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 September 30, 2016

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 October 27, 2016, was the following: 320,063,302.

Cardinal Health

Q1 Fiscal 2017 Form 10-Q

Table of Contents

	Page
Management's Discussion and Analysis of Financial Condition and Results of Operations	2
Explanation and Reconciliation of Non-GAAP Financial Measures	11
Quantitative and Qualitative Disclosures about Market Risk	14
Controls and Procedures	14
Legal Proceedings	14
Risk Factors	15
Unregistered Sales of Equity Securities and Use of Proceeds	15
Financial Statements and Supplementary Data	16
Exhibits	28
Form 10-Q Cross Reference Index	29
Signatures	30

About Cardinal Health

Cardinal Health, Inc. is an Ohio corporation formed in 1979 and is a globally integrated healthcare services and products company providing customized solutions for hospital systems, pharmacies, ambulatory surgery centers, clinical laboratories and physicians' offices. We provide clinically proven medical products and pharmaceuticals and cost-effective solutions that enhance supply chain efficiency. We connect patients, providers, payers, pharmacists, and manufacturers for integrated care coordination and better patient management. We manage our business and report our financial results in two segments: Pharmaceutical and Medical. As used in this report, “we,” “our,” “us,” and similar pronouns refer to Cardinal Health, Inc. and its subsidiaries, unless the context requires otherwise.

Forward-Looking Statements

This Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 (this "Form 10-Q") (including information incorporated by reference) includes "forward-looking statements" addressing expectations, prospects, estimates and other matters that are dependent upon future events or developments. Many forward-looking statements appear in Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A"), but there are others in the document, which may be identified by the words such as "expect," "anticipate," "intend," "plan," "believe," "will," "should," "could," "would," "project," "continue," "likely," and similar expressions, and include statements reflecting future results, trends or guidance, statements of outlook and expense accruals. 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 "Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended June 30, 2016 (our “2016 Form 10-K”). Forward-looking statements in this document speak only as of the date of this document. Except to the extent required by applicable law, we undertake no obligation to update or revise any forward-looking statement.

Non-GAAP Financial Measures

In the "Overview of Consolidated Results" section of MD&A, we use financial measures that are derived from our consolidated financial data but are not presented in our condensed consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). These measures are considered "non-GAAP financial measures" under the Securities and Exchange Commission ("SEC") rules. The reasons we use these non-GAAP financial measures and the reconciliations to their most directly comparable GAAP financial measures are included in the “Explanation and Reconciliation of Non-GAAP Financial Measures” section following MD&A in this Form 10-Q.

1 Cardinal Health | Q1Fiscal 2017 Form 10-Q

MD&A Overview

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 between the periods specified in our condensed consolidated balance sheets at September 30, 2016 and June 30, 2016, and in our condensed consolidated statements of earnings for the three months ended September 30, 2016 and 2015. All comparisons presented are with respect to the prior-year period, unless stated otherwise. This discussion and analysis should be read in conjunction with the MD&A included in our 2016 Form 10-K.

Cardinal Health | Q1Fiscal 2017 Form 10-Q 2

MD&A Overview

Overview of Consolidated Results

Revenue

Revenue for the three months ended September 30, 2016 was $32.0 billion, a 14 percent increase, due primarily to sales growth from new and existing pharmaceutical distribution customers.

GAAP and Non-GAAP Operating Earnings

	Three Months Ended September 30,
(in millions)	2016		2015		Change
GAAP	$	535	$	620	(14	)%
Restructuring and employee severance	9		12
Amortization and other acquisition-related costs	122		105
Impairments and (gain)/loss on disposal of assets	3		—
Litigation (recoveries)/charges, net	1		—
Non-GAAP	$	669	$	737	(9	)%

The sum of the components may not equal the total due to rounding.

During the three months ended September 30, 2016, GAAP operating earnings decreased 14 percent to $535 million and non-GAAP operating earnings decreased 9 percent to $669 million. The decreases in both GAAP and non-GAAP operating earnings were due to generic pharmaceutical customer pricing changes, reduced levels of branded pharmaceutical inflation and the loss of a large pharmaceutical distribution customer. These were partially offset by other aspects of our Pharmaceutical segment generics program, which exclude the above-mentioned pricing changes.

3 Cardinal Health | Q1Fiscal 2017 Form 10-Q

MD&A Overview

GAAP and Non-GAAP Diluted EPS

	Three Months Ended September 30,
($ per share)	2016		2015		Change
GAAP	$	0.96	$	1.15	(17	)%
Restructuring and employee severance	0.02		0.02
Amortization and other acquisition-related costs	0.25		0.21
Impairments and (gain)/loss on disposal of assets	0.01		—
Litigation (recoveries)/charges, net	—		—
Non-GAAP	$	1.24	$	1.38	(10	)%

The sum of the components may not equal the total due to rounding.

During the three months ended September 30, 2016, GAAP diluted earnings per share attributable to Cardinal Health, Inc. ("diluted EPS") decreased 17 percent to $0.96 per share and non-GAAP diluted EPS decreased 10 percent to $1.24 per share. GAAP and non-GAAP diluted EPS decreased primarily due to the factors impacting GAAP and non-GAAP operating earnings.

Cash and Equivalents

Our cash and equivalents balance was $2.0 billion at September 30, 2016 compared to $2.4 billion at June 30, 2016. The decrease in cash and equivalents during the three months ended September 30, 2016 was driven by $250 million paid for share repurchases, $149 million paid in dividends and $100 million in capital expenditures, offset in part by net cash provided by operating activities of $104 million.

Significant Developments

Acquisitions

On October 2, 2015, we completed the acquisition of the Cordis business from Ethicon, Inc., a wholly-owned subsidiary of Johnson & Johnson, for $1.9 billion. The acquisition of Cordis, a global manufacturer and distributor of interventional cardiology devices and endovascular solutions with operations in more than 50 countries, expands our Medical segment's portfolio of self-manufactured products and its geographic scope.

Trends

Within our Pharmaceutical segment, we now expect fiscal 2017 segment profit to be less than fiscal 2016 segment profit due to the factors described below under "Results of Operations" that impacted results in the three months ended September 30, 2016. However, as is generally the case, the frequency, timing, magnitude, and profit impact of pharmaceutical customer pricing changes and branded and generic pharmaceutical manufacturer pricing changes remains uncertain and their impact on Pharmaceutical segment profit and consolidated operating

earnings in fiscal 2017 could be more or less than we expect.

Cardinal Health | Q1Fiscal 2017 Form 10-Q 4

MD&A Results of Operations

Results of Operations

Revenue

	Three Months Ended September 30,
(in millions)	2016			2015			Change
Pharmaceutical	$	28,762		$	25,140		14	%
Medical	3,279			2,919			12	%
Total segment revenue	32,041			28,059			14	%
Corporate	(2		)	(4		)	N.M.
Total revenue	$	32,039		$	28,055		14	%

Pharmaceutical Segment

Pharmaceutical segment revenue growth for the three months ended September 30, 2016 was primarily due to $3.9 billion in sales growth from new and existing pharmaceutical distribution customers, including the on-boarding of a new mail order customer.

Medical Segment

Medical segment revenue growth for the three months ended September 30, 2016 was due to acquisitions, which contributed $194 million, and sales growth from new and existing customers.

Cost of Products Sold

Cost of products sold increased $4.0 billion(15 percent) compared to the prior-year period, as a result of the same factors affecting the change in revenue and gross margin.

5 Cardinal Health | Q1Fiscal 2017 Form 10-Q

MD&A Results of Operations

Gross Margin

	Three Months Ended September 30,
(in millions)	2016		2015		Change
Gross margin	$	1,590	$	1,579	1	%

Gross margin during the three months ended September 30, 2016 was essentially flat versus the prior-year period.

Acquisitions and additional sales to new and existing pharmaceutical distribution customers increased gross margin by $116 million and $109 million, respectively. These were partially offset by the loss of a large pharmaceutical distribution customer.

Gross margin as a percent of revenue declined 67 basis points during the three months ended September 30, 2016 due to generic pharmaceutical customer pricing changes and changes in product mix resulting from the on-boarding of a new mail order customer. While the new mail order customer contributes positively to gross margin dollars it has a dilutive impact on our overall gross margin rate.

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

	Three Months Ended September 30,
(in millions)	2016		2015		Change
SG&A expenses	$	920	$	842	9	%

The increase in SG&A expenses during the three months ended September 30, 2016 was due to the impact of acquisitions ($95 million).

Cardinal Health | Q1Fiscal 2017 Form 10-Q 6

MD&A Results of Operations

Segment Profit

We evaluate segment performance based on segment profit, among other measures. See Note 13 of the "Notes to Condensed Consolidated Financial Statements" for additional information on segment profit.

	Three Months Ended September 30,
(in millions)	2016			2015			Change
Pharmaceutical	$	534		$	657		(19	)%
Medical	127			101			26	%
Total segment profit	661			758			(13	)%
Corporate	(126		)	(138		)	9	%
Total consolidated operating earnings	$	535		$	620		(14	)%

Pharmaceutical Segment Profit

The decrease in Pharmaceutical segment profit during the three months ended September 30, 2016 was largely due to generic pharmaceutical customer pricing changes. Reduced levels of branded pharmaceutical inflation and the loss of a large pharmaceutical distribution customer beginning April 1, 2016 also contributed to the decrease in Pharmaceutical segment profit. These were partially offset by other aspects of our generics program, which

exclude the above-mentioned pricing changes.

Medical Segment Profit

The increase in Medical segment profit during the three months ended September 30, 2016 was primarily due to acquisitions and contributions from Cardinal Health Brand products.

7 Cardinal Health | Q1Fiscal 2017 Form 10-Q

MD&A Results of Operations

Other Components of Consolidated Operating Earnings

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

	Three Months Ended September 30,
(in millions)	2016		2015
Restructuring and employee severance	$	9	$	12
Amortization and other acquisition-related costs	122		105
Impairments and (gain)/loss on disposal of assets, net	3		—
Litigation (recoveries)/charges, net	1		—

Amortization and Other Acquisition-Related Costs

Amortization of acquisition-related intangible assets was $101 million and $67 million for the three months ended September 30, 2016 and 2015, respectively.

Earnings Before Income Taxes

In addition to the items discussed above, earnings before income taxes was impacted by the following:

	Three Months Ended September 30,
(in millions)	2016			2015		Change
Other (income)/expense, net	$	(3	)	$	8	N.M.
Interest expense, net	44			44		—	%

Provision for Income Taxes

During the three months ended September 30, 2016 and 2015, the effective tax rate was 37.3 percent and 32.3 percent, respectively. The effective tax rate for the three months ended September 30, 2015 included net favorable discrete items of $28 million.

Cardinal Health | Q1Fiscal 2017 Form 10-Q 8

MD&A Liquidity and Capital Resources

Liquidity and Capital Resources

We currently believe that, based on available capital resources (cash on hand and committed credit facilities) and projected operating cash flow, we have adequate capital resources to fund working capital needs; currently anticipated capital expenditures; currently anticipated 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 markets for additional financing.

Cash and Equivalents

Our cash and equivalents balance was $2.0 billion at September 30, 2016 compared to $2.4 billion at June 30, 2016. At September 30, 2016, our cash and equivalents were held in cash depository accounts with major banks or invested in high quality, short-term liquid investments.

During the three months ended September 30, 2016, we deployed $250 million on share repurchases, $149 million for cash dividends and $100 million for capital expenditures; net cash provided by operating activities was $104 million, driven by net earnings and changes in working capital.

The cash and equivalents balance at September 30, 2016 included $622 million of cash held by subsidiaries outside of the United States. Although the vast majority of cash is available for repatriation, bringing the cash into the United States could trigger U.S federal, state and local income tax obligations.

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, as well as fluctuating working capital needs driven by customer and product mix.

Other Financing Arrangements and Financial Instruments

Credit Facilities and Commercial Paper

In addition to cash and equivalents and operating cash flow, other sources of liquidity include a $1.75 billion revolving credit facility and a $700 million committed receivables sales facility program. We also have a commercial paper program of up to $1.5 billion, backed by the revolving credit facility. At September 30, 2016, we had no amounts outstanding under the revolving credit facility; however, availability was reduced by outstanding letters of credit of $14 million. We also had no amounts outstanding under the committed receivables sales facility program; however, availability was reduced by outstanding standby letters of credit of $38 million at September 30, 2016.

Our revolving credit facility and committed receivables sales facility program require us to maintain a consolidated leverage ratio of no more than 3.25-to-1 and our committed receivables sales facility also requires us to maintain a consolidated interest coverage ratio, as of the end of any calendar quarter, of at least 4-to-1. As of September 30, 2016, we were in compliance with these financial covenants.

Available-for-Sale Securities

At both September 30, 2016 and June 30, 2016, we held $200 million of marketable securities, which are classified as available-for-sale.

Capital Deployment

Capital Expenditures

Capital expenditures during the three months ended September 30, 2016 and 2015 were $100 million and $83 million, respectively.

Dividends

On August 8, 2016, our Board of Directors approved a quarterly dividend of $0.4489 per share, or $1.80 per share on an annualized basis, payable on October 15, 2016 to shareholders of record on October 3, 2016.

Share Repurchases

During the three months ended September 30, 2016 we repurchased $250 million of our common shares. We funded the repurchases with available cash. At September 30, 2016, we had $793 million remaining under our existing share repurchase program.

9 Cardinal Health | Q1Fiscal 2017 Form 10-Q

MD&A Other Items

Other Items

The MD&A in our 2016 Form 10-K addresses our contractual obligations, critical accounting policies and sensitive accounting estimates, and off-balance sheet arrangements, as of and for the fiscal year ended June 30, 2016. There have been no subsequent material changes outside of the ordinary course of business to those items.

Cardinal Health | Q1Fiscal 2017 Form 10-Q 10

Explanation and Reconciliation of Non-GAAP Financial Measures

Explanation and Reconciliation of Non-GAAP Financial Measures

The "Overview of Consolidated Results" section within MD&A in this Form 10-Q contains financial measures that are not calculated in accordance with GAAP.

In addition to analyzing our business based on financial information prepared in accordance with GAAP, we use these non-GAAP financial measures internally to evaluate our performance, evaluate the balance sheet, engage in financial and operational planning, and determine incentive compensation because we believe that these measures provide additional perspective on and, in some circumstances are more closely correlated to, the performance of our underlying, ongoing business. We provide these non-GAAP financial measures to investors as supplemental metrics to assist readers in assessing the effects of items and events on our financial and operating results on a year-over-year basis and in comparing our performance to that of our competitors. However, the non-GAAP financial measures that we use may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. The non-GAAP financial measures disclosed by us should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements set forth below should be carefully evaluated.

Exclusions from Non-GAAP Financial Measures

The differences between the non-GAAP measures presented in this Form 10-Q and the most directly comparable GAAP measure are represented by the following items, which management believes are useful to exclude for its own and for investors’ assessment of the business for the reasons identified below:

• LIFO charges and credits, which we began excluding in fiscal 2015 because the factors that drive last-in first-out ("LIFO") inventory charges or credits such as pharmaceutical manufacturer price appreciation or deflation and year-end inventory levels (which can be meaningfully influenced by customer buying behavior immediately preceding our fiscal year-end), are largely out of our control and cannot be accurately predicted. We also believe that the exclusion of LIFO charges from non-GAAP metrics allows for a better comparison of our current financial results to our historical financial results and to our peer group companies;

• restructuring and employee severance costs, which include charges for programs in which we fundamentally change our operations and are excluded because they are not part of the ongoing operations of our underlying business, which includes normal levels of reinvestment in the business;

• amortization and other acquisition-related costs. We exclude amortization costs primarily for consistency with the presentation of the financial results of our peer group companies. Additionally, these non-cash amounts are variable in amount and frequency and are significantly impacted by the timing and size of acquisitions, so their exclusion allows for better comparison of forecasted, current and historical financial results. We exclude other acquisition-related costs because they are directly related to an acquisition but do not meet the criteria to be recognized on the acquired entity’s initial balance sheet as part of the purchase price allocation. They are also significantly impacted by the timing and size of acquisitions;

• impairments and gains or loss on disposal of assets, which are excluded because they do not occur in or reflect the ordinary course of our ongoing business operations and their exclusion results in a metric that more meaningfully reflects the sustainability of our operating performance;

• litigation recoveries or charges, net, which often relate to events that may have occurred in prior or multiple periods, do not occur in or reflect the ordinary course of our business and are inherently unpredictable in timing and amount; and

• loss on extinguishment of debt, which does not typically occur in the normal course of business and may obscure analysis of trends and financial performance. Additionally, the amount and frequency of these types of charges is not consistent and is significantly impacted by the timing and size of debt financing transactions.

The tax effect for each of the non-GAAP items described above is determined using the tax rate and other tax attributes applicable to the item and the jurisdiction(s) in which the item is recorded. The gross, tax and net impact of each item are presented with our GAAP to non-GAAP reconciliations.

11 Cardinal Health | Q1Fiscal 2017 Form 10-Q

Explanation and Reconciliation of Non-GAAP Financial Measures

Definitions

Growth rate calculation: Growth rates in this Form 10-Q are determined by dividing the difference between current period results and prior period results by prior period results.

Non-GAAP operating earnings: operating earnings excluding (1) LIFO charges/(credits), (2) restructuring and employee severance, (3) amortization and other acquisition-related costs, (4) impairments and (gain)/loss on disposal of assets, and (5) litigation (recoveries)/charges, net.

Non-GAAP earnings before income taxes: earnings before income taxes excluding (1) LIFO charges/(credits), (2) restructuring and employee severance, (3) amortization and other acquisition-related costs, (4) impairments and (gain)/loss on disposal of assets, and (5) litigation (recoveries)/charges.

Non-GAAP net earnings attributable to Cardinal Health, Inc.: net earnings attributable to Cardinal Health, Inc. excluding (1) LIFO charges/(credits), (2) restructuring and employee severance, (3) amortization and other acquisition-related costs, (4) impairments and (gain)/loss on disposal of assets, (5) litigation (recoveries)/charges, net, and (6) loss on extinguishment of debt, each net of tax.

Non-GAAP diluted EPS attributable to Cardinal Health, Inc.: non-GAAP net earnings attributable to Cardinal Health, Inc. divided by diluted weighted-average shares outstanding.

Cardinal Health | Q1Fiscal 2017 Form 10-Q 12

Explanation and Reconciliation of Non-GAAP Financial Measures

GAAP to Non-GAAP Reconciliations

(in millions, except per common share amounts)	Operating Earnings		Operating Earnings Growth Rate		Earnings Before Income Taxes		Provision for Income Taxes		Net Earnings1		Net Earnings1 Growth Rate		Diluted EPS1		Diluted EPS1 Growth Rate
	First Quarter Fiscal 2017
GAAP	$	535	(14	)%	$	494	$	184	$	309	(19	)%	$	0.96	(17	)%
Restructuring and employee severance	9				9		4		5				0.02
Amortization and other acquisition-related costs	122				122		40		82				0.25
Impairments and loss on disposal of assets	3				3		1		2				0.01
Litigation (recoveries)/charges, net	1				1		—		1				—
Non-GAAP	$	669	(9	)%	$	629	$	229	$	399	(13	)%	$	1.24	(10	)%
	First Quarter Fiscal 2016
GAAP	$	620	33	%	$	568	$	184	$	383	44	%	$	1.15	47	%
Restructuring and employee severance	12				12		5		7				0.02
Amortization and other acquisition-related costs	105				105		37		68				0.21
Impairments and loss on disposal of assets	—				—		—		—				—
Litigation (recoveries)/charges, net	—				—		—		—				—
Non-GAAP	$	737	30	%	$	685	$	226	$	458	35	%	$	1.38	38	%

¹  attributable to Cardinal Health, Inc.

The sum of the components may not equal the total due to rounding.

We apply varying tax rates depending on the item's nature and tax jurisdiction where it is incurred.

There were no LIFO charges/(credits) or losses on extinguishment of debt during the periods presented.

13 Cardinal Health | Q1Fiscal 2017 Form 10-Q

Other

Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in the quantitative and qualitative market risk disclosures included in our 2016 Form 10-K since the end of fiscal 2016 through September 30, 2016.

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 September 30, 2016. Based on this evaluation, our principal executive officer and principal financial officer have concluded that as of September 30, 2016, 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 September 30, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Implementation of New Software Systems

The Pharmaceutical segment is in a multi-year project implementing a replacement of certain finance and operating information systems, which is expected to affect internal control over financial reporting. This project did not impact internal control over financial reporting during the quarter ended September 30, 2016. The Pharmaceutical segment plans to begin transitioning selected processes to the new systems later in fiscal 2017. If these new systems are not effectively implemented or fail to operate as intended, it could adversely affect our internal control over financial reporting.

Legal Proceedings

The legal proceedings described in Note 7 of the "Notes to Condensed Consolidated Financial Statements" are incorporated in this "Legal Proceedings" section by reference.

Cardinal Health | Q1Fiscal 2017 Form 10-Q 14

Other

Risk Factors

You should carefully consider the information in this Form 10-Q and the risk factors discussed in "Risk Factors" and other risks discussed in our 2016 Form 10-K and our filings with the SEC since June 30, 2016. 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.

Unregistered Sales of Equity Securities and Use of Proceeds

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 Programs (2)	Approximate Dollar Value of Shares That May Yet be Purchased Under the Program (2) (in millions)
July 2016	3,072,428	$	81.37	3,072,251	$	793
August 2016	331	80.68		—	793
September 2016	2,620	80.66		—	793
Total	3,075,379	$	81.37	3,072,251	$	793

(1) Reflects 177, 331 and 2,620 common shares purchased in July, August and September 2016, respectively, through a rabbi trust as investments of participants in our Deferred Compensation Plan.

(2) On October 29, 2013, our Board of Directors approved a $1.0 billion share repurchase program and on August 6, 2014, the Board of Directors authorized an additional $1.0 billion under the program, for a total of $2.0 billion. This program was completed in July 2016. On May 4, 2016, our Board of Directors also approved a $1.0 billion share repurchase program that expires on December 31, 2019. During the three months ended September 30, 2016, we repurchased 3 million common shares under these programs. After these repurchases, we have $793 million available under our new repurchase program.

15 Cardinal Health | Q1Fiscal 2017 Form 10-Q

Financial Statements

Condensed Consolidated Statements of Earnings

(Unaudited)

	Three Months Ended September 30,
(in millions, except per common share amounts)	2016			2015
Revenue	$	32,039		$	28,055
Cost of products sold	30,449			26,476
Gross margin	1,590			1,579
Operating expenses:
Distribution, selling, general, and administrative expenses	920			842
Restructuring and employee severance	9			12
Amortization and other acquisition-related costs	122			105
Impairments and (gain)/loss on disposal of assets, net	3			—
Litigation (recoveries)/charges, net	1			—
Operating earnings	535			620
Other (income)/expense, net	(3		)	8
Interest expense, net	44			44
Earnings before income taxes	494			568
Provision for income taxes	184			184
Net earnings	310			384
Less: Net earnings attributable to noncontrolling interests	(1		)	(1		)
Net earnings attributable to Cardinal Health, Inc.	$	309		$	383
Earnings per common share attributable to Cardinal Health, Inc.:
Basic	$	0.97		$	1.17
Diluted	0.96			1.15
Weighted-average number of common shares outstanding:
Basic	320			328
Diluted	322			331
Cash dividends declared per common share	$	0.4489		$	0.3870

See notes to condensed consolidated financial statements.

Cardinal Health | Q1Fiscal 2017 Form 10-Q 16

Financial Statements

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

	Three Months Ended September 30,
(in millions)	2016			2015
Net earnings	$	310		$	384
Other comprehensive income/(loss):
Foreign currency translation adjustments and other	(1		)	(44		)
Net unrealized gain/(loss) on derivative instruments, net of tax	1			(1		)
Total other comprehensive income/(loss), net of tax	—			(45		)
Total comprehensive income	310			339
Less: comprehensive income attributable to noncontrolling interests	(1		)	(1		)
Total comprehensive income attributable to Cardinal Health, Inc.	$	309		$	338

See notes to condensed consolidated financial statements.

17 Cardinal Health | Q1Fiscal 2017 Form 10-Q

Financial Statements

Condensed Consolidated Balance Sheets

(Unaudited)

(in millions)	September 30, 2016			June 30, 2016
Assets
Current assets:
Cash and equivalents	$	2,001		$	2,356
Trade receivables, net	7,708			7,405
Inventories, net	10,917			10,615
Prepaid expenses and other	1,657			1,580
Total current assets	22,283			21,956
Property and equipment, net	1,823			1,796
Goodwill and other intangibles, net	9,427			9,426
Other assets	873			944
Total assets	$	34,406		$	34,122
Liabilities, Redeemable Noncontrolling Interests, and Shareholders’ Equity
Current liabilities:
Accounts payable	$	17,597		$	17,306
Current portion of long-term obligations and other short-term borrowings	616			587
Other accrued liabilities	1,788			1,808
Total current liabilities	20,001			19,701
Long-term obligations, less current portion	4,916			4,952
Deferred income taxes and other liabilities	2,842			2,781
Redeemable noncontrolling interests	116			117
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 September 30, 2016 and June 30, 2016	2,958			3,010
Retained earnings	6,582			6,419
Common Shares in treasury, at cost: 44 million shares and 42 million shares at September 30, 2016 and June 30 2016, respectively	(2,912		)	(2,759		)
Accumulated other comprehensive loss	(116		)	(116		)
Total Cardinal Health, Inc. shareholders' equity	6,512			6,554
Noncontrolling interests	19			17
Total shareholders’ equity	6,531			6,571
Total liabilities, redeemable noncontrolling interests, and shareholders’ equity	$	34,406		$	34,122

See notes to condensed consolidated financial statements.

Cardinal Health | Q1Fiscal 2017 Form 10-Q 18

Financial Statements

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Three Months Ended September 30,
(in millions)	2016			2015
Cash flows from operating activities:
Net earnings	$	310		$	384
Adjustments to reconcile net earnings to net cash provided by/(used in) operating activities:
Depreciation and amortization	173			137
Impairments and loss on disposal of assets, net	3			—
Share-based compensation	23			30
Provision for bad debts	7			17
Change in fair value of contingent consideration obligation	—			(1		)
Change in operating assets and liabilities, net of effects from acquisitions:
Increase in trade receivables	(306		)	(348		)
Increase in inventories	(298		)	(495		)
Increase in accounts payable	279			425
Other accrued liabilities and operating items, net	(87		)	(201		)
Net cash provided by/(used in) operating activities	104			(52		)
Cash flows from investing activities:
Acquisition of subsidiaries, net of cash acquired	(9		)	(1,399		)
Additions to property and equipment	(100		)	(83		)
Purchase of available for sale securities and other investments	(52		)	(26		)
Proceeds from sale of available-for-sale securities and other investments	34			25
Proceeds from maturities of available-for-sale securities	17			5
Net cash used in investing activities	(110		)	(1,478		)
Cash flows from financing activities:
Payment of contingent consideration obligation	—			(23		)
Net change in short-term borrowings	25			36
Net purchase of noncontrolling interests	(10		)	—
Reduction of long-term obligations	(1		)	(4		)
Proceeds from interest rate swap terminations	14			—
Net tax withholdings from share-based compensation	(9		)	(21		)
Excess tax benefits from share-based compensation	30			31
Dividends on common shares	(149		)	(131		)
Purchase of treasury shares	(250		)	—
Net cash used in financing activities	(350		)	(112		)
Effect of exchange rates changes on cash and equivalents	1			—
Net decrease in cash and equivalents	(355		)	(1,642		)
Cash and equivalents at beginning of period	2,356			4,616
Cash and equivalents at end of period	$	2,001		$	2,974

See notes to condensed consolidated financial statements.

19 Cardinal Health | Q1Fiscal 2017 Form 10-Q

Notes to Financial Statements

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. References to "we," "our," and similar pronouns in this Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 (this "Form 10-Q") refer to Cardinal Health, Inc. and its majority-owned or controlled subsidiaries unless the context requires otherwise.

Our condensed consolidated financial statements have been prepared in accordance with the U.S. Securities and Exchange Commission ("SEC") instructions to Quarterly Reports on Form 10-Q and include the information and disclosures required by accounting principles generally accepted in the United States ("GAAP") for interim financial reporting. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect amounts reported in the condensed consolidated financial statements and accompanying notes. Actual amounts may differ from these estimated amounts. In our opinion, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included. Except as disclosed elsewhere in this Form 10-Q, all such adjustments are of a normal and recurring nature. In addition, financial results presented for this fiscal 2017 interim period are not necessarily indicative of the results that may be expected for the full fiscal year ending June 30, 2017. These condensed consolidated financial statements are unaudited and, accordingly, should be read in conjunction with the audited consolidated financial statements and related notes contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2016 (the "2016 Form 10-K").

Recent Financial Accounting Standards

In August 2016, the Financial Accounting Standards Board (the "FASB") issued accounting guidance which clarifies the classification of certain cash receipts and cash payments in the statement of cash flows, including those related to contingent consideration payments made after a business combination, distributions received from equity method investees, debt prepayment or debt extinguishment costs, and proceeds from the settlement of insurance claims. This guidance will be effective for us in the first quarter of fiscal 2019. We are currently evaluating the impact of this standard on our consolidated financial statements.

In April 2015, the FASB issued amended accounting guidance that clarifies the circumstances under which a cloud computing customer would account for the arrangement as a license of internal-use software. If it is determined that a software license does not exist in the arrangement, the customer would account for this arrangement as a service contract. We adopted this guidance in the first quarter

of fiscal 2017. The adoption of this guidance did not have a material impact on our financial position or results of operations.

Also in April 2015, the FASB issued amended accounting guidance related to the presentation of debt issuance costs in the financial statements. This guidance requires an entity to present such costs in the balance sheet as a direct deduction from the related debt rather than as an asset. We adopted this guidance in the first quarter of fiscal 2017. Upon adoption of this guidance, debt issuance costs of $29 million were reclassified from other assets to long-term obligations, less current portion within the condensed consolidated balance sheet.

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 2019. We are in the process of assessing any differences between the amended and existing guidance that could impact our consolidated financial statements and continuing to evaluate the options for adoption.

2. Acquisitions

Cordis

On October 2, 2015, we acquired the Cordis business from Ethicon, Inc., a wholly-owned subsidiary of Johnson & Johnson, for $1.9 billion using cash on hand and proceeds from our debt offering in June 2015. The acquisition of Cordis, a global manufacturer and distributor of interventional cardiology devices and endovascular solutions with operations in more than 50 countries, expands our Medical segment's portfolio of self-manufactured products and its geographic scope. We closed the Cordis acquisition in 20 principal countries on October 2, 2015, and acquired control of, as described in GAAP, and the rights to, the net economic benefit from the entire Cordis business in the remaining countries at that time.

Transaction and integration costs associated with the acquisition of Cordis were $14 million and $21 million during the three months ended September 30, 2016 and 2015, respectively, and are included in amortization and other acquisition-related costs in the condensed consolidated statements of earnings.

Fair Value of Assets Acquired and Liabilities Assumed

The allocation of the fair value of assets acquired and liabilities assumed for the acquisitions of Cordis, naviHealth Holdings, LLC. ("naviHealth"), and The Harvard Drug Group ("Harvard Drug") were finalized during the three months ended September 30, 2016, resulting in goodwill of $943 million, $334 million, and $634 million, respectively. There were no significant adjustments to the allocation

Cardinal Health | Q1Fiscal 2017 Form 10-Q 20

Notes to Financial Statements

of the fair value of assets acquired and liabilities assumed for the naviHealth and Harvard Drug acquisitions from those disclosed in our fiscal 2016 Form 10-K. We recorded additional goodwill for Cordis of $82 million, substantially all of which was to increase an accrual for assumed pre-acquisition product liability lawsuits. See Note 7 for further discussion of the product liability lawsuits.

3. Restructuring and Employee Severance

The following table summarizes restructuring and employee severance costs:

	Three months ended September 30,
(in millions)	2016		2015
Employee-related costs (1)	$	7	$	6
Facility exit and other costs (2)	2		6
Total restructuring and employee severance	$	9	$	12

(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 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, 2016	$	15		$	1		$	16
Additions	6			—			6
Payments and other adjustments	(4		)	(1		)	(5		)
Balance at September 30, 2016	$	17		$	—		$	17

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, 2016	$	2,919		$	4,248	$	7,167
Goodwill acquired, net of purchase price adjustments	9			86		95
Foreign currency translation adjustments and other	(2		)	1		(1		)
Balance at September 30, 2016	$	2,926		$	4,335	$	7,261

Other Intangible Assets

The following tables summarize other intangible assets by class at:

	September 30, 2016
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible		Weighted- Average Remaining Amortization Period (Years)
Indefinite-life intangibles:
IPR&D, trademarks and other	$	70	$	—	$	70	N/A
Total indefinite-life intangibles	70		—		70		N/A
Definite-life intangibles:
Customer relationships	1,931		793		1,138		9
Trademarks, trade names, and patents	527		156		371		14
Developed technology and other	812		225		587		8
Total definite-life intangibles	3,270		1,174		2,096		10
Total other intangible assets	$	3,340	$	1,174	$	2,166	N/A

	June 30, 2016
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible
Indefinite-life intangibles:
IPR&D, trademarks and other	$	72	$	—	$	72
Total indefinite-life intangibles	72		—		72
Definite-life intangibles:
Customer relationships	1,946		737		1,209
Trademarks, trade names, and patents	508		140		368
Developed technology and other	808		198		610
Total definite-life intangibles	3,262		1,075		2,187
Total other intangible assets	$	3,334	$	1,075	$	2,259

Total amortization of intangible assets was $101 million and $67 million for the three months ended September 30, 2016 and 2015, respectively. Estimated annual amortization of intangible assets for the remainder of fiscal 2017 through 2021 is as follows: $285 million, $350 million, $281 million, $254 million, and $207 million.

21 Cardinal Health | Q1Fiscal 2017 Form 10-Q

Notes to Financial Statements

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)	September 30, 2016		June 30, 2016
Current available-for-sale securities:
Treasury bills	$	—	$	3
International bonds	3		2
Corporate bonds	58		58
U.S. agency bonds	7		6
Asset-backed securities	31		28
International equity securities	2		2
U.S. agency mortgage-backed securities	7		14
Total current available-for-sale securities	108		113
Long-term available-for-sale securities:
Treasury bills	29		10
International bonds	3		1
Corporate bonds	32		36
U.S. agency bonds	8		9
Asset-backed securities	8		17
U.S. agency mortgage-backed securities	12		14
Total long-term available-for-sale securities	92		87
Total available-for-sale securities	$	200	$	200

Gross unrealized gains and losses were immaterial at both September 30, 2016 and June 30, 2016. During the three months ended September 30, 2016 and 2015, gross realized gains and losses were immaterial and we did not recognize any other-than-temporary impairments. At September 30, 2016, the weighted-average effective maturity of our current and long-term investments was approximately 6 months and 17 months, respectively.

6. 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 September 30, 2016 and 2015, the effective tax rate was 37.3 percent and 32.3 percent, respectively. The effective tax rate for the three months ended September 30, 2015 included net favorable discrete items of $28 million.

At September 30, 2016 and June 30, 2016, we had $532 million and $527 million of unrecognized tax benefits, respectively. The September 30, 2016 and June 30, 2016, balances include $358 million and $355 million of unrecognized tax benefits, respectively, that if recognized, would have an impact on the effective tax rate.

At September 30, 2016 and June 30, 2016, we had $149 million and $145 million, respectively, accrued for the payment of interest and penalties related to unrecognized tax benefits, which we recognize in the provision for income taxes in the condensed consolidated

statements of earnings. These balances are gross amounts before any tax benefits and are included in deferred income taxes and other liabilities in the condensed consolidated balance sheets.

It is reasonably possible that there could be a change in the amount of unrecognized tax benefits within the next 12 months due to activities of the U.S. Internal Revenue Service ("IRS") or other taxing authorities, possible settlement of audit issues, reassessment of existing unrecognized tax benefits or the expiration of statutes of limitations. We estimate that the range of the possible change in unrecognized tax benefits within the next 12 months is between zero and a net decrease of $175 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. With few exceptions, we are subject to audit by taxing authorities for fiscal years 2006 through the current fiscal year.

We are a party to a tax matters agreement with CareFusion Corporation ("CareFusion"), which has been acquired by Becton, Dickinson and Company. Under the tax matters agreement, CareFusion is obligated to indemnify us for certain tax exposures and transaction taxes prior to our fiscal 2010 spin-off of CareFusion. The indemnification receivable was $126 million and $172 million at September 30, 2016 and June 30, 2016, respectively, and is included in other assets in the condensed consolidated balance sheets.

7. Commitments, Contingent Liabilities and Litigation

Commitments

Generic Sourcing Venture with CVS Health Corporation ("CVS Health")

In July 2014, we established Red Oak Sourcing, LLC ("Red Oak Sourcing"), a U.S.-based generic pharmaceutical sourcing venture with CVS Health for an initial term of 10 years. Red Oak Sourcing negotiates generic pharmaceutical supply contracts on behalf of both companies. Due to the achievement of predetermined milestones, we are required to make quarterly payments of $45.6 million to CVS Health for the remainder of the initial term.

Legal Proceedings

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

We may be named from time to time in qui tam actions, which are initiated by private third parties purporting to act on behalf of federal or state governments and which 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. Most

Cardinal Health | Q1Fiscal 2017 Form 10-Q 22

Notes to Financial Statements

of these matters are resolved without incident; however, such subpoenas or requests can lead to the assertion of claims or the commencement of legal proceedings against us.

From time to time, we may determine that products we manufacture or market do not meet our specifications, regulatory requirements, or published standards. When we or a regulatory agency identify a quality or regulatory issue, we investigate and take appropriate corrective action. Such actions can lead to product recalls, costs to repair or replace affected products, temporary interruptions in product sales, action by regulators, and product liability claims and lawsuits, including class actions.

We accrue for contingencies related to disputes, litigation, and regulatory matters if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Because these matters are inherently unpredictable and unfavorable developments or resolutions can occur, assessing contingencies is highly subjective and requires judgments about future events. We regularly review contingencies to determine whether our accruals and related disclosures are adequate. The amount of ultimate loss may differ from these estimates.

With respect to the matters described below, except as otherwise stated, we are unable to estimate a range of reasonably possible loss for matters for which there is no accrual, or additional loss for matters for which we have recorded an 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. However, the outcome of one or more of these matters could be material to our results of operations for a particular quarterly period.

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

Except as otherwise stated below, 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 discuss a settlement with the U.S. Department of Justice. Our total accrual for this matter was $44 million at both September 30, 2016 and June 30, 2016, which is included in other accrued liabilities in the condensed consolidated balance sheets.

State of West Virginia vs. Cardinal Health, Inc.

Since June 2012, the West Virginia Attorney General has filed complaints against a number of pharmaceutical wholesale distributors, including us. The complaints, which were filed in the Circuit Court of Boone County, West Virginia, allege, 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. The complaints seek, among other things, injunctive and other equitable relief and monetary damages. We are vigorously defending ourselves in this matter.

Product Liability Lawsuits

As of October 31, 2016, we and our Cordis business have been named as defendants in 31 product liability lawsuits involving claims by approximately 250 plaintiffs that allege personal injuries associated with the use of Cordis OptEase and TrapEase inferior vena cava (IVC) filter products. These lawsuits seek a variety of remedies, including unspecified monetary damages. We are vigorously defending ourselves in these matters.

Based on currently available information, we have recorded an accrual, most of which relates to legal defense costs, as an adjustment to pre-acquisition liabilities assumed in the Cordis acquisition. Refer to Note 2 for further information regarding this adjustment. We do not believe that reasonably possible losses in excess of this accrued amount will be material to our financial statements.

23 Cardinal Health | Q1Fiscal 2017 Form 10-Q

Notes to Financial Statements

8. Fair Value Measurements

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

	September 30, 2016
(in millions)	Level 1		Level 2		Level 3			Total
Assets:
Cash equivalents	$	176	$	—	$	—		$	176
Forward contracts (1)	—		2		—			2
Available-for-sale securities (2)	—		200		—			200
Other investments (3)	109		—		—			109
Liabilities:
Contingent Consideration (4)	—		—		(21		)	(21		)

	June 30, 2016
(in millions)	Level 1		Level 2		Level 3			Total
Assets:
Cash equivalents	$	516	$	—	$	—		$	516
Forward contracts (1)	—		19		—			19
Available-for-sale securities (2)	—		200		—			200
Other investments (3)	103		—		—			103
Liabilities:
Contingent Consideration (4)	—		—		(19		)	(19		)

(1) 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.

(2) 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.

(3) 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.

(4) Contingent consideration represents the obligations incurred in connection with acquisitions. We do not deem the fair value of the contingent consideration obligations under any single acquisition to be significant. The estimate of fair value of the contingent consideration obligations requires subjective assumptions to be made regarding future business results, discount rates, discount periods, and probabilities assigned to various potential business result scenarios and was determined using probability assessments with respect to the likelihood of reaching various targets or of achieving certain milestones. The fair value measurement is based on significant inputs unobservable in the market and thus represents a Level 3 measurement. Changes in current expectations of progress could change the probability of achieving the targets within the measurement periods and result in an increase or decrease in the fair value of the contingent consideration obligation.

The following table presents those liabilities measured at fair value on a recurring basis using unobservable inputs (Level 3):

(in millions)	Contingent Consideration Obligation
Balance at June 30, 2016	$	19
Additions from acquisitions	2
Changes in fair value of contingent consideration (1)	—
Balance at September 30, 2016	$	21

(1) Amount is included in amortization and other acquisition-related costs in the condensed consolidated statements of earnings.

9. Financial Instruments

We utilize derivative financial instruments to manage exposure to certain risks related to our ongoing operations. The primary risks managed through the use of derivative instruments include interest rate risk, currency exchange risk, and commodity price risk. We do not use derivative instruments for trading or speculative purposes. While the majority of our derivative instruments are designated as hedging instruments, we also enter into derivative instruments that are designed to hedge a risk, but are not designated as hedging instruments. These derivative instruments are adjusted to fair value through earnings at the end of each period. Our derivative and hedging programs are consistent with those described in the 2016 Form 10-K. The amount of ineffectiveness associated with these derivative instruments was immaterial for the three months ended September 30, 2016 and 2015.

During the three months ended September 30, 2016, we entered into forward interest rate swap locks with a total notional amount of $200 million to hedge probable, but not firmly committed, future transactions associated with our debt.

During the three months ended September 30, 2016, we terminated notional amounts of $200 million of pay-floating interest rate swaps. We received net settlement proceeds of $14 million related to the pay-floating interest rate swaps terminated during the three months ended September 30, 2016 and the pay-floating interest rate swaps terminated in fiscal 2016, as previously disclosed in our 2016 Form 10-K. These swaps were previously designated as fair value hedges. There was no immediate impact to the condensed consolidated statements of earnings; however, the fair value adjustment to debt is being amortized over the life of the underlying debt as a reduction to interest expense, net in the condensed consolidated statements of earnings.

Fair Value of Financial Instruments

The carrying amounts of cash and equivalents, trade receivables, accounts payable, and other accrued liabilities at September 30, 2016 and June 30, 2016 approximate fair value due to their short-term maturities.

Cardinal Health | Q1Fiscal 2017 Form 10-Q 24

Notes to Financial Statements

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)	September 30, 2016		June 30, 2016
Estimated fair value	$	5,884	$	5,780
Carrying amount	5,532		5,539

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

10. Redeemable Noncontrolling Interests

Redeemable noncontrolling interest represents the third parties' share of the net assets of naviHealth. The third-party noncontrolling interest holders hold an option that allows them to sell their noncontrolling interests to us at any time after the two-year anniversary of the closing, or earlier if a trigger event occurs. The terms of the agreement also provide us with the option to acquire any remaining noncontrolling interests at any time after the two-year anniversary of the closing, which is August 26, 2017. Our ownership interest in naviHealth was 82 percent at September 30, 2016.

The reconciliation of the changes in redeemable noncontrolling interests are as follows:

(in millions)	Redeemable Noncontrolling Interest
Balance at June 30, 2016	$	117
Net earnings attributable to redeemable noncontrolling interests	1
Net purchase of redeemable noncontrolling interests	(2		)
Balance at September 30, 2016	$	116

11. Shareholders' Equity

During the three months ended September 30, 2016, we repurchased 3 million common shares having an aggregate cost of $250 million. The average price paid per common share was $81.37.

During the three months ended September 30, 2015, we did not repurchase any common shares.

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 Loss

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

(in millions)	Foreign Currency Translation Adjustments			Unrealized Gain/(Loss) on Derivatives, net of tax			Accumulated Other Comprehensive Loss
Balance at June 30, 2016	$	(123	)	$	7		$	(116	)
Other comprehensive income/(loss), before reclassifications	(1		)	2			1
Amounts reclassified to earnings	—			(1		)	(1		)
Other comprehensive income/(loss), net of tax	(1		)	1			—
Balance at September 30, 2016	$	(124	)	$	8		$	(116	)

Activity related to realized and unrealized gains and losses on available-for-sale securities, as described in Note 5, was immaterial during the three months ended September 30, 2016.

12. Earnings Per Share Attributable to Cardinal Health, Inc.

The following table reconciles the number of common shares used to compute basic and diluted earnings per share attributable to Cardinal Health, Inc.:

	Three Months Ended September 30,
(in millions)	2016	2015
Weighted-average common shares–basic	320	328
Effect of dilutive securities:
Employee stock options, restricted share units, and performance share units	2	3
Weighted-average common shares–diluted	322	331

The potentially dilutive employee stock options, restricted share units, and performance share units that were antidilutive for the three months ended September 30, 2016 and 2015 were 3 million and 2 million, 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 performance for purposes of allocating resources and assessing performance combined with the nature of the individual business activities.

25 Cardinal Health | Q1Fiscal 2017 Form 10-Q

Notes to Financial Statements

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

	Three Months Ended September 30,
(in millions)	2016			2015
Pharmaceutical	$	28,762		$	25,140
Medical	3,279			2,919
Total segment revenue	32,041			28,059
Corporate (1)	(2		)	(4		)
Total revenue	$	32,039		$	28,055

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

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

We do not allocate the following items to our segments: last-in first-out, or ("LIFO"), inventory charges/(credits); restructuring and employee severance; amortization and other acquisition-related costs; impairments and (gain)/loss on disposal of assets; litigation (recoveries)/charges, net; other income, net; interest expense, net; loss on extinguishment of debt; and provision for income taxes.

In addition, certain investment spending, certain portions of enterprise-wide incentive compensation, and other spending are not allocated to the segments. Investment spending generally includes the first-year spend for certain projects that require incremental investments in the form of additional operating expenses. We encourage our segments and corporate functions to identify investment projects that will promote innovation and provide future returns. As approval decisions for such projects are dependent upon executive management, the expenses for such projects are often retained at Corporate. Investment spending within Corporate was $1 million and $6 million for the three months ended September 30, 2016 and 2015, respectively.

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

	Three Months Ended September 30,
(in millions)	2016			2015
Pharmaceutical	$	534		$	657
Medical	127			101
Total segment profit	661			758
Corporate	(126		)	(138		)
Total operating earnings	$	535		$	620

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

(in millions)	September 30, 2016		June 30, 2016
Pharmaceutical	$	21,034	$	20,662
Medical	10,553		10,236
Corporate	2,819		3,224
Total assets	$	34,406	$	34,122

14. Share-Based Compensation

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

The following table provides total share-based compensation expense by type of award:

	Three Months Ended September 30,
(in millions)	2016		2015
Restricted share unit expense	$	17	$	13
Employee stock option expense	5		5
Performance share unit expense	1		12
Total share-based compensation	$	23	$	30

The total tax benefit related to share-based compensation was $8 million and $11 million for the three months ended September 30, 2016 and 2015, respectively.

Restricted Share Units

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

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

(in millions, except per share amounts)	Restricted Share Units		Weighted-Average Grant Date Fair Value per Share
Nonvested at June 30, 2016	2		$	71.73
Granted	1		83.15
Vested	(1	)	68.14
Canceled and forfeited	—		—
Nonvested at September 30, 2016	2		$	80.22

At September 30, 2016, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested restricted share units not yet recognized was $121 million, which is expected to be recognized over a weighted-average period of two years.

Stock Options

Employee stock options granted under the Plans generally vest in equal annual installments over three years and are exercisable for 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.

Cardinal Health | Q1Fiscal 2017 Form 10-Q 26

Notes to Financial Statements

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, 2016	7		$	54.09
Granted	2		83.14
Exercised	(1	)	37.83
Canceled and forfeited	—		—
Outstanding at September 30, 2016	8		$	60.65
Exercisable at September 30, 2016	5		$	49.96

At September 30, 2016, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested stock options not yet recognized was $35 million, which is expected to be recognized over a weighted-average period of two years. The following tables provide additional detail related to stock options:

(in millions)	September 30, 2016		June 30, 2016
Aggregate intrinsic value of outstanding options at period end	$	147	$	181
Aggregate intrinsic value of exercisable options at period end	145		161

(in years)	September 30, 2016	June 30, 2016
Weighted-average remaining contractual life of outstanding options	7	6
Weighted-average remaining contractual life of exercisable options	6	5

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, 2016	0.8		$	63.96
Granted	0.2		83.19
Vested (1)	(0.4	)	51.49
Canceled and forfeited	—		—
Nonvested at September 30, 2016	0.6		$	77.72

(1) Vested based on achievement of 170 percent of the target performance goal.

At September 30, 2016, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested performance share units not yet recognized was $23 million, which is expected to be recognized over a weighted-average period of two years.

27 Cardinal Health | Q1Fiscal 2017 Form 10-Q

Exhibits

Exhibits

Exhibit Number	Exhibit Description
2.1	Letter Agreement by and between Ethicon, Inc. and Cardinal Health, Inc. regarding pre-closing product registration transfer process for certain Day 2 Countries, dated August 8, 2016
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 June 30, 2016, 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

Cardinal Health uses its website as a channel of distribution for material company information. Important information, including news releases, financial information, earnings and analyst presentations, and information about upcoming presentations and events is routinely posted and accessible at ir.cardinalhealth.com. In addition, the website allows investors and other interested persons to sign up automatically to receive e-mail alerts when the company posts news releases, SEC filings and certain other information on its website.

Cardinal Health | Q1Fiscal 2017 Form 10-Q 28

Form 10-Q Cross Reference Index

Form 10-Q Cross Reference Index

Item Number		Page
	Part I. Financial Information
Item 1	Financial Statements	16
Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	2
Item 3	Quantitative and Qualitative Disclosures about Market Risk	14
Item 4	Controls and Procedures	14
	Part II. Other Information
Item 1	Legal Proceedings	14
Item 1A	Risk Factors	15
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	15
Item 3	Defaults Upon Senior Securities	N/A
Item 4	Mine Safety Disclosures	N/A
Item 5	Other Information	N/A
Item 6	Exhibits	28
	Signatures	30

N/A Not applicable

29 Cardinal Health | Q1Fiscal 2017 Form 10-Q

Additional Information

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:	November 2, 2016	/s/    GEORGE S. BARRETT
		George S. Barrett
		Chairman and Chief Executive Officer
		/s/    MICHAEL C. KAUFMANN
		Michael C. Kaufmann
		Chief Financial Officer

Cardinal Health | Q1Fiscal 2017 Form 10-Q 30

EX-2.1

Exhibit 2.1

August 8, 2016

Cardinal Health, Inc.

7000 Cardinal Place

Dublin, OH 43017

RE: Side Letter regarding Pre-Closing Product Registration Transfer Process for Certain Remaining Day 2 Countries.

Dear Sir or Madam:

Reference is made to the Stock and Asset Purchase Agreement, dated as of March 1, 2015 (the “SAPA”), by and between Ethicon, Inc., a Delaware corporation and Cardinal Health, Inc., an Ohio corporation (“Buyer”), pursuant to which Buyer purchased the Business (as such term is defined in the SAPA) from Seller. Each capitalized term used and not defined in this letter agreement shall have the meaning assigned to it in the SAPA.

Seller and Cardinal Health Switzerland 515 GMBH, an Affiliate of Buyer (“Cardinal Switzerland”) are parties to the Transition Services Agreement (the “TSA”), dated October 2, 2015, pursuant to which Seller and certain of its Affiliates provide certain services to Cardinal Switzerland and its Affiliates to facilitate the transition of the Business.

Seller and Cardinal Switzerland are also parties to a Distribution Agreement (the “Distribution Agreement”) dated October 2, 2015, with respect to the Non-Principal Country Units, including those set forth in Exhibit A (each, together with each country into which they sell the Products, a “Day 2 Territory” and together, the “Day 2 Territories”), pursuant to which Seller has agreed to provide Distribution Services (as such term is defined in the Distribution Agreement) for the Day 2 Products (as such term is defined in the Distribution Agreement) in such Day 2 Territories until the applicable Closing for such Day 2 Territories (the “Day 2 Closings”).

In accordance with Section 11.05 of the SAPA, Seller and Buyer wish to amend Section 2.01(b) of the SAPA to permit Buyer and its Affiliates to undertake certain actions set forth below with respect to the Day 2 Products in the applicable Day 2 Territories in advance of the applicable Day 2 Closings (the “Closing Facilitation Steps”). For the avoidance of doubt, this letter agreement shall apply only to the Day 2 Products in the applicable Day 2 Territories, and shall not modify or otherwise affect the rights and obligations of Seller and its Affiliates or Buyer and its Affiliates in any other Non-Principal Country Unit.

In order to better position the Business in each Day 2 Territory to transfer to Buyer, Buyer may take, or cause Buyer’s Affiliates to take (and Seller hereby expressly consents to and shall cooperate with and use commercially reasonable efforts to assist Buyer with), the following Closing Facilitation Steps:

1. Seller or its Affiliates in the Day 2 Territories shall deliver to Buyer, promptly following request from Buyer, product registration certificates and other applicable documentation required for Buyer to obtain market authorization holder registration for the Day 2 Products listed in the Distribution Agreement for such Day 2 Territory. Product registration certificates and other applicable documentation shall be provided in the local language if required by applicable Law and in English, where available.

2. Promptly following the delivery of the certificates described in clause 1 above, Buyer shall initiate the local regulatory processes required to obtain requisite marketing authorization, permissions, approvals and other

documentation (collectively, the “Product Licenses”) from the Food and Drug Administration or similar Governmental Entity of the applicable Day 2 Territory (for each Day 2 Territory, the “Regulatory Authority”) necessary to allow the Buyer to market and sell the Day 2 Products upon the applicable Day 2 Closing.

3. Seller shall use commercially reasonable efforts to assist Buyer in effecting the Closing Facilitation Steps, including providing all information requested by Buyer to Buyer on a timely basis, and attending such meetings (in person or telephonically) with the applicable Regulatory Authority, in each case as may be required by applicable Laws or practices or as may be reasonably requested by Buyer in connection with the Closing Facilitation Steps.

4. For each Day 2 Territory, Buyer or an Affiliate or representative thereof shall notify Seller of the receipt of the applicable Product Licenses from the applicable Regulatory Authority as soon as practical (and in any event not later than 10 days) after receipt by Buyer. Seller shall have no liability for any Damages (as such term is defined in the SAPA) including importation delays or disruption to Business operations in the applicable Day 2 Territory, caused by or arising out of Buyer’s failure to deliver such notice to Seller. Upon the receipt of the applicable Product Licenses in such Day 2 Territory from the applicable Regulatory Authority, Buyer shall fully assume all responsibility for holding and maintaining such Product Licenses including the performance of all legal, regulatory, quality assurance, compliance and other obligations stemming from ownership of such Product Licenses and, notwithstanding any provisions of the SAPA, the TSA, the Distribution Agreement or any other Transaction Documents to the contrary, Seller and its Affiliates shall bear no liability to Buyer or its Affiliates with respect thereto and shall be indemnified by Buyer against any third-party claims resulting therefrom.

5. In the event that Buyer receives the applicable Product Licenses required to market and sell the applicable Day 2 Products in a Day 2 Territory prior to such Day 2 Closing and, as a consequence, Seller and its Affiliates are no longer able to import, sell or distribute Product in such Day 2 Territory, Buyer agrees to (i) waive any claim against Seller or its Affiliates under the SAPA, the TSA, the Distribution Agreement or any other Transaction Document with respect to the performance of the applicable Service (as such term is defined in the TSA), and (ii) indemnify Seller against any Damages resulting therefrom.

6. Provided Seller has complied with its obligations in the SAPA and clause 3 above, Buyer acknowledges and agrees that the risk of any Damages incurred by the Business arising from Buyer filing to obtain and/or receiving the applicable Product Licenses in advance of the applicable Day 2 Closing shall be solely born by Buyer. Buyer takes full responsibility to establish appropriate Day 2 Product inventories at Buyer’s expense prior to the transfer of such Product Licenses or the issuance of Product Licenses in the name of Buyer or an Affiliate thereof, as applicable, in order to mitigate any Business disruption stemming from such transfer or issuance. Buyer shall use commercially reasonable efforts to obtain the necessary Product Licenses for each Day 2 Territory on or prior to such Day 2 Closing.  In the event that Buyer is unable through no fault of its own to obtain such Product License on or prior to the respective Day 2 Closing, and Buyer believes that additional post-closing regulatory support for the Products (“Post-Closing Services”) is required, Buyer shall promptly notify Seller and request such Post-Closing Services. The terms and duration of such Post-Closing Services, if any, shall be as mutually agreed upon by the parties.

7. Provided Seller has complied with its obligations in the SAPA and clause 3 above, Buyer shall indemnify and hold harmless Seller against and from any and all Damages which Seller and any Seller Indemnities may incur or suffer to the extent such Damages arise out of or result from the Closing Facilitation Steps set forth in this letter agreement, including any Damages that Seller and its Affiliates may incur due to any action by a third-party service provider, distributor or other agent engaged by Buyer to assist in the Closing Facilitation Steps or receive any Product License on behalf of Buyer (each a “Third Party Market Authorization Holder”)

2

in accordance with the provisions of Article X of the SAPA. Buyer agrees and acknowledges that Seller and its Affiliates and Service Providers (as such term is defined in the TSA) are not party to any agreement or arrangement between Buyer and any Third Party Market Authorization Holder, and Seller and its Affiliates and Service Providers shall not be liable in any way for any claims arising out of or any Damages suffered by either Buyer or such Third Party Market Authorization Holder or such party’s affiliates and assigns pursuant thereto.

In the event that a Regulatory Authority for an applicable Day 2 Territory enacts any rule, regulation or other regulatory guideline that would prohibit Seller or its Affiliates or Buyer or its Affiliates from completing the actions contemplated herein or as required by the SAPA, the parties shall reasonably cooperate to reassess the approach and modify the terms of this letter agreement as may be necessary.

Except as expressly set forth herein, this Letter Agreement shall not by implication or otherwise limit, impair, constitute a waiver of or otherwise affect the rights and remedies of Seller or Buyer or their respective Affiliates under the SAPA or other Transaction Documents, and, except as otherwise expressly agreed to herein, shall not alter, modify or amend any of the terms, conditions, obligations or agreements of Seller or Buyer or their respective Affiliates contained in the Transaction Documents, all of which shall continue in full force and effect.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

3

If this letter agreement is acceptable to you, please so indicate by signing below, at which time this letter will become binding upon the parties hereto as of the date first written above.

Sincerely,
ETHICON, INC.
/s/ Alan Rae
Name:	Alan Rae
Title:	Vice President New Business Development

4

Acknowledged, accepted and agreed to as of the date first written above:

CARDINAL HEALTH, INC.

/s/ Mike Kaufmann

Name: Mike Kaufmann

Title: Chief Financial Officer

5

EX-12.1

Exhibit 12.1

Computation of Ratio of Earnings to Fixed Charges

				Fiscal Year Ended June 30
(in millions, except ratios)	2012			2013			2014			2015			2016			Three Months Ended September 30, 2016
Earnings from continuing operations before income taxes	$	1,698.1		$	888.3		$	1,798.3		$	1,967.3		$	2,275.6		$	490.5
Plus fixed charges:
Interest expense	92.3			119.2			129.4			137.0			178.2			43.9
Capitalized interest	$	6.0		$	1.7		$	1.2		$	1.8		$	5.6		$	2.2
Amortization of debt offering costs	2.8			3.5			3.6			7.6			5.6			1.4
Interest portion of rent expense	$	7.8		$	8.3		$	9.8		$	9.6		$	11.5		$	3.3
Fixed charges	108.9			132.7			144.0			156.0			200.9			50.8
Plus: amortization of capitalized interest	$	3.2		$	3.4		$	2.9		$	2.4		$	2.5		$	0.7
Less: capitalized interest	(6.0		)	(1.7		)	(1.2		)	(1.8		)	(5.6		)	(2.2		)
Earnings	$	1,804.2		$	1,022.7		$	1,944.0		$	2,123.9		$	2,473.4		$	539.8
Ratio of earnings to fixed charges (1)	$	16.6		$	7.7		$	13.5		$	13.6		$	12.3		$	10.6

(1) The ratio of earnings to fixed charges is computed by dividing fixed charges into earnings from continuing operations before income taxes 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: November 2, 2016

/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: November 2, 2016

/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 September 30, 2016 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: November 2, 2016

/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, “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, 2016 (the “2016 Form 10-K”), our quarterly reports on Form 10-Q or our current reports on Form 8-K (along with any exhibits and amendments to such reports), as well as our news 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 that reflect our current view (as of the date the forward-looking statement is first made) about 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;

• uncertainties relating to the pricing of generic pharmaceuticals;

• uncertainties relating to the timing, frequency and profitability of generic pharmaceutical launches;

• our ability to maintain the benefits our generic pharmaceutical sourcing venture with CVS Health Corporation;

• with respect to our distribution agreements with branded pharmaceutical manufacturers, changes in the amount of service fees we receive or, in cases where part of our compensation under these agreements is branded pharmaceutical price appreciation, changes in the frequency or magnitude of such price appreciation;

• changes in the timing or frequency of the introduction of branded pharmaceuticals;

• uncertainties relating to the frequency or magnitude of branded pharmaceutical price appreciation;

• actions of regulatory bodies and other governmental authorities, including the U.S. Drug Enforcement Administration ("DEA"), certain agencies within the U.S. Department of Health and Human Services (including the U.S. Food and Drug Administration, Centers for Medicare and Medicaid Services, the Office of Inspector General and the Office for Civil Rights), the U.S. Nuclear Regulatory Commission, the U.S. Federal Trade Commission, the U.S. Customs and Border Protection, various state boards of pharmacy, state controlled substance agencies, state health departments, state insurance departments, state Medicaid departments or comparable regulatory bodies or governmental authorities or foreign equivalents that, in each case, could delay, limit or suspend product development, manufacturing, distribution, importation or sales or result in warning letters, recalls, seizures, injunctions or monetary sanctions;

• 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;

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

• 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 and related product liability claims and lawsuits, including class actions;

• 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 our collecting, handling and maintaining patient-identifiable health information and other sensitive personal and financial information, which are subject to federal, state and foreign laws that regulate the use and disclosure of such information;

• risks arising from certain of our businesses being Medicare-certified suppliers or participating in state Medicaid programs, which businesses are subject to accreditation and quality standards and other rules and regulations, including applicable billing, payment and record-keeping requirements;

• risks arising from certain of our businesses manufacturing pharmaceutical and medical products or repackaging pharmaceuticals that are purchased through federal or state healthcare programs, which businesses are subject to federal and state laws that establish eligibility for reimbursement by such programs;

• 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;

• changes in laws or changes 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;

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

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

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

• uncertainties due to government healthcare reform;

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

• changes in regulatory policies regarding pharmaceutical manufacturer product pricing practices;

• changes in hospital buying groups or hospital buying practices;

• changes in distribution or sourcing models for pharmaceutical and medical and surgical products, including an increase in direct and limited distribution;

• the risks of counterfeit products in the supply chain;

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

• 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 or result in the loss of customers;

• disruption or damage to, or failure of, our information systems, critical facilities, including our national logistics center, or distribution networks;

• risks to our business and information and controls systems in the event that the Pharmaceutical segment's planned multi-year systems replacement project or other business process improvements, infrastructure modernizations or initiatives to use third-party service providers for key systems and processes are not effectively implemented;

• any compromise of our information systems or those of a third-party with whom we do business, including unauthorized access to or use or disclosure of sensitive information;

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

• possible losses relating to product liability claims regarding products for which we cannot obtain product liability insurance or for which such insurance is not adequate to cover our losses;

• our ability to maintain adequate intellectual property protections;

• 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, and uncertainties relating to our ability to achieve the anticipated results from acquisitions;

• risks and uncertainties relating to the acquisition of Cordis, including the ability to achieve the expected synergies and positive impact to operating results and the additional risks the Cordis acquisition subjects us to relating to regulatory matters, legal proceedings, tax laws or positions and global operations, including the effects of local economic environments and currency volatility;

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

• bankruptcy, insolvency or other credit failure of a customer or supplier that owes us a substantial amount;

• 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;

• risks associated with volatility and disruption to the global capital and credit markets, which may adversely affect our ability to access credit, our cost of credit and the financial soundness of our customers and suppliers;

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

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

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

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

• other factors described in the “Risk Factors” section of the 2016 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.

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Document and Entity Information - shares	3 Months Ended
	Sep. 30, 2016	Oct. 27, 2016
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2016
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1
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		320,063,302

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Consolidated Statements of Earnings - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Revenue	$ 32,039	$ 28,055
Cost of products sold	30,449	26,476
Gross margin	1,590	1,579
Operating expenses:
Distribution, selling, general, and administrative expenses	920	842
Restructuring and employee severance	9	12
Amortization and other acquisition-related costs	122	105
Impairments and (gain)/loss on disposal of assets, net	3	0
Litigation (recoveries)/charges, net	1	0
Operating earnings	535	620
Other (income)/expense, net	(3)	8
Interest expense, net	44	44
Earnings before income taxes	494	568
Provision for income taxes	184	184
Net earnings	310	384
Net earnings attributable to noncontrolling interests	1	1
Net earnings attributable to Cardinal Health, Inc.	$ 309	$ 383
Earnings per common share attributable to Cardinal Health, Inc.:
Basic (in shares)	$ 0.97	$ 1.17
Diluted (in shares)	$ 0.96	$ 1.15
Weighted-average number of common shares outstanding:
Basic (in shares)	320	328
Diluted (in shares)	322	331
Cash dividends declared per common share	$ 0.4489	$ 0.3870

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Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Statement of Comprehensive Income [Abstract]
Net earnings	$ 310	$ 384
Other comprehensive income/(loss):
Foreign currency translation adjustments and other	(1)	(44)
Net unrealized gain/(loss) on derivative instruments, net of tax	1	(1)
Total other comprehensive income/(loss), net of tax	0	(45)
Total comprehensive income	310	339
Less: comprehensive income attributable to noncontrolling interests	(1)	(1)
Total comprehensive income attributable to Cardinal Health, Inc.	$ 309	$ 338

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Consolidated Balance Sheets - USD ($) $ in Millions	Sep. 30, 2016	Jun. 30, 2016
Current assets:
Cash and equivalents	$ 2,001	$ 2,356
Trade receivables, net	7,708	7,405
Inventories, net	10,917	10,615
Prepaid expenses and other	1,657	1,580
Total current assets	22,283	21,956
Property and equipment, net	1,823	1,796
Goodwill and other intangibles, net	9,427	9,426
Other assets	873	944
Total assets	34,406	34,122
Current liabilities:
Accounts payable	17,597	17,306
Current portion of long-term obligations and other short-term borrowings	616	587
Other accrued liabilities	1,788	1,808
Total current liabilities	20,001	19,701
Long-term obligations, less current portion	4,916	4,952
Deferred income taxes and other liabilities	2,842	2,781
Redeemable noncontrolling interests	116	117
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 September 30, 2016 and June 30, 2016	2,958	3,010
Retained earnings	6,582	6,419
Common Shares in treasury, at cost: 44 million shares and 42 million shares at September 30, 2016 and June 30 2016, respectively	(2,912)	(2,759)
Accumulated other comprehensive loss	(116)	(116)
Total Cardinal Health, Inc. shareholders' equity	6,512	6,554
Noncontrolling interests	19	17
Total shareholders’ equity	6,531	6,571
Total liabilities, redeemable noncontrolling interests, and shareholders’ equity	$ 34,406	$ 34,122

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Consolidated Balance Sheets (Parenthetical) - shares	Sep. 30, 2016	Jun. 30, 2016
Statement of Financial Position [Abstract]
Preferred shares, authorized	500,000	500,000
Preferred shares, issued	0	0
Common shares, authorized	755,000,000	755,000,000
Common shares, issued	364,000,000	364,000,000
Common shares in treasury	44,000,000	42,000,000

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Consolidated Statements of Cash Flows - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash flows from operating activities:
Net earnings	$ 310	$ 384
Adjustments to reconcile net earnings to net cash provided by/(used in) operating activities:
Depreciation and amortization	173	137
Impairments and (gain)/loss on disposal of assets, net	3	0
Share-based compensation	23	30
Provision for bad debts	7	17
Change in fair value of contingent consideration obligation	0	(1)
Change in operating assets and liabilities, net of effects from acquisitions:
Increase in trade receivables	(306)	(348)
Increase in inventories	(298)	(495)
Increase in accounts payable	279	425
Other accrued liabilities and operating items, net	(87)	(201)
Net cash provided by/(used in) operating activities	104	(52)
Cash flows from investing activities:
Acquisition of subsidiaries, net of cash acquired	(9)	(1,399)
Additions to property and equipment	(100)	(83)
Purchase of available for sale securities and other investments	(52)	(26)
Proceeds from sale of available-for-sale securities and other investments	34	25
Proceeds from maturities of available-for-sale securities	17	5
Net cash used in investing activities	(110)	(1,478)
Cash flows from financing activities:
Payment of contingent consideration obligation	0	23
Net change in short-term borrowings	25	36
Net purchase of noncontrolling interests	(10)	0
Reduction of long-term obligations	(1)	(4)
Proceeds from interest rate swap terminations	14	0
Net tax withholdings from share-based compensation	(9)	(21)
Excess tax benefits from share-based compensation	30	31
Dividends on common shares	(149)	(131)
Payments for Repurchase of Common Stock	(250)
Treasury Stock, Value, Acquired, Cost Method		0
Net cash used in financing activities	(350)	(112)
Effect of exchange rates changes on cash and equivalents	1	0
Net decrease in cash and equivalents	(355)	(1,642)
Cash and equivalents at beginning of period	2,356	4,616
Cash and equivalents at end of period	$ 2,001	$ 2,974

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Basis of Presentation and Summary of Significant Accounting Policies

3 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

Basis of Presentation and Summary of Significant Accounting Policies

1. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

Our condensed consolidated financial statements include the accounts of all majority-owned or controlled subsidiaries, and all significant intercompany transactions and amounts have been eliminated. References to "we," "our," and similar pronouns in this Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 (this "Form 10-Q") refer to Cardinal Health, Inc. and its majority-owned or controlled subsidiaries unless the context requires otherwise.

Our condensed consolidated financial statements have been prepared in accordance with the U.S. Securities and Exchange Commission ("SEC") instructions to Quarterly Reports on Form 10-Q and include the information and disclosures required by accounting principles generally accepted in the United States ("GAAP") for interim financial reporting. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect amounts reported in the condensed consolidated financial statements and accompanying notes. Actual amounts may differ from these estimated amounts. In our opinion, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included. Except as disclosed elsewhere in this Form 10-Q, all such adjustments are of a normal and recurring nature. In addition, financial results presented for this fiscal 2017 interim period are not necessarily indicative of the results that may be expected for the full fiscal year ending June 30, 2017. These condensed consolidated financial statements are unaudited and, accordingly, should be read in conjunction with the audited consolidated financial statements and related notes contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2016 (the "2016 Form 10-K").

Recent Financial Accounting Standards

In August 2016, the Financial Accounting Standards Board (the "FASB") issued accounting guidance which clarifies the classification of certain cash receipts and cash payments in the statement of cash flows, including those related to contingent consideration payments made after a business combination, distributions received from equity method investees, debt prepayment or debt extinguishment costs, and proceeds from the settlement of insurance claims. This guidance will be effective for us in the first quarter of fiscal 2019. We are currently evaluating the impact of this standard on our consolidated financial statements.

In April 2015, the FASB issued amended accounting guidance that clarifies the circumstances under which a cloud computing customer would account for the arrangement as a license of internal-use software. If it is determined that a software license does not exist in the arrangement, the customer would account for this arrangement as a service contract. We adopted this guidance in the first quarter of fiscal 2017. The adoption of this guidance did not have a material impact on our financial position or results of operations.

Also in April 2015, the FASB issued amended accounting guidance related to the presentation of debt issuance costs in the financial statements. This guidance requires an entity to present such costs in the balance sheet as a direct deduction from the related debt rather than as an asset. We adopted this guidance in the first quarter of fiscal 2017. Upon adoption of this guidance, debt issuance costs of $29 million were reclassified from other assets to long-term obligations, less current portion within the condensed consolidated balance sheet.

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 2019. We are in the process of assessing any differences between the amended and existing guidance that could impact our consolidated financial statements and continuing to evaluate the options for adoption.

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Acquisitions Acquisitions

3 Months Ended

Sep. 30, 2016

Business Combinations [Abstract]

Acquisitions

2. Acquisitions

Cordis

On October 2, 2015, we acquired the Cordis business from Ethicon, Inc., a wholly-owned subsidiary of Johnson & Johnson, for $1.9 billion using cash on hand and proceeds from our debt offering in June 2015. The acquisition of Cordis, a global manufacturer and distributor of interventional cardiology devices and endovascular solutions with operations in more than 50 countries, expands our Medical segment's portfolio of self-manufactured products and its geographic scope. We closed the Cordis acquisition in 20 principal countries on October 2, 2015, and acquired control of, as described in GAAP, and the rights to, the net economic benefit from the entire Cordis business in the remaining countries at that time.

Transaction and integration costs associated with the acquisition of Cordis were $14 million and $21 million during the three months ended September 30, 2016 and 2015, respectively, and are included in amortization and other acquisition-related costs in the condensed consolidated statements of earnings.

Fair Value of Assets Acquired and Liabilities Assumed

The allocation of the fair value of assets acquired and liabilities assumed for the acquisitions of Cordis, naviHealth Holdings, LLC. ("naviHealth"), and The Harvard Drug Group ("Harvard Drug") were finalized during the three months ended September 30, 2016, resulting in goodwill of $943 million, $334 million, and $634 million, respectively. There were no significant adjustments to the allocation of the fair value of assets acquired and liabilities assumed for the naviHealth and Harvard Drug acquisitions from those disclosed in our fiscal 2016 Form 10-K. We recorded additional goodwill for Cordis of $82 million, substantially all of which was to increase an accrual for assumed pre-acquisition product liability lawsuits. See Note 7 for further discussion of the product liability lawsuits.

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Restructuring and Employee Severance

3 Months Ended

Sep. 30, 2016

Restructuring Charges [Abstract]

Restructuring and Employee Severance

3. Restructuring and Employee Severance

The following table summarizes restructuring and employee severance costs:

	Three months ended September 30,
(in millions)	2016		2015
Employee-related costs (1)	$	7	$	6
Facility exit and other costs (2)	2		6
Total restructuring and employee severance	$	9	$	12

(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 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, 2016	$	15		$	1		$	16
Additions	6			—			6
Payments and other adjustments	(4		)	(1		)	(5		)
Balance at September 30, 2016	$	17		$	—		$	17

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Goodwill and Other Intangible Assets

3 Months Ended

Sep. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

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, 2016	$	2,919		$	4,248	$	7,167
Goodwill acquired, net of purchase price adjustments	9			86		95
Foreign currency translation adjustments and other	(2		)	1		(1		)
Balance at September 30, 2016	$	2,926		$	4,335	$	7,261

Other Intangible Assets

The following tables summarize other intangible assets by class at:

	September 30, 2016
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible		Weighted- Average Remaining Amortization Period (Years)
Indefinite-life intangibles:
IPR&D, trademarks and other	$	70	$	—	$	70	N/A
Total indefinite-life intangibles	70		—		70		N/A
Definite-life intangibles:
Customer relationships	1,931		793		1,138		9
Trademarks, trade names, and patents	527		156		371		14
Developed technology and other	812		225		587		8
Total definite-life intangibles	3,270		1,174		2,096		10
Total other intangible assets	$	3,340	$	1,174	$	2,166	N/A

	June 30, 2016
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible
Indefinite-life intangibles:
IPR&D, trademarks and other	$	72	$	—	$	72
Total indefinite-life intangibles	72		—		72
Definite-life intangibles:
Customer relationships	1,946		737		1,209
Trademarks, trade names, and patents	508		140		368
Developed technology and other	808		198		610
Total definite-life intangibles	3,262		1,075		2,187
Total other intangible assets	$	3,334	$	1,075	$	2,259

Total amortization of intangible assets was $101 million and $67 million for the three months ended September 30, 2016 and 2015, respectively. Estimated annual amortization of intangible assets for the remainder of fiscal 2017 through 2021 is as follows: $285 million, $350 million, $281 million, $254 million, and $207 million.

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Available-for-Sale Securities

3 Months Ended

Sep. 30, 2016

Investments, Debt and Equity Securities [Abstract]

Available-for-Sale Securities

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)	September 30, 2016		June 30, 2016
Current available-for-sale securities:
Treasury bills	$	—	$	3
International bonds	3		2
Corporate bonds	58		58
U.S. agency bonds	7		6
Asset-backed securities	31		28
International equity securities	2		2
U.S. agency mortgage-backed securities	7		14
Total current available-for-sale securities	108		113
Long-term available-for-sale securities:
Treasury bills	29		10
International bonds	3		1
Corporate bonds	32		36
U.S. agency bonds	8		9
Asset-backed securities	8		17
U.S. agency mortgage-backed securities	12		14
Total long-term available-for-sale securities	92		87
Total available-for-sale securities	$	200	$	200

Gross unrealized gains and losses were immaterial at both September 30, 2016 and June 30, 2016. During the three months ended September 30, 2016 and 2015, gross realized gains and losses were immaterial and we did not recognize any other-than-temporary impairments. At September 30, 2016, the weighted-average effective maturity of our current and long-term investments was approximately 6 months and 17 months, respectively.

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Income Taxes

3 Months Ended

Sep. 30, 2016

Income Tax Disclosure [Abstract]

Income Taxes

6. 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 September 30, 2016 and 2015, the effective tax rate was 37.3 percent and 32.3 percent, respectively. The effective tax rate for the three months ended September 30, 2015 included net favorable discrete items of $28 million.

At September 30, 2016 and June 30, 2016, we had $532 million and $527 million of unrecognized tax benefits, respectively. The September 30, 2016 and June 30, 2016, balances include $358 million and $355 million of unrecognized tax benefits, respectively, that if recognized, would have an impact on the effective tax rate.

At September 30, 2016 and June 30, 2016, we had $149 million and $145 million, respectively, accrued for the payment of interest and penalties related to unrecognized tax benefits, which we recognize in the provision for income taxes in the condensed consolidated statements of earnings. These balances are gross amounts before any tax benefits and are included in deferred income taxes and other liabilities in the condensed consolidated balance sheets.

It is reasonably possible that there could be a change in the amount of unrecognized tax benefits within the next 12 months due to activities of the U.S. Internal Revenue Service ("IRS") or other taxing authorities, possible settlement of audit issues, reassessment of existing unrecognized tax benefits or the expiration of statutes of limitations. We estimate that the range of the possible change in unrecognized tax benefits within the next 12 months is between zero and a net decrease of $175 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. With few exceptions, we are subject to audit by taxing authorities for fiscal years 2006 through the current fiscal year.

We are a party to a tax matters agreement with CareFusion Corporation ("CareFusion"), which has been acquired by Becton, Dickinson and Company. Under the tax matters agreement, CareFusion is obligated to indemnify us for certain tax exposures and transaction taxes prior to our fiscal 2010 spin-off of CareFusion. The indemnification receivable was $126 million and $172 million at September 30, 2016 and June 30, 2016, respectively, and is included in other assets in the condensed consolidated balance sheets.

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Commitments, Contingent Liabilities and Litigation

3 Months Ended

Sep. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments, Contingent Liabilities and Litigation

7. Commitments, Contingent Liabilities and Litigation

Commitments

Generic Sourcing Venture with CVS Health Corporation ("CVS Health")

In July 2014, we established Red Oak Sourcing, LLC ("Red Oak Sourcing"), a U.S.-based generic pharmaceutical sourcing venture with CVS Health for an initial term of 10 years. Red Oak Sourcing negotiates generic pharmaceutical supply contracts on behalf of both companies. Due to the achievement of predetermined milestones, we are required to make quarterly payments of $45.6 million to CVS Health for the remainder of the initial term.

Legal Proceedings

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

We may be named from time to time in qui tam actions, which are initiated by private third parties purporting to act on behalf of federal or state governments and which 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. Most of these matters are resolved without incident; however, such subpoenas or requests can lead to the assertion of claims or the commencement of legal proceedings against us.

From time to time, we may determine that products we manufacture or market do not meet our specifications, regulatory requirements, or published standards. When we or a regulatory agency identify a quality or regulatory issue, we investigate and take appropriate corrective action. Such actions can lead to product recalls, costs to repair or replace affected products, temporary interruptions in product sales, action by regulators, and product liability claims and lawsuits, including class actions.

We accrue for contingencies related to disputes, litigation, and regulatory matters if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Because these matters are inherently unpredictable and unfavorable developments or resolutions can occur, assessing contingencies is highly subjective and requires judgments about future events. We regularly review contingencies to determine whether our accruals and related disclosures are adequate. The amount of ultimate loss may differ from these estimates.

With respect to the matters described below, except as otherwise stated, we are unable to estimate a range of reasonably possible loss for matters for which there is no accrual, or additional loss for matters for which we have recorded an 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. However, the outcome of one or more of these matters could be material to our results of operations for a particular quarterly period.

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

Except as otherwise stated below, 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 discuss a settlement with the U.S. Department of Justice. Our total accrual for this matter was $44 million at both September 30, 2016 and June 30, 2016, which is included in other accrued liabilities in the condensed consolidated balance sheets.

State of West Virginia vs. Cardinal Health, Inc.

Since June 2012, the West Virginia Attorney General has filed complaints against a number of pharmaceutical wholesale distributors, including us. The complaints, which were filed in the Circuit Court of Boone County, West Virginia, allege, 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. The complaints seek, among other things, injunctive and other equitable relief and monetary damages. We are vigorously defending ourselves in this matter.

Product Liability Lawsuits

As of October 31, 2016, we and our Cordis business have been named as defendants in 31 product liability lawsuits involving claims by approximately 250 plaintiffs that allege personal injuries associated with the use of Cordis OptEase and TrapEase inferior vena cava (IVC) filter products. These lawsuits seek a variety of remedies, including unspecified monetary damages. We are vigorously defending ourselves in these matters.

Based on currently available information, we have recorded an accrual, most of which relates to legal defense costs, as an adjustment to pre-acquisition liabilities assumed in the Cordis acquisition. Refer to Note 2 for further information regarding this adjustment. We do not believe that reasonably possible losses in excess of this accrued amount will be material to our financial statements.

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Fair Value Measurements

3 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurements

8. Fair Value Measurements

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

	September 30, 2016
(in millions)	Level 1		Level 2		Level 3			Total
Assets:
Cash equivalents	$	176	$	—	$	—		$	176
Forward contracts (1)	—		2		—			2
Available-for-sale securities (2)	—		200		—			200
Other investments (3)	109		—		—			109
Liabilities:
Contingent Consideration (4)	—		—		(21		)	(21		)

	June 30, 2016
(in millions)	Level 1		Level 2		Level 3			Total
Assets:
Cash equivalents	$	516	$	—	$	—		$	516
Forward contracts (1)	—		19		—			19
Available-for-sale securities (2)	—		200		—			200
Other investments (3)	103		—		—			103
Liabilities:
Contingent Consideration (4)	—		—		(19		)	(19		)

(1) 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.

(2) 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.

(3) 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.

(4) Contingent consideration represents the obligations incurred in connection with acquisitions. We do not deem the fair value of the contingent consideration obligations under any single acquisition to be significant. The estimate of fair value of the contingent consideration obligations requires subjective assumptions to be made regarding future business results, discount rates, discount periods, and probabilities assigned to various potential business result scenarios and was determined using probability assessments with respect to the likelihood of reaching various targets or of achieving certain milestones. The fair value measurement is based on significant inputs unobservable in the market and thus represents a Level 3 measurement. Changes in current expectations of progress could change the probability of achieving the targets within the measurement periods and result in an increase or decrease in the fair value of the contingent consideration obligation.

The following table presents those liabilities measured at fair value on a recurring basis using unobservable inputs (Level 3):

(in millions)	Contingent Consideration Obligation
Balance at June 30, 2016	$	19
Additions from acquisitions	2
Changes in fair value of contingent consideration (1)	—
Balance at September 30, 2016	$	21

(1) Amount is included in amortization and other acquisition-related costs in the condensed consolidated statements of earnings.

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Financial Instruments

3 Months Ended

Sep. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Financial Instruments

9. Financial Instruments

We utilize derivative financial instruments to manage exposure to certain risks related to our ongoing operations. The primary risks managed through the use of derivative instruments include interest rate risk, currency exchange risk, and commodity price risk. We do not use derivative instruments for trading or speculative purposes. While the majority of our derivative instruments are designated as hedging instruments, we also enter into derivative instruments that are designed to hedge a risk, but are not designated as hedging instruments. These derivative instruments are adjusted to fair value through earnings at the end of each period. Our derivative and hedging programs are consistent with those described in the 2016 Form 10-K. The amount of ineffectiveness associated with these derivative instruments was immaterial for the three months ended September 30, 2016 and 2015.

During the three months ended September 30, 2016, we entered into forward interest rate swap locks with a total notional amount of $200 million to hedge probable, but not firmly committed, future transactions associated with our debt.

During the three months ended September 30, 2016, we terminated notional amounts of $200 million of pay-floating interest rate swaps. We received net settlement proceeds of $14 million related to the pay-floating interest rate swaps terminated during the three months ended September 30, 2016 and the pay-floating interest rate swaps terminated in fiscal 2016, as previously disclosed in our 2016 Form 10-K. These swaps were previously designated as fair value hedges. There was no immediate impact to the condensed consolidated statements of earnings; however, the fair value adjustment to debt is being amortized over the life of the underlying debt as a reduction to interest expense, net in the condensed consolidated statements of earnings.

Fair Value of Financial Instruments

The carrying amounts of cash and equivalents, trade receivables, accounts payable, and other accrued liabilities at September 30, 2016 and June 30, 2016 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)	September 30, 2016		June 30, 2016
Estimated fair value	$	5,884	$	5,780
Carrying amount	5,532		5,539

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

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Redeemable Noncontrolling Interests

3 Months Ended

Sep. 30, 2016

Temporary Equity [Abstract]

Redeemable Noncontrolling Interests

10. Redeemable Noncontrolling Interests

Redeemable noncontrolling interest represents the third parties' share of the net assets of naviHealth. The third-party noncontrolling interest holders hold an option that allows them to sell their noncontrolling interests to us at any time after the two-year anniversary of the closing, or earlier if a trigger event occurs. The terms of the agreement also provide us with the option to acquire any remaining noncontrolling interests at any time after the two-year anniversary of the closing, which is August 26, 2017. Our ownership interest in naviHealth was 82 percent at September 30, 2016.

The reconciliation of the changes in redeemable noncontrolling interests are as follows:

(in millions)	Redeemable Noncontrolling Interest
Balance at June 30, 2016	$	117
Net earnings attributable to redeemable noncontrolling interests	1
Net purchase of redeemable noncontrolling interests	(2		)
Balance at September 30, 2016	$	116

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Shareholders' Equity

3 Months Ended

Sep. 30, 2016

Equity [Abstract]

Shareholders' Equity

11. Shareholders' Equity

During the three months ended September 30, 2016, we repurchased 3 million common shares having an aggregate cost of $250 million. The average price paid per common share was $81.37.

During the three months ended September 30, 2015, we did not repurchase any common shares.

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 Loss

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

(in millions)	Foreign Currency Translation Adjustments			Unrealized Gain/(Loss) on Derivatives, net of tax			Accumulated Other Comprehensive Loss
Balance at June 30, 2016	$	(123	)	$	7		$	(116	)
Other comprehensive income/(loss), before reclassifications	(1		)	2			1
Amounts reclassified to earnings	—			(1		)	(1		)
Other comprehensive income/(loss), net of tax	(1		)	1			—
Balance at September 30, 2016	$	(124	)	$	8		$	(116	)

Activity related to realized and unrealized gains and losses on available-for-sale securities, as described in Note 5, was immaterial during the three months ended September 30, 2016.

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Earnings Per Share Attributable to Cardinal Health, Inc.

3 Months Ended

Sep. 30, 2016

Earnings Per Share [Abstract]

Earnings Per Share Attributable to Cardinal Health, Inc.

12. Earnings Per Share Attributable to Cardinal Health, Inc.

The following table reconciles the number of common shares used to compute basic and diluted earnings per share attributable to Cardinal Health, Inc.:

	Three Months Ended September 30,
(in millions)	2016	2015
Weighted-average common shares–basic	320	328
Effect of dilutive securities:
Employee stock options, restricted share units, and performance share units	2	3
Weighted-average common shares–diluted	322	331

The potentially dilutive employee stock options, restricted share units, and performance share units that were antidilutive for the three months ended September 30, 2016 and 2015 were 3 million and 2 million, respectively.

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Segment Information

3 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Segment Information

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 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)	2016			2015
Pharmaceutical	$	28,762		$	25,140
Medical	3,279			2,919
Total segment revenue	32,041			28,059
Corporate (1)	(2		)	(4		)
Total revenue	$	32,039		$	28,055

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

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

We do not allocate the following items to our segments: last-in first-out, or ("LIFO"), inventory charges/(credits); restructuring and employee severance; amortization and other acquisition-related costs; impairments and (gain)/loss on disposal of assets; litigation (recoveries)/charges, net; other income, net; interest expense, net; loss on extinguishment of debt; and provision for income taxes.

In addition, certain investment spending, certain portions of enterprise-wide incentive compensation, and other spending are not allocated to the segments. Investment spending generally includes the first-year spend for certain projects that require incremental investments in the form of additional operating expenses. We encourage our segments and corporate functions to identify investment projects that will promote innovation and provide future returns. As approval decisions for such projects are dependent upon executive management, the expenses for such projects are often retained at Corporate. Investment spending within Corporate was $1 million and $6 million for the three months ended September 30, 2016 and 2015, respectively.

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

	Three Months Ended September 30,
(in millions)	2016			2015
Pharmaceutical	$	534		$	657
Medical	127			101
Total segment profit	661			758
Corporate	(126		)	(138		)
Total operating earnings	$	535		$	620

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

(in millions)	September 30, 2016		June 30, 2016
Pharmaceutical	$	21,034	$	20,662
Medical	10,553		10,236
Corporate	2,819		3,224
Total assets	$	34,406	$	34,122

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Share-Based Compensation

3 Months Ended

Sep. 30, 2016

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

Share-Based Compensation

14. Share-Based Compensation

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

The following table provides total share-based compensation expense by type of award:

	Three Months Ended September 30,
(in millions)	2016		2015
Restricted share unit expense	$	17	$	13
Employee stock option expense	5		5
Performance share unit expense	1		12
Total share-based compensation	$	23	$	30

The total tax benefit related to share-based compensation was $8 million and $11 million for the three months ended September 30, 2016 and 2015, respectively.

Restricted Share Units

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

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

(in millions, except per share amounts)	Restricted Share Units		Weighted-Average Grant Date Fair Value per Share
Nonvested at June 30, 2016	2		$	71.73
Granted	1		83.15
Vested	(1	)	68.14
Canceled and forfeited	—		—
Nonvested at September 30, 2016	2		$	80.22

At September 30, 2016, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested restricted share units not yet recognized was $121 million, which is expected to be recognized over a weighted-average period of two years.

Stock Options

Employee stock options granted under the Plans generally vest in equal annual installments over three years and are exercisable for 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, 2016	7		$	54.09
Granted	2		83.14
Exercised	(1	)	37.83
Canceled and forfeited	—		—
Outstanding at September 30, 2016	8		$	60.65
Exercisable at September 30, 2016	5		$	49.96

At September 30, 2016, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested stock options not yet recognized was $35 million, which is expected to be recognized over a weighted-average period of two years. The following tables provide additional detail related to stock options:

(in millions)	September 30, 2016		June 30, 2016
Aggregate intrinsic value of outstanding options at period end	$	147	$	181
Aggregate intrinsic value of exercisable options at period end	145		161

(in years)	September 30, 2016	June 30, 2016
Weighted-average remaining contractual life of outstanding options	7	6
Weighted-average remaining contractual life of exercisable options	6	5

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, 2016	0.8		$	63.96
Granted	0.2		83.19
Vested (1)	(0.4	)	51.49
Canceled and forfeited	—		—
Nonvested at September 30, 2016	0.6		$	77.72

(1) Vested based on achievement of 170 percent of the target performance goal.

At September 30, 2016, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested performance share units not yet recognized was $23 million, which is expected to be recognized over a weighted-average period of two years.

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

3 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

Our condensed consolidated financial statements include the accounts of all majority-owned or controlled subsidiaries, and all significant intercompany transactions and amounts have been eliminated. References to "we," "our," and similar pronouns in this Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 (this "Form 10-Q") refer to Cardinal Health, Inc. and its majority-owned or controlled subsidiaries unless the context requires otherwise.

Our condensed consolidated financial statements have been prepared in accordance with the U.S. Securities and Exchange Commission ("SEC") instructions to Quarterly Reports on Form 10-Q and include the information and disclosures required by accounting principles generally accepted in the United States ("GAAP") for interim financial reporting. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect amounts reported in the condensed consolidated financial statements and accompanying notes. Actual amounts may differ from these estimated amounts. In our opinion, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included. Except as disclosed elsewhere in this Form 10-Q, all such adjustments are of a normal and recurring nature. In addition, financial results presented for this fiscal 2017 interim period are not necessarily indicative of the results that may be expected for the full fiscal year ending June 30, 2017. These condensed consolidated financial statements are unaudited and, accordingly, should be read in conjunction with the audited consolidated financial statements and related notes contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2016 (the "2016 Form 10-K").

Recent Financial Accounting Standards

Recent Financial Accounting Standards

In August 2016, the Financial Accounting Standards Board (the "FASB") issued accounting guidance which clarifies the classification of certain cash receipts and cash payments in the statement of cash flows, including those related to contingent consideration payments made after a business combination, distributions received from equity method investees, debt prepayment or debt extinguishment costs, and proceeds from the settlement of insurance claims. This guidance will be effective for us in the first quarter of fiscal 2019. We are currently evaluating the impact of this standard on our consolidated financial statements.

In April 2015, the FASB issued amended accounting guidance that clarifies the circumstances under which a cloud computing customer would account for the arrangement as a license of internal-use software. If it is determined that a software license does not exist in the arrangement, the customer would account for this arrangement as a service contract. We adopted this guidance in the first quarter of fiscal 2017. The adoption of this guidance did not have a material impact on our financial position or results of operations.

Also in April 2015, the FASB issued amended accounting guidance related to the presentation of debt issuance costs in the financial statements. This guidance requires an entity to present such costs in the balance sheet as a direct deduction from the related debt rather than as an asset. We adopted this guidance in the first quarter of fiscal 2017. Upon adoption of this guidance, debt issuance costs of $29 million were reclassified from other assets to long-term obligations, less current portion within the condensed consolidated balance sheet.

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 2019. We are in the process of assessing any differences between the amended and existing guidance that could impact our consolidated financial statements and continuing to evaluate the options for adoption.

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Restructuring and Employee Severance (Tables)

3 Months Ended

Sep. 30, 2016

Restructuring Charges [Abstract]

Summary of Restructuring and Employee Severance

The following table summarizes restructuring and employee severance costs:

	Three months ended September 30,
(in millions)	2016		2015
Employee-related costs (1)	$	7	$	6
Facility exit and other costs (2)	2		6
Total restructuring and employee severance	$	9	$	12

(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, 2016	$	15		$	1		$	16
Additions	6			—			6
Payments and other adjustments	(4		)	(1		)	(5		)
Balance at September 30, 2016	$	17		$	—		$	17

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Goodwill and Other Intangible Assets (Tables)

3 Months Ended

Sep. 30, 2016

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, 2016	$	2,919		$	4,248	$	7,167
Goodwill acquired, net of purchase price adjustments	9			86		95
Foreign currency translation adjustments and other	(2		)	1		(1		)
Balance at September 30, 2016	$	2,926		$	4,335	$	7,261

Schedule of Finite-Lived Intangible Assets

The following tables summarize other intangible assets by class at:

	September 30, 2016
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible		Weighted- Average Remaining Amortization Period (Years)
Indefinite-life intangibles:
IPR&D, trademarks and other	$	70	$	—	$	70	N/A
Total indefinite-life intangibles	70		—		70		N/A
Definite-life intangibles:
Customer relationships	1,931		793		1,138		9
Trademarks, trade names, and patents	527		156		371		14
Developed technology and other	812		225		587		8
Total definite-life intangibles	3,270		1,174		2,096		10
Total other intangible assets	$	3,340	$	1,174	$	2,166	N/A

	June 30, 2016
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible
Indefinite-life intangibles:
IPR&D, trademarks and other	$	72	$	—	$	72
Total indefinite-life intangibles	72		—		72
Definite-life intangibles:
Customer relationships	1,946		737		1,209
Trademarks, trade names, and patents	508		140		368
Developed technology and other	808		198		610
Total definite-life intangibles	3,262		1,075		2,187
Total other intangible assets	$	3,334	$	1,075	$	2,259

Schedule of Indefinite-Lived Intangible Assets

The following tables summarize other intangible assets by class at:

	September 30, 2016
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible		Weighted- Average Remaining Amortization Period (Years)
Indefinite-life intangibles:
IPR&D, trademarks and other	$	70	$	—	$	70	N/A
Total indefinite-life intangibles	70		—		70		N/A
Definite-life intangibles:
Customer relationships	1,931		793		1,138		9
Trademarks, trade names, and patents	527		156		371		14
Developed technology and other	812		225		587		8
Total definite-life intangibles	3,270		1,174		2,096		10
Total other intangible assets	$	3,340	$	1,174	$	2,166	N/A

	June 30, 2016
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible
Indefinite-life intangibles:
IPR&D, trademarks and other	$	72	$	—	$	72
Total indefinite-life intangibles	72		—		72
Definite-life intangibles:
Customer relationships	1,946		737		1,209
Trademarks, trade names, and patents	508		140		368
Developed technology and other	808		198		610
Total definite-life intangibles	3,262		1,075		2,187
Total other intangible assets	$	3,334	$	1,075	$	2,259

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Available-for-Sale Securities (Tables)

3 Months Ended

Sep. 30, 2016

Investments, Debt and Equity Securities [Abstract]

Available-for-sale Securities

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

(in millions)	September 30, 2016		June 30, 2016
Current available-for-sale securities:
Treasury bills	$	—	$	3
International bonds	3		2
Corporate bonds	58		58
U.S. agency bonds	7		6
Asset-backed securities	31		28
International equity securities	2		2
U.S. agency mortgage-backed securities	7		14
Total current available-for-sale securities	108		113
Long-term available-for-sale securities:
Treasury bills	29		10
International bonds	3		1
Corporate bonds	32		36
U.S. agency bonds	8		9
Asset-backed securities	8		17
U.S. agency mortgage-backed securities	12		14
Total long-term available-for-sale securities	92		87
Total available-for-sale securities	$	200	$	200

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Fair Value Measurements (Tables)

3 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value, Assets and Liabilities Measured on Recurring Basis

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

	September 30, 2016
(in millions)	Level 1		Level 2		Level 3			Total
Assets:
Cash equivalents	$	176	$	—	$	—		$	176
Forward contracts (1)	—		2		—			2
Available-for-sale securities (2)	—		200		—			200
Other investments (3)	109		—		—			109
Liabilities:
Contingent Consideration (4)	—		—		(21		)	(21		)

	June 30, 2016
(in millions)	Level 1		Level 2		Level 3			Total
Assets:
Cash equivalents	$	516	$	—	$	—		$	516
Forward contracts (1)	—		19		—			19
Available-for-sale securities (2)	—		200		—			200
Other investments (3)	103		—		—			103
Liabilities:
Contingent Consideration (4)	—		—		(19		)	(19		)

(1) 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.

(2) 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.

(3) 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.

(4) Contingent consideration represents the obligations incurred in connection with acquisitions. We do not deem the fair value of the contingent consideration obligations under any single acquisition to be significant. The estimate of fair value of the contingent consideration obligations requires subjective assumptions to be made regarding future business results, discount rates, discount periods, and probabilities assigned to various potential business result scenarios and was determined using probability assessments with respect to the likelihood of reaching various targets or of achieving certain milestones. The fair value measurement is based on significant inputs unobservable in the market and thus represents a Level 3 measurement. Changes in current expectations of progress could change the probability of achieving the targets within the measurement periods and result in an increase or decrease in the fair value of the contingent consideration obligation.

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

The following table presents those liabilities measured at fair value on a recurring basis using unobservable inputs (Level 3):

(in millions)	Contingent Consideration Obligation
Balance at June 30, 2016	$	19
Additions from acquisitions	2
Changes in fair value of contingent consideration (1)	—
Balance at September 30, 2016	$	21

(1) Amount is included in amortization and other acquisition-related costs in the condensed consolidated statements of earnings.

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Financial Instruments (Tables)

3 Months Ended

Sep. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Estimated Fair Value of Long-term Obligations and Other Short-term Borrowings Compared to the Respective Carrying Amount

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

(in millions)	September 30, 2016		June 30, 2016
Estimated fair value	$	5,884	$	5,780
Carrying amount	5,532		5,539

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Redeemable Noncontrolling Interests (Tables)

3 Months Ended

Sep. 30, 2016

Temporary Equity [Abstract]

Reconciliation of the Changes in Redeemable Noncontrolling Interests

The reconciliation of the changes in redeemable noncontrolling interests are as follows:

(in millions)	Redeemable Noncontrolling Interest
Balance at June 30, 2016	$	117
Net earnings attributable to redeemable noncontrolling interests	1
Net purchase of redeemable noncontrolling interests	(2		)
Balance at September 30, 2016	$	116

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Shareholders' Equity (Tables)

3 Months Ended

Sep. 30, 2016

Equity [Abstract]

Schedule of Changes in the Balance of Accumulated Other Comprehensive Loss by Component and in Total

Accumulated Other Comprehensive Loss

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

(in millions)	Foreign Currency Translation Adjustments			Unrealized Gain/(Loss) on Derivatives, net of tax			Accumulated Other Comprehensive Loss
Balance at June 30, 2016	$	(123	)	$	7		$	(116	)
Other comprehensive income/(loss), before reclassifications	(1		)	2			1
Amounts reclassified to earnings	—			(1		)	(1		)
Other comprehensive income/(loss), net of tax	(1		)	1			—
Balance at September 30, 2016	$	(124	)	$	8		$	(116	)

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Earnings Per Share Attributable to Cardinal Health, Inc. (Tables)

3 Months Ended

Sep. 30, 2016

Earnings Per Share [Abstract]

Reconciliation of Common Shares Used to Compute Basic and Diluted Earnings Per Share

	Three Months Ended September 30,
(in millions)	2016	2015
Weighted-average common shares–basic	320	328
Effect of dilutive securities:
Employee stock options, restricted share units, and performance share units	2	3
Weighted-average common shares–diluted	322	331

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Segment Information (Tables)

3 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Revenue by Reportable Segment

	Three Months Ended September 30,
(in millions)	2016			2015
Pharmaceutical	$	28,762		$	25,140
Medical	3,279			2,919
Total segment revenue	32,041			28,059
Corporate (1)	(2		)	(4		)
Total revenue	$	32,039		$	28,055

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

Segment Profit by Reportable Segment

	Three Months Ended September 30,
(in millions)	2016			2015
Pharmaceutical	$	534		$	657
Medical	127			101
Total segment profit	661			758
Corporate	(126		)	(138		)
Total operating earnings	$	535		$	620

Assets by Reportable Segment

(in millions)	September 30, 2016		June 30, 2016
Pharmaceutical	$	21,034	$	20,662
Medical	10,553		10,236
Corporate	2,819		3,224
Total assets	$	34,406	$	34,122

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Share-Based Compensation (Tables)

3 Months Ended

Sep. 30, 2016

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

Schedule of Total Share-based Compensation Expense by Type of Award

The following table provides total share-based compensation expense by type of award:

	Three Months Ended September 30,
(in millions)	2016		2015
Restricted share unit expense	$	17	$	13
Employee stock option expense	5		5
Performance share unit expense	1		12
Total share-based compensation	$	23	$	30

Schedule of Stock Option Transactions Under the Plans

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

(in millions, except per share amounts)	Stock Options		Weighted-Average Exercise Price per Common Share
Outstanding at June 30, 2016	7		$	54.09
Granted	2		83.14
Exercised	(1	)	37.83
Canceled and forfeited	—		—
Outstanding at September 30, 2016	8		$	60.65
Exercisable at September 30, 2016	5		$	49.96

Schedule of Additional Data Related to Stock Option Activity

The following tables provide additional detail related to stock options:

(in millions)	September 30, 2016		June 30, 2016
Aggregate intrinsic value of outstanding options at period end	$	147	$	181
Aggregate intrinsic value of exercisable options at period end	145		161

(in years)	September 30, 2016	June 30, 2016
Weighted-average remaining contractual life of outstanding options	7	6
Weighted-average remaining contractual life of exercisable options	6	5

Schedule of Transactions Related to Restricted Share Units Under the Plans

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

(in millions, except per share amounts)	Restricted Share Units		Weighted-Average Grant Date Fair Value per Share
Nonvested at June 30, 2016	2		$	71.73
Granted	1		83.15
Vested	(1	)	68.14
Canceled and forfeited	—		—
Nonvested at September 30, 2016	2		$	80.22

Schedule of Transactions Related to Performance Share Units Under the Plans

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

(in millions, except per share amounts)	Performance Share Units		Weighted-Average Grant Date Fair Value per Share
Nonvested at June 30, 2016	0.8		$	63.96
Granted	0.2		83.19
Vested (1)	(0.4	)	51.49
Canceled and forfeited	—		—
Nonvested at September 30, 2016	0.6		$	77.72

(1) Vested based on achievement of 170 percent of the target performance goal.

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Basis of Presentation and Summary of Significant Accounting Policies (Narrative, Recent Financial Accounting Standards) (Details) $ in Millions	Sep. 30, 2016 USD ($)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Debt Issuance Costs, Gross	$ 29

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Acquisitions (Narrative) (Details) $ in Millions		3 Months Ended
	Oct. 02, 2015 USD ($) country	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Jun. 30, 2016 USD ($)
Business Acquisition [Line Items]
Cash paid for acquisitions, net of cash acquired		$ 9	$ 1,399
Goodwill		7,261		$ 7,167
Goodwill, Acquired During Period		95
Cordis
Business Acquisition [Line Items]
Cash paid for acquisitions, net of cash acquired	$ 1,900
Number of countries in which the entity operates | country	50
Number of principal countries | country	20
Transaction and integration costs		14	$ 21
Goodwill		943
Goodwill, Acquired During Period		82
naviHealth
Business Acquisition [Line Items]
Goodwill		334
Harvard Drug
Business Acquisition [Line Items]
Goodwill		$ 634

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Restructuring and Employee Severance (Activity Related to Restructuring and Employee Severance Costs) (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Restructuring Charges [Abstract]
Employee-related costs	$ 7	$ 6
Facility exit and other costs	2	6
Total restructuring and employee severance	$ 9	$ 12

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Restructuring and Employee Severance (Liabilities Associated with Restructuring and Employee Severance Activities) (Details) $ in Millions	3 Months Ended
	Sep. 30, 2016 USD ($)
Restructuring Reserve [Roll Forward]
Beginning Balance	$ 16
Additions	6
Payments and other adjustments	(5)
Ending Balance	17
Employee- Related Costs
Restructuring Reserve [Roll Forward]
Beginning Balance	15
Additions	6
Payments and other adjustments	(4)
Ending Balance	17
Facility Exit and Other Costs
Restructuring Reserve [Roll Forward]
Beginning Balance	1
Additions	0
Payments and other adjustments	(1)
Ending Balance	$ 0

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Goodwill and Other Intangible Assets (Schedule of Goodwill by Reportable Segment) (Details) $ in Millions	3 Months Ended
	Sep. 30, 2016 USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 7,167
Goodwill acquired, net of purchase price adjustments	95
Foreign currency translation adjustments and other	(1)
Ending balance	7,261
Pharmaceutical
Goodwill [Roll Forward]
Beginning balance	2,919
Goodwill acquired, net of purchase price adjustments	9
Foreign currency translation adjustments and other	(2)
Ending balance	2,926
Medical
Goodwill [Roll Forward]
Beginning balance	4,248
Goodwill acquired, net of purchase price adjustments	86
Foreign currency translation adjustments and other	1
Ending balance	$ 4,335

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Goodwill and Other Intangible Assets (Schedule of Intangible Assets) (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2016	Jun. 30, 2016
Indefinite-lived Intangible Assets [Line Items]
Net Intangible	$ 70	$ 72
Finite-Lived Intangible Assets [Line Items]
Gross Intangible	3,270	3,262
Accumulated Amortization	1,174	1,075
Net Intangible	$ 2,096	2,187
Weighted- Average Remaining Amortization Period (Years)	10 years
Gross Intangible, Total other intangible assets	$ 3,340	3,334
Net Intangible, Total other intangible assets	2,166	2,259
IPR&D, trademarks and other
Indefinite-lived Intangible Assets [Line Items]
Net Intangible	70
IPR&D, trademarks and other
Indefinite-lived Intangible Assets [Line Items]
Net Intangible		72
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Intangible	1,931	1,946
Accumulated Amortization	793	737
Net Intangible	$ 1,138	1,209
Weighted- Average Remaining Amortization Period (Years)	9 years
Trademarks, trade names, and patents
Finite-Lived Intangible Assets [Line Items]
Gross Intangible	$ 527	508
Accumulated Amortization	156	140
Net Intangible	$ 371	368
Weighted- Average Remaining Amortization Period (Years)	14 years
Developed technology and other
Finite-Lived Intangible Assets [Line Items]
Gross Intangible	$ 812	808
Accumulated Amortization	225	198
Net Intangible	$ 587	$ 610
Weighted- Average Remaining Amortization Period (Years)	8 years

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Goodwill and Other Intangible Assets (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization of intangible assets	$ 101	$ 67
Estimated annual amortization of intangible assets - 2017	285
Estimated annual amortization of intangible assets - 2018	350
Estimated annual amortization of intangible assets - 2019	281
Estimated annual amortization of intangible assets - 2020	254
Estimated annual amortization of intangible assets - 2021	$ 207

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Available-for-Sale Securities (Schedule of Available-for-Sale Securities) (Details) - USD ($) $ in Millions	Sep. 30, 2016	Jun. 30, 2016
Schedule of Available-for-sale Securities [Line Items]
Total current available-for-sale securities	$ 108	$ 113
Total long-term available-for-sale securities	92	87
Total available-for-sale securities		200
Treasury bills
Schedule of Available-for-sale Securities [Line Items]
Total current available-for-sale securities	0	3
Total long-term available-for-sale securities	29	10
International bonds
Schedule of Available-for-sale Securities [Line Items]
Total current available-for-sale securities	3	2
Total long-term available-for-sale securities	3	1
Corporate bonds
Schedule of Available-for-sale Securities [Line Items]
Total current available-for-sale securities	58	58
Total long-term available-for-sale securities	32	36
U.S. agency bonds
Schedule of Available-for-sale Securities [Line Items]
Total current available-for-sale securities	7	6
Total long-term available-for-sale securities	8	9
Asset-backed securities
Schedule of Available-for-sale Securities [Line Items]
Total current available-for-sale securities	31	28
Total long-term available-for-sale securities	8	17
International equity securities
Schedule of Available-for-sale Securities [Line Items]
Total current available-for-sale securities	2	2
U.S. agency mortgage-backed securities
Schedule of Available-for-sale Securities [Line Items]
Total current available-for-sale securities	7	14
Total long-term available-for-sale securities	$ 12	$ 14

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Available-for-Sale Securities (Narrative) (Details)	3 Months Ended
	Sep. 30, 2016
Short Term
Schedule of Available-for-sale Securities [Line Items]
Weighted average effective maturity	6 months
Long Term
Schedule of Available-for-sale Securities [Line Items]
Weighted average effective maturity	17 months

XML

Income Taxes (Narrative) (Details) - USD ($)	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Jun. 30, 2016
Income Taxes
Effective Income Tax Rate Reconciliation, Percent	37.30%	32.30%
Net unfavorable/(favorable) discrete items, amount	$ (28,000,000)
Unrecognized tax benefits	532,000,000		$ 527,000,000
Unrecognized tax benefits that would impact effective tax rate	358,000,000		355,000,000
Unrecognized tax benefits, interest and penalties accrued	149,000,000		145,000,000
Amount CareFusion is liable under tax matters agreement in the event amount must be paid to the taxing authority	126,000,000		$ 172,000,000
Minimum
Income Taxes
Estimated range of decrease in unrecognized tax benefits within the next 12 months	0
Maximum
Income Taxes
Estimated range of decrease in unrecognized tax benefits within the next 12 months	$ 175,000,000
Federal | Minimum
Income Taxes
Tax years open for examination	2006
Federal | Maximum
Income Taxes
Tax years open for examination	2016
State and Local | Minimum
Income Taxes
Tax years open for examination	2006
State and Local | Maximum
Income Taxes
Tax years open for examination	2016
Foreign | Minimum
Income Taxes
Tax years open for examination	2006
Foreign | Maximum
Income Taxes
Tax years open for examination	2016

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Commitments, Contingent Liabilities and Litigation (Details) $ in Millions		1 Months Ended	3 Months Ended
	Oct. 31, 2016 plaintiff lawsuit	Jul. 31, 2014	Sep. 30, 2016 USD ($)	Jun. 30, 2016 USD ($)
Subsequent Event
Loss Contingencies [Line Items]
Number of lawsuits filed | lawsuit	31
Number of plaintiffs | plaintiff	250
DEA Investigation and Related Matters
Loss Contingencies [Line Items]
Litigation accrual			$ 44.0	$ 44.0
CVS Health
Loss Contingencies [Line Items]
Initial term of pharmaceutical sourcing venture		10 years
Maximum quarterly payment			$ 45.6

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Fair Value Measurements (Fair Value of Assets and Liabilities Measured on a Recurring Basis) (Details) - USD ($) $ in Millions	Sep. 30, 2016	Jun. 30, 2016
Assets:
Total available-for-sale securities		$ 200
Recurring
Assets:
Cash equivalents	$ 176	516
Forward contracts	2	19
Total available-for-sale securities	200	200
Other investments	109	103
Liabilities:
Contingent Consideration	(21)	(19)
Recurring | Level 1
Assets:
Cash equivalents	176	516
Forward contracts	0	0
Total available-for-sale securities	0	0
Other investments	109	103
Liabilities:
Contingent Consideration	0	0
Recurring | Level 2
Assets:
Cash equivalents	0	0
Forward contracts	2	19
Total available-for-sale securities	200	200
Other investments	0	0
Liabilities:
Contingent Consideration	0	0
Recurring | Level 3
Assets:
Cash equivalents	0	0
Forward contracts	0	0
Total available-for-sale securities	0	0
Other investments	0	0
Liabilities:
Contingent Consideration	$ (21)	$ (19)

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Fair Value Measurements (Reconciliation of Liabilities Measured at Fair Value on a Recurring Basis Using Unobservable Inputs (Level 3)) (Details) - Recurring - Contingent Consideration Obligation $ in Millions	3 Months Ended
	Sep. 30, 2016 USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at beginning of period	$ 19
Additions from acquisitions	2
Changes in fair value of contingent consideration	0
Balance at end of period	$ 21

XML

Financial Instruments (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Derivative [Line Items]
Payments for (Proceeds from) Hedge, Financing Activities	$ (14)	$ 0
Designated as Hedging Instrument | Fair Value Hedging | Interest Rate Swap
Derivative [Line Items]
Derivative, notional amount	200
Derivatives, terminated notional amounts	$ 200

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Financial Instruments (Summary of Estimated Fair Value of Long-term Obligations and Other Short-term Borrowings) (Details) - USD ($) $ in Millions	Sep. 30, 2016	Jun. 30, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying amount	$ 5,532	$ 5,539
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Estimated fair value	$ 5,884	$ 5,780

XML

Redeemable Noncontrolling Interests (Narrative) (Details)	Sep. 30, 2016
naviHealth
Redeemable Noncontrolling Interest [Line Items]
Ownership interest (as a percent)	82.00%

XML

Redeemable Noncontrolling Interests (Changes in Redeemable Noncontrolling Interests) (Details) $ in Millions	3 Months Ended
	Sep. 30, 2016 USD ($)
Increase (Decrease) in Temporary Equity [Roll Forward]
Balance at beginning of period	$ 117
Balance at end of period	116
naviHealth
Increase (Decrease) in Temporary Equity [Roll Forward]
Balance at beginning of period	117
Net earnings attributable to redeemable noncontrolling interests	1
Net purchase of redeemable noncontrolling interests	(2)
Balance at end of period	$ 116

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Shareholders' Equity (Narrative) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Class of Stock [Line Items]
Treasury Stock, Value, Acquired, Cost Method		$ 0
Treasury Shares
Class of Stock [Line Items]
Treasury shares acquired (using cost method), shares	3
Treasury shares acquired, average price per share (in usd per share)	$ 81.37

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Shareholders' Equity (Changes in the Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
AOCI, Net of Tax [Roll Forward]
Balance at beginning of period	$ 6,571
Other comprehensive income/(loss), before reclassifications	1
Amounts reclassified to earnings	(1)
Total other comprehensive income/(loss), net of tax	0	$ (45)
Balance at end of period	6,531
Foreign Currency Translation Adjustments
AOCI, Net of Tax [Roll Forward]
Balance at beginning of period	(123)
Other comprehensive income/(loss), before reclassifications	(1)
Amounts reclassified to earnings	0
Total other comprehensive income/(loss), net of tax	(1)
Balance at end of period	(124)
Unrealized Gain/(Loss) on Derivatives, net of tax
AOCI, Net of Tax [Roll Forward]
Balance at beginning of period	7
Other comprehensive income/(loss), before reclassifications	2
Amounts reclassified to earnings	(1)
Total other comprehensive income/(loss), net of tax	1
Balance at end of period	8
Accumulated Other Comprehensive Loss
AOCI, Net of Tax [Roll Forward]
Balance at beginning of period	(116)
Balance at end of period	$ (116)

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Earnings Per Share Attributable to Cardinal Health, Inc. (Reconciliation of Common Shares Used to Compute Basic and Diluted EPS) (Details) - shares shares in Millions	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Earnings Per Share [Abstract]
Weighted-average common shares–basic (in shares)	320	328
Effect of dilutive securities:
Employee stock options, restricted share units, and performance share units (in shares)	2	3
Weighted-average common shares–diluted (in shares)	322	331

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Earnings Per Share Attributable to Cardinal Health, Inc. (Narrative) (Details) - shares shares in Millions	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Earnings Per Share [Abstract]
Potentially dilutive employee stock options, restricted share units and performance share units that were antidilutive (in shares)	3	2

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Segment Information (Narrative) (Details) $ in Millions	3 Months Ended
	Sep. 30, 2016 USD ($) segment	Sep. 30, 2015 USD ($)
Segment Reporting [Abstract]
Number of operating segments	2
Number of reportable segments	2
Project costs on investment and other spending | $	$ 1	$ 6

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Segment Information (Revenue by Reportable Segment) (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Segment Reporting Information [Line Items]
Total revenue	$ 32,039	$ 28,055
Operating Segments
Segment Reporting Information [Line Items]
Total revenue	32,041	28,059
Operating Segments | Pharmaceutical
Segment Reporting Information [Line Items]
Total revenue	28,762	25,140
Operating Segments | Medical
Segment Reporting Information [Line Items]
Total revenue	3,279	2,919
Corporate
Segment Reporting Information [Line Items]
Total revenue	$ (2)	$ (4)

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Segment Information (Segment Profit by Reportable Segment) (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total operating earnings	$ 535	$ 620
Operating Segments
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total operating earnings	661	758
Operating Segments | Pharmaceutical
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total operating earnings	534	657
Operating Segments | Medical
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total operating earnings	127	101
Corporate
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total operating earnings	$ (126)	$ (138)

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Segment Information (Assets by Reportable Segment) (Details) - USD ($) $ in Millions	Sep. 30, 2016	Jun. 30, 2016
Segment Reporting Information [Line Items]
Total assets	$ 34,406	$ 34,122
Operating Segments | Pharmaceutical
Segment Reporting Information [Line Items]
Total assets	21,034	20,662
Operating Segments | Medical
Segment Reporting Information [Line Items]
Total assets	10,553	10,236
Corporate
Segment Reporting Information [Line Items]
Total assets	$ 2,819	$ 3,224

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Share-Based Compensation (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Tax benefit related to share-based compensation	$ 8	$ 11
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period (in years)	3 years
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized	$ 35
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	2 years
Stock Options | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercisable period of plans (in years)	7 years
Stock Options | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercisable period of plans (in years)	10 years
Restricted Share Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period (in years)	3 years
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized	$ 121
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	2 years
Performance Share Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period (in years)	3 years
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized	$ 23
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	2 years
Performance Share Units | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Target performance goal (as a percent)	0.00%
Performance Share Units | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Target performance goal (as a percent)	200.00%

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Share-Based Compensation (Schedule of Total Share-Based Compensation Expense by Type of Award) (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation	$ 23	$ 30
Restricted Share Unit
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation	17	13
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation	5	5
Performance Share Unit
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation	$ 1	$ 12

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Share-Based Compensation (Schedule of All Stock Option Transactions Under the Plans) (Details) shares in Millions	3 Months Ended
	Sep. 30, 2016 $ / shares shares
Stock Options
Outstanding at beginning of period (in shares) | shares	7
Granted (in shares) | shares	2
Exercised (in shares) | shares	(1)
Canceled and forfeited (in shares) | shares	0
Outstanding at end of period (in shares) | shares	8
Exercisable at end of period (in shares) | shares	5
Weighted-Average Exercise Price per Common Share
Outstanding at beginning of period (in usd per share) | $ / shares	$ 54.09
Granted (in usd per share) | $ / shares	83.14
Exercised (in usd per share) | $ / shares	37.83
Canceled and forfeited (in usd per share) | $ / shares	0.00
Outstanding at end of period (in usd per share) | $ / shares	60.65
Exercisable at end of period (in usd per share) | $ / shares	$ 49.96

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Share-Based Compensation (Schedule of Additional Data Related to Stock Options) (Details) - Stock Options - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Sep. 30, 2016	Jun. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate intrinsic value of outstanding options at period end	$ 147	$ 181
Aggregate intrinsic value of exercisable options at period end	$ 145	$ 161
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	7 years	6 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term	6 years	5 years

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Share-Based Compensation (Schedule of All Transactions Related to Restricted Share Units Under the Plans) (Details) - Restricted Share Units shares in Millions	3 Months Ended
	Sep. 30, 2016 $ / shares shares
Restricted Share Units
Nonvested at beginning of period (in shares) | shares	2
Granted (in shares) | shares	1
Vested (in shares) | shares	(1)
Canceled and forfeited (in shares) | shares	0
Nonvested at end of period (in shares) | shares	2
Weighted-Average Grant Date Fair Value per Share
Nonvested at beginning of period (in usd per share) | $ / shares	$ 71.73
Granted (in usd per share) | $ / shares	83.15
Vested (in usd per share) | $ / shares	68.14
Canceled and forfeited (in usd per share) | $ / shares	0.00
Nonvested at end of period (in usd per share) | $ / shares	$ 80.22

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Share-Based Compensation (Schedule of All Transactions Related to Performance Share Units Under the Plans) (Details) - Performance Share Units shares in Millions	3 Months Ended
	Sep. 30, 2016 $ / shares shares
Performance Share Units
Nonvested at beginning of period (in shares) | shares	0.8
Granted (in shares) | shares	0.2
Vested (in shares) | shares	(0.4)	[1]
Canceled and forfeited (in shares) | shares	0.0
Nonvested at end of period (in shares) | shares	0.6
Weighted-Average Grant Date Fair Value per Share
Nonvested at beginning of period (in usd per share) | $ / shares	$ 63.96
Granted (in usd per share) | $ / shares	83.19
Vested (in usd per share) | $ / shares	51.49
Canceled and forfeited (in usd per share) | $ / shares	0.00
Nonvested at end of period (in usd per share) | $ / shares	$ 77.72

[1] Vested based on achievement of 170 percent of the target performance goal.