | $ 31,821 | $ 101,460 | $ 97,010 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 33,636 | 31,824 | 101,470 | 97,018 |
Operating Segments | Pharmaceutical | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 29,720 | 28,406 | 89,786 | 86,911 |
Operating Segments | Medical | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 3,916 | 3,418 | 11,684 | 10,107 |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | $ (3) | $ (3) | $ (10) | $ (8) |
Segment Information (Segment Pr
Segment Information (Segment Profit by Reportable Segment) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Total operating earnings | $ 546 | $ 605 | $ 1,206 | $ 1,681 |
Operating Segments | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Total operating earnings | 795 | 759 | 2,124 | 2,117 |
Operating Segments | Pharmaceutical | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Total operating earnings | 596 | 611 | 1,576 | 1,682 |
Operating Segments | Medical | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Total operating earnings | 199 | 148 | 548 | 435 |
Corporate | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Total operating earnings | $ (249) | $ (154) | $ (918) | $ (436) |
Segment Information (Assets by
Segment Information (Assets by Reportable Segment) (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Jun. 30, 2017 |
Segment Reporting Information [Line Items] | ||
Total assets | $ 41,031 | $ 40,112 |
Operating Segments | Pharmaceutical | ||
Segment Reporting Information [Line Items] | ||
Total assets | 20,573 | 21,848 |
Operating Segments | Medical | ||
Segment Reporting Information [Line Items] | ||
Total assets | 17,746 | 10,688 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Total assets | $ 2,712 | $ 7,576 |
Share-Based Compensation (Narra
Share-Based Compensation (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Tax benefit related to share-based compensation | $ 8 | $ 9 | $ 20 | $ 25 |
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period (in years) | 3 years | |||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ 26 | 26 | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years | |||
Exercisable period of plans (in years) | 10 years | |||
Restricted Share Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period (in years) | 3 years | |||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ 73 | 73 | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years | |||
Performance Share Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period (in years) | 3 years | |||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ 9 | $ 9 | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years | |||
Target performance goal (as a percent) | 133.00% | |||
Performance Share Units | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Target performance goal (as a percent) | 0.00% | |||
Performance Share Units | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Target performance goal (as a percent) | 200.00% |
Share-Based Compensation (Sched
Share-Based Compensation (Schedule of Total Share-Based Compensation Expense by Type of Award) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation | $ 24 | $ 25 | $ 64 | $ 73 |
Restricted Share Unit | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation | 20 | 18 | 56 | 53 |
Employee Stock Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation | 7 | 4 | 17 | 14 |
Performance Share Unit | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation | $ (4) | $ 3 | $ (9) | $ 6 |
Share-Based Compensation (Sch64
Share-Based Compensation (Schedule of All Stock Option Transactions Under the Plans) (Details) shares in Millions | 9 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Stock Options | |
Outstanding at beginning of period (in shares) | shares | 6 |
Granted (in shares) | shares | 2 |
Exercised (in shares) | shares | (1) |
Canceled and forfeited (in shares) | shares | 0 |
Outstanding at end of period (in shares) | shares | 7 |
Exercisable at end of period (in shares) | shares | 5 |
Weighted-Average Exercise Price per Common Share | |
Outstanding at beginning of period (in usd per share) | $ / shares | $ 63.44 |
Granted (in usd per share) | $ / shares | 66.44 |
Exercised (in usd per share) | $ / shares | 43.08 |
Canceled and forfeited (in usd per share) | $ / shares | 0 |
Outstanding at end of period (in usd per share) | $ / shares | 64.82 |
Exercisable at end of period (in usd per share) | $ / shares | $ 59.55 |
Share-Based Compensation (Sch65
Share-Based Compensation (Schedule of Additional Data Related to Stock Options) (Details) - Stock Options - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Jun. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ 26 | |
Aggregate intrinsic value of outstanding options at period end | 46 | $ 109 |
Aggregate intrinsic value of exercisable options at period end | $ 46 | $ 106 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 7 years | 7 years |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 6 years | 6 years |
Share-Based Compensation (Sch66
Share-Based Compensation (Schedule of All Transactions Related to Restricted Share Units Under the Plans) (Details) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended |
Mar. 31, 2018USD ($)$ / sharesshares | Mar. 31, 2018USD ($)$ / sharesshares | |
Restricted Share Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ | $ 73 | $ 73 |
Restricted Share Units | ||
Nonvested at beginning of period (in shares) | shares | 2 | |
Granted (in shares) | shares | 1 | |
Vested (in shares) | shares | (1) | |
Canceled and forfeited (in shares) | shares | 0 | |
Nonvested at end of period (in shares) | shares | 2 | 2 |
Weighted-Average Grant Date Fair Value per Share | ||
Nonvested at beginning of period (in usd per share) | $ / shares | $ 76.72 | |
Granted (in usd per share) | $ / shares | 66.13 | |
Vested (in usd per share) | $ / shares | 79.23 | |
Canceled and forfeited (in usd per share) | $ / shares | 0 | |
Nonvested at end of period (in usd per share) | $ / shares | $ 71.97 | $ 71.97 |
Employee Stock Option | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ | $ 26 | $ 26 |
Share-Based Compensation (Sch67
Share-Based Compensation (Schedule of All Transactions Related to Performance Share Units Under the Plans) (Details) - Performance Share Units $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended |
Mar. 31, 2018USD ($)$ / sharesshares | Mar. 31, 2018USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 133.00% | |
Performance Share Units | ||
Nonvested at beginning of period (in shares) | shares | 0.6 | |
Granted (in shares) | shares | 0.2 | |
Vested (in shares) | shares | (0.2) | |
Canceled and forfeited (in shares) | shares | (0.2) | |
Nonvested at end of period (in shares) | shares | 0.4 | 0.4 |
Weighted-Average Grant Date Fair Value per Share | ||
Nonvested at beginning of period (in usd per share) | $ / shares | $ 77.83 | |
Granted (in usd per share) | $ / shares | 66.43 | |
Vested (in usd per share) | $ / shares | 71.57 | |
Canceled and forfeited (in usd per share) | $ / shares | 0 | |
Nonvested at end of period (in usd per share) | $ / shares | $ 66.14 | $ 66.14 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ | $ 9 | $ 9 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years | |
Award vesting period (in years) | 3 years |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | Feb. 01, 2018 | Jan. 31, 2018 | Nov. 30, 2017 |
Subsequent Event [Line Items] | |||
Sale of business, consideration | $ 1,200 | ||
Proceeds from Divestiture of Businesses | $ 861 | ||
Cash Paid For Contract Termination | $ 60 | $ 65 |