Segment Information

9 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

Segment Information

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 our performance combined with the nature of the individual business activities.

The following tables present revenue for each reportable segment and Corporate:

	Three Months Ended March 31
(in millions)	2014		2013
Pharmaceutical (1)	$	18,762	$	22,070
Medical	2,657		2,484
Total segment revenue	21,419		24,554
Corporate (2)	8		(2		)
Total revenue	$	21,427	$	24,552

	Nine Months Ended March 31
(in millions)	2014		2013
Pharmaceutical (1)	$	60,018	$	68,314
Medical	8,168		7,363
Total segment revenue	68,186		75,677
Corporate (2)	4		(4		)
Total revenue	$	68,190	$	75,673

(1) The decrease in Pharmaceutical segment revenue is primarily due to the Walgreens contract expiration.

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

We evaluate segment performance based upon 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. Corporate expenses are allocated to the segments based upon headcount, level of benefit provided and ratable allocation. Other income, net, interest expense, net and provision for income taxes are not allocated to the segments.

Restructuring and employee severance, amortization and other acquisition-related costs, impairments and loss on disposal of assets and litigation (recoveries)/charges, net are not allocated to the segments. In addition, certain investment and other spending are not allocated to the segments. Investment spending generally includes the first-year spend for certain projects that require incremental investments in the form of additional operating expenses. We encourage our segments and corporate functions to identify investment projects that will promote innovation and provide future returns. As approval decisions for such projects are dependent upon executive management, the expenses for such projects are often retained at Corporate. Investment spending within Corporate was $7 million for both the three months ended March 31, 2014 and 2013 and $17 million and $14 million for the nine months ended March 31, 2014 and 2013, respectively.

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

	Three Months Ended March 31
(in millions)	2014			2013
Pharmaceutical	$	452		$	498
Medical	111			100
Total segment profit	563			598
Corporate	(55		)	(123		)
Total operating earnings	$	508		$	475

	Nine Months Ended March 31
(in millions)	2014			2013
Pharmaceutical	$	1,368		$	1,339
Medical	348			268
Total segment profit	1,716			1,607
Corporate	(218		)	(168		)
Total operating earnings	$	1,498		$	1,439

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

(in millions)	March 31, 2014		June 30, 2013
Pharmaceutical (1)	$	14,447	$	16,258
Medical	6,376		6,521
Corporate	3,878		3,040
Total assets	$	24,701	$	25,819

(1) The decrease in Pharmaceutical segment assets is primarily due to the Walgreens contract expiration.