Segment Information

3 Months Ended

Sep. 30, 2015

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

The following table presents revenue for each reportable segment and Corporate:

	Three Months Ended September 30
(in millions)	2015			2014
Pharmaceutical	$	25,140		$	21,209
Medical	2,919			2,852
Total segment revenue	28,059			24,061
Corporate (1)	(4		)	9
Total revenue	$	28,055		$	24,070

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

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

We do not allocate the following items to our segments: LIFO inventory charges/(credits); restructuring and employee severance; amortization and other acquisition-related costs; impairments and (gain)/loss on disposal of assets; litigation (recoveries)/charges, net; other income, net; interest expense, net; loss on extinguishment of debt; and provision for income taxes. We did not recognize any LIFO charges or credits during the three months ended September 30, 2015 and 2014. In addition, certain investments, certain portions of enterprise-wide incentive compensation, and other spending are not allocated to the segments. Investment spending generally includes the first-year spend for certain projects that require incremental investments in the form of additional operating expenses. We encourage our segments and corporate functions to identify investment projects that will promote innovation and provide future returns. As approval decisions for such projects are dependent upon executive management, the expenses for such projects are often retained at Corporate. Investment spending within Corporate was $6 million and $2 million for the three months ended September 30, 2015 and 2014, respectively.

Beginning in fiscal 2016, we changed our methodology for allocating certain portions of enterprise-wide incentive compensation expenses among Corporate and the segments. This change does not impact consolidated operating earnings or net earnings, and did not materially impact either segment during the three months ended September 30, 2015.

The following table presents segment profit by reportable segment and Corporate:

	Three Months Ended September 30
(in millions)	2015			2014
Pharmaceutical	$	657		$	451
Medical	101			113
Total segment profit	758			564
Corporate	(138		)	(98		)
Total operating earnings	$	620		$	466

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

(in millions)	September 30, 2015		June 30, 2015
Pharmaceutical	$	19,596	$	17,385
Medical	7,833		7,095
Corporate	3,793		5,662
Total assets	$	31,222	$	30,142