10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2014

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File Number: 1-11373

Cardinal Health, Inc.

(Exact name of registrant as specified in its charter)

Ohio	31-0958666
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
7000 Cardinal Place, Dublin, Ohio	43017
(Address of principal executive offices)	(Zip Code)
(614) 757-5000
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ    No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes þ    No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  þ	Accelerated filer o
Non-accelerated filer  o (Do not check if a smaller reporting company)	Smaller reporting company  o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  o  No þ

The number of the registrant’s common shares, without par value, outstanding as of January 27, 2015, was the following: 330,130,751.

	Cardinal Health, Inc. and Subsidiaries
Table of Contents

Item	Index*	Page
	Part I. Financial Information
1	Financial Statements	3
	Condensed Consolidated Statements of Earnings for the Three and Six Months Ended December 31, 2014 and 2013 (Unaudited)	3
	Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended December 31, 2014 and 2013 (Unaudited)	4
	Condensed Consolidated Balance Sheets at December 31, 2014 (Unaudited) and June 30, 2014	5
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended December 31, 2014 and 2013 (Unaudited)	6
	Notes to Condensed Consolidated Financial Statements	7
2	Management's Discussion and Analysis of Financial Condition and Results of Operations	16
3	Quantitative and Qualitative Disclosures About Market Risk	21
4	Controls and Procedures	21
	Part II. Other Information
1	Legal Proceedings	22
1A	Risk Factors	22
2	Unregistered Sales of Equity Securities and Use of Proceeds	22
5	Other Information	23
6	Exhibits	24
	Signatures	25
*	Items not listed are inapplicable.

Table of Contents	Cardinal Health, Inc. and Subsidiaries
Part I. Financial Information

Item 1: Financial Statements

Condensed Consolidated Statements of Earnings (Unaudited)

	Three Months Ended December 31						Six Months Ended December 31
(in millions, except per common share amounts)	2014			2013			2014			2013
Revenue	$	25,537		$	22,240		$	49,607		$	46,763
Cost of products sold	24,083			20,895			46,813			44,155
Gross margin	1,454			1,345			2,794			2,608
Operating expenses:
Distribution, selling, general and administrative expenses	815			766			1,590			1,497
Restructuring and employee severance	7			10			26			20
Amortization and other acquisition-related costs	60			56			112			105
Impairments and (gain)/loss on disposal of assets, net	(18		)	9			(18		)	9
Litigation (recoveries)/charges, net	44			(15		)	72			(13		)
Operating earnings	546			519			1,012			990
Other income, net	(1		)	(6		)	(4		)	(10		)
Interest expense, net	36			33			70			66
Loss on extinguishment of debt	60			—			60			—
Earnings before income taxes and discontinued operations	451			492			886			934
Provision for income taxes	162			217			331			320
Earnings from continuing operations	289			275			555			614
Earnings from discontinued operations, net of tax	—			3			—			3
Net earnings	$	289		$	278		$	555		$	617
Basic earnings per common share:
Continuing operations	$	0.87		$	0.80		$	1.66		$	1.80
Discontinued operations	—			0.01			—			0.01
Net basic earnings per common share	$	0.87		$	0.81		$	1.66		$	1.81
Diluted earnings per common share:
Continuing operations	$	0.86		$	0.79		$	1.65		$	1.78
Discontinued operations	—			0.01			—			0.01
Net diluted earnings per common share	$	0.86		$	0.80		$	1.65		$	1.79
Weighted-average number of common shares outstanding:
Basic	331			342			333			341
Diluted	334			346			337			345
Cash dividends declared per common share	$	0.3425		$	0.3025		$	0.6850		$	0.6050

See notes to condensed consolidated financial statements.

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Table of Contents Cardinal Health, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

	Three Months Ended December 31					Six Months Ended December 31
(in millions)	2014			2013		2014			2013
Net earnings	$	289		$	278	$	555		$	617
Other comprehensive income/(loss):
Net change in foreign currency translation adjustments	(40		)	4		(64		)	28
Net unrealized gain/(loss) on derivative instruments, net of tax	(9		)	3		(9		)	3
Total other comprehensive income/(loss), net of tax	(49		)	7		(73		)	31
Total comprehensive income	$	240		$	285	$	482		$	648

See notes to condensed consolidated financial statements.

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Table of Contents Cardinal Health, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in millions)	December 31, 2014			June 30, 2014
	(Unaudited)
Assets
Current assets:
Cash and equivalents	$	2,881		$	2,865
Trade receivables, net	5,653			5,380
Inventories, net	9,408			8,266
Prepaid expenses and other	1,213			1,428
Total current assets	19,155			17,939
Property and equipment, net	1,415			1,459
Goodwill and other intangibles, net	5,876			5,870
Other assets	802			765
Total assets	$	27,248		$	26,033
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	13,602		$	12,149
Current portion of long-term obligations and other short-term borrowings	270			801
Other accrued liabilities	2,158			2,165
Total current liabilities	16,030			15,115
Long-term obligations, less current portion	3,706			3,171
Deferred income taxes and other liabilities	1,412			1,346
Shareholders’ equity:
Preferred shares, without par value:
Authorized—500 thousand shares, Issued—none	—			—
Common shares, without par value:
Authorized—755 million shares, Issued—364 million shares at December 31, 2014 and June 30, 2014	2,973			2,980
Retained earnings	5,100			4,774
Common shares in treasury, at cost: 34 million shares and 27 million shares at December 31, 2014 and June 30, 2014, respectively	(1,970		)	(1,423		)
Accumulated other comprehensive income/(loss)	(3		)	70
Total shareholders’ equity	6,100			6,401
Total liabilities and shareholders’ equity	$	27,248		$	26,033

See notes to condensed consolidated financial statements.

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Table of Contents Cardinal Health, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

	Six Months Ended December 31
(in millions)	2014			2013
Cash flows from operating activities:
Net earnings	$	555		$	617
Earnings from discontinued operations, net of tax	—			(3		)
Earnings from continuing operations	555			614
Adjustments to reconcile earnings from continuing operations to net cash provided by operating activities:
Depreciation and amortization	220			234
Loss on extinguishment of debt	60			—
Gain on sale of other investments	(5		)	—
Impairments and (gain)/loss on disposal of assets, net	(18		)	9
Share-based compensation	53			48
Provision for bad debts	26			29
Change in operating assets and liabilities, net of effects from acquisitions:
Decrease/(increase) in trade receivables	(291		)	1,420
Increase in inventories	(1,137		)	(100		)
Increase/(decrease) in accounts payable	1,438			(1,088		)
Other accrued liabilities and operating items, net	113			(178		)
Net cash provided by operating activities	1,014			988
Cash flows from investing activities:
Acquisition of subsidiaries, net of cash acquired	(86		)	(50		)
Additions to property and equipment	(83		)	(90		)
Purchase of available-for-sale securities and other investments	(107		)	—
Proceeds from sale of available-for-sale securities and other investments	107			—
Proceeds from maturities of available-for-sale securities	16			—
Proceeds from divestitures and disposal of held for sale assets	53			—
Net cash used in investing activities	(100		)	(140		)
Cash flows from financing activities:
Net change in short-term borrowings	(18		)	73
Reduction of long-term obligations	(1,220		)	(1		)
Proceeds from long-term obligations, net of issuance costs	1,182			—
Net proceeds from issuance of common shares	35			139
Tax proceeds from share-based compensation	42			39
Dividends on common shares	(233		)	(208		)
Purchase of treasury shares	(686		)	(50		)
Net cash used in financing activities	(898		)	(8		)
Net increase in cash and equivalents	16			840
Cash and equivalents at beginning of period	2,865			1,901
Cash and equivalents at end of period	$	2,881		$	2,741

See notes to condensed consolidated financial statements.

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Notes to Condensed Consolidated Financial Statements

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. To conform to the current year presentation, certain prior year amounts have been reclassified. References to "we," "our" and similar pronouns in this Quarterly Report on Form 10-Q for the quarter ended December 31, 2014 (this "Form 10-Q") refer to Cardinal Health, Inc. and its majority-owned or controlled subsidiaries unless the context requires otherwise. The results of businesses acquired or disposed of are included in the condensed consolidated financial statements from the effective date of the acquisition or up to the date of disposal, respectively.

Our condensed consolidated financial statements have been prepared in accordance with the U.S. Securities and Exchange Commission ("SEC") instructions to Quarterly Reports on Form 10-Q and include all of the information and disclosures required by accounting principles generally accepted in the United States ("GAAP") for interim financial reporting. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect amounts reported in the condensed consolidated financial statements and accompanying notes. Actual amounts may differ from these estimated amounts. In addition, operating results presented for this fiscal 2015 interim period are not necessarily indicative of the results that may be expected for the full fiscal year ending June 30, 2015.

These condensed consolidated financial statements are unaudited and are presented pursuant to the rules and regulations of the SEC. Accordingly, the condensed consolidated financial statements included in this Form 10-Q should be read in conjunction with the audited consolidated financial statements and related notes contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2014 (the "2014 Form 10-K"). In our opinion, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included. Except as disclosed elsewhere in this Form 10-Q, all such adjustments are of a normal and recurring nature.

Recent Financial Accounting Standards

In August 2014, the Financial Accounting Standards Board ("FASB") issued amended accounting guidance related to uncertainties about an entity’s ability to continue as a going concern. This guidance requires management to evaluate whether there is substantial doubt about a company’s ability to continue as a going concern. This amendment will be effective for us in the fourth quarter of fiscal 2017, with early adoption

permitted. We do not expect the adoption of this guidance to impact our financial statement disclosures.

In May 2014, the FASB issued amended accounting guidance related to revenue recognition. This guidance is based on the principle that revenue is recognized in an amount that reflects the consideration to which an entity expects to be entitled in exchange for the transfer of goods or services to customers. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. This amendment will be effective for us in the first quarter of fiscal 2018. We are continuing to evaluate the options for adoption and the impact on our financial position and results of operations.

In July 2013, the FASB issued amended accounting guidance related to the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. This guidance requires an entity to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, unless certain conditions exists. We adopted this guidance in the first quarter of fiscal 2015. The adoption of this guidance did not impact our financial position or results of operations.

In March 2013, the FASB issued amended accounting guidance related to a parent company's accounting for the cumulative translation adjustment upon derecognition of certain subsidiaries or group of assets within a foreign entity or of an investment in a foreign entity. The amended guidance requires the release of any cumulative translation adjustment into net income only upon complete or substantially complete liquidation of a controlling interest in a subsidiary or a group of assets within a foreign entity. Also, it requires the release of all or a pro rata portion of the cumulative translation adjustment to net income in the case of sale of an equity method investment that is a foreign entity. We adopted this amended guidance in the first quarter of fiscal 2015. The adoption of this guidance did not impact our financial position or results of operations.

2. Acquisitions

While we have completed acquisitions during the six months ended December 31, 2014, the pro forma results of operations and the results of operations for acquired businesses since the acquisition dates have not been separately disclosed because the effects were not significant compared to the consolidated financial statements, individually or in the aggregate.

AccessClosure

On May 9, 2014, we completed the acquisition of Access Closure, Inc. ("AccessClosure") for $320 million in an all-cash transaction. We funded the acquisition with cash on hand. The

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Table of Contents	Cardinal Health, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

acquisition of AccessClosure, a manufacturer and distributor of extravascular closure devices, expands the Medical segment's portfolio of self-manufactured products. The assessment of fair value for AccessClosure is preliminary and is based on information that was available at the time the condensed consolidated financial statements were prepared.

3. Restructuring and Employee Severance

The following tables summarize restructuring and employee severance costs related to our restructuring activities:

	Three Months Ended December 31
(in millions)	2014		2013
Employee-related costs (1)	$	5	$	4
Facility exit and other costs (2)	2		6
Total restructuring and employee severance	$	7	$	10

	Six Months Ended December 31
(in millions)	2014		2013
Employee-related costs (1)	$	21	$	8
Facility exit and other costs (2)	5		12
Total restructuring and employee severance	$	26	$	20

(1) Employee-related costs primarily consist of termination benefits provided to employees who have been involuntarily terminated and duplicate payroll costs during transition periods.

(2) Facility exit and other costs primarily consist of lease termination costs, accelerated depreciation, equipment relocation costs, project consulting fees and costs associated with restructuring our delivery of information technology infrastructure services.

The majority of restructuring costs incurred during the three and six months ended December 31, 2014 and 2013 related to restructuring activities within our Medical segment.

In connection with a restructuring plan within our Medical segment announced on January 30, 2013, we completed the sale of our property in Waukegan, Illinois during the three months ended December 31, 2014, which resulted in a $1 million loss on disposal of held for sale assets.

The following table summarizes activity related to liabilities associated with restructuring and employee severance:

(in millions)	Employee- Related Costs			Facility Exit and Other Costs		Total
Balance at June 30, 2014	$	24		$	—	$	24
Additions	18			1		19
Payments and other adjustments	(18		)	—		(18		)
Balance at December 31, 2014	$	24		$	1	$	25

4. Goodwill and Other Intangible Assets

Goodwill

The following table summarizes the changes in the carrying amount of goodwill, by segment and in total:

(in millions)	Pharmaceutical		Medical			Total
Balance at June 30, 2014	$	2,158	$	2,720		$	4,878
Goodwill acquired, net of purchase price adjustments	21		50			71
Foreign currency translation adjustments and other	—		(20		)	(20		)
Balance at December 31, 2014	$	2,179	$	2,750		$	4,929

Other Intangible Assets

Other intangible assets are amortized over periods ranging from one to twenty years. The following tables summarize other intangible assets by class at:

	December 31, 2014
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible
Indefinite-life intangibles:
Trademarks and other	$	14	$	—	$	14
Total indefinite-life intangibles	14		—		14
Definite-life intangibles:
Customer relationships	1,041		434		607
Trademarks, trade names and patents	225		79		146
Developed technology and other	295		115		180
Total definite-life intangibles	1,561		628		933
Total other intangible assets	$	1,575	$	628	$	947

	June 30, 2014
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible
Indefinite-life intangibles:
Trademarks and other	$	14	$	—	$	14
Total indefinite-life intangibles	14		—		14
Definite-life intangibles:
Customer relationships	1,043		388		655
Trademarks, trade names and patents	213		69		144
Developed technology and other	258		79		179
Total definite-life intangibles	1,514		536		978
Total other intangible assets	$	1,528	$	536	$	992

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Notes to Condensed Consolidated Financial Statements (continued)

Total amortization of intangible assets was $47 million and $46 million for the three months ended December 31, 2014 and 2013, respectively, and $92 million for both the six months ended December 31, 2014 and 2013. Estimated annual amortization of intangible assets for the remainder of fiscal 2015 through 2019 is as follows: $94 million, $176 million, $167 million, $124 million and $76 million.

5. Available-for-Sale Securities

We invest in marketable securities, which are classified as available-for-sale and are carried at fair value in the condensed consolidated balance sheets. We held the following investments in marketable securities at fair value at:

(in millions)	December 31, 2014		June 30, 2014
Current available-for-sale securities:
Commercial paper	$	14	$	4
Treasury bills	—		85
International bonds	1		1
Corporate bonds	5		3
U.S. agency bonds	25		—
U.S. agency mortgage-backed securities	6		—
Total current available-for-sale securities	51		93
Long-term available-for-sale securities:
Corporate bonds	9		5
U.S. agency bonds	7		2
U.S. agency mortgage-backed securities	21		—
Total long-term available-for-sale securities	37		7
Total available-for-sale securities	$	88	$	100

Gross unrealized gains and losses were immaterial at December 31, 2014. During the three and six months ended December 31, 2014, gross realized gains and losses were immaterial and we did not recognize any other-than-temporary impairments. At December 31, 2014, the weighted-average effective maturity of our current and long-term investments was approximately 9 months and 16 months, respectively.

6. Long-Term Obligations and Other Short-Term Borrowings

Long-Term Debt

In a registered debt offering in November 2014, we sold $450 million aggregate principal amount of 2.4% Notes that mature on November 15, 2019, $400 million aggregate principal amount of 3.5% Notes that mature on November 15, 2024 and $350 million aggregate principal amount of 4.5% Notes that mature on November 15, 2044 (collectively, the "Notes"). The Notes are unsecured obligations and rank equally in right of payment with all of our existing and future unsecured and unsubordinated indebtedness.

The Notes require us to offer to purchase the Notes at 101% of the principal amount plus accrued and unpaid interest if we undergo a change of control, as defined in the Notes, and if the Notes receive specified ratings below investment grade by each of Standard & Poor's Ratings Services, Moody's Investors Service, Inc. and Fitch Ratings.

In December 2014, we used the net proceeds from the offering, together with cash on hand, to redeem all of the outstanding 4.0% Notes due 2015, 5.8% Notes due 2016, 5.85% Notes due 2017 and 6.0% Notes due 2017 at a redemption price equal to 100% of the principal amount and any accrued but unpaid interest, plus the make-whole premium applicable to each series of notes. As a result of the redemption, we incurred a loss on the extinguishment of debt of $60 million ($37 million, net of tax), which included a make-whole premium of $80 million, write-off of $2 million of unamortized debt issuance costs and an offsetting $22 million fair value adjustment to the respective debt related to previously terminated interest rate swaps.

The following table summarizes long-term obligations and other short-term borrowings:

(in millions)	December 31, 2014		June 30, 2014
1.7% Notes due 2018	$	401	$	401
1.9% Notes due 2017	250		251
2.4% Notes due 2019	449		—
3.2% Notes due 2022	249		248
3.2% Notes due 2023	549		549
3.5% Notes due 2024	398		—
4.0% Notes due 2015	—		513
4.5% Notes due 2044	345		—
4.6% Notes due 2043	349		349
4.625% Notes due 2020	525		525
5.8% Notes due 2016	—		301
5.85% Notes due 2017	—		158
6.0% Notes due 2017	—		197
7.0% Debentures due 2026	124		124
7.8% Debentures due 2016	37		37
Other obligations	300		319
Total	$	3,976	$	3,972
Less: current portion of long-term obligations and other short-term borrowings	270		801
Long-term obligations, less current portion	$	3,706	$	3,171

Maturities of long-term obligations and other short-term borrowings for the remainder of fiscal 2015 through 2019 and thereafter are as follows: $270 million, $22 million, $289 million, $402 million, $1 million, and $2,992 million.

Other Financing Arrangements

On November 3, 2014, we renewed our committed receivables sales facility program through Cardinal Health Funding, LLC

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Table of Contents	Cardinal Health, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

("CHF") until November 3, 2017 and increased the size of the facility from $700 million to $950 million. CHF was organized for the sole purpose of buying receivables and selling undivided interests in those receivables to third-party purchasers. Although consolidated in accordance with GAAP, CHF is a separate legal entity from Cardinal Health and from our subsidiary that sells receivables to CHF. CHF is designed to be a special purpose, bankruptcy-remote entity whose assets are available solely to satisfy the claims of its creditors. We had no outstanding balance under the committed receivable sales facility program at December 31, 2014 and June 30, 2014, except for standby letters of credit of $41 million at both December 31, 2014 and June 30, 2014.

7. Income Taxes

Fluctuations in our provision for income taxes as a percentage of pretax earnings (“effective tax rate”) are due to changes in international and U.S. state effective tax rates resulting from our business mix and discrete items.

During the three months ended December 31, 2014, the effective tax rate of 36.0 percent was unfavorably impacted by 3.0 percentage points ($13 million) due to nondeductibility of litigation charges and favorably impacted by 3.1 percentage points ($14 million) related to a previously unrecognized tax benefit for a loss carryback from fiscal 2007.

During the six months ended December 31, 2014, the effective tax rate of 37.4 percent was unfavorably impacted by 1.4 percentage points ($12 million) due to the remeasurement of unrecognized tax benefits and 2.7 percentage points ($24 million) due to nondeductibility of litigation charges, partially offset by 1.6 percentage points ($14 million) due to adjusting deferred tax assets and related valuation allowances for the impact of Puerto Rico tax law changes enacted during the period and 1.6 percentage points ($14 million) related to a previously unrecognized tax benefit for a loss carryback from fiscal 2007.

During the three months ended December 31, 2013, the effective tax rate of 44.1 percent was impacted by net unfavorable discrete items of $38 million, which increased the rate by 7.7 percentage points. The discrete items include the unfavorable impact of remeasurement of unrecognized tax benefits ($56 million) as a result of proposed assessments of additional tax.

During the six months ended December 31, 2013, the effective tax rate of 34.2 percent was impacted by net favorable discrete items of $23 million, which reduced the rate by 2.4 percentage points. The discrete items include the favorable impact of the settlement of federal and state tax controversies ($67 million) and the unfavorable impact of remeasurement of unrecognized tax benefits ($56 million).

We had $525 million and $510 million of unrecognized tax benefits at December 31, 2014 and June 30, 2014, respectively. The December 31, 2014 and June 30, 2014 balances include

$333 million and $322 million, respectively, of unrecognized tax benefits that, if recognized, would have an impact on the effective tax rate. The remaining unrecognized tax benefits relate to tax positions for which ultimate deductibility is highly certain but for which there is uncertainty as to the timing of such deductibility. Recognition of these tax benefits would not affect our effective tax rate. We include the full amount of unrecognized tax benefits in deferred income taxes and other liabilities in the condensed consolidated balance sheets.

We recognize accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes. At December 31, 2014 and June 30, 2014, we had $155 million and $143 million, respectively, accrued for the payment of interest and penalties. These balances are gross amounts before any tax benefits and are included in deferred income taxes and other liabilities in the condensed consolidated balance sheets.

It is reasonably possible that there could be a change in the amount of unrecognized tax benefits within the next 12 months due to activities of the U.S. Internal Revenue Service ("IRS") or other taxing authorities, including proposed assessments of additional tax, possible settlement of audit issues, reassessment of existing unrecognized tax benefits or the expiration of applicable statutes of limitations. We estimate that the range of the possible change in unrecognized tax benefits within the next 12 months is a net decrease of approximately zero to $180 million, exclusive of penalties and interest.

We file income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and various foreign jurisdictions. We are subject to audit by the IRS for fiscal years 2006 through thecurrent fiscal year. We are generally subject to audit by taxing authorities in various U.S. state and foreign jurisdictions for fiscal years 2003 through the current fiscal year.

The IRS is currently conducting audits of fiscal years 2006 through 2010, and our transfer pricing arrangements continue to be under consideration as part of these audits. While the IRS has made and could make proposed adjustments to our transfer pricing arrangements or other matters, we are defending our reported tax positions, and have accounted for the unrecognized tax benefits associated with our tax positions.

We are a party to a tax matters agreement with CareFusion Corporation ("CareFusion"), under which CareFusion is obligated to indemnify us for certain tax exposures and transaction taxes prior to our fiscal 2010 spin-off of CareFusion. The indemnification receivable was $214 million and $210 million at December 31, 2014 and June 30, 2014, respectively, and is included in other assets in the condensed consolidated balance sheets.

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Table of Contents	Cardinal Health, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

8. Commitments, Contingent Liabilities and Litigation

Commitments

Generic Sourcing Venture With CVS Health Corporation

In July 2014, we established Red Oak Sourcing, LLC ("Red Oak Sourcing"), a U.S.-based generic pharmaceutical sourcing entity with CVS Health Corporation (“CVS”) with an initial term of 10 years. Both companies have contributed sourcing and supply chain expertise to the 50/50 generic sourcing venture and have committed to source generic pharmaceuticals through arrangements negotiated by it. Red Oak Sourcing negotiates generic pharmaceutical supply contracts on behalf of both companies, but does not own products or hold inventory on behalf of either company. We are required to pay 39 quarterly payments of $25.6 million to CVS which commenced in October 2014. In addition, only if certain milestones are achieved, we are required to pay additional predetermined amounts to CVS beginning in fiscal 2016. Beginning in the three months ended December 31, 2014, the $25.6 million payment is being expensed quarterly over the remaining term of the sourcing venture.

Legal Proceedings

We become involved from time to time in disputes, litigation and regulatory matters incidental to our business.

We may be named from time to time in qui tam actions, which are initiated by private third parties purporting to act on behalf of federal or state governments, that allege that false claims have been submitted or have been caused to be submitted for payment by the government. After a private party has filed a qui tam action, the government must investigate the private party's claim and determine whether to intervene in and take control over the litigation. These actions may remain under seal while the government makes this determination. If the government declines to intervene, the private party may nonetheless continue to pursue the litigation on his or her own on behalf of the government.

From time to time, we receive subpoenas or requests for information from various government agencies relating to our business or to the business of a customer, supplier or other industry participant. The responses to these subpoenas and requests for information sometimes require considerable time and effort, and can result in us incurring considerable costs. Such subpoenas and requests also can lead to the assertion of claims or the commencement of legal proceedings against us, which can result in substantial settlements.

In addition, we occasionally may suspect that products we manufacture, market or distribute do not meet product specifications, published standards or regulatory requirements. In such circumstances, we investigate and take appropriate corrective action. Such actions can lead to product recalls, costs

to repair or replace affected products, temporary interruptions in product sales and action by regulators.

We accrue for contingencies related to disputes, litigation and regulatory matters if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Because these matters are inherently unpredictable and unfavorable developments or resolutions can occur, assessing contingencies is highly subjective and requires judgments about futureevents. We regularly review contingencies to determine whether our accruals and related disclosures are adequate. While we have accrued for certain matters as described below at our best estimate of the amount of possible loss, the amount of ultimate loss may differ from these estimates.

With respect to the matters described below, we are unable to estimate a range of reasonably possible loss for matters for which there is no accrual, since damages or fines have not been specified or the proceedings are at stages where significant uncertainty exists as to legal or factual issues and as to whether such matters will proceed to trial. We do not believe, based on currently available information, that the outcomes of these matters will have a material adverse effect on our financial position, results of operations or cash flows, though the outcome of one or more of these matters could be material to our results of operations for a particular period.

We recognize income from the favorable outcome of litigation when we receive the associated cash or assets.

We recognize estimated loss contingencies for litigation and regulatory matters and income from favorable resolution of litigation in litigation (recoveries)/charges, net in our condensed consolidated statements of earnings.

DEA Investigation and Related Matters

In February 2012, the U.S. Drug Enforcement Administration (the "DEA") issued an order to show cause and immediate suspension of our Lakeland, Florida distribution center's registration to distribute controlled substances, asserting that we failed to maintain required controls against the diversion of controlled substances. In May 2012, we entered into a settlement agreement with the DEA that resolved the administrative aspects of the DEA's action but did not resolve potential liability for civil fines in Florida or elsewhere for the conduct covered by the settlement agreement. In that regard, we are continuing to engage in discussions with several offices of the U.S. Department of Justice (the "DOJ"), including discussions regarding a possible settlement. We incurred litigation charges of $7 million and $34 million for this matter during the three and six months ended December 31, 2014, respectively. Our total accrual for this matter at December 31, 2014 is $34 million and is included in other accrued liabilities in the condensed consolidated balance sheet.

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Notes to Condensed Consolidated Financial Statements (continued)

State of West Virginia vs. Cardinal Health, Inc.

In June 2012, the West Virginia Attorney General filed complaints, which have been amended, against 13 pharmaceutical wholesale distributors, including us, in the Circuit Court of Boone County, West Virginia alleging, among other things, that the distributors failed to maintain effective controls to guard against diversion of controlled substances in West Virginia, failed to report suspicious orders of controlled substances in accordance with the West Virginia Uniform Controlled Substances Act and were negligent in distributing controlled substances to pharmacies that serve individuals who abuse controlled substances. In addition to injunctive and other equitable relief, the complaints seek monetary damages and the creation of a court-supervised fund, to be financed by the defendants in these actions, for a medical monitoring program focused on prescription drug abuse. We are vigorously defending ourselves in this matter.

FTC Investigation

The Federal Trade Commission (“FTC”) has been investigating supplier arrangements involving our Nuclear Pharmacy Services division primarily focused on the period between 2003 and 2008. We have been providing information to and cooperating with the FTC on this matter. Additionally, we have begun discussions with the FTC staff regarding a possible settlement of this matter, which would include, among other things, a payment to the government. We incurred a litigation charge of $27 million for this matter during the three months ended December 31, 2014, which represents the amount we believe we will pay if we are able to settle this matter and is included in other accrued liabilities in the condensed consolidated balance sheet.

Qui Tam Action

Our Cardinal Health at Home division was named as a defendant in an amended qui tam complaint that was filed in November 2014 in the U.S. District Court for the District of Massachusetts against several manufacturers and distributors of ostomy and continence care products. The complaint seeks damages and penalties on behalf of the United States for alleged violations of the federal healthcare fraud and abuse laws, Medicare regulations and the federal False Claims Act in connection with the marketing and sale of these products. The DOJ has not yet determined whether to intervene in this qui tam action and is currently conducting an investigation of this matter. We are providing information to the DOJ in connection with its investigation.

Antitrust Litigation Proceeds

We recognized income resulting from settlements of class action antitrust claims in which we were a class member of $16 million during both the three and six months ended December 31, 2013.

9. Fair Value Measurements

The following tables present the fair values for assets measured on a recurring basis at:

	December 31, 2014
(in millions)	Level 1		Level 2		Level 3		Total
Cash equivalents (1)	$	212	$	—	$	—	$	212
Forward contracts (2)	—		—		—		—
Available-for-sale securities (3)	—		88		—		88
Other investments (4)	112		—		—		112
Total	$	324	$	88	$	—	$	412

	June 30, 2014
(in millions)	Level 1		Level 2		Level 3		Total
Cash equivalents (1)	$	740	$	—	$	—	$	740
Forward contracts (2)	—		10		—		10
Available-for-sale securities (3)	—		100		—		100
Other investments (4)	106		—		—		106
Total	$	846	$	110	$	—	$	956

(1) Cash equivalents are comprised of highly liquid investments purchased with a maturity of three months or less. The carrying value of these cash equivalents approximates fair value due to their short-term maturities.

(2) The fair value of interest rate swaps, foreign currency contracts and commodity contracts is determined based on the present value of expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Observable Level 2 inputs are used to determine the present value of expected future cash flows. The fair value of these derivative contracts, which are subject to master netting arrangements under certain circumstances, is presented on a gross basis in the condensed consolidated balance sheets.

(3) We invest in marketable securities, which are classified as available-for-sale and are carried at fair value in the condensed consolidated balance sheets. Observable Level 2 inputs such as quoted prices for similar securities, interest rate spreads, yield curves and credit risk are used to determine the fair value. See Note 5 for additional information regarding available-for-sale securities.

(4) The other investments balance includes investments in mutual funds, which are used to offset fluctuations in deferred compensation liabilities. These mutual funds primarily invest in the equity securities of companies with large market capitalization and high quality fixed income debt securities. The fair value of these investments is determined using quoted market prices.

10. Financial Instruments

We utilize derivative financial instruments to manage exposure to certain risks related to our ongoing operations. The primary risks managed through the use of derivative instruments include interest rate risk, currency exchange risk and commodity price risk. We do not use derivative instruments for trading or speculative purposes. While the majority of our derivative instruments are designated as hedging instruments, we also enter into derivative instruments that are designed to hedge a risk, but are not designated as hedging instruments. These derivative instruments are adjusted to current fair value through earnings at the end of each period. Our derivative and hedging programs are consistent with those described in the 2014 Form 10-K.

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Notes to Condensed Consolidated Financial Statements (continued)

During the three months ended September 30, 2014, we entered into forward interest rate swaps with a total notional amount of $50 million to hedge probable, but not firmly committed, future transactions associated with our debt.

During the three months ended December 31, 2014, we entered into pay-floating interest rate swaps with total notional amounts of $450 million in connection with the debt issuance described in Note 6. These swaps have been designated fair value hedges of our fixed rate date and are included in other assets in the condensed consolidated balance sheet.

In December 2014, we terminated notional amounts of $875 million of pay-floating interest rate swaps in connection with the debt redemption described in Note 6. These swaps were previously designated as fair value hedges.

During the six months ended December 31, 2013, we entered into pay-floating interest rate swaps with total notional amounts of $300 million. These swaps have been designated as fair value hedges of our fixed rate debt and are included in other assets in the condensed consolidated balance sheets.

Fair Value of Financial Instruments

The carrying amounts of cash and equivalents, trade receivables, net, accounts payable and other accrued liabilities at December 31, 2014 and June 30, 2014 approximate fair value due to their short-term maturities.

The following table summarizes the estimated fair value of our long-term obligations and other short-term borrowings compared to the respective carrying amounts at:

(in millions)	December 31, 2014		June 30, 2014
Estimated fair value	$	4,089	$	4,115
Carrying amount	3,976		3,972

The estimated fair value of our long-term obligations and other short-term borrowings is estimated based on either the quoted market prices for the same or similar issues or other inputs derived from available market information, which represents a Level 2 measurement.

11. Shareholders' Equity

Share Repurchases

During the six months ended December 31, 2014, we repurchased 9.1 million common shares having an aggregate cost of $684 million. The average price paid per common share was $75.00.

During the six months ended December 31, 2013, we repurchased 1.0 million common shares having an aggregate cost of $50 million. The average price paid per common share was $51.65.

We funded the repurchases with available cash. The common shares repurchased are held in treasury to be used for general corporate purposes.

Accumulated Other Comprehensive Income

The following table summarizes the changes in the balance of accumulated other comprehensive income by component and in total:

(in millions)	Foreign Currency Translation Adjustments			Unrealized Gain/(Loss) on Derivatives, net of tax			Accumulated Other Comprehensive Income/(Loss)
Balance at June 30, 2014	$	63		$	7		$	70
Other comprehensive loss, net of tax before reclassifications	(64		)	(9		)	(73		)
Amounts reclassified to earnings	—			—			—
Total other comprehensive loss, net of tax of $5 million	(64		)	(9		)	(73		)
Balance at December 31, 2014	$	(1	)	$	(2	)	$	(3	)

Activity related to realized and unrealized gains and losses on available-for-sale securities as described in Note 5, was immaterial during the three and six months ended December 31, 2014.

12. Earnings Per Share

The following tables reconcile the number of common shares used to compute basic and diluted earnings per share:

	Three Months Ended December 31
(in millions)	2014	2013
Weighted-average common shares–basic	331	342
Effect of dilutive securities:
Employee stock options, restricted share units and performance share units	3	4
Weighted-average common shares–diluted	334	346

	Six Months Ended December 31
(in millions)	2014	2013
Weighted-average common shares–basic	333	341
Effect of dilutive securities:
Employee stock options, restricted share units and performance share units	4	4
Weighted-average common shares–diluted	337	345

The potentially dilutive employee stock options, restricted share units and performance share units that were antidilutive were 1 million and zero for the three months ended December 31, 2014

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Notes to Condensed Consolidated Financial Statements (continued)

and 2013, respectively, and 1 million and 2 million for the six months ended December 31, 2014 and 2013, respectively.

13. 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 for purposes of allocating resources and assessing performance combined with the nature of the individual business activities.

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

	Three Months Ended December 31
(in millions)	2014			2013
Pharmaceutical	$	22,627		$	19,443
Medical	2,914			2,799
Total segment revenue	25,541			22,242
Corporate (1)	(4		)	(2		)
Total revenue	$	25,537		$	22,240

	Six Months Ended December 31
(in millions)	2014		2013
Pharmaceutical (2)	$	43,836	$	41,256
Medical	5,766		5,511
Total segment revenue	49,602		46,767
Corporate (1)	5		(4		)
Total revenue	$	49,607	$	46,763

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

(2) Our pharmaceutical distribution contract with Walgreen Co. expired on August 31, 2013.

We evaluate segment performance based upon segment profit, among other measures. Segment profit is segment revenue, less segment cost of products sold, less segment SG&A expenses. Segment SG&A expenses include share-based compensation expense as well as allocated corporate expenses for shared functions, including corporate management, corporate finance, financial and customer care shared services, human resources, information technology and legal. Corporate expenses are allocated to the segments based upon headcount, level of benefit provided and other ratable allocation methodologies.

We do not allocate the following items to our segments: restructuring and employee severance; amortization and other acquisition-related costs; impairments and (gain)/loss on disposal of assets; litigation (recoveries)/charges; other income, net; interest expense, net; loss on extinguishment of debt; and,

provision for income taxes. In addition, certain investment and other spending are not allocated to the segments. Investment spending generally includes the first-year spend for certain projects that require incremental investments in the form of additional operating expenses. We encourage our segments and corporate functions to identify investment projects that will promote innovation and provide future returns. As approval decisions for such projects are dependent upon executive management, the expenses for such projects are often retained at Corporate. Investment spending within Corporate was $4 million and $6 million for the three months ended December 31, 2014 and 2013, respectively, and $6 million and $10 million for the six months ended December 31, 2014 and 2013, respectively.

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

	Three Months Ended December 31
(in millions)	2014			2013
Pharmaceutical	$	542		$	482
Medical	115			131
Total segment profit	657			613
Corporate	(111		)	(94		)
Total operating earnings	$	546		$	519

	Six Months Ended December 31
(in millions)	2014			2013
Pharmaceutical	$	992		$	916
Medical	229			238
Total segment profit	1,221			1,154
Corporate	(209		)	(164		)
Total operating earnings	$	1,012		$	990

14. Share-Based Compensation

Share-Based Compensation Plans

We maintain stock incentive plans (collectively, the “Plans”) for the benefit of certain of our officers, directors and employees.

The following tables provide total share-based compensation expense by type of award:

	Three Months Ended December 31
(in millions)	2014		2013
Restricted share unit expense	$	18	$	15
Employee stock option expense	5		5
Performance share unit expense	5		4
Total share-based compensation	$	28	$	24

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Notes to Condensed Consolidated Financial Statements (continued)

	Six Months Ended December 31
(in millions)	2014		2013
Restricted share unit expense	$	34	$	31
Employee stock option expense	10		10
Performance share unit expense	9		7
Total share-based compensation	$	53	$	48

The total tax benefit related to share-based compensation was $9 million and $8 million for the three months ended December 31, 2014 and 2013, respectively, and $18 million and $17 million for the six months ended December 31, 2014 and 2013, respectively.

Stock Options

Employee stock options granted under the Plans generally vest in equal annual installments over three years and are exercisable for periods ranging from seven to ten years from the grant date. All stock options are exercisable at a price equal to the market value of the common shares underlying the option on the grant date.

The following table summarizes all stock option transactions under the Plans:

(in millions, except per share amounts)	Stock Options		Weighted-Average Exercise Price per Common Share
Outstanding at June 30, 2014	10		$	39.16
Granted	1		71.57
Exercised	(2	)	39.05
Canceled and forfeited	—		—
Outstanding at December 31, 2014	9		$	44.28
Exercisable at December 31, 2014	5		$	35.91

At December 31, 2014, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested stock options not yet recognized was $33 million, which is expected to be recognized over a weighted-average period of two years. The following table provides additional data related to stock option activity:

(in millions, except contractual lives)	December 31, 2014		June 30, 2014
Aggregate intrinsic value of outstanding options at period end	$	329	$	282
Aggregate intrinsic value of exercisable options at period end	$	246	$	185
Weighted-average remaining contractual life of outstanding options (in years)	6		6
Weighted-average remaining contractual life of exercisable options (in years)	5		4

Restricted Share Units

Restricted share units granted under the Plans generally vest in equal annual installments over three years. Restricted share units accrue cash dividend equivalents that are payable upon vesting of the awards.

The following table summarizes all transactions related to restricted share units under the Plans:

(in millions, except per share amounts)	Restricted Share Units		Weighted-Average Grant Date Fair Value per Share
Nonvested at June 30, 2014	3		$	45.65
Granted	1		71.89
Vested	(1	)	44.41
Canceled and forfeited	—		—
Nonvested at December 31, 2014	3		$	56.83

At December 31, 2014, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested restricted share units not yet recognized was $112 million, which is expected to be recognized over a weighted-average period of two years.

Performance Share Units

Performance share units vest over a three-year performance period based on achievement of specific performance goals. Based on the extent to which the targets are achieved, vested shares may range from zero to 200 percent of the target award amount. Performance share units accrue cash dividend equivalents that are payable upon vesting of the awards.

The following table summarizes all transactions related to performance share units under the Plans (based on target award amounts):

(in millions, except per share amounts)	Performance Share Units		Weighted-Average Grant Date Fair Value per Share
Nonvested at June 30, 2014	0.9		$	44.41
Granted	0.2		66.78
Vested (1)	(0.2	)	41.59
Canceled and forfeited	—		—
Nonvested at December 31, 2014	0.9		$	50.61

(1) Vested based on achievement of 120 percent of the target performance goal.

At December 31, 2014, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested performance share units not yet recognized was $21 million, which is expected to be recognized over a weighted-average period of two years.

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Financial Review

Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

The discussion and analysis presented below is concerned with material changes in financial condition and results of operations for our condensed consolidated balance sheets at December 31, 2014 and June 30, 2014, and for our condensed consolidated statements of earnings for the three and six months ended December 31, 2014 and 2013. This discussion and analysis should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our 2014 Form 10-K.

Portions of this Form 10-Q (including any information incorporated by reference) include "forward-looking statements." The words "expect," "anticipate," "intend," "plan," "believe," "will," "should," "could," "would," "project," "continue," "likely," and similar expressions, among others, generally identify "forward-looking statements," which speak only as of the date the statements were made. The matters discussed in these forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those made, projected or implied in the forward-looking statements. The most significant of these risks, uncertainties and other factors are described in Exhibit 99.1 to this Form 10-Q and in "Item 1A: Risk Factors" of our 2014 Form 10-K. Except to the extent required by applicable law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Overview

We are a healthcare services company providing pharmaceutical and medical products and services that help pharmacies, hospitals and other healthcare providers focus on patient care while reducing costs, enhancing efficiency and improving quality. We also provide medical products to patients in the home.

We report our financial results in two segments: Pharmaceutical and Medical.

Revenue for the three and six months ended December 31, 2014 was $25.5 billion and $49.6 billion, a 15 percent and 6 percent increase, respectively, from the prior-year periods due primarily to sales growth from existing and new pharmaceutical distribution customers. Revenue was negatively impacted for the six months ended December 31, 2014 due to the previously disclosed expiration of our pharmaceutical distribution contract with Walgreen Co. ("Walgreens") on August 31, 2013.

Gross margin increased 8 percent to $1.5 billion and 7 percent to $2.8 billion for the three and six months ended December 31, 2014, respectively, reflecting sales growth from existing and new customers and strong performance from our Pharmaceutical segment generic programs, offset in part by customer pricing

changes. The increase for the six months ended December 31, 2014 was partially offset by the Walgreens contract expiration in the prior-year period.

Operating earnings increased 5 percent to $546 million and 2 percent to $1.0 billion for the three and six months ended December 31, 2014, respectively, primarily due to the gross margin increase, partially offset by increased litigation charges.

Earnings from continuing operations increased 5 percent to $289 million for the three months ended December 31, 2014, and decreased 10 percent to $555 million for the six months ended December 31, 2014. Both periods were impacted by the factors discussed above, a current-year loss on extinguishment of debt ($60 million) and a prior-year tax charge ($56 million). The decrease for the six months ended December 31, 2014 also reflects a $67 million favorable impact in the prior-year period from the settlement of tax controversies.

Our cash and equivalents balance was $2.9 billion at both December 31, 2014 and June 30, 2014. For the six months ended December 31, 2014, net cash provided by operating activities of $1.0 billion was largely offset by share repurchases of $684 million and cash dividends of $233 million. In addition, we refinanced $1.2 billion of long-term debt at lower interest rates and longer maturities.

Generic Sourcing Venture With CVS Health Corporation

In July 2014, we established Red Oak Sourcing, LLC (“Red Oak Sourcing”), a U.S.-based generic pharmaceutical sourcing entity with CVS Health Corporation (“CVS”) with an initial term of 10 years. Both companies have contributed sourcing and supply chain expertise to the generic sourcing venture and have committed to source generic pharmaceuticals through arrangements negotiated by it. Red Oak Sourcing negotiates generic pharmaceutical supply contracts on behalf of both companies, but does not own products or hold inventory on behalf of either company. We are required to pay 39 quarterly payments of $25.6 million to CVS which commenced in October 2014. In addition, only if certain milestones are achieved, we are required to pay additional predetermined amounts to CVS beginning in fiscal 2016. Beginning in the three months ended December 31, 2014, the $25.6 million payment is being expensed quarterly over the remaining term of the sourcing venture.

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Financial Review (continued)

Results of Operations

Revenue

	Three Months Ended December 31
(in millions)	2014			2013			Change
Pharmaceutical	$	22,627		$	19,443		16	%
Medical	2,914			2,799			4	%
Total segment revenue	25,541			22,242			15	%
Corporate	(4		)	(2		)	N.M.
Total revenue	$	25,537		$	22,240		15	%

	Six Months Ended December 31
(in millions)	2014		2013			Change
Pharmaceutical	$	43,836	$	41,256		6	%
Medical	5,766		5,511			5	%
Total segment revenue	49,602		46,767			6	%
Corporate	5		(4		)	N.M.
Total revenue	$	49,607	$	46,763		6	%

Pharmaceutical Segment

Compared to the prior-year periods, revenue was positively impacted by sales growth from both existing and new pharmaceutical distribution customers, which had a combined impact of $3.2 billion and $5.8 billion during the three and six months ended December 31, 2014, respectively. The increase for the six months ended December 31, 2014 was partially offset by the Walgreens contract expiration in the prior-year period ($3.3 billion).

Medical Segment

Revenue growth for the three and six months ended December 31, 2014 compared to the prior-year periods was due to acquisitions ($92 million and $189 million, respectively) and modest growth from existing customers.

Cost of Products Sold

As a result of the same factors affecting the change in revenue, cost of products sold increased $3.2 billion (15 percent) and $2.7 billion (6 percent) compared to the prior-year periods. See the gross margin discussion below for additional drivers impacting cost of products sold.

Gross Margin

	Three Months Ended December 31
(in millions)	2014		2013		Change
Gross margin	$	1,454	$	1,345	8	%

	Six Months Ended December 31
(in millions)	2014		2013		Change
Gross margin	$	2,794	$	2,608	7	%

Consolidated gross margin increased during the three and six months ended December 31, 2014 compared to the prior-year periods by $109 million and $186 million, respectively.

Consolidated gross margin during the three and six months ended December 31, 2014 was positively impacted by sales growth from existing and new pharmaceutical distribution customers, and for the six months ending December 31, 2014 was negatively impacted by the Walgreens contract expiration. The net impact of these factors increased consolidated gross margin by $137 million and $191 million, respectively.

Consolidated gross margin rate contracted during the three months ended December 31, 2014, which had an adverse impact on consolidated gross margin of $50 million for the period. Apart from the Walgreens contract expiration, consolidated gross margin rate also contracted during the six months ended December 31, 2014, which had an adverse impact on consolidated gross margin of $51 million for the period. Consolidated gross margin rate was adversely impacted by customer pricing changes, newly launched hepatitis C pharmaceutical products, and new customer mix. These were partially offset by strong performance from generic programs, which includes benefits from Red Oak Sourcing.

Consolidated gross margin during the three and six months ended December 31, 2014 was positively impacted by acquisitions ($24 million and $48 million, respectively).

Distribution, Selling, General and Administrative ("SG&A") Expenses

	Three Months Ended December 31
(in millions)	2014		2013		Change
SG&A expenses	$	815	$	766	6	%

	Six Months Ended December 31
(in millions)	2014		2013		Change
SG&A expenses	$	1,590	$	1,497	6	%

The increase in SG&A expenses during the three and six months ended December 31, 2014 compared to the prior-year period reflected acquisitions ($24 million and $51 million, respectively).

Segment Profit and Consolidated Operating Earnings

	Three Months Ended December 31
(in millions)	2014			2013			Change
Pharmaceutical	$	542		$	482		12	%
Medical	115			131			(12	)%
Total segment profit	657			613			7	%
Corporate	(111		)	(94		)	N.M.
Total operating earnings	$	546		$	519		5	%

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Financial Review (continued)

	Six Months Ended December 31
(in millions)	2014			2013			Change
Pharmaceutical	$	992		$	916		8	%
Medical	229			238			(4	)%
Total segment profit	1,221			1,154			6	%
Corporate	(209		)	(164		)	N.M.
Total operating earnings	$	1,012		$	990		2	%

Pharmaceutical Segment Profit

The increase in Pharmaceutical segment profit during the three and six months ended December 31, 2014 compared to the prior-year periods was positively impacted by sales growth from existing and new pharmaceutical distribution customers and strong performance from generic programs, partially offset by the adverse impact of customer pricing changes. Segment profit for the six months ended December 31, 2014 was negatively impacted by the Walgreens contract expiration in the prior-year period.

Medical Segment Profit

The principal drivers for the decrease in Medical segment profit during the three months ended December 31, 2014 compared to the prior-year period were an increase in enterprise-wide incentive compensation and a decrease in earnings from our Canadian business. Medical segment profit for the six months ended December 31, 2014 compared to the prior-year period benefited from our Cardinal Health brand products, and was reduced by national brand products.

Consolidated Operating Earnings

In addition to revenue, gross margin and SG&A expenses discussed above, operating earnings were impacted by the following:

	Three Months Ended December 31
(in millions)	2014			2013			Change
Restructuring and employee severance	$	7		$	10		N.M.
Amortization and other acquisition-related costs	60			56			N.M.
Impairments and (gain)/loss on disposal of assets, net	(18		)	9			N.M.
Litigation (recoveries)/charges, net	44			(15		)	N.M.

	Six Months Ended December 31
(in millions)	2014			2013			Change
Restructuring and employee severance	$	26		$	20		N.M.
Amortization and other acquisition-related costs	112			105			N.M.
Impairments and (gain)/loss on disposal of assets, net	(18		)	9			N.M.
Litigation (recoveries)/charges, net	72			(13		)	N.M.

Restructuring and Employee Severance

The majority of restructuring costs incurred during the three and six months ended December 31, 2014 and 2013 related to restructuring activities within our Medical segment.

Amortization and Other Acquisition-Related Costs

Amortization of acquisition-related intangible assets was $47 million and $46 million for the three months ended December 31, 2014 and 2013, respectively, and $91 million for both the six months ended December 31, 2014 and 2013.

Litigation (Recoveries)/Charges, Net

During the three and six months ended December 31, 2014, we incurred litigation charges of $7 million and $34 million, respectively, related to the DEA investigation and related matters. During the three months ended December 31, 2014, we also incurred litigation charges of $27 million related to the FTC investigation. These matters are discussed further in Note 8 of the "Notes to Condensed Consolidated Financial Statements."

Earnings Before Income Taxes and Discontinued Operations

In addition to the items discussed above, earnings before income taxes and discontinued operations were impacted by the following:

	Three Months Ended December 31
(in millions)	2014			2013			Change
Other income, net	$	(1	)	$	(6	)	N.M.
Interest expense, net	36			33			10	%
Loss on extinguishment of debt	60			—			N.M.

	Six Months Ended December 31
(in millions)	2014			2013			Change
Other income, net	$	(4	)	$	(10	)	N.M.
Interest expense, net	70			66			6	%
Loss on extinguishment of debt	60			—			N.M.

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Table of Contents	Cardinal Health, Inc. and Subsidiaries
Financial Review (continued)

Loss on Extinguishment of Debt

In December 2014 we redeemed certain debt resulting in a loss on the extinguishment of debt of $60 million ($37 million, net of tax). See Note 6 of "Notes to Condensed Consolidated Financial Statements" for additional information.

Provision for Income Taxes

Fluctuations in the effective tax rate are due to changes within international and U.S. state effective tax rates resulting from our business mix and discrete items.

During the three months ended December 31, 2014, the effective tax rate of 36.0 percent was unfavorably impacted by 3.0 percentage points ($13 million) due to nondeductibility of litigation charges and favorably impacted by 3.1 percentage points ($14 million) related to a previously unrecognized tax benefit for a loss carryback from fiscal 2007.

During the six months ended December 31, 2014, the effective tax rate of 37.4 percent was unfavorably impacted by 1.4 percentage points ($12 million) due to the remeasurement of unrecognized tax benefits and 2.7 percentage points ($24 million) due to nondeductibility of litigation charges, partially offset by 1.6 percentage points ($14 million) due to adjusting deferred tax assets and related valuation allowances for the impact of Puerto Rico tax law changes enacted during the period and 1.6 percentage points ($14 million) related to a previously unrecognized tax benefit for a loss carryback from fiscal 2007.

During the three months ended December 31, 2013, the effective tax rate of 44.1 percent was impacted by net unfavorable discrete items of $38 million, which increased the rate by 7.7 percentage points. The discrete items include the unfavorable impact of remeasurement of unrecognized tax benefits ($56 million) as a result of proposed assessments of additional tax.

During the six months ended December 31, 2013, the effective tax rate of 34.2 percent was impacted by net favorable discrete items of $23 million which reduced the rate by 2.4 percentage points. The discrete items include the favorable impact of the settlement of federal and state tax controversies ($67 million) and the unfavorable impact of remeasurement of unrecognized tax benefits ($56 million).

Liquidity and Capital Resources

We currently believe that, based upon available capital resources (cash on hand and access to committed credit facilities) and projected operating cash flow, we have adequate capital resources to fund working capital needs; currently anticipated capital expenditures, business growth and expansion; contractual obligations; tax payments; and current and projected debt service requirements, dividends and share repurchases. If we decide to engage in one or more additional acquisitions, depending on the size and timing of such transactions, we may need to access capital in addition to cash on hand and our existing committed credit facilities.

Cash and Equivalents

Our cash and equivalents balance was $2.9 billion at December 31, 2014 and June 30, 2014. At December 31, 2014, our cash and equivalents were held in cash depository accounts with major banks or invested in high quality, short-term liquid investments. For the six months ended December 31, 2014, net cash provided by operating activities of $1.0 billion was largely offset by share repurchases of $684 million and cash dividends of $233 million. In addition, we refinanced $1.2 billion of long-term debt at lower interest rates and longer maturities.

Changes in working capital, which impact operating cash flow, can vary significantly depending on factors such as the timing of customer payments, inventory purchases and payments to vendors in the regular course of business.

The cash and equivalents balance at December 31, 2014 included $448 million of cash held by subsidiaries outside of the United States. Although the vast majority of this cash is available for repatriation, permanently bringing the money into the United States could trigger U.S. federal, state and local income tax obligations. As a U.S. parent company, we may temporarily access cash held by our foreign subsidiaries through intercompany loans without becoming subject to U.S. federal income tax.

Credit Facilities and Commercial Paper

On November 3, 2014, we renewed our committed receivables sales facility program through Cardinal Health Funding, LLC until November 3, 2017 and increased the size of the facility from $700 million to $950 million with the inclusion of certain receivables from the Medical segment. Other sources of liquidity include a $1.5 billion revolving credit facility and a commercial paper program of up to $1.5 billion, backed by the revolving credit facility. At December 31, 2014, we had no outstanding balances or borrowings under these facilities, except for standby letters of credit of $41 million under the committed receivables sales facility program.

Our revolving credit facility and committed receivables sales facility program require us to maintain, as of any fiscal quarter end, a consolidated interest coverage ratio of at least 4-to-1 and a consolidated leverage ratio of no more than 3.25-to-1. As of December 31, 2014, we were in compliance with these financial covenants.

Long-Term Obligations

In November 2014, we sold $450 million aggregate principal amount of 2.4% Notes that mature on November 15, 2019, $400 million aggregate principal amount of 3.5% Notes that mature on November 15, 2024, and $350 million aggregate principal amount of 4.5% Notes that mature on November 15, 2044 in a registered offering.

In December 2014, we used the net proceeds from the offering, together with cash on hand, to redeem all of the outstanding 4.0% Notes due 2015, 5.8% Notes due 2016, 5.85% Notes due

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Table of Contents	Cardinal Health, Inc. and Subsidiaries
Financial Review (continued)

2017 and 6.0% Notes due 2017 at a redemption price equal to 100% of the principal amount and accrued but unpaid interest, plus the make-whole premium applicable to each series of notes. As a result of this redemption, during the three months ended December 31, 2014, we recorded a loss on the extinguishment of debt of $60 million ($37 million, net of tax).

Available-for-Sale Securities

At December 31, 2014, we held $88 million of marketable securities, which are classified as available-for-sale.

Capital Expenditures

Capital expenditures were $83 million and $90 million during the six months ended December 31, 2014 and 2013, respectively.

Dividends

On November 5, 2014 our Board of Directors approved a quarterly dividend of $0.3425 per share, or $1.37 on an annualized basis, which was paid on January 15, 2015 to shareholders of record on January 2, 2015.

Share Repurchases

During the six months ended December 31, 2014, we repurchased $684 million of our common shares.

Our Board of Directors has approved a $2.0 billion share repurchase program, which expires on December 31, 2016. At December 31, 2014, we had $1.0 billion remaining under our repurchase authorization.

Off-Balance Sheet Arrangements

We had no significant off-balance sheet arrangements at December 31, 2014.

Contractual Obligations

Except for the registered debt offering and debt redemption described above under “Liquidity and Capital Resources” and in Note 6 of the “Notes to Condensed Consolidated Financial Statements”, as of December 31, 2014 there have been no other material changes, outside of the ordinary course of business, in our outstanding contractual obligations disclosed in our 2014 Form 10-K.

At December 31, 2014, our long-term debt and short-term borrowings and interest on long-term debt for the remainder of fiscal 2015 and fiscal periods thereafter are as follows:

(in millions)	2015		2016 to 2017		2018 to 2019		There-after		Total
Long-term debt and short-term borrowings (1)	$	270	$	311	$	403	$	2,992	$	3,976
Interest on long-term debt	70		262		226		1,042		1,600
Total long-term and short-term obligations	$	340	$	573	$	629	$	4,034	$	5,576

(1) Represents maturities of our long-term debt obligations and other short-term borrowings. See Note 6 of the “Notes to Consolidated Financial Statements” for further information.

Recent Financial Accounting Standards

See Note 1 of the “Notes to Condensed Consolidated Financial Statements” for a discussion of recent financial accounting standards.

Critical Accounting Policies and Sensitive Accounting Estimates

Refer to the Critical Accounting Policies and Sensitive Accounting Estimates section of "Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2014 Form 10-K. There have been no material changes to our critical accounting policies and sensitive accounting estimates since the end of fiscal 2014 through December 31, 2014.

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Table of Contents Cardinal Health, Inc. and Subsidiaries

Item 3: Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in the quantitative and qualitative market risks since the end of fiscal 2014 through December 31, 2014 from those reported in our 2014 Form 10-K.

Item 4: Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We evaluated, with the participation of our principal executive officer and principal financial officer, the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act")) as of December 31, 2014. Based on this evaluation, our principal executive officer and principal financial officer have concluded that as of December 31, 2014, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and that such information is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended December 31, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Table of Contents	Cardinal Health, Inc. and Subsidiaries
Part II. Other Information

Item 1: Legal Proceedings

In addition to the proceedings described below, the legal proceedings described in Note 8 of the "Notes to Condensed Consolidated Financial Statements" are incorporated in this "Item 1: Legal Proceedings" by reference.

On January 23, 2015, Erste-Sparinvest Kapitalanlagegesellschaft m.b.H., a purported shareholder, filed a derivative action in the U.S. District Court for the Southern District of Ohio against the current and certain former members of our Board of Directors alleging that the defendants breached their fiduciary duties by failing to implement and maintain a system to prevent diversion of controlled substances in connection with, among other things, the DEA’s past suspensions of our distribution centers’ registrations. The derivative complaint seeks, among other things, unspecified money damages against the defendants and an award of attorney's fees. This same plaintiff had made demand on our Board of Directors in May 2014 to take action against current and certain former directors based on allegations similar to those made in the derivative complaint. A special committee of independent directors investigated the allegations made in the demand, and after receiving and evaluating the special committee's findings and recommendations with respect to the demand, our Board of Directors determined in November 2014 that pursuing the claims set forth in the demand was not in the best interest of the company. In the derivative complaint, the plaintiff also alleges that the Board of Directors wrongfully rejected the demand.

Item 1A: Risk Factors

You should carefully consider the information in this Form 10-Q and the risk factors discussed in "Part I, Item 1A: Risk Factors" and other risks discussed in our 2014 Form 10-K and our filings with the SEC since June 30, 2014. These risks could materially

and adversely affect our results of operations, financial condition, liquidity and cash flows. Our business also could be affected by risks that we are not presently aware of or that we currently consider immaterial to our operations.

Item 2: Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information about purchases we made of our common shares during the three months ended December 31, 2014:

Issuer Purchases of Equity Securities
Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program (2)	Approximate Dollar Value of Shares That May Yet be Purchased Under the Program (2) (in millions)
October 1-31, 2014	3,124,188	$	74.12	3,121,186	$	1,136
November 1-30, 2014	1,158,561	80.05		1,158,458	1,043
December 1-31, 2014	114	82.00		—	1,043
Total	4,282,863	$	75.72	4,279,644	$	1,043

(1) Includes 181, 103 and 114 common shares purchased in October, November and December 2014, respectively, through a rabbi trust as investments of participants in our Deferred Compensation Plan and 2,821 common shares tendered in October 2014 to satisfy tax withholding and pay the exercise price upon exercise of outstanding stock options.

(2) On October 29, 2013, our Board of Directors approved a $1.0 billion share repurchase program, which expires on December 31, 2016. On August 6, 2014, our Board of Directors authorized an additional $1.0 billion under this share repurchase program. During the three months ended December 31, 2014, we repurchased $324 million of our common shares under this program.

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Table of Contents	Cardinal Health, Inc. and Subsidiaries
Part II. Other Information

Item 5: Other Information

Barrett Trading Plan

On November 6, 2014, George S. Barrett, our Chairman and Chief Executive Officer, adopted a pre-arranged trading plan that provides for the potential exercise of stock options and the sale of the resulting shares during the period beginning February 2015 and ending as late as December 2015. The plan covers up to 954,658 stock options that were granted in 2009 and are scheduled to expire in 2016. Under the plan, shares may potentially be sold on the open market at prevailing market prices, subject to minimum price thresholds specified in the plan.

Mr. Barrett indicated that the plan is being established to help diversify his personal investment holdings. The plan does not impact Mr. Barrett's compliance with his required ownership level under our share ownership guidelines of six times his base salary, which he substantially exceeds.

The plan was established under Rule 10b5-1 under the Exchange Act and our policies regarding stock transactions. The transactions will be disclosed publicly in Form 144 and Form 4 filings with the SEC.

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Table of Contents Cardinal Health, Inc. and Subsidiaries

Item 6: Exhibits

Exhibit Number	Exhibit Description
3.1	Amended and Restated Articles of Incorporation of Cardinal Health, Inc., as amended (incorporated by reference to Exhibit 3.1 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, File No. 1-11373)
3.2	Cardinal Health, Inc. Restated Code of Regulations (incorporated by reference to Exhibit 3.2 to Cardinal Health’s Current Report on Form 8-K filed on August 10, 2012, File No. 1-11373)
4.1	2.400% Notes due 2019 (incorporated by reference to Exhibit 4.1 to Cardinal Health's Current Report on Form 8-K filed on November 19, 2014, File No. 1-11373)
4.2	3.500% Notes due 2024 (incorporated by reference to Exhibit 4.2 to Cardinal Health's Current Report on Form 8-K filed on November 19, 2014, File No. 1-11373)
4.3	4.500% Notes due 2044 (incorporated by reference to Exhibit 4.3 to Cardinal Health's Current Report on Form 8-K filed on November 19, 2014, File No. 1-11373)
10.1	Restricted Share Units Agreement, dated November 4, 2014, between Cardinal Health, Inc. and Jeffrey W. Henderson (incorporated by reference to Exhibit 10.2 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, File No. 1-11373)
10.2	First Amendment and Joinder, dated as of November 3, 2014, to the Fourth Amended and Restated Receivables Purchase Agreement, dated as of November 1, 2013 (incorporated by reference to Exhibit 10.3 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, File No. 1-11373)
10.3	Sixth Amended and Restated Performance Guaranty, dated as of November 3, 2014, executed by Cardinal Health, Inc. in favor of Cardinal Health Funding, LLC (incorporated by reference to Exhibit 10.4 to Cardinal Health's Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, File No. 1-11373)
10.4	Cardinal Health, Inc. Management Incentive Plan (incorporated by reference to Exhibit 10.1 of Cardinal Health's Current Report on Form 8-K filed on November 10, 2014, File No. 1-11373)
12.1	Computation of Ratio of Earnings to Fixed Charges
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.1	Statement Regarding Forward-Looking Information
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

Cardinal Health Website

We use our website as a channel of distribution for material information about us. Important information, including news releases, earnings and analyst presentations and financial information is routinely posted and accessible on the Investors page at www.cardinalhealth.com. In addition, our website allows investors and other interested persons to sign up to automatically receive email alerts when we post news releases, SEC filings and certain other information on our website.

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Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		Cardinal Health, Inc.
Date:	February 3, 2015	/s/    GEORGE S. BARRETT
		George S. Barrett
		Chairman and Chief Executive Officer
		/s/    MICHAEL C. KAUFMANN
		Michael C. Kaufmann
		Chief Financial Officer

25

EX-12.1

	Exhibit 12.1
Cardinal Health, Inc. and Subsidiaries

Computation of Ratio of Earnings to Fixed Charges

	Fiscal Year Ended June 30															Six Months Ended December 31, 2014
(in millions, except ratios)	2010			2011			2012			2013			2014
Earnings before income taxes and discontinued operations	$	1,211.6		$	1,518.3		$	1,698.1		$	888.3		$	1,798.3		$	886.0
Plus fixed charges:
Interest expense	125.5			95.2			92.3			119.2			129.4			70.0
Capitalized interest	2.9			5.7			6.0			1.7			1.2			0.7
Amortization of debt offering costs	9.9			1.8			2.8			3.5			3.6			2.0
Interest portion of rent expense	6.0			7.1			7.8			8.3			9.8			4.7
Fixed charges	144.3			109.8			108.9			132.7			144.0			77.4
Plus: amortization of capitalized interest	6.5			5.3			3.2			3.4			2.9			1.2
Less: capitalized interest	(2.9		)	(5.7		)	(6.0		)	(1.7		)	(1.2		)	(0.7		)
Earnings	$	1,359.5		$	1,627.7		$	1,804.2		$	1,022.7		$	1,944.0		$	963.9
Ratio of earnings to fixed charges (1)	9.4			14.8			16.6			7.7			13.5			12.5

(1) The ratio of earnings to fixed charges is computed by dividing fixed charges into earnings before income taxes and discontinued operations plus fixed charges and capitalized interest. Fixed charges include interest expense, amortization of debt offering costs and the portion of rent expense that is deemed to be representative of the interest factor. Interest expense recorded on tax exposures has been recorded in income tax expense and has therefore been excluded from the calculation.

EX-31.1

Exhibit 31.1

I, George S. Barrett, certify that:

1. I have reviewed this Form 10-Q of Cardinal Health, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 3, 2015

/s/ GEORGE S. BARRETT

George S. Barrett

Chairman and Chief Executive Officer

EX-31.2

Exhibit 31.2

I, Michael C. Kaufmann, certify that:

1. I have reviewed this Form 10-Q of Cardinal Health, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 3, 2015

/s/ MICHAEL C. KAUFMANN

Michael C. Kaufmann

Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification of the Chief Executive Officer and the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Each of George S. Barrett, Chairman and Chief Executive Officer of Cardinal Health, Inc. (the “Company”), and Michael C. Kaufmann, Chief Financial Officer of the Company, certifies, pursuant to 18 U.S.C. Section 1350, that:

(1) the Quarterly Report on Form 10-Q for the quarter ended December 31, 2014 containing the financial statements of the Company (the “Periodic Report”), which this statement accompanies, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2) the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: February 3, 2015

/s/ GEORGE S. BARRETT

George S. Barrett

Chairman and Chief Executive Officer

/s/ MICHAEL C. KAUFMANN

Michael C. Kaufmann

Chief Financial Officer

EX-99.1

Exhibit 99.1

Statement Regarding Forward-Looking Information

As used in this exhibit, “Cardinal Health,” the “Company,” “we,” “our,” “us” and similar pronouns refer to Cardinal Health, Inc. and its subsidiaries, unless the context requires otherwise. Our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended June 30, 2014 (the “2014 Form 10-K”), any quarterly report on Form 10-Q or any of our current reports on Form 8-K (along with any exhibits and amendments to such reports), as well as our Annual Report to Shareholders, our press releases, or any other written or oral statements made by or on behalf of us, may include directly or by incorporation by reference forward-looking statements which reflect our current view (as of the date the forward-looking statement is first made) with respect to future events, prospects, projections or financial performance. The matters discussed in these forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected, anticipated or implied in or by such statements. These risks and uncertainties include:

• competitive pressures in the markets in which we operate, including pricing pressures;

• increasing consolidation in the healthcare industry, which could give the resulting enterprises greater bargaining power and may increase pressure on prices for our products and services;

• uncertainties due to government healthcare reform;

• changes to the prescription drug reimbursement formula and related reporting requirements for generic pharmaceuticals under Medicaid;

• material reductions in purchases, non-renewal or early termination of contracts or delinquencies, defaults or insolvencies by key customers;

• risks associated with the generic pharmaceutical sourcing venture with CVS Health Corporation, including those relating to our ability to realize the expected benefits from the sourcing venture;

• actions of regulatory bodies and other governmental authorities, including the U.S. Drug Enforcement Administration ("DEA"), the U.S. Food and Drug Administration, the U.S. Nuclear Regulatory Commission, the U.S. Department of Health and Human Services, the U.S. Federal Trade Commission, various state boards of pharmacy, state health departments, state insurance departments or comparable agencies or foreign equivalents that could delay, limit or suspend product development, manufacturing, distribution, importation or sales or result in warning letters, recalls, seizures, injunctions and monetary sanctions;

• the possibility of civil fines levied against us (in excess of the reserve we have accrued) by the U.S. Department of Justice for conduct covered by the settlement agreement that we entered into in connection with the DEA's suspension of our Lakeland, Florida distribution center's registration to distribute controlled substances;

• the loss of, or default by, one or more key suppliers for which alternative suppliers may not be readily available;

• unfavorable changes to the terms of key customer or supplier relationships, or changes in customer mix;

• changes in manufacturers' pricing, selling, inventory, distribution or supply policies or practices;

• changes in hospital buying groups or hospital buying practices;

• changes in the frequency or magnitude of brand or generic pharmaceutical price appreciation, restrictions in the amount of inventory available to us, or changes in the timing or frequency of generic launches or the introduction of brand pharmaceuticals;

• uncertainties relating to market conditions for pharmaceuticals;

• uncertainties relating to demand for our products and services;

• changes in the distribution or outsourcing pattern for pharmaceutical and medical/surgical products and services, including an increase in direct and limited distribution;

• the costs, difficulties and uncertainties related to the integration of acquired businesses, including liabilities relating to the operations or activities of such businesses prior to their acquisition;

• uncertainties relating to our ability to achieve the anticipated results from the acquisition of Access Closure, Inc.;

• risks arising from certain of our businesses being Medicare-certified suppliers and participating in state Medicaid programs, which may require meeting defined quality standards and maintaining accreditation to receive reimbursement as well as compliance with applicable billing, payment and record-keeping requirements;

• risks arising from possible violations of the U.S. Foreign Corrupt Practices Act, Chinese anti-corruption laws and other similar anti-corruption laws in other jurisdictions and U.S. and foreign export control, trade embargo and customs laws;

• risks arising from possible violations of healthcare fraud and abuse laws;

• our ability to introduce and market new products and our ability to keep pace with advances in technology;

• our ability to maintain adequate intellectual property protections;

• changes in laws or in the interpretation or application of laws or regulations, as well as possible failures to comply with applicable laws or regulations, including as a result of possible misinterpretations or misapplications;

• the continued financial viability and success of our customers and suppliers;

• costs or claims resulting from potential errors or defects in our manufacturing of medical devices or other products or in our compounding, repackaging, information systems or pharmacy management services that may injure persons or damage property or operations, including costs from remediation efforts or recalls;

• the results, costs, effects or timing of any commercial disputes, government contract compliance matters, patent infringement claims, qui tam actions or other legal proceedings;

• the costs, effects, timing or success of restructuring programs or plans;

• significant charges to earnings if goodwill or intangible assets become impaired;

• increased costs for commodities used in the Medical segment including various components, compounds, raw materials or energy such as oil-based resins, cotton, latex and other commodities;

• shortages in commodities, components, compounds, raw materials or energy used by our businesses, including supply disruptions of radioisotopes;

• the risks of counterfeit products in the supply chain;

• risks associated with global operations, including the effect of local economic environments, inflation, recession, currency volatility and global competition, in addition to risks associated with compliance with U.S and international laws relating to global operations;

• difficulties or delays in the development, production, manufacturing, sourcing and marketing of new or existing products and services, including difficulties or delays associated with obtaining requisite regulatory consents or approvals associated with those activities;

• disruption or damage to or failure of our information or controls systems or a data security breach;

• disruptions to the proper functioning of our critical facilities, including our national logistics center;

• uncertainties relating to general political, business, industry, regulatory and market conditions;

• adverse changes in U.S. or foreign tax laws, unfavorable challenges to our tax positions and payments to settle these challenges; and

• other factors described in “Item 1A: Risk Factors” of the 2014 Form 10-K.

The words “expect,” “anticipate,” “intend,” “plan,” “believe,” “will,” “should,” “could,” “would,” “project,” “continue,” “likely,” and similar expressions generally identify “forward-looking statements,” which speak only as of the date the statements were made, and also include statements reflecting future results or guidance, statements of outlook and expense accruals. We undertake no obligation to update or revise any forward-looking statements, except to the extent required by applicable law.

2

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Available-for-Sale Securities (Narrative) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Other than Temporary Impairment Losses, Investments, Available-for-sale Securities	$ 0
Short Term
Schedule of Available-for-sale Securities [Line Items]
Weighted average effective maturity	9 months
Long Term
Schedule of Available-for-sale Securities [Line Items]
Weighted average effective maturity	16 months

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Segment Information (Segment Profit by Reportable Segment) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Operating earnings	$ 546	$ 519	$ 1,012	$ 990
Pharmaceutical
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Operating earnings	542	482	992	916
Medical
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Operating earnings	115	131	229	238
Reportable Segments
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Operating earnings	657	613	1,221	1,154
Corporate
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Operating earnings	$ (111)	$ (94)	$ (209)	$ (164)

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Shareholders' Equity (Narrative) (Details) (Treasury Shares, USD $) In Millions, except Per Share data, unless otherwise specified	6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Treasury Shares
Treasury shares acquired (using Cost Method), Shares	9.1	1.0
Treasury shares acquired (using Cost Method), Value	$ 684	$ 50
Treasury Stock Acquired, Average Cost Per Share	$ 75.00	$ 51.65

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Share-Based Compensation (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense	$ 9	$ 8	$ 18	$ 17
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period, in years			3 years
Total compensation cost, net of estimated forfeitures, related to unvested awards not yet recognized, pre-tax	33		33
Weighted-average period over which award cost is expected to be recognized (in years)			2 years
Stock Options | Minimum
Share-based Compensation Arrangement by Share-based Payment Award
Exercisable period of plans, in years			7 years
Stock Options | Maximum
Share-based Compensation Arrangement by Share-based Payment Award
Exercisable period of plans, in years			10 years
Restricted Share Units
Share-based Compensation Arrangement by Share-based Payment Award
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period, in years			3 years
Total compensation cost, net of estimated forfeitures, related to unvested awards not yet recognized, pre-tax	112		112
Weighted-average period over which award cost is expected to be recognized (in years)			2 years
Performance Share Units
Share-based Compensation Arrangement by Share-based Payment Award
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period, in years			3 years
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage			120.00%
Total compensation cost, net of estimated forfeitures, related to unvested awards not yet recognized, pre-tax	$ 21		$ 21
Weighted-average period over which award cost is expected to be recognized (in years)			2 years
Performance Share Units | Minimum
Share-based Compensation Arrangement by Share-based Payment Award
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage			0.00%
Performance Share Units | Maximum
Share-based Compensation Arrangement by Share-based Payment Award
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage			200.00%

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Financial Instruments (Narrative) (Details) (Designated as Hedging Instrument, Interest Rate Swap, USD $) In Millions, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2014	Dec. 10, 2014	Dec. 31, 2013
Cash Flow Hedging
Derivative [Line Items]
Derivative, Notional Amount	$ 50
Fair Value Hedging [Member]
Derivative [Line Items]
Derivative, Notional Amount		$ 450	$ 875	$ 300

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Restructuring and Employee Severance (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended		12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Jun. 30, 2013
Restructuring Cost and Reserve [Line Items]
Loss on disposal of held for sale assets	$ 18	$ (9)	$ 18	$ (9)
Fiscal 2013 Medical Restructuring [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Activities, Initiation Date					Jan. 30, 2013
Waukegan, Illinois Property [Member]
Restructuring Cost and Reserve [Line Items]
Loss on disposal of held for sale assets	$ 1

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Share-Based Compensation (Schedule of All Stock Option Transactions Under the Plans) (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	6 Months Ended
	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Stock Options Outstanding at Beginning of Period	10
Stock Options Outstanding, Granted	1
Stock Options Outstanding, Exercised	(2)
Stock Options Outstanding, Canceled and forfeited	0
Stock Options Outstanding at End of Period	9
Stock Options Outstanding, Exercisable at End of Period	5
Share Based Compensation Arrangement By Share Based Payment Award Options Outstanding Weighted-Average Exercise Price [Roll Forward]
Weighted-Average Exercise Price Per Common Share, Outstanding at Beginning of Period	$ 39.16
Weighted-Average Exercise Price Per Common Share, Granted	$ 71.57
Weighted-Average Exercise Price Per Common Share, Exercised	$ 39.05
Weighted-Average Exercise Price Per Common Share, Canceled and forfeited	$ 0.00
Weighted-Average Exercise Price Per Common Share, Outstanding at End of Period	$ 44.28
Weighted-Average Exercise Price Per Common Share, Exercisable at End of Period	$ 35.91

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Long-Term Obligations and Other Short-Term Borrowings (Tables)

6 Months Ended

Dec. 31, 2014

Debt Disclosure [Abstract]

Schedule of Debt

The following table summarizes long-term obligations and other short-term borrowings:

(in millions)	December 31, 2014		June 30, 2014
1.7% Notes due 2018	$	401	$	401
1.9% Notes due 2017	250		251
2.4% Notes due 2019	449		—
3.2% Notes due 2022	249		248
3.2% Notes due 2023	549		549
3.5% Notes due 2024	398		—
4.0% Notes due 2015	—		513
4.5% Notes due 2044	345		—
4.6% Notes due 2043	349		349
4.625% Notes due 2020	525		525
5.8% Notes due 2016	—		301
5.85% Notes due 2017	—		158
6.0% Notes due 2017	—		197
7.0% Debentures due 2026	124		124
7.8% Debentures due 2016	37		37
Other obligations	300		319
Total	$	3,976	$	3,972
Less: current portion of long-term obligations and other short-term borrowings	270		801
Long-term obligations, less current portion	$	3,706	$	3,171

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Earnings Per Share (Narrative) (Details) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Earnings Per Share [Abstract]
Potentially dilutive employee stock options, restricted share units and performance share units that were anitdilutive	1	0	1	2

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Long-Term Obligations and Other Short-Term Borrowings (Summary of Long-Term Obligations and Other Short-Term Borrowings) (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2014	Jun. 30, 2014
Debt Instrument
Other Obligations	$ 300	$ 319
Total debt	3,976	3,972
Current portion of long-term obligations and other short-term borrowings	270	801
Long-term obligations, less current portion	3,706	3,171
1.7% Notes due 2018
Debt Instrument
Notes payable	401	401
1.9% Notes due 2017
Debt Instrument
Notes payable	250	251
2.4% Notes due 2019 [Member] [Domain]
Debt Instrument
Notes payable	449	0
3.2% Notes due 2022
Debt Instrument
Notes payable	249	248
3.2% Notes due 2023
Debt Instrument
Notes payable	549	549
3.5% Notes due 2024 [Member]
Debt Instrument
Notes payable	398	0
4.0% Notes due 2015
Debt Instrument
Notes payable	0	513
4.5% Notes due 2044 [Member] [Member]
Debt Instrument
Notes payable	345	0
4.6% Notes due 2043
Debt Instrument
Notes payable	349	349
4.625% Notes due 2020
Debt Instrument
Notes payable	525	525
5.8% Notes due 2016
Debt Instrument
Notes payable	0	301
5.85% Notes due 2017
Debt Instrument
Notes payable	0	158
6.0% Notes due 2017
Debt Instrument
Notes payable	0	197
7.0% Debentures due 2026
Debt Instrument
Notes payable	124	124
7.8% Debentures due 2016
Debt Instrument
Notes payable	$ 37	$ 37

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Goodwill and Other Intangible Assets (Schedule of Goodwill by Reportable Segment) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Dec. 31, 2014
Goodwill
Beginning Balance	$ 4,878
Goodwill acquired, net of purchase price adjustments	71
Foreign currency translation adjustments and other	(20)
Ending Balance	4,929
Pharmaceutical
Goodwill
Beginning Balance	2,158
Goodwill acquired, net of purchase price adjustments	21
Foreign currency translation adjustments and other	0
Ending Balance	2,179
Medical
Goodwill
Beginning Balance	2,720
Goodwill acquired, net of purchase price adjustments	50
Foreign currency translation adjustments and other	(20)
Ending Balance	$ 2,750

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Segment Information (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended		12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Jun. 30, 2014
Segment Reporting [Abstract]
Number of Operating Segments			2		2
Number of Reportable Segments			2		2
Project Costs On Investment And Other Spending	$ 4	$ 6	$ 6	$ 10

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Financial Instruments (Summary of Estimated Fair Value of Our Long-Term Obligations and Other Short-Term Borrowings) (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2014	Jun. 30, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount	$ 3,976	$ 3,972
Fair Value, Inputs, Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Estimated fair value	$ 4,089	$ 4,115

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Restructuring and Employee Severance

6 Months Ended

Dec. 31, 2014

Restructuring Charges [Abstract]

Restructuring and Employee Severance

Restructuring and Employee Severance

The following tables summarize restructuring and employee severance costs related to our restructuring activities:

	Three Months Ended December 31
(in millions)	2014		2013
Employee-related costs (1)	$	5	$	4
Facility exit and other costs (2)	2		6
Total restructuring and employee severance	$	7	$	10

	Six Months Ended December 31
(in millions)	2014		2013
Employee-related costs (1)	$	21	$	8
Facility exit and other costs (2)	5		12
Total restructuring and employee severance	$	26	$	20

(1) Employee-related costs primarily consist of termination benefits provided to employees who have been involuntarily terminated and duplicate payroll costs during transition periods.

(2) Facility exit and other costs primarily consist of lease termination costs, accelerated depreciation, equipment relocation costs, project consulting fees and costs associated with restructuring our delivery of information technology infrastructure services.

The majority of restructuring costs incurred during the three and six months ended December 31, 2014 and 2013 related to restructuring activities within our Medical segment.

In connection with a restructuring plan within our Medical segment announced on January 30, 2013, we completed the sale of our property in Waukegan, Illinois during the three months ended December 31, 2014, which resulted in a $1 million loss on disposal of held for sale assets.

The following table summarizes activity related to liabilities associated with restructuring and employee severance:

(in millions)	Employee- Related Costs			Facility Exit and Other Costs		Total
Balance at June 30, 2014	$	24		$	—	$	24
Additions	18			1		19
Payments and other adjustments	(18		)	—		(18		)
Balance at December 31, 2014	$	24		$	1	$	25

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Income Taxes (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Jun. 30, 2014
Income Taxes
Effective Income Tax Rate, Continuing Operations	36.00%	44.10%	37.40%	34.20%
Unfavorable/(favorable) impact of nondeductible litigation expense, Amount	$ 13		$ 24
Unfavorable/(favorable) impact of nondeductible litigation expense, Percent	3.00%		2.70%
Unfavorable/(favorable) impact due to remeasurement of unrecognized tax benefits, Amount			12
Unfavorable/(favorable) impact due to remeasurement of unrecognized tax benefits, Percent			1.40%
Unfavorable/(favorable) impact of Puerto Rico tax law changes, Amount			(14)
Unfavorable/(favorable) impact of Puerto Rico tax law changes, Percent			1.60%
Net Unfavorable/(Favorable) Discrete Items, Amount		38		(23)
Net Unfavorable/(Favorable) Discrete Items, Percent		7.70%		2.40%
Unfavorable/(favorable) impact of settlements of federal and state tax controversies, settlements and unusual provisions, Amount				(67)
Significant Increase/(Decrease) in Unrecognized Tax Benefits is Reasonably Possible, Estimated Range of Change, Lower Bound	0		0
Significant Increase/(Decrease) in Unrecognized Tax Benefits is Reasonably Possible, Estimated Range of Change, Upper Bound	180		180
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued	155		155		143
Amount CareFusion is liable under tax matters agreement in the event amount must be paid to the taxing authority	214		214		210
Unrecognized tax benefits	525		525		510
Unrecognized Tax Benefits that Would Impact Effective Tax Rate	333		333		322
Federal | Minimum
Income Taxes
Tax years open for examination	2006
Tax years under examination	2006
Federal | Maximum
Income Taxes
Tax years open for examination	2014
Tax years under examination	2010
State and Foreign Jurisdiction | Minimum
Income Taxes
Tax years open for examination	2003
State and Foreign Jurisdiction | Maximum
Income Taxes
Tax years open for examination	2014
Loss carryback from fiscal 2007
Income Taxes
Unrecognized Tax Benefits, Period Increase (Decrease)	(14)		(14)
Unfavorable/(favorable) impact due to remeasurement of unrecognized tax benefits, Percent	3.10%		1.60%
Impact of proposed assessment of additional tax
Income Taxes
Unrecognized Tax Benefits, Period Increase (Decrease)		$ 56		$ 56

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Earnings Per Share (Tables)

6 Months Ended

Dec. 31, 2014

Earnings Per Share [Abstract]

Reconciliation of common shares used to compute basic and diluted earnings per share

	Six Months Ended December 31
(in millions)	2014	2013
Weighted-average common shares–basic	333	341
Effect of dilutive securities:
Employee stock options, restricted share units and performance share units	4	4
Weighted-average common shares–diluted	337	345

The following tables reconcile the number of common shares used to compute basic and diluted earnings per share:

	Three Months Ended December 31
(in millions)	2014	2013
Weighted-average common shares–basic	331	342
Effect of dilutive securities:
Employee stock options, restricted share units and performance share units	3	4
Weighted-average common shares–diluted	334	346

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Shareholders' Equity (Tables)

6 Months Ended

Dec. 31, 2014

Equity [Abstract]

Schedule of the changes in the balance of accumulated other comprehensive income by component and in total

The following table summarizes the changes in the balance of accumulated other comprehensive income by component and in total:

(in millions)	Foreign Currency Translation Adjustments			Unrealized Gain/(Loss) on Derivatives, net of tax			Accumulated Other Comprehensive Income/(Loss)
Balance at June 30, 2014	$	63		$	7		$	70
Other comprehensive loss, net of tax before reclassifications	(64		)	(9		)	(73		)
Amounts reclassified to earnings	—			—			—
Total other comprehensive loss, net of tax of $5 million	(64		)	(9		)	(73		)
Balance at December 31, 2014	$	(1	)	$	(2	)	$	(3	)

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Share-Based Compensation (Schedule of Total Share-Based Compensation Expense by Type of Award) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Share-based compensation expense	$ 28	$ 24	$ 53	$ 48
Restricted Share Units
Share-based compensation expense	18	15	34	31
Stock Options
Share-based compensation expense	5	5	10	10
Performance Share Units
Share-based compensation expense	$ 5	$ 4	$ 9	$ 7

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Commitments, Contingent Liabilities and Litigation (Narrative) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended	3 Months Ended	6 Months Ended
	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2014
Loss Contingencies
Proceeds from Litigation Settlements	$ 16
DEA Investigation and Related Matters [Member]
Loss Contingencies
Litigation Charges		7	34
Litigation Accrual		34	34
State of West Virginia vs Cardinal Health, Inc
Loss Contingencies
Loss Contingency, Number of Defendants			13
FTC Investigation [Member]
Loss Contingencies
Litigation Charges		27
CVS Health Corporation Member [Domain]
Red Oak Sourcing Establishment Date			July 2014
Red Oak Sourcing Initial Term			10 years
Number Of Quarterly Payments To CVS		39
Quarterly Payment To CVS		$ 25.6
Quarterly Payment To CVS Commencement Date		October 2014

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Segment Information (Tables)

6 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Revenue by Reportable Segment

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

	Three Months Ended December 31
(in millions)	2014			2013
Pharmaceutical	$	22,627		$	19,443
Medical	2,914			2,799
Total segment revenue	25,541			22,242
Corporate (1)	(4		)	(2		)
Total revenue	$	25,537		$	22,240

	Six Months Ended December 31
(in millions)	2014		2013
Pharmaceutical (2)	$	43,836	$	41,256
Medical	5,766		5,511
Total segment revenue	49,602		46,767
Corporate (1)	5		(4		)
Total revenue	$	49,607	$	46,763

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

(2) Our pharmaceutical distribution contract with Walgreen Co. expired on August 31, 2013.

^[1]

Segment Profit by Reportable Segment

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

	Three Months Ended December 31
(in millions)	2014			2013
Pharmaceutical	$	542		$	482
Medical	115			131
Total segment profit	657			613
Corporate	(111		)	(94		)
Total operating earnings	$	546		$	519

	Six Months Ended December 31
(in millions)	2014			2013
Pharmaceutical	$	992		$	916
Medical	229			238
Total segment profit	1,221			1,154
Corporate	(209		)	(164		)
Total operating earnings	$	1,012		$	990

^[1]

[1] Facility exit and other costs primarily consist of lease termination costs, accelerated depreciation, equipment relocation costs, project consulting fees and costs associated with restructuring our delivery of information technology infrastructure services.

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Share-Based Compensation (Tables)

6 Months Ended

Dec. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of total share-based compensation expense by type of award

The following tables provide total share-based compensation expense by type of award:

	Three Months Ended December 31
(in millions)	2014		2013
Restricted share unit expense	$	18	$	15
Employee stock option expense	5		5
Performance share unit expense	5		4
Total share-based compensation	$	28	$	24

	Six Months Ended December 31
(in millions)	2014		2013
Restricted share unit expense	$	34	$	31
Employee stock option expense	10		10
Performance share unit expense	9		7
Total share-based compensation	$	53	$	48

Schedule of all stock option transactions under the Plans

The following table summarizes all stock option transactions under the Plans:

(in millions, except per share amounts)	Stock Options		Weighted-Average Exercise Price per Common Share
Outstanding at June 30, 2014	10		$	39.16
Granted	1		71.57
Exercised	(2	)	39.05
Canceled and forfeited	—		—
Outstanding at December 31, 2014	9		$	44.28
Exercisable at December 31, 2014	5		$	35.91

Schedule of additional data related to stock option activity

The following table provides additional data related to stock option activity:

(in millions, except contractual lives)	December 31, 2014		June 30, 2014
Aggregate intrinsic value of outstanding options at period end	$	329	$	282
Aggregate intrinsic value of exercisable options at period end	$	246	$	185
Weighted-average remaining contractual life of outstanding options (in years)	6		6
Weighted-average remaining contractual life of exercisable options (in years)	5		4

Schedule of all transactions related to restricted share units under the Plans

The following table summarizes all transactions related to restricted share units under the Plans:

(in millions, except per share amounts)	Restricted Share Units		Weighted-Average Grant Date Fair Value per Share
Nonvested at June 30, 2014	3		$	45.65
Granted	1		71.89
Vested	(1	)	44.41
Canceled and forfeited	—		—
Nonvested at December 31, 2014	3		$	56.83

Schedule of all transactions related to performance share units under the Plans

The following table summarizes all transactions related to performance share units under the Plans (based on target award amounts):

(in millions, except per share amounts)	Performance Share Units		Weighted-Average Grant Date Fair Value per Share
Nonvested at June 30, 2014	0.9		$	44.41
Granted	0.2		66.78
Vested (1)	(0.2	)	41.59
Canceled and forfeited	—		—
Nonvested at December 31, 2014	0.9		$	50.61

(1) Vested based on achievement of 120 percent of the target performance goal.

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Basis of Presentation and Summary of Significant Accounting Policies

6 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

Our condensed consolidated financial statements include the accounts of all majority-owned or controlled subsidiaries, and all significant intercompany transactions and amounts have been eliminated. To conform to the current year presentation, certain prior year amounts have been reclassified. References to "we," "our" and similar pronouns in this Quarterly Report on Form 10-Q for the quarter ended December 31, 2014 (this "Form 10-Q") refer to Cardinal Health, Inc. and its majority-owned or controlled subsidiaries unless the context requires otherwise. The results of businesses acquired or disposed of are included in the condensed consolidated financial statements from the effective date of the acquisition or up to the date of disposal, respectively.

Our condensed consolidated financial statements have been prepared in accordance with the U.S. Securities and Exchange Commission ("SEC") instructions to Quarterly Reports on Form 10-Q and include all of the information and disclosures required by accounting principles generally accepted in the United States ("GAAP") for interim financial reporting. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect amounts reported in the condensed consolidated financial statements and accompanying notes. Actual amounts may differ from these estimated amounts. In addition, operating results presented for this fiscal 2015 interim period are not necessarily indicative of the results that may be expected for the full fiscal year ending June 30, 2015.

These condensed consolidated financial statements are unaudited and are presented pursuant to the rules and regulations of the SEC. Accordingly, the condensed consolidated financial statements included in this Form 10-Q should be read in conjunction with the audited consolidated financial statements and related notes contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2014 (the "2014 Form 10-K"). In our opinion, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included. Except as disclosed elsewhere in this Form 10-Q, all such adjustments are of a normal and recurring nature.

Recent Financial Accounting Standards

In August 2014, the Financial Accounting Standards Board ("FASB") issued amended accounting guidance related to uncertainties about an entity’s ability to continue as a going concern. This guidance requires management to evaluate whether there is substantial doubt about a company’s ability to continue as a going concern. This amendment will be effective for us in the fourth quarter of fiscal 2017, with early adoption permitted. We do not expect the adoption of this guidance to impact our financial statement disclosures.

In May 2014, the FASB issued amended accounting guidance related to revenue recognition. This guidance is based on the principle that revenue is recognized in an amount that reflects the consideration to which an entity expects to be entitled in exchange for the transfer of goods or services to customers. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. This amendment will be effective for us in the first quarter of fiscal 2018. We are continuing to evaluate the options for adoption and the impact on our financial position and results of operations.

In July 2013, the FASB issued amended accounting guidance related to the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. This guidance requires an entity to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, unless certain conditions exists. We adopted this guidance in the first quarter of fiscal 2015. The adoption of this guidance did not impact our financial position or results of operations.

In March 2013, the FASB issued amended accounting guidance related to a parent company's accounting for the cumulative translation adjustment upon derecognition of certain subsidiaries or group of assets within a foreign entity or of an investment in a foreign entity. The amended guidance requires the release of any cumulative translation adjustment into net income only upon complete or substantially complete liquidation of a controlling interest in a subsidiary or a group of assets within a foreign entity. Also, it requires the release of all or a pro rata portion of the cumulative translation adjustment to net income in the case of sale of an equity method investment that is a foreign entity. We adopted this amended guidance in the first quarter of fiscal 2015. The adoption of this guidance did not impact our financial position or results of operations.

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Acquisitions (Narrative) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended		0 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	May 09, 2014
Business Acquisition
Payments to Acquire Businesses, Net of Cash Acquired	$ 86	$ 50
AccessClosure
Business Acquisition
Business Acquisition, Effective Date of Acquisition			May 09, 2014
Payments to Acquire Businesses, Net of Cash Acquired			$ 320

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Available-for-Sale Securities (Schedule of Available-for-Sale Securities) (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2014		Jun. 30, 2014
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities	$ 88	[1]	$ 100	[1]
Available-for-sale Securities, Current	51		93
Available-for-sale Securities, Noncurrent	37		7
Commercial Paper
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Current	14		4
Treasury bills
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Current	0		85
International bonds
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Current	1		1
Corporate bonds
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Current	5		3
Available-for-sale Securities, Noncurrent	9		5
U.S. agency bonds
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Current	25		0
Available-for-sale Securities, Noncurrent	7		2
U.S. agency mortgage-backed securities
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Current	6		0
Available-for-sale Securities, Noncurrent	$ 21		$ 0

[1] We invest in marketable securities, which are classified as available-for-sale and are carried at fair value in the condensed consolidated balance sheets. Observable Level 2 inputs such as quoted prices for similar securities, interest rate spreads, yield curves and credit risk are used to determine the fair value. See Note 5 for additional information regarding available-for-sale securities.

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Segment Information (Revenue by Reportable Segment) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended				6 Months Ended
	Dec. 31, 2014		Dec. 31, 2013		Dec. 31, 2014		Dec. 31, 2013
Segment Reporting Information
Revenue	$ 25,537		$ 22,240		$ 49,607		$ 46,763
Pharmaceutical
Segment Reporting Information
Revenue	22,627		19,443		43,836	[1]	41,256	[1]
Medical
Segment Reporting Information
Revenue	2,914		2,799		5,766		5,511
Reportable Segments
Segment Reporting Information
Revenue	25,541		22,242		49,602		46,767
Corporate
Segment Reporting Information
Revenue	$ (4)	[2]	$ (2)	[2]	$ 5	[2]	$ (4)	[2]
Walgreen Co | Pharmaceutical
Segment Reporting Information
Contract expiration date			Aug. 31, 2013

[1] Our pharmaceutical distribution contract with Walgreen Co. expired on August 31, 2013.

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

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Condensed Consolidated Statements of Earnings (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Income Statement [Abstract]
Revenue	$ 25,537	$ 22,240	$ 49,607	$ 46,763
Cost of products sold	24,083	20,895	46,813	44,155
Gross margin	1,454	1,345	2,794	2,608
Operating expenses:
Distribution, selling, general and administrative expenses	815	766	1,590	1,497
Restructuring and employee severance	7	10	26	20
Amortization and other acquisition-related costs	60	56	112	105
Impairments and (gain)/loss on disposal of assets, net	(18)	9	(18)	9
Litigation (recoveries)/charges, net	44	(15)	72	(13)
Operating earnings	546	519	1,012	990
Other income, net	(1)	(6)	(4)	(10)
Interest expense, net	36	33	70	66
Loss on extinguishment of debt	60	0	60	0
Earnings before income taxes and discontinued operations	451	492	886	934
Provision for income taxes	162	217	331	320
Earnings from continuing operations	289	275	555	614
Earnings from discontinued operations, net of tax	0	3	0	3
Net earnings	$ 289	$ 278	$ 555	$ 617
Basic earnings per common share:
Continuing operations	$ 0.87	$ 0.80	$ 1.66	$ 1.80
Discontinued operations	$ 0.00	$ 0.01	$ 0.00	$ 0.01
Net basic earnings per common share	$ 0.87	$ 0.81	$ 1.66	$ 1.81
Diluted earnings per common share:
Continuing operations	$ 0.86	$ 0.79	$ 1.65	$ 1.78
Discontinued operations	$ 0.00	$ 0.01	$ 0.00	$ 0.01
Net diluted earnings per common share	$ 0.86	$ 0.80	$ 1.65	$ 1.79
Weighted-average number of common shares outstanding:
Basic	331	342	333	341
Diluted	334	346	337	345
Cash dividends declared per common share	$ 0.3425	$ 0.3025	$ 0.6850	$ 0.6050

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Fair Value Measurements (Fair Value of Assets and Liabilities Measured on a Recurring Basis) (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2014		Jun. 30, 2014
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Cash equivalents	$ 212	[1]	$ 740	[1]
Forward contracts	0	[2]	10	[2]
Available-for-sale securities	88	[3]	100	[3]
Other investments	112	[4]	106	[4]
Total	412		956
Fair Value, Inputs, Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Cash equivalents	212	[1]	740	[1]
Forward contracts	0	[2]	0	[2]
Available-for-sale securities	0	[3]	0	[3]
Other investments	112	[4]	106	[4]
Total	324		846
Fair Value, Inputs, Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Cash equivalents	0	[1]	0	[1]
Forward contracts	0	[2]	10	[2]
Available-for-sale securities	88	[3]	100	[3]
Other investments	0	[4]	0	[4]
Total	88		110
Fair Value, Inputs, Level 3
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Cash equivalents	0	[1]	0	[1]
Forward contracts	0	[2]	0	[2]
Available-for-sale securities	0	[3]	0	[3]
Other investments	0	[4]	0	[4]
Total	$ 0		$ 0

[1] Cash equivalents are comprised of highly liquid investments purchased with a maturity of three months or less. The carrying value of these cash equivalents approximates fair value due to their short-term maturities.

[2] The fair value of interest rate swaps, foreign currency contracts and commodity contracts is determined based on the present value of expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Observable Level 2 inputs are used to determine the present value of expected future cash flows. The fair value of these derivative contracts, which are subject to master netting arrangements under certain circumstances, is presented on a gross basis in the condensed consolidated balance sheets.

[3] We invest in marketable securities, which are classified as available-for-sale and are carried at fair value in the condensed consolidated balance sheets. Observable Level 2 inputs such as quoted prices for similar securities, interest rate spreads, yield curves and credit risk are used to determine the fair value. See Note 5 for additional information regarding available-for-sale securities.

[4] The other investments balance includes investments in mutual funds, which are used to offset fluctuations in deferred compensation liabilities. These mutual funds primarily invest in the equity securities of companies with large market capitalization and high quality fixed income debt securities. The fair value of these investments is determined using quoted market prices.

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Condensed Consolidated Statements of Cash Flows (USD $) In Millions, unless otherwise specified	6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Cash flows from operating activities:
Net earnings	$ 555	$ 617
Earnings from discontinued operations, net of tax	0	3
Earnings from continuing operations	555	614
Adjustments to reconcile earnings from continuing operations to net cash provided by operating activities:
Depreciation and amortization	220	234
Loss on extinguishment of debt	60	0
Gain on sale of other investments	(5)	0
Impairments and (gain)/loss on disposal of assets, net	(18)	9
Share-based compensation	53	48
Provision for bad debts	26	29
Change in operating assets and liabilities, net of effects from acquisitions:
Decrease/(increase) in trade receivables	(291)	1,420
Increase in inventories	(1,137)	(100)
Increase/(decrease) in accounts payable	1,438	(1,088)
Other accrued liabilities and operating items, net	113	(178)
Net cash provided by operating activities	1,014	988
Cash flows from investing activities:
Acquisition of subsidiaries, net of cash acquired	(86)	(50)
Additions to property and equipment	(83)	(90)
Purchase of available-for-sale securities and other investments	(107)	0
Proceeds from sale of available-for-sale securities and other investments	107	0
Proceeds from maturities of available-for-sale securities	16	0
Proceeds from divestitures and disposal of held for sale assets	53	0
Net cash used in investing activities	(100)	(140)
Cash flows from financing activities:
Net change in short-term borrowings	(18)	73
Reduction of long-term obligations	(1,220)	(1)
Proceeds from long-term obligations, net of issuance costs	1,182	0
Net proceeds from issuance of common shares	35	139
Tax proceeds from share-based compensation	42	39
Dividends on common shares	(233)	(208)
Purchase of treasury shares	(686)	(50)
Net cash used in financing activities	(898)	(8)
Net increase in cash and equivalents	16	840
Cash and equivalents at beginning of period	2,865	1,901
Cash and equivalents at end of period	$ 2,881	$ 2,741

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Share-Based Compensation (Schedule of All Transactions Related to Restricted Share Units Under the Plans) (Details) (Restricted Share Units, USD $) In Millions, except Per Share data, unless otherwise specified	6 Months Ended
	Dec. 31, 2014
Restricted Share Units
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Nonvested at Beginning of Period	3.0
Granted	1.0
Vested	(1.0)
Canceled and forfeited	0
Nonvested at End of Period	3.0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted-Average Grant Date Fair Value [Roll Forward]
Weighted-Average Grant Date Fair Value Per Share, Nonvested at Beginning of Period	$ 45.65
Weighted-Average Grant Date Fair Value Per Share, Granted	$ 71.89
Weighted-Average Grant Date Fair Value Per Share, Vested	$ 44.41
Weighted-Average Grant Date Fair Value Per Share, Canceled and forfeited	$ 0.00
Weighted-Average Grant Date Fair Value Per Share, Nonvested at End of Period	$ 56.83

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Restructuring and Employee Severance (Liabilities Associated with Restructuring and Employee Severance Activities) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Dec. 31, 2014
Employee-Related Costs
Restructuring Reserve
Beginning Balance	$ 24
Additions to restructuring reserve	18
Payments and other adjustments	(18)
Ending Balance	24
Facility Exit and Other Costs
Restructuring Reserve
Beginning Balance	0
Additions to restructuring reserve	1
Payments and other adjustments	0
Ending Balance	1
Total
Restructuring Reserve
Beginning Balance	24
Additions to restructuring reserve	19
Payments and other adjustments	(18)
Ending Balance	$ 25

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Restructuring and Employee Severance (Tables)

6 Months Ended

Dec. 31, 2014

Restructuring Charges [Abstract]

Summary of restructuring and employee severance relating to restructuring activity

The following tables summarize restructuring and employee severance costs related to our restructuring activities:

	Three Months Ended December 31
(in millions)	2014		2013
Employee-related costs (1)	$	5	$	4
Facility exit and other costs (2)	2		6
Total restructuring and employee severance	$	7	$	10

	Six Months Ended December 31
(in millions)	2014		2013
Employee-related costs (1)	$	21	$	8
Facility exit and other costs (2)	5		12
Total restructuring and employee severance	$	26	$	20

(1) Employee-related costs primarily consist of termination benefits provided to employees who have been involuntarily terminated and duplicate payroll costs during transition periods.

(2) Facility exit and other costs primarily consist of lease termination costs, accelerated depreciation, equipment relocation costs, project consulting fees and costs associated with restructuring our delivery of information technology infrastructure services.

Schedule of activity related to liabilities associated with restructuring and employee severance

The following table summarizes activity related to liabilities associated with restructuring and employee severance:

(in millions)	Employee- Related Costs			Facility Exit and Other Costs		Total
Balance at June 30, 2014	$	24		$	—	$	24
Additions	18			1		19
Payments and other adjustments	(18		)	—		(18		)
Balance at December 31, 2014	$	24		$	1	$	25

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Goodwill and Other Intangible Assets (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Goodwill and Intangible Assets
Amortization of Intangible Assets	$ 47	$ 46	$ 92	$ 92
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months	94		94
Finite-Lived Intangible Assets, Amortization Expense, Year Two	176		176
Finite-Lived Intangible Assets, Amortization Expense, Year Three	167		167
Finite-Lived Intangible Assets, Amortization Expense, Year Four	124		124
Finite-Lived Intangible Assets, Amortization Expense, Year Five	$ 76		$ 76
Minimum
Goodwill and Intangible Assets
Finite-Lived Intangible Asset, Useful Life	1 year
Maximum
Goodwill and Intangible Assets
Finite-Lived Intangible Asset, Useful Life	20 years

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Available-for-Sale Securities (Tables)

6 Months Ended

Dec. 31, 2014

Investments, Debt and Equity Securities [Abstract]

Available-for-sale Securities

We held the following investments in marketable securities at fair value at:

(in millions)	December 31, 2014		June 30, 2014
Current available-for-sale securities:
Commercial paper	$	14	$	4
Treasury bills	—		85
International bonds	1		1
Corporate bonds	5		3
U.S. agency bonds	25		—
U.S. agency mortgage-backed securities	6		—
Total current available-for-sale securities	51		93
Long-term available-for-sale securities:
Corporate bonds	9		5
U.S. agency bonds	7		2
U.S. agency mortgage-backed securities	21		—
Total long-term available-for-sale securities	37		7
Total available-for-sale securities	$	88	$	100

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Acquisitions

6 Months Ended

Dec. 31, 2014

Business Combinations [Abstract]

Acquisitions

Acquisitions

While we have completed acquisitions during the six months ended December 31, 2014, the pro forma results of operations and the results of operations for acquired businesses since the acquisition dates have not been separately disclosed because the effects were not significant compared to the consolidated financial statements, individually or in the aggregate.

AccessClosure

On May 9, 2014, we completed the acquisition of Access Closure, Inc. ("AccessClosure") for $320 million in an all-cash transaction. We funded the acquisition with cash on hand. The acquisition of AccessClosure, a manufacturer and distributor of extravascular closure devices, expands the Medical segment's portfolio of self-manufactured products. The assessment of fair value for AccessClosure is preliminary and is based on information that was available at the time the condensed consolidated financial statements were prepared.

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Condensed Consolidated Statements of Comprehensive Income (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Net earnings	$ 289	$ 278	$ 555	$ 617
Other comprehensive income/(loss):
Net change in foreign currency translation adjustments	(40)	4	(64)	28
Net unrealized gain/(loss) on derivative instruments, net of tax	(9)	3	(9)	3
Total other comprehensive income/(loss), net of tax	(49)	7	(73)	31
Total comprehensive income	$ 240	$ 285	$ 482	$ 648

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Shareholders' Equity

6 Months Ended

Dec. 31, 2014

Equity [Abstract]

Shareholders' Equity

Shareholders' Equity

Share Repurchases

During the six months ended December 31, 2014, we repurchased 9.1 million common shares having an aggregate cost of $684 million. The average price paid per common share was $75.00.

During the six months ended December 31, 2013, we repurchased 1.0 million common shares having an aggregate cost of $50 million. The average price paid per common share was $51.65.

We funded the repurchases with available cash. The common shares repurchased are held in treasury to be used for general corporate purposes.

Accumulated Other Comprehensive Income

The following table summarizes the changes in the balance of accumulated other comprehensive income by component and in total:

(in millions)	Foreign Currency Translation Adjustments			Unrealized Gain/(Loss) on Derivatives, net of tax			Accumulated Other Comprehensive Income/(Loss)
Balance at June 30, 2014	$	63		$	7		$	70
Other comprehensive loss, net of tax before reclassifications	(64		)	(9		)	(73		)
Amounts reclassified to earnings	—			—			—
Total other comprehensive loss, net of tax of $5 million	(64		)	(9		)	(73		)
Balance at December 31, 2014	$	(1	)	$	(2	)	$	(3	)

Activity related to realized and unrealized gains and losses on available-for-sale securities as described in Note 5, was immaterial during the three and six months ended December 31, 2014.

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Document and Entity Information	6 Months Ended
	Dec. 31, 2014	Jan. 27, 2015
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Dec. 31, 2014
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2
Trading Symbol	cah
Entity Registrant Name	CARDINAL HEALTH INC
Entity Central Index Key	0000721371
Current Fiscal Year End Date	--06-30
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		330,130,751

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Earnings Per Share

6 Months Ended

Dec. 31, 2014

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

The following tables reconcile the number of common shares used to compute basic and diluted earnings per share:

	Three Months Ended December 31
(in millions)	2014	2013
Weighted-average common shares–basic	331	342
Effect of dilutive securities:
Employee stock options, restricted share units and performance share units	3	4
Weighted-average common shares–diluted	334	346

	Six Months Ended December 31
(in millions)	2014	2013
Weighted-average common shares–basic	333	341
Effect of dilutive securities:
Employee stock options, restricted share units and performance share units	4	4
Weighted-average common shares–diluted	337	345

The potentially dilutive employee stock options, restricted share units and performance share units that were antidilutive were 1 million and zero for the three months ended December 31, 2014 and 2013, respectively, and 1 million and 2 million for the six months ended December 31, 2014 and 2013, respectively.

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Condensed Consolidated Balance Sheets (USD $) In Millions, unless otherwise specified	Dec. 31, 2014	Jun. 30, 2014
Current assets:
Cash and equivalents	$ 2,881	$ 2,865
Trade receivables, net	5,653	5,380
Inventories, net	9,408	8,266
Prepaid expenses and other	1,213	1,428
Total current assets	19,155	17,939
Property and equipment, net	1,415	1,459
Goodwill and other intangibles, net	5,876	5,870
Other assets	802	765
Total assets	27,248	26,033
Current liabilities:
Accounts payable	13,602	12,149
Current portion of long-term obligations and other short-term borrowings	270	801
Other accrued liabilities	2,158	2,165
Total current liabilities	16,030	15,115
Long-term obligations, less current portion	3,706	3,171
Deferred income taxes and other liabilities	1,412	1,346
Preferred shares, without par value:
Authorized-500 thousand shares, Issued-none	0	0
Common shares, without par value:
Authorized-755 million shares, Issued-364 million shares at December 31, 2014 and June 30, 2014	2,973	2,980
Retained earnings	5,100	4,774
Common shares in treasury, at cost: 34 million shares and 27 million shares at December 31, 2014 and June 30, 2014, respectively	(1,970)	(1,423)
Accumulated other comprehensive income/(loss)	(3)	70
Total shareholders' equity	6,100	6,401
Total liabilities and shareholders' equity	$ 27,248	$ 26,033

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Long-Term Obligations and Other Short-Term Borrowings

6 Months Ended

Dec. 31, 2014

Debt Disclosure [Abstract]

Debt Disclosure

Long-Term Obligations and Other Short-Term Borrowings

Long-Term Debt

In a registered debt offering in November 2014, we sold $450 million aggregate principal amount of 2.4% Notes that mature on November 15, 2019, $400 million aggregate principal amount of 3.5% Notes that mature on November 15, 2024 and $350 million aggregate principal amount of 4.5% Notes that mature on November 15, 2044 (collectively, the "Notes"). The Notes are unsecured obligations and rank equally in right of payment with all of our existing and future unsecured and unsubordinated indebtedness.

The Notes require us to offer to purchase the Notes at 101% of the principal amount plus accrued and unpaid interest if we undergo a change of control, as defined in the Notes, and if the Notes receive specified ratings below investment grade by each of Standard & Poor's Ratings Services, Moody's Investors Service, Inc. and Fitch Ratings.

In December 2014, we used the net proceeds from the offering, together with cash on hand, to redeem all of the outstanding 4.0% Notes due 2015, 5.8% Notes due 2016, 5.85% Notes due 2017 and 6.0% Notes due 2017 at a redemption price equal to 100% of the principal amount and any accrued but unpaid interest, plus the make-whole premium applicable to each series of notes. As a result of the redemption, we incurred a loss on the extinguishment of debt of $60 million ($37 million, net of tax), which included a make-whole premium of $80 million, write-off of $2 million of unamortized debt issuance costs and an offsetting $22 million fair value adjustment to the respective debt related to previously terminated interest rate swaps.

The following table summarizes long-term obligations and other short-term borrowings:

(in millions)	December 31, 2014		June 30, 2014
1.7% Notes due 2018	$	401	$	401
1.9% Notes due 2017	250		251
2.4% Notes due 2019	449		—
3.2% Notes due 2022	249		248
3.2% Notes due 2023	549		549
3.5% Notes due 2024	398		—
4.0% Notes due 2015	—		513
4.5% Notes due 2044	345		—
4.6% Notes due 2043	349		349
4.625% Notes due 2020	525		525
5.8% Notes due 2016	—		301
5.85% Notes due 2017	—		158
6.0% Notes due 2017	—		197
7.0% Debentures due 2026	124		124
7.8% Debentures due 2016	37		37
Other obligations	300		319
Total	$	3,976	$	3,972
Less: current portion of long-term obligations and other short-term borrowings	270		801
Long-term obligations, less current portion	$	3,706	$	3,171

Maturities of long-term obligations and other short-term borrowings for the remainder of fiscal 2015 through 2019 and thereafter are as follows: $270 million, $22 million, $289 million, $402 million, $1 million, and $2,992 million.

Other Financing Arrangements

On November 3, 2014, we renewed our committed receivables sales facility program through Cardinal Health Funding, LLC ("CHF") until November 3, 2017 and increased the size of the facility from $700 million to $950 million. CHF was organized for the sole purpose of buying receivables and selling undivided interests in those receivables to third-party purchasers. Although consolidated in accordance with GAAP, CHF is a separate legal entity from Cardinal Health and from our subsidiary that sells receivables to CHF. CHF is designed to be a special purpose, bankruptcy-remote entity whose assets are available solely to satisfy the claims of its creditors. We had no outstanding balance under the committed receivable sales facility program at December 31, 2014 and June 30, 2014, except for standby letters of credit of $41 million at both December 31, 2014 and June 30, 2014.

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Available-for-Sale Securities

6 Months Ended

Dec. 31, 2014

Investments, Debt and Equity Securities [Abstract]

Available-for-Sale Securities Disclosure

Available-for-Sale Securities

We invest in marketable securities, which are classified as available-for-sale and are carried at fair value in the condensed consolidated balance sheets. We held the following investments in marketable securities at fair value at:

(in millions)	December 31, 2014		June 30, 2014
Current available-for-sale securities:
Commercial paper	$	14	$	4
Treasury bills	—		85
International bonds	1		1
Corporate bonds	5		3
U.S. agency bonds	25		—
U.S. agency mortgage-backed securities	6		—
Total current available-for-sale securities	51		93
Long-term available-for-sale securities:
Corporate bonds	9		5
U.S. agency bonds	7		2
U.S. agency mortgage-backed securities	21		—
Total long-term available-for-sale securities	37		7
Total available-for-sale securities	$	88	$	100

Gross unrealized gains and losses were immaterial at December 31, 2014. During the three and six months ended December 31, 2014, gross realized gains and losses were immaterial and we did not recognize any other-than-temporary impairments. At December 31, 2014, the weighted-average effective maturity of our current and long-term investments was approximately 9 months and 16 months, respectively.

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Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Dec. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill by Reportable Segment

The following table summarizes the changes in the carrying amount of goodwill, by segment and in total:

(in millions)	Pharmaceutical		Medical			Total
Balance at June 30, 2014	$	2,158	$	2,720		$	4,878
Goodwill acquired, net of purchase price adjustments	21		50			71
Foreign currency translation adjustments and other	—		(20		)	(20		)
Balance at December 31, 2014	$	2,179	$	2,750		$	4,929

Schedule of Intangible Assets

The following tables summarize other intangible assets by class at:

	December 31, 2014
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible
Indefinite-life intangibles:
Trademarks and other	$	14	$	—	$	14
Total indefinite-life intangibles	14		—		14
Definite-life intangibles:
Customer relationships	1,041		434		607
Trademarks, trade names and patents	225		79		146
Developed technology and other	295		115		180
Total definite-life intangibles	1,561		628		933
Total other intangible assets	$	1,575	$	628	$	947

	June 30, 2014
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible
Indefinite-life intangibles:
Trademarks and other	$	14	$	—	$	14
Total indefinite-life intangibles	14		—		14
Definite-life intangibles:
Customer relationships	1,043		388		655
Trademarks, trade names and patents	213		69		144
Developed technology and other	258		79		179
Total definite-life intangibles	1,514		536		978
Total other intangible assets	$	1,528	$	536	$	992

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Segment Information

6 Months Ended

Dec. 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 for purposes of allocating resources and assessing performance combined with the nature of the individual business activities.

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

	Three Months Ended December 31
(in millions)	2014			2013
Pharmaceutical	$	22,627		$	19,443
Medical	2,914			2,799
Total segment revenue	25,541			22,242
Corporate (1)	(4		)	(2		)
Total revenue	$	25,537		$	22,240

	Six Months Ended December 31
(in millions)	2014		2013
Pharmaceutical (2)	$	43,836	$	41,256
Medical	5,766		5,511
Total segment revenue	49,602		46,767
Corporate (1)	5		(4		)
Total revenue	$	49,607	$	46,763

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

(2) Our pharmaceutical distribution contract with Walgreen Co. expired on August 31, 2013.

We evaluate segment performance based upon segment profit, among other measures. Segment profit is segment revenue, less segment cost of products sold, less segment SG&A expenses. Segment SG&A expenses include share-based compensation expense as well as allocated corporate expenses for shared functions, including corporate management, corporate finance, financial and customer care shared services, human resources, information technology and legal. Corporate expenses are allocated to the segments based upon headcount, level of benefit provided and other ratable allocation methodologies.

We do not allocate the following items to our segments: restructuring and employee severance; amortization and other acquisition-related costs; impairments and (gain)/loss on disposal of assets; litigation (recoveries)/charges; other income, net; interest expense, net; loss on extinguishment of debt; and, provision for income taxes. In addition, certain investment and other spending are not allocated to the segments. Investment spending generally includes the first-year spend for certain projects that require incremental investments in the form of additional operating expenses. We encourage our segments and corporate functions to identify investment projects that will promote innovation and provide future returns. As approval decisions for such projects are dependent upon executive management, the expenses for such projects are often retained at Corporate. Investment spending within Corporate was $4 million and $6 million for the three months ended December 31, 2014 and 2013, respectively, and $6 million and $10 million for the six months ended December 31, 2014 and 2013, respectively.

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

	Three Months Ended December 31
(in millions)	2014			2013
Pharmaceutical	$	542		$	482
Medical	115			131
Total segment profit	657			613
Corporate	(111		)	(94		)
Total operating earnings	$	546		$	519

	Six Months Ended December 31
(in millions)	2014			2013
Pharmaceutical	$	992		$	916
Medical	229			238
Total segment profit	1,221			1,154
Corporate	(209		)	(164		)
Total operating earnings	$	1,012		$	990

^[1]

[1] Facility exit and other costs primarily consist of lease termination costs, accelerated depreciation, equipment relocation costs, project consulting fees and costs associated with restructuring our delivery of information technology infrastructure services.

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Fair Value Measurements

6 Months Ended

Dec. 31, 2014

Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract]

Fair Value Measurements

Fair Value Measurements

The following tables present the fair values for assets measured on a recurring basis at:

	December 31, 2014
(in millions)	Level 1		Level 2		Level 3		Total
Cash equivalents (1)	$	212	$	—	$	—	$	212
Forward contracts (2)	—		—		—		—
Available-for-sale securities (3)	—		88		—		88
Other investments (4)	112		—		—		112
Total	$	324	$	88	$	—	$	412

	June 30, 2014
(in millions)	Level 1		Level 2		Level 3		Total
Cash equivalents (1)	$	740	$	—	$	—	$	740
Forward contracts (2)	—		10		—		10
Available-for-sale securities (3)	—		100		—		100
Other investments (4)	106		—		—		106
Total	$	846	$	110	$	—	$	956

(1) Cash equivalents are comprised of highly liquid investments purchased with a maturity of three months or less. The carrying value of these cash equivalents approximates fair value due to their short-term maturities.

(2) The fair value of interest rate swaps, foreign currency contracts and commodity contracts is determined based on the present value of expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Observable Level 2 inputs are used to determine the present value of expected future cash flows. The fair value of these derivative contracts, which are subject to master netting arrangements under certain circumstances, is presented on a gross basis in the condensed consolidated balance sheets.

(3) We invest in marketable securities, which are classified as available-for-sale and are carried at fair value in the condensed consolidated balance sheets. Observable Level 2 inputs such as quoted prices for similar securities, interest rate spreads, yield curves and credit risk are used to determine the fair value. See Note 5 for additional information regarding available-for-sale securities.

(4) The other investments balance includes investments in mutual funds, which are used to offset fluctuations in deferred compensation liabilities. These mutual funds primarily invest in the equity securities of companies with large market capitalization and high quality fixed income debt securities. The fair value of these investments is determined using quoted market prices.

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Share-Based Compensation (Schedule of all Transactions Related to Performance Share Units Under the Plans) (Details) (Performance Share Units, USD $) In Millions, except Per Share data, unless otherwise specified	6 Months Ended
	Dec. 31, 2014
Performance Share Units
Share-based Compensation Arrangement by Share-based Payment Award
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage	120.00%
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Nonvested at Beginning of Period	0.9
Granted	0.2
Vested	(0.2)	[1]
Canceled and forfeited	0
Nonvested at End of Period	0.9
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted-Average Grant Date Fair Value [Roll Forward]
Weighted-Average Grant Date Fair Value Per Share, Nonvested at Beginning of Period	$ 44.41
Weighted-Average Grant Date Fair Value Per Share, Granted	$ 66.78
Weighted-Average Grant Date Fair Value Per Share, Vested	$ 41.59
Weighted-Average Grant Date Fair Value Per Share, Canceled and forfeited	$ 0.00
Weighted-Average Grant Date Fair Value Per Share, Nonvested at End of Period	$ 50.61

[1] Vested based on achievement of 120 percent of the target performance goal.

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Income Taxes

6 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Fluctuations in our provision for income taxes as a percentage of pretax earnings (“effective tax rate”) are due to changes in international and U.S. state effective tax rates resulting from our business mix and discrete items.

During the three months ended December 31, 2014, the effective tax rate of 36.0 percent was unfavorably impacted by 3.0 percentage points ($13 million) due to nondeductibility of litigation charges and favorably impacted by 3.1 percentage points ($14 million) related to a previously unrecognized tax benefit for a loss carryback from fiscal 2007.

During the six months ended December 31, 2014, the effective tax rate of 37.4 percent was unfavorably impacted by 1.4 percentage points ($12 million) due to the remeasurement of unrecognized tax benefits and 2.7 percentage points ($24 million) due to nondeductibility of litigation charges, partially offset by 1.6 percentage points ($14 million) due to adjusting deferred tax assets and related valuation allowances for the impact of Puerto Rico tax law changes enacted during the period and 1.6 percentage points ($14 million) related to a previously unrecognized tax benefit for a loss carryback from fiscal 2007.

During the three months ended December 31, 2013, the effective tax rate of 44.1 percent was impacted by net unfavorable discrete items of $38 million, which increased the rate by 7.7 percentage points. The discrete items include the unfavorable impact of remeasurement of unrecognized tax benefits ($56 million) as a result of proposed assessments of additional tax.

During the six months ended December 31, 2013, the effective tax rate of 34.2 percent was impacted by net favorable discrete items of $23 million, which reduced the rate by 2.4 percentage points. The discrete items include the favorable impact of the settlement of federal and state tax controversies ($67 million) and the unfavorable impact of remeasurement of unrecognized tax benefits ($56 million).

We had $525 million and $510 million of unrecognized tax benefits at December 31, 2014 and June 30, 2014, respectively. The December 31, 2014 and June 30, 2014 balances include $333 million and $322 million, respectively, of unrecognized tax benefits that, if recognized, would have an impact on the effective tax rate. The remaining unrecognized tax benefits relate to tax positions for which ultimate deductibility is highly certain but for which there is uncertainty as to the timing of such deductibility. Recognition of these tax benefits would not affect our effective tax rate. We include the full amount of unrecognized tax benefits in deferred income taxes and other liabilities in the condensed consolidated balance sheets.

We recognize accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes. At December 31, 2014 and June 30, 2014, we had $155 million and $143 million, respectively, accrued for the payment of interest and penalties. These balances are gross amounts before any tax benefits and are included in deferred income taxes and other liabilities in the condensed consolidated balance sheets.

It is reasonably possible that there could be a change in the amount of unrecognized tax benefits within the next 12 months due to activities of the U.S. Internal Revenue Service ("IRS") or other taxing authorities, including proposed assessments of additional tax, possible settlement of audit issues, reassessment of existing unrecognized tax benefits or the expiration of applicable statutes of limitations. We estimate that the range of the possible change in unrecognized tax benefits within the next 12 months is a net decrease of approximately zero to $180 million, exclusive of penalties and interest.

We file income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and various foreign jurisdictions. We are subject to audit by the IRS for fiscal years 2006 through thecurrent fiscal year. We are generally subject to audit by taxing authorities in various U.S. state and foreign jurisdictions for fiscal years 2003 through the current fiscal year.

The IRS is currently conducting audits of fiscal years 2006 through 2010, and our transfer pricing arrangements continue to be under consideration as part of these audits. While the IRS has made and could make proposed adjustments to our transfer pricing arrangements or other matters, we are defending our reported tax positions, and have accounted for the unrecognized tax benefits associated with our tax positions.

We are a party to a tax matters agreement with CareFusion Corporation ("CareFusion"), under which CareFusion is obligated to indemnify us for certain tax exposures and transaction taxes prior to our fiscal 2010 spin-off of CareFusion. The indemnification receivable was $214 million and $210 million at December 31, 2014 and June 30, 2014, respectively, and is included in other assets in the condensed consolidated balance sheets.

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Commitments, Contingent Liabilities and Litigation

6 Months Ended

Dec. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments, contingent liabilities and litigation

Commitments, Contingent Liabilities and Litigation

Commitments

Generic Sourcing Venture With CVS Health Corporation

In July 2014, we established Red Oak Sourcing, LLC ("Red Oak Sourcing"), a U.S.-based generic pharmaceutical sourcing entity with CVS Health Corporation (“CVS”) with an initial term of 10 years. Both companies have contributed sourcing and supply chain expertise to the 50/50 generic sourcing venture and have committed to source generic pharmaceuticals through arrangements negotiated by it. Red Oak Sourcing negotiates generic pharmaceutical supply contracts on behalf of both companies, but does not own products or hold inventory on behalf of either company. We are required to pay 39 quarterly payments of $25.6 million to CVS which commenced in October 2014. In addition, only if certain milestones are achieved, we are required to pay additional predetermined amounts to CVS beginning in fiscal 2016. Beginning in the three months ended December 31, 2014, the $25.6 million payment is being expensed quarterly over the remaining term of the sourcing venture.

Legal Proceedings

We become involved from time to time in disputes, litigation and regulatory matters incidental to our business.

We may be named from time to time in qui tam actions, which are initiated by private third parties purporting to act on behalf of federal or state governments, that allege that false claims have been submitted or have been caused to be submitted for payment by the government. After a private party has filed a qui tam action, the government must investigate the private party's claim and determine whether to intervene in and take control over the litigation. These actions may remain under seal while the government makes this determination. If the government declines to intervene, the private party may nonetheless continue to pursue the litigation on his or her own on behalf of the government.

From time to time, we receive subpoenas or requests for information from various government agencies relating to our business or to the business of a customer, supplier or other industry participant. The responses to these subpoenas and requests for information sometimes require considerable time and effort, and can result in us incurring considerable costs. Such subpoenas and requests also can lead to the assertion of claims or the commencement of legal proceedings against us, which can result in substantial settlements.

In addition, we occasionally may suspect that products we manufacture, market or distribute do not meet product specifications, published standards or regulatory requirements. In such circumstances, we investigate and take appropriate corrective action. Such actions can lead to product recalls, costs to repair or replace affected products, temporary interruptions in product sales and action by regulators.

We accrue for contingencies related to disputes, litigation and regulatory matters if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Because these matters are inherently unpredictable and unfavorable developments or resolutions can occur, assessing contingencies is highly subjective and requires judgments about futureevents. We regularly review contingencies to determine whether our accruals and related disclosures are adequate. While we have accrued for certain matters as described below at our best estimate of the amount of possible loss, the amount of ultimate loss may differ from these estimates.

With respect to the matters described below, we are unable to estimate a range of reasonably possible loss for matters for which there is no accrual, since damages or fines have not been specified or the proceedings are at stages where significant uncertainty exists as to legal or factual issues and as to whether such matters will proceed to trial. We do not believe, based on currently available information, that the outcomes of these matters will have a material adverse effect on our financial position, results of operations or cash flows, though the outcome of one or more of these matters could be material to our results of operations for a particular period.

We recognize income from the favorable outcome of litigation when we receive the associated cash or assets.

We recognize estimated loss contingencies for litigation and regulatory matters and income from favorable resolution of litigation in litigation (recoveries)/charges, net in our condensed consolidated statements of earnings.

DEA Investigation and Related Matters

In February 2012, the U.S. Drug Enforcement Administration (the "DEA") issued an order to show cause and immediate suspension of our Lakeland, Florida distribution center's registration to distribute controlled substances, asserting that we failed to maintain required controls against the diversion of controlled substances. In May 2012, we entered into a settlement agreement with the DEA that resolved the administrative aspects of the DEA's action but did not resolve potential liability for civil fines in Florida or elsewhere for the conduct covered by the settlement agreement. In that regard, we are continuing to engage in discussions with several offices of the U.S. Department of Justice (the "DOJ"), including discussions regarding a possible settlement. We incurred litigation charges of $7 million and $34 million for this matter during the three and six months ended December 31, 2014, respectively. Our total accrual for this matter at December 31, 2014 is $34 million and is included in other accrued liabilities in the condensed consolidated balance sheet.

State of West Virginia vs. Cardinal Health, Inc.

In June 2012, the West Virginia Attorney General filed complaints, which have been amended, against 13 pharmaceutical wholesale distributors, including us, in the Circuit Court of Boone County, West Virginia alleging, among other things, that the distributors failed to maintain effective controls to guard against diversion of controlled substances in West Virginia, failed to report suspicious orders of controlled substances in accordance with the West Virginia Uniform Controlled Substances Act and were negligent in distributing controlled substances to pharmacies that serve individuals who abuse controlled substances. In addition to injunctive and other equitable relief, the complaints seek monetary damages and the creation of a court-supervised fund, to be financed by the defendants in these actions, for a medical monitoring program focused on prescription drug abuse. We are vigorously defending ourselves in this matter.

FTC Investigation

The Federal Trade Commission (“FTC”) has been investigating supplier arrangements involving our Nuclear Pharmacy Services division primarily focused on the period between 2003 and 2008. We have been providing information to and cooperating with the FTC on this matter. Additionally, we have begun discussions with the FTC staff regarding a possible settlement of this matter, which would include, among other things, a payment to the government. We incurred a litigation charge of $27 million for this matter during the three months ended December 31, 2014, which represents the amount we believe we will pay if we are able to settle this matter and is included in other accrued liabilities in the condensed consolidated balance sheet.

Qui Tam Action

Our Cardinal Health at Home division was named as a defendant in an amended qui tam complaint that was filed in November 2014 in the U.S. District Court for the District of Massachusetts against several manufacturers and distributors of ostomy and continence care products. The complaint seeks damages and penalties on behalf of the United States for alleged violations of the federal healthcare fraud and abuse laws, Medicare regulations and the federal False Claims Act in connection with the marketing and sale of these products. The DOJ has not yet determined whether to intervene in this qui tam action and is currently conducting an investigation of this matter. We are providing information to the DOJ in connection with its investigation.

Antitrust Litigation Proceeds

We recognized income resulting from settlements of class action antitrust claims in which we were a class member of $16 million during both the three and six months ended December 31, 2013.

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Financial Instruments

6 Months Ended

Dec. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Financial Instruments

Financial Instruments

We utilize derivative financial instruments to manage exposure to certain risks related to our ongoing operations. The primary risks managed through the use of derivative instruments include interest rate risk, currency exchange risk and commodity price risk. We do not use derivative instruments for trading or speculative purposes. While the majority of our derivative instruments are designated as hedging instruments, we also enter into derivative instruments that are designed to hedge a risk, but are not designated as hedging instruments. These derivative instruments are adjusted to current fair value through earnings at the end of each period. Our derivative and hedging programs are consistent with those described in the 2014 Form 10-K.

During the three months ended September 30, 2014, we entered into forward interest rate swaps with a total notional amount of $50 million to hedge probable, but not firmly committed, future transactions associated with our debt.

During the three months ended December 31, 2014, we entered into pay-floating interest rate swaps with total notional amounts of $450 million in connection with the debt issuance described in Note 6. These swaps have been designated fair value hedges of our fixed rate date and are included in other assets in the condensed consolidated balance sheet.

In December 2014, we terminated notional amounts of $875 million of pay-floating interest rate swaps in connection with the debt redemption described in Note 6. These swaps were previously designated as fair value hedges.

During the six months ended December 31, 2013, we entered into pay-floating interest rate swaps with total notional amounts of $300 million. These swaps have been designated as fair value hedges of our fixed rate debt and are included in other assets in the condensed consolidated balance sheets.

Fair Value of Financial Instruments

The carrying amounts of cash and equivalents, trade receivables, net, accounts payable and other accrued liabilities at December 31, 2014 and June 30, 2014 approximate fair value due to their short-term maturities.

The following table summarizes the estimated fair value of our long-term obligations and other short-term borrowings compared to the respective carrying amounts at:

(in millions)	December 31, 2014		June 30, 2014
Estimated fair value	$	4,089	$	4,115
Carrying amount	3,976		3,972

The estimated fair value of our long-term obligations and other short-term borrowings is estimated based on either the quoted market prices for the same or similar issues or other inputs derived from available market information, which represents a Level 2 measurement.

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Restructuring and Employee Severance (Activity Related to Restructuring and Employee Severance Costs) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended				6 Months Ended
	Dec. 31, 2014		Dec. 31, 2013		Dec. 31, 2014		Dec. 31, 2013
Restructuring Cost and Reserve [Line Items]
Gain (Loss) on Sale of Assets and Asset Impairment Charges	$ 18		$ (9)		$ 18		$ (9)
Employee-related costs	5	[1]	4	[1]	21	[1]	8	[1]
Facility exit and other costs	2	[2]	6	[2]	5	[2]	12	[2]
Total restructuring and employee severance	$ 7		$ 10		$ 26		$ 20

[1] Employee-related costs primarily consist of termination benefits provided to employees who have been involuntarily terminated and duplicate payroll costs during transition periods.

[2] Facility exit and other costs primarily consist of lease termination costs, accelerated depreciation, equipment relocation costs, project consulting fees and costs associated with restructuring our delivery of information technology infrastructure services.

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Earnings Per Share (Reconciliation of Common Shares Used to Compute Basic and Diluted EPS) (Details) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Earnings Per Share [Abstract]
Weighted-average common shares-basic	331	342	333	341
Effect of dilutive securities:
Employee stock options, restricted share units and performance share units	3	4	4	4
Weighted-average common shares-diluted	334	346	337	345

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Basis of Presentation and Summary of Significant Accounting Policies (Policies)

6 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Basis of Presentation, Policy

Basis of Presentation

Our condensed consolidated financial statements include the accounts of all majority-owned or controlled subsidiaries, and all significant intercompany transactions and amounts have been eliminated. To conform to the current year presentation, certain prior year amounts have been reclassified. References to "we," "our" and similar pronouns in this Quarterly Report on Form 10-Q for the quarter ended December 31, 2014 (this "Form 10-Q") refer to Cardinal Health, Inc. and its majority-owned or controlled subsidiaries unless the context requires otherwise. The results of businesses acquired or disposed of are included in the condensed consolidated financial statements from the effective date of the acquisition or up to the date of disposal, respectively.

Our condensed consolidated financial statements have been prepared in accordance with the U.S. Securities and Exchange Commission ("SEC") instructions to Quarterly Reports on Form 10-Q and include all of the information and disclosures required by accounting principles generally accepted in the United States ("GAAP") for interim financial reporting. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect amounts reported in the condensed consolidated financial statements and accompanying notes. Actual amounts may differ from these estimated amounts. In addition, operating results presented for this fiscal 2015 interim period are not necessarily indicative of the results that may be expected for the full fiscal year ending June 30, 2015.

These condensed consolidated financial statements are unaudited and are presented pursuant to the rules and regulations of the SEC. Accordingly, the condensed consolidated financial statements included in this Form 10-Q should be read in conjunction with the audited consolidated financial statements and related notes contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2014 (the "2014 Form 10-K"). In our opinion, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included. Except as disclosed elsewhere in this Form 10-Q, all such adjustments are of a normal and recurring nature.

Recent Financial Accounting Standards, Policy

Recent Financial Accounting Standards

In August 2014, the Financial Accounting Standards Board ("FASB") issued amended accounting guidance related to uncertainties about an entity’s ability to continue as a going concern. This guidance requires management to evaluate whether there is substantial doubt about a company’s ability to continue as a going concern. This amendment will be effective for us in the fourth quarter of fiscal 2017, with early adoption permitted. We do not expect the adoption of this guidance to impact our financial statement disclosures.

In May 2014, the FASB issued amended accounting guidance related to revenue recognition. This guidance is based on the principle that revenue is recognized in an amount that reflects the consideration to which an entity expects to be entitled in exchange for the transfer of goods or services to customers. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. This amendment will be effective for us in the first quarter of fiscal 2018. We are continuing to evaluate the options for adoption and the impact on our financial position and results of operations.

In July 2013, the FASB issued amended accounting guidance related to the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. This guidance requires an entity to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, unless certain conditions exists. We adopted this guidance in the first quarter of fiscal 2015. The adoption of this guidance did not impact our financial position or results of operations.

In March 2013, the FASB issued amended accounting guidance related to a parent company's accounting for the cumulative translation adjustment upon derecognition of certain subsidiaries or group of assets within a foreign entity or of an investment in a foreign entity. The amended guidance requires the release of any cumulative translation adjustment into net income only upon complete or substantially complete liquidation of a controlling interest in a subsidiary or a group of assets within a foreign entity. Also, it requires the release of all or a pro rata portion of the cumulative translation adjustment to net income in the case of sale of an equity method investment that is a foreign entity. We adopted this amended guidance in the first quarter of fiscal 2015. The adoption of this guidance did not impact our financial position or results of operations.

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Fair Value Measurements (Tables)

6 Months Ended

Dec. 31, 2014

Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract]

Fair Value, Assets and Liabilities Measured on Recurring Basis

The following tables present the fair values for assets measured on a recurring basis at:

	December 31, 2014
(in millions)	Level 1		Level 2		Level 3		Total
Cash equivalents (1)	$	212	$	—	$	—	$	212
Forward contracts (2)	—		—		—		—
Available-for-sale securities (3)	—		88		—		88
Other investments (4)	112		—		—		112
Total	$	324	$	88	$	—	$	412

	June 30, 2014
(in millions)	Level 1		Level 2		Level 3		Total
Cash equivalents (1)	$	740	$	—	$	—	$	740
Forward contracts (2)	—		10		—		10
Available-for-sale securities (3)	—		100		—		100
Other investments (4)	106		—		—		106
Total	$	846	$	110	$	—	$	956

(1) Cash equivalents are comprised of highly liquid investments purchased with a maturity of three months or less. The carrying value of these cash equivalents approximates fair value due to their short-term maturities.

(2) The fair value of interest rate swaps, foreign currency contracts and commodity contracts is determined based on the present value of expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Observable Level 2 inputs are used to determine the present value of expected future cash flows. The fair value of these derivative contracts, which are subject to master netting arrangements under certain circumstances, is presented on a gross basis in the condensed consolidated balance sheets.

(3) We invest in marketable securities, which are classified as available-for-sale and are carried at fair value in the condensed consolidated balance sheets. Observable Level 2 inputs such as quoted prices for similar securities, interest rate spreads, yield curves and credit risk are used to determine the fair value. See Note 5 for additional information regarding available-for-sale securities.

(4) The other investments balance includes investments in mutual funds, which are used to offset fluctuations in deferred compensation liabilities. These mutual funds primarily invest in the equity securities of companies with large market capitalization and high quality fixed income debt securities. The fair value of these investments is determined using quoted market prices.

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Shareholders' Equity (Schedule of the changes in the balance in accumulated other comprehensive income by component and in total) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Rollforward]
Accumulated other comprehensive income/(loss) at Beginning of Period			$ 70
Other comprehensive loss, net of tax before reclassifications			(73)
Amounts reclassified to earnings			0
Other comprehensive loss, Foreign currency transaction and translation adjustment, Net of tax	(40)	4	(64)	28
Other comprehensive loss, Derivatives qualifying as hedges, Net of tax	(9)	3	(9)	3
Total other comprehensive loss, net of tax	(49)	7	(73)	31
Accumulated other comprehensive income/(loss) at End of Period	(3)		(3)
Other Comprehensive Income (Loss), Tax			5
Foreign Currency Translation Adjustments
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Rollforward]
Accumulated other comprehensive income/(loss) at Beginning of Period			63
Other comprehensive loss, net of tax before reclassifications			(64)
Amounts reclassified to earnings			0
Other comprehensive loss, Foreign currency transaction and translation adjustment, Net of tax			(64)
Accumulated other comprehensive income/(loss) at End of Period	(1)		(1)
Unrealized Gain/(Loss) on Derivatives, net of tax
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Rollforward]
Accumulated other comprehensive income/(loss) at Beginning of Period			7
Other comprehensive loss, net of tax before reclassifications			(9)
Amounts reclassified to earnings			0
Other comprehensive loss, Derivatives qualifying as hedges, Net of tax			(9)
Accumulated other comprehensive income/(loss) at End of Period	$ (2)		$ (2)

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Long-Term Obligations and Other Short-Term Borrowings (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Jun. 30, 2014	Sep. 30, 2014
Debt Instrument
Long-term Debt and Capital Lease Obligations, Current	$ 270		$ 270		$ 801
Long-term Debt, Maturities, Repayments of Principal in Year Two	22		22
Long-term Debt, Maturities, Repayments of Principal in Year Three	289		289
Long-term Debt, Maturities, Repayments of Principal in Year Four	402		402
Long-term Debt, Maturities, Repayments of Principal in Year Five	1		1
Long-term Debt, Maturities, Repayments of Principal after Year Five	2,992		2,992
Debt Instrument, Offering Date			Nov. 07, 2014
Offer As Percentage Of Principal Amount			101.00%
Loss on Extinguishment of Debt	(60)	0	(60)	0
Loss on Extniguishment of Debt, Net of Tax	37
Make-Whole Premium	80
Unamortized debt issuance costs	2
Fair Value adjustment related to previously terminated swaps	22
2.4% Notes due 2019
Debt Instrument
Notes Payable	449		449		0
Debt Instrument, Maturity Date			Nov. 15, 2019
Debt Instrument, Face Amount	450		450
Debt Instrument, Interest Rate, Stated Percentage	2.40%		2.40%
Offer As Percentage Of Principal Amount			101.00%
3.5% Notes due 2024
Debt Instrument
Notes Payable	398		398		0
Debt Instrument, Maturity Date			Nov. 15, 2024
Debt Instrument, Face Amount	400		400
Debt Instrument, Interest Rate, Stated Percentage	3.50%		3.50%
Offer As Percentage Of Principal Amount			101.00%
4.5% Notes due 2044
Debt Instrument
Notes Payable	345		345		0
Debt Instrument, Maturity Date			Nov. 15, 2044
Debt Instrument, Face Amount	350		350
Debt Instrument, Interest Rate, Stated Percentage	4.50%		4.50%
Offer As Percentage Of Principal Amount			101.00%
Committed Receivables Sales Facility Program [Member]
Debt Instrument
Line of Credit Facility, Effective Date of Increase			Nov. 03, 2014
Line of Credit Facility, Maximum Borrowing Capacity	950		950			700
Line of Credit Facility, Expiration Date			Nov. 03, 2017
Line of Credit Facility, Amount Outstanding	0		0
Stand by Letters of Credit Outstanding, Amount	$ 41		$ 41

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Millions, unless otherwise specified	Sep. 30, 2014	Jun. 30, 2014
Preferred shares, No Par Value
Preferred shares, Authorized	0.5	0.5
Preferred shares, Issued	0	0
Common shares, No Par Value
Common shares, Authorized	755	755
Common shares, Issued	364	364
Common shares in treasury	0	27

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Goodwill and Other Intangible Assets

6 Months Ended

Dec. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

Goodwill

The following table summarizes the changes in the carrying amount of goodwill, by segment and in total:

(in millions)	Pharmaceutical		Medical			Total
Balance at June 30, 2014	$	2,158	$	2,720		$	4,878
Goodwill acquired, net of purchase price adjustments	21		50			71
Foreign currency translation adjustments and other	—		(20		)	(20		)
Balance at December 31, 2014	$	2,179	$	2,750		$	4,929

Other Intangible Assets

Other intangible assets are amortized over periods ranging from one to twenty years. The following tables summarize other intangible assets by class at:

	December 31, 2014
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible
Indefinite-life intangibles:
Trademarks and other	$	14	$	—	$	14
Total indefinite-life intangibles	14		—		14
Definite-life intangibles:
Customer relationships	1,041		434		607
Trademarks, trade names and patents	225		79		146
Developed technology and other	295		115		180
Total definite-life intangibles	1,561		628		933
Total other intangible assets	$	1,575	$	628	$	947

	June 30, 2014
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible
Indefinite-life intangibles:
Trademarks and other	$	14	$	—	$	14
Total indefinite-life intangibles	14		—		14
Definite-life intangibles:
Customer relationships	1,043		388		655
Trademarks, trade names and patents	213		69		144
Developed technology and other	258		79		179
Total definite-life intangibles	1,514		536		978
Total other intangible assets	$	1,528	$	536	$	992

Total amortization of intangible assets was $47 million and $46 million for the three months ended December 31, 2014 and 2013, respectively, and $92 million for both the six months ended December 31, 2014 and 2013. Estimated annual amortization of intangible assets for the remainder of fiscal 2015 through 2019 is as follows: $94 million, $176 million, $167 million, $124 million and $76 million.

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Share-Based Compensation (Schedule of Additional Data Related to Stock Option Activity) (Details) (Stock Options, USD $) In Millions, unless otherwise specified	6 Months Ended	12 Months Ended
	Dec. 31, 2014	Jun. 30, 2014
Stock Options
Aggregate intrinsic value of outstanding options at period end, Stock Options	$ 329	$ 282
Aggregate intrinsic value of exercisable options at period end, Stock Options	$ 246	$ 185
Weighted-average remaining contractual life of outstanding options	6 years	6 years
Weighted-average remaining contractual life of exercisable options	5 years	4 years

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Financial Instruments (Tables)

6 Months Ended

Dec. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of the estimated fair value of our long-term obligations and other short-term borrowings compared to the respective carrying amounts

The following table summarizes the estimated fair value of our long-term obligations and other short-term borrowings compared to the respective carrying amounts at:

(in millions)	December 31, 2014		June 30, 2014
Estimated fair value	$	4,089	$	4,115
Carrying amount	3,976		3,972

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Goodwill and Other Intangible Assets (Schedule of Intangible Assets) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Jun. 30, 2014
Amortization of Intangible Assets	$ 47	$ 46	$ 92	$ 92
Indefinite-life intangibles:
Indefinite-Lived Intangible Assets, Gross	14		14		14
Indefinite-Lived Intangible Assets, Accumulated Amortization	0		0		0
Indefinite-Lived Intangible Assets (Excluding Goodwill)	14		14		14
Definite-life intangibles:
Finite-Lived Intangible Assets, Gross	1,561		1,561		1,514
Finite-Lived Intangible Assets, Accumulated Amortization	628		628		536
Finite-Lived Intangible Assets, Net	933		933		978
Total Intangibles, Gross	1,575		1,575		1,528
Total Intangibles, Accumulated Amortization	628		628		536
Intangible Assets, Net (Excluding Goodwill)	947		947		992
Customer relationships
Definite-life intangibles:
Finite-Lived Intangible Assets, Gross	1,041		1,041		1,043
Finite-Lived Intangible Assets, Accumulated Amortization	434		434		388
Finite-Lived Intangible Assets, Net	607		607		655
Trademarks, trade names and patents
Definite-life intangibles:
Finite-Lived Intangible Assets, Gross	225		225		213
Finite-Lived Intangible Assets, Accumulated Amortization	79		79		69
Finite-Lived Intangible Assets, Net	146		146		144
Developed technology and other
Definite-life intangibles:
Finite-Lived Intangible Assets, Gross	295		295		258
Finite-Lived Intangible Assets, Accumulated Amortization	115		115		79
Finite-Lived Intangible Assets, Net	180		180		179
Trademarks and other
Indefinite-life intangibles:
Indefinite-Lived Intangible Assets, Gross	14		14		14
Indefinite-Lived Intangible Assets, Accumulated Amortization	0		0		0
Indefinite-Lived Intangible Assets (Excluding Goodwill)	$ 14		$ 14		$ 14

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Share-Based Compensation

6 Months Ended

Dec. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments

Share-Based Compensation

Share-Based Compensation Plans

We maintain stock incentive plans (collectively, the “Plans”) for the benefit of certain of our officers, directors and employees.

The following tables provide total share-based compensation expense by type of award:

	Three Months Ended December 31
(in millions)	2014		2013
Restricted share unit expense	$	18	$	15
Employee stock option expense	5		5
Performance share unit expense	5		4
Total share-based compensation	$	28	$	24

	Six Months Ended December 31
(in millions)	2014		2013
Restricted share unit expense	$	34	$	31
Employee stock option expense	10		10
Performance share unit expense	9		7
Total share-based compensation	$	53	$	48

The total tax benefit related to share-based compensation was $9 million and $8 million for the three months ended December 31, 2014 and 2013, respectively, and $18 million and $17 million for the six months ended December 31, 2014 and 2013, respectively.

Stock Options

Employee stock options granted under the Plans generally vest in equal annual installments over three years and are exercisable for periods ranging from seven to ten years from the grant date. All stock options are exercisable at a price equal to the market value of the common shares underlying the option on the grant date.

The following table summarizes all stock option transactions under the Plans:

(in millions, except per share amounts)	Stock Options		Weighted-Average Exercise Price per Common Share
Outstanding at June 30, 2014	10		$	39.16
Granted	1		71.57
Exercised	(2	)	39.05
Canceled and forfeited	—		—
Outstanding at December 31, 2014	9		$	44.28
Exercisable at December 31, 2014	5		$	35.91

At December 31, 2014, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested stock options not yet recognized was $33 million, which is expected to be recognized over a weighted-average period of two years. The following table provides additional data related to stock option activity:

(in millions, except contractual lives)	December 31, 2014		June 30, 2014
Aggregate intrinsic value of outstanding options at period end	$	329	$	282
Aggregate intrinsic value of exercisable options at period end	$	246	$	185
Weighted-average remaining contractual life of outstanding options (in years)	6		6
Weighted-average remaining contractual life of exercisable options (in years)	5		4

Restricted Share Units

Restricted share units granted under the Plans generally vest in equal annual installments over three years. Restricted share units accrue cash dividend equivalents that are payable upon vesting of the awards.

The following table summarizes all transactions related to restricted share units under the Plans:

(in millions, except per share amounts)	Restricted Share Units		Weighted-Average Grant Date Fair Value per Share
Nonvested at June 30, 2014	3		$	45.65
Granted	1		71.89
Vested	(1	)	44.41
Canceled and forfeited	—		—
Nonvested at December 31, 2014	3		$	56.83

At December 31, 2014, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested restricted share units not yet recognized was $112 million, which is expected to be recognized over a weighted-average period of two years.

Performance Share Units

Performance share units vest over a three-year performance period based on achievement of specific performance goals. Based on the extent to which the targets are achieved, vested shares may range from zero to 200 percent of the target award amount. Performance share units accrue cash dividend equivalents that are payable upon vesting of the awards.

The following table summarizes all transactions related to performance share units under the Plans (based on target award amounts):

(in millions, except per share amounts)	Performance Share Units		Weighted-Average Grant Date Fair Value per Share
Nonvested at June 30, 2014	0.9		$	44.41
Granted	0.2		66.78
Vested (1)	(0.2	)	41.59
Canceled and forfeited	—		—
Nonvested at December 31, 2014	0.9		$	50.61

(1) Vested based on achievement of 120 percent of the target performance goal.

At December 31, 2014, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested performance share units not yet recognized was $21 million, which is expected to be recognized over a weighted-average period of two years.