v3.22.4
Segment Information
 6 Months Ended
Dec. 31, 2022
Segment Reporting [Abstract]  
Segment Information
12. Segment Information
Our operations are principally managed on a products and services basis and are comprised of two operating segments, which are the same as our reportable segments: Pharmaceutical and Medical. The factors for determining the reportable segments include the manner in which management evaluates performance for purposes of allocating resources and assessing performance combined with the nature of the individual business activities.
Our Pharmaceutical segment distributes branded and generic pharmaceutical, specialty pharmaceutical and over-the-counter healthcare and consumer products in the United States. This segment also provides services to pharmaceutical manufacturers and healthcare providers for specialty pharmaceutical products; provides pharmacy management services to hospitals and operates a limited number of pharmacies, including pharmacies in community health centers; operates nuclear pharmacies and radiopharmaceutical manufacturing facilities; and connects pharmacists, payers and pharmaceutical companies and delivers health solutions for medication therapy management, digital patient engagement and telepharmacy; and repackages generic pharmaceuticals and over-the-counter healthcare products.
Our Medical segment manufactures, sources and distributes Cardinal Health branded medical, surgical and laboratory products, which are sold in the United States, Canada, Europe, Asia and other markets. In addition to distributing Cardinal Health branded products, this segment also distributes a broad range of medical, surgical and laboratory products known as national brand products and provides supply chain services and solutions to hospitals, ambulatory surgery centers, clinical laboratories and other healthcare providers in the United States and Canada. This segment also distributes medical products to patients' homes in the United States through our Cardinal Health at-Home Solutions division.
Revenue
The following tables present revenue for each reportable segment and disaggregated revenue within our two reportable segments and Corporate:
Three Months Ended December 31,
(in millions)20222021
Pharmaceutical Distribution and Specialty Solutions (1) (2)$47,391 $41,164 
Nuclear and Precision Health Solutions (3)282 211 
Pharmaceutical segment revenue
47,673 41,375 
Medical distribution and products (4)3,099 3,446 
Cardinal Health at-Home Solutions698 639 
Medical segment revenue
3,797 4,085 
  Total segment revenue51,470 45,460 
Corporate (5)(1)(3)
Total revenue$51,469 $45,457 
Six Months Ended December 31,
(in millions)20222021
Pharmaceutical Distribution and Specialty Solutions (1) (2)$92,938 $80,778 
Nuclear and Precision Health Solutions (3)563 419 
Pharmaceutical segment revenue
93,501 81,197 
Medical distribution and products (4)6,239 7,013 
Cardinal Health at-Home Solutions1,336 1,221 
Medical segment revenue
7,575 8,234 
  Total segment revenue101,076 89,431 
Corporate (5)(4)(6)
Total revenue$101,072 $89,425 
(1)Products and services offered by our Specialty Solutions division are referred to as “specialty pharmaceutical products and services."
(2)Comprised of all Pharmaceutical segment businesses except for Nuclear and Precision Health Solutions division.
(3)Increase from prior year relates to new product launches and changes in revenue recognition presentation from agent to principal for certain customer contracts.
(4)Comprised of all Medical segment businesses except for Cardinal Health at-Home Solutions division.
(5)Corporate revenue consists of the elimination of inter-segment revenue and other revenue not allocated to the segments.
The following tables present revenue by geographic area:
Three Months Ended December 31,
(in millions)20222021
United States$50,333 $44,382 
International1,137 1,078 
  Total segment revenue51,470 45,460 
Corporate (1)(1)(3)
Total revenue$51,469 $45,457 
Six Months Ended December 31,
(in millions)20222021
United States$98,810 $87,223 
International2,266 2,208 
  Total segment revenue101,076 89,431 
Corporate (1)(4)(6)
Total revenue$101,072 $89,425 
(1)Corporate revenue consists of the elimination of inter-segment revenue and other revenue not allocated to the segments.
Segment Profit
We evaluate segment performance based on segment profit, among other measures. Segment profit is segment revenue, less segment cost of products sold, less segment distribution, selling, general and administrative ("SG&A") expenses. Segment SG&A expenses include share-based compensation expense as well as allocated corporate expenses for shared functions, including corporate management, corporate finance, financial and customer care shared services, human resources, information technology, and legal and compliance, including certain litigation defense
costs. Corporate expenses are allocated to the segments based on headcount, level of benefit provided and other ratable allocation methodologies. The results attributable to noncontrolling interests are recorded within segment profit.
We do not allocate the following items to our segments:
•last-in first-out, or ("LIFO"), inventory charges/(credits);
•surgical gown recall costs/(income);
•shareholder cooperation agreement costs;
•state opioid assessment related to prior fiscal years;
•restructuring and employee severance;
•amortization and other acquisition-related costs;
•impairments and (gain)/loss on disposal of assets, net; in connection with goodwill impairment testing for the Medical Unit as discussed further in Note 4, we recognized goodwill impairment charges of $709 million and $863 million during the three and six months ended December 31, 2022, respectively;
•litigation (recoveries)/charges, net;
•other (income)/expense, net;
•interest expense, net;
•loss on early extinguishment of debt;
•(gain)/loss on sale of equity interest in naviHealth; or
•provision for/(benefit from) income taxes
In addition, certain investment spending, certain portions of enterprise-wide incentive compensation and other spending are not allocated to the segments. Investment spending generally includes the first-year spend for certain projects that require incremental investments in the form of additional operating expenses. Because approval for these projects is dependent on executive management, we retain these expenses at Corporate. Investment spending within Corporate was $5 million and $11 million for the three months ended December 31, 2022 and 2021, and $11 million and $18 million for the six months ended December 31, 2022 and 2021, respectively.
The following tables present segment profit by reportable segment and Corporate:
Three Months Ended December 31,
(in millions)20222021
Pharmaceutical (1)$464 $426 
Medical17 50 
Total segment profit481 476 
Corporate(600)(1,426)
Total operating loss$(119)$(950)
Six Months Ended December 31,
(in millions)20222021
Pharmaceutical (1)$895 $832 
Medical9 173 
Total segment profit904 1,005 
Corporate(886)(1,540)
Total operating earnings/(loss)$18 $(535)
(1)Pharmaceutical segment profit during the three and six months ended December 31, 2021 was positively impacted by a $16 million judgment for lost profits related to an ordinary course intellectual property rights claim.
The following table presents total assets for each reportable segment and Corporate at:
(in millions)December 31,
2022		June 30,
2022
Pharmaceutical$28,992 $26,409 
Medical (1)10,757 11,632 
Corporate 4,733 5,837 
Total assets$44,482 $43,878 
(1)Medical reflects cumulative $863 million goodwill impairment charges recorded in connection with the interim goodwill impairment testing for the Medical Unit during the three and six months ended December 31, 2022, respectively.