10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

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

For the quarterly period ended March 31, 2022

or

☐ 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)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common shares (without par value)	CAH	New York Stock Exchange

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 every Interactive Data File required to be submitted 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 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, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act o

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

The number of the registrant’s common shares, without par value, outstanding as of April 30, 2022, was the following: 272,427,362.

Cardinal Health

Q3 Fiscal 2022 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	18
Quantitative and Qualitative Disclosures about Market Risk	23
Controls and Procedures	23
Legal Proceedings	24
Risk Factors	25
Unregistered Sales of Equity Securities and Use of Proceeds	26
Financial Statements	27
Exhibits	47
Form 10-Q Cross Reference Index	48
Signatures	49

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 hospitals, healthcare systems, pharmacies, ambulatory surgery centers, clinical laboratories and physician offices. We provide pharmaceuticals and medical products 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. Our fiscal year ends on June 30. References to fiscal 2022 and fiscal 2021 and to FY22 and FY21 are to the fiscal years ending or ended June 30, 2022 and June 30, 2021, respectively.

Forward-Looking Statements

This Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 (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 this Form 10-Q, which may be identified by 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. These matters are subject to risks and uncertainties that could cause actual results to differ materially from those made, projected or implied. The most significant of these risks and uncertainties are described in this Form 10-Q, including Exhibit 99.1, and in "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended June 30, 2021 (our “2021 Form 10-K”). Forward-looking statements in this Form 10-Q 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 United States 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 | Q3 Fiscal 2022 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 March 31, 2022 and June 30, 2021, and in our condensed consolidated statements of earnings/(loss) for the three and nine months ended March 31, 2022 and 2021. 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 2021 Form 10-K.

 2 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

MD&A Overview

Overview of Consolidated Results

Revenue

During the three and nine months ended March 31, 2022, revenue increased 14 percent and 12 percent to $44.8 billion and $134.3 billion, respectively, primarily due to sales growth from pharmaceutical distribution and specialty pharmaceutical customers, which largely consisted of branded pharmaceutical sales to existing and net new customers.

GAAP and Non-GAAP Operating Earnings/(Loss)

	Three Months Ended March 31,						Nine Months Ended March 31,
(in millions)	2022		2021		Change		2022		2021		Change
GAAP operating earnings/(loss)	$	(97)	$	473	N.M.		$	(632)	$	310	N.M.
Surgical gown recall costs/(income)	—		(1)				1		(3)
State opioid assessment related to prior fiscal years	—		(2)				—		39
Restructuring and employee severance	31		24				56		81
Amortization and other acquisition-related costs	79		111				237		345
Impairments and (gain)/loss on disposal of assets	471		69				1,764		78
Litigation (recoveries)/charges, net	61		15				113		1,085
Non-GAAP operating earnings	$	545	$	689	(21)	%	$	1,540	$	1,935	(20)	%

The sum of the components and certain computations may reflect rounding adjustments.

We had GAAP operating losses of $97 million and $632 million during the three and nine months ended March 31, 2022, respectively, due to $474 million and $1.8 billion pre-tax non-cash goodwill impairment charges related to the Medical segment, respectively. See "Critical Accounting Policies and Sensitive Accounting Estimates" section of this MD&A and Note 4 of the "Notes to Condensed Consolidated Financial Statements" for additional detail.

During the nine months ended March 31, 2021, we recognized a $1.02 billion pre-tax charge for the estimated liability associated with lawsuits and claims brought against us by states and political subdivisions relating to the distribution of prescription opioid pain medications. See further description of opioid lawsuits and claims in the Significant Developments in Fiscal 2022 and Trends section in this MD&A and Note 6 of the "Notes to Condensed Consolidated Financial Statements."

Non-GAAP operating earnings during the three and nine months ended March 31, 2022 decreased 21 percent and 20 percent, respectively, due to the decrease in Medical segment profit largely resulting from increased inflationary impacts, primarily related to commodities and transportation, and the adverse impact of global supply chain constraints.

 3 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

MD&A Overview

GAAP and Non-GAAP Diluted EPS

	Three Months Ended March 31,						Nine Months Ended March 31,
($ per share)	2022 (2,3)		2021 (2)		Change		2022 (2,3)		2021 (2)		Change
GAAP diluted EPS (1)	$	(5.05)	$	0.40	N.M		$	(3.82)	$	1.68	N.M.
State opioid assessment related to prior fiscal years	—		—				—		0.10
Restructuring and employee severance	0.08		0.06				0.15		0.21
Amortization and other acquisition-related costs	0.21		0.28				0.63		0.88
Impairments and (gain)/loss on disposal of assets (4)	6.03		0.25				6.71		0.22
Litigation (recoveries)/charges, net (5)	0.18		0.54				0.33		1.70
Loss on early extinguishment of debt	—		—				0.03		—
Non-GAAP diluted EPS (1)	$	1.45	$	1.53	(5)	%	$	4.01	$	4.79	(16)	%

The sum of the components and certain computations may reflect rounding adjustments.

(1)Diluted earnings/(loss) per share attributable to Cardinal Health, Inc. ("diluted EPS").

(2)The reconciling items are presented within this table net of tax. See quantification of tax effect of each reconciling item in our GAAP to Non-GAAP Reconciliations in the "Explanation and Reconciliation of Non-GAAP Financial Measures."

(3)For the three and nine months ended March 31, 2022, GAAP diluted EPS and the EPS impact from the GAAP to non-GAAP per share reconciling items are calculated using a weighted average of 275 million and 281 million common shares, respectively, which excludes potentially dilutive securities from the denominator due to their anti-dilutive effects resulting from our GAAP net loss for the periods. For the three and nine months ended March 31, 2022, non-GAAP diluted EPS is calculated using a weighted average of 277 million and 282 million common shares, which includes potentially dilutive shares.

(4)Impairments and (gain)/loss on disposals of assets, net includes pre-tax goodwill impairment charges of $474 million and $1.8 billion related to our Medical segment recorded during the three and nine months ended March 31, 2022, respectively. For fiscal 2022, the estimated net tax benefit related to these impairments is $126 million and is included in the annual effective tax rate. As a result, the amount of tax expense in the current quarter and year-to-date periods increased by approximately $1.2 billion and approximately $180 million, respectively, and is expected to lower the provision for income taxes during the fourth quarter of fiscal 2022 by approximately $180 million.

(5)Litigation (recoveries)/charges, net, includes a tax benefit recorded during the nine months ended March 31, 2021 related to a net operating loss carryback. Our wholly-owned insurance subsidiary recorded a self-insurance pre-tax loss in its fiscal 2020 statutory financial statements primarily related to opioid litigation. This self-insurance pre-tax loss, which did not impact our pre-tax consolidated results, was deducted on our fiscal 2020 consolidated federal income tax return and contributed to a significant net operating loss for tax purposes. The net operating loss was carried back and adjusted our taxable income for fiscal 2015, 2016, 2017 and 2018 as permitted under the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. During the nine months ended March 31, 2021, the total benefit from the net operating loss carryback was $419 million; however, for purposes of Non-GAAP financial measures, we allocated $385 million of the benefit to litigation (recoveries)/charges, net, which is excluded from non-GAAP measures, based on the relative amount of the self-insurance pre-tax loss related to opioid litigation claims versus separate tax adjustments. The tax benefit allocated to the separate tax adjustments of $34 million is included in non-GAAP measures.

During the three and nine months ended March 31, 2022, GAAP diluted EPS was adversely impacted by the goodwill impairment charges related to the Medical segment, which had a $(6.01) and $(6.67) per share after-tax impact, respectively. See "Critical Accounting Policies and Sensitive Accounting Estimates" section of this MD&A, and Note 4 and Note 7 of the "Notes to Condensed Consolidated Financial Statements" for additional detail.

During the nine months ended March 31, 2021, GAAP diluted EPS included a tax benefit from the net operating loss carryback primarily related to a self-insurance pre-tax loss. Refer to Note 7 of the "Notes to Condensed Consolidated Financial Statements" for additional detail. During the nine months ended March 31, 2021, GAAP diluted EPS was adversely impacted by the opioid litigation charge recognized for the estimated liability associated with lawsuits and claims brought against us by states and political subdivisions relating to the distribution of prescription opioid pain medications, which had a $(2.85) per share after-tax impact on GAAP diluted EPS. See the Significant Developments in Fiscal 2022 and Trends section in this MD&A and Note 6 of the "Notes to Condensed Consolidated Financial Statements" for additional information.

During the three and nine months ended March 31, 2022, non-GAAP diluted EPS decreased 5 percent and 16 percent to $1.45 and $4.01 per share, respectively. This decrease was primarily due to the factors impacting non-GAAP operating earnings, partially offset by a lower share count as a result of share repurchases. The year-over-year comparison also benefited from a lower non-GAAP effective tax rate due to favorable discrete items during the three months ended March 31, 2022 and the impact of adverse tax matters in the prior year, including adjustments to our tax provision for the resolution of certain open matters with the U.S. Internal Revenue Service ("IRS").

 4 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

MD&A Overview

Cash and Equivalents

Our cash and equivalents balance was $2.4 billion at March 31, 2022 compared to $3.4 billion at June 30, 2021. During the nine months ended March 31, 2022, net cash provided by operating activities was $130 million, which was adversely impacted by the payment of the majority of our first annual settlement payment under the Settlement Agreement and payments for other litigation matters, the timing of collections of customer receivables and the day of the week on which a fiscal period ends. During the nine months ended March 31, 2022, we deployed $1.0 billion for share repurchases, $597 million for debt repayment, and $425 million for cash dividends. We also received proceeds of $923 million, net of cash transferred, from the divestiture of the Cordis business.

 5 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

MD&A Overview

Significant Developments in Fiscal 2022 and Trends

Opioid Lawsuits Development

In February 2022, we and two other national distributors announced that each company had determined that a sufficient number of political subdivisions had agreed to participate in the previously disclosed settlement agreement (the “Settlement Agreement”) to settle the vast majority of the opioid lawsuits filed by states and local governmental entities. This Settlement Agreement became effective on April 2, 2022.

Parties to this Settlement Agreement include 46 out of 49 eligible states as well as the District of Columbia and all eligible territories. As of April 28, 2022, over 98 percent of eligible political subdivisions (as calculated by population under the Settlement Agreement) that had brought opioid-related suits against the companies have joined the settlement or otherwise had their claims addressed by state legislation.

The Settlement Agreement includes a cash component, pursuant to which we will pay up to approximately $6.0 billion, the majority of which would be paid over 18 years. The exact payment amount will depend on several factors, including the extent to which states take action to foreclose opioid lawsuits by political subdivisions (e.g., by passing laws barring or limiting opioid lawsuits by political subdivisions) and the extent to which additional political subdivisions in participating states file opioid lawsuits against us.

The Settlement Agreement also includes injunctive relief terms related to distributors’ controlled substance anti-diversion programs, including with respect to: (1) governance; (2) independence and training of the personnel operating controlled substances monitoring programs; (3) due diligence for new and existing customers; (4) ordering limits for certain products; and (5) suspicious order monitoring. A monitor will be selected to oversee compliance with these provisions for a period of five years. In addition, we and the two other settling distributors will engage a third-party vendor to act as a clearinghouse for data aggregation and reporting, which distributors will fund for ten years.

West Virginia subdivisions and Native American tribes are not a part of this settlement process and we have been involved in separate negotiations with these groups. In September 2021 we announced that we, along with two other national distributors, had reached an agreement with the Cherokee Nation in connection with ongoing negotiations toward a broader agreement with Native American tribes. In January 2022, we, along with two other national distributors, executed a term sheet with the Native American tribes.

The first phase of a bench trial in West Virginia State Court for a consolidated case brought by 63 West Virginia subdivisions against the Company and two other national distributors is scheduled to begin July 5, 2022. A bench trial before a federal judge in West Virginia brought by Cabell County and City of Huntington against us and two other national distributors concluded in July 2021. The judge has not yet issued a decision.

In May 2022, we and two other national distributors reached an agreement with the Washington Attorney General, under which we will pay up to approximately $160 million to the State of Washington and its participating political subdivisions to resolve opioid-related claims. This amount is consistent with the amount that would have been allocated to Washington under the Settlement Agreement, had Washington agreed to participate, plus certain attorneys’ fees and costs. The terms of this agreement are consistent with the Settlement Agreement. This agreement is subject to certain contingencies, including the rate of subdivision participation.

During the nine months ended March 31, 2022, we paid into escrow the majority of our first annual payment under the Settlement Agreement. We also made payments under the separate New York, Ohio and Rhode Island settlements, as well as certain payments under Cherokee Nation settlement and Native American term sheet. During the nine months ended March 31, 2022, we paid $348 million in connection with these matters. In total, we have $6.70 billion accrued at March 31, 2022, of which $738 million is included in other accrued liabilities, and the remainder is included in deferred income taxes and other liabilities in our condensed consolidated balance sheets.

In addition to the lawsuits and claims brought by states and governmental entities, described above, we are involved in other opioid-related litigation and investigations, which are described further in Note 6 of the “Notes to Condensed Consolidated Financial Statements.”

Because loss contingencies are inherently unpredictable and unfavorable developments or resolutions can occur, the assessment is highly subjective and requires judgments about future events. We regularly review these opioid litigation matters to determine whether our accrual is adequate. The amount of ultimate loss may differ materially from this accrual, whether as a result of settlement discussions, a judicial decision or verdict or otherwise. See Note 6 of the "Notes to Condensed Consolidated Financial Statements" for additional information.

 6 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

MD&A Overview

Inflationary Impacts and Global Supply Chain Constraints, and Medical Goodwill

Medical segment profit was negatively impacted by increased inflationary impacts, primarily related to transportation (including ocean and domestic freight), commodities, labor and the adverse impact of global supply chain constraints during the three and nine months ended March 31, 2022.

Due to the risks and uncertainties related to these impacts, we performed interim goodwill impairment testing at March 31, 2022 and December 31, 2021, which resulted in year-to-date pre-tax non-cash goodwill impairment charges of $1.8 billion, included in impairments and (gain)/loss on disposal of assets in our condensed consolidated statements of earnings/(loss). See "Critical Accounting Policies and Sensitive Accounting Estimates" section of this MD&A and Note 4 of the "Notes to Condensed Consolidated Financial Statements" for additional detail. For fiscal 2022, the estimated net tax benefit related to these impairments is $126 million and is included in the annual effective tax rate. As a result, the amount of tax expense in the current quarter and year-to-date periods increased by approximately $1.2 billion and approximately $180 million, respectively, and is expected to lower the provision for income taxes during the fourth quarter of fiscal 2022 by approximately $180 million. Refer to Note 7 of the "Notes to Condensed Consolidated Financial Statements" for additional detail.

We expect these inflationary impacts and global supply chain constraints to continue to adversely impact Medical segment profit. In order to partially mitigate the impact, we have implemented an initial phase of price increases and we are evolving our commercial contracting processes and investing in additional supply chain capacity. If these increased costs and the adverse impact of global supply chain constraints are greater than we expect, continue beyond our expectations, or we are unable to increase prices, our results of operations will be adversely impacted to a greater extent than we currently anticipate.

We also experienced increased costs in the Pharmaceutical segment, primarily related to transportation and labor, during the three and nine months ended March 31, 2022.

PPE Demand and Pricing

Personal protective equipment ("PPE") refers to protective clothing, medical and non-medical grade gloves, face shields, face masks and other equipment designed to protect the wearer from injury or the spread of infection or illness. Demand for PPE has fluctuated during fiscal 2021 and fiscal 2022 resulting in variability in sales volumes, inventory levels and costs to manufacture and source these products.

PPE adversely impacted Medical segment profit on a year-over-year basis for the three and nine months ended March 31, 2022 and we expect further adverse impacts due to lower volumes. In addition, the prior year included the timing favorability related to our cost mitigation efforts, primarily pricing.

We experienced the peak of heightened demand for PPE during the second and third quarters of fiscal 2021. This increased demand resulted in higher sales volume for certain products, increased costs to manufacture and source these products and higher inventory levels to meet customer commitments. As a result, we sought out additional sources for these products and to mitigate the impact of these cost increases, we have raised our selling prices for the affected products. During the fourth quarter of fiscal 2021, selling prices and customer demand for certain PPE decreased as compared to the peak. This resulted in inventory cost above net realizable value, requiring an inventory reserve of $197 million, primarily related to certain categories of gloves, which adversely impacted Medical segment profit.

COVID-19

The COVID-19 pandemic (“COVID-19”) began to materially affect our businesses during the third quarter of fiscal 2020. However, due to the passage of time, intervening events and other market dynamics, the comparison to pre-COVID-19 operations has become less meaningful as a basis for us to assess our financial condition.

In the Pharmaceutical segment, volumes have rebounded and stabilized from the declines we experienced during the height of COVID-19 and we believe fluctuations between periods are driven by current market dynamics, rather than the ongoing effects of COVID-19.

Our Medical segment continues to experience the effects of inflation, global supply chain constraints and PPE dynamics, which we consider to be independent of COVID-19 for purposes of assessing our financial results and which are discussed separately above. Due to the magnitude of the impact these factors have had on our Medical segment, as well as the passage of time, we no longer believe that comparisons to pre-COVID-19 operations are relevant in assessing our results of operations or financial condition.

 7 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

MD&A Overview

Cordis Divestiture

In August 2021, we sold our Cordis business to Hellman & Friedman for proceeds of $923 million, net of cash transferred, and we retained certain working capital accounts and certain liabilities. The purchase price is subject to adjustments based on working capital requirements as set forth in the agreement. Cardinal Health will retain product liability associated with lawsuits and claims related to inferior vena cava ("IVC") filters in the U.S. and Canada, as well as authority for these matters discussed in Note 6 of the "Notes to Condensed Consolidated Financial Statements." In connection with the closing, we entered into a Transition Services Agreement ("TSA") with the buyer to provide support functions for a period of up to twenty-four months following the sale. See Note 2 of the "Notes to Condensed Consolidated Financial Statements" for additional information.

As anticipated, Medical segment revenue and Medical segment profit were adversely impacted during the three and nine months ended March 31, 2022 due to the divestiture of the Cordis business. We expect the divestiture will decrease Medical segment revenue by approximately $700 million and adversely impact Medical segment profit by approximately $70 million in fiscal 2022. The divestiture of the Cordis business resulted in a decrease in amortization of acquisition-related intangible assets during the three and nine months ended March 31, 2022, which we expect to continue for the remainder of fiscal 2022. The divestiture of the Cordis business is subject to risks and uncertainties that may further adversely impact Medical segment profit. For example, the TSA period may be extended beyond our current expectations or could have unintended consequences, and the costs associated with the exit or disposal activities and stranded costs could be greater than anticipated.

 8 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

MD&A Results of Operations

Results of Operations

Revenue

	Three Months Ended March 31,						Nine Months Ended March 31,
(in millions)	2022		2021		Change		2022		2021		Change
Pharmaceutical	$	40,957	$	35,104	17	%	$	122,154	$	107,452	14	%
Medical	3,884		4,174		(7)	%	12,118		12,441		(3)	%
Total segment revenue	44,841		39,278		14	%	134,272		119,893		12	%
Corporate	(5)		(3)		N.M		(11)		(12)		N.M
Total revenue	$	44,836	$	39,275	14	%	$	134,261	$	119,881	12	%

Pharmaceutical Segment

During the three and nine months ended March 31, 2022, revenue increased primarily due to sales growth from pharmaceutical distribution and specialty pharmaceutical customers, which together increased revenue by $5.8 billion and $14.6 billion, respectively, and largely consisted of branded pharmaceutical sales to existing and net new customers.

Medical Segment

Medical segment revenue decreased during the three months ended March 31, 2022 primarily due to the impact of the divestiture of the Cordis business and lower volumes within products and distribution, including the adverse impact of global supply chain constraints.

During the nine months ended March 31, 2022, the adverse impact of the divestiture of the Cordis business was partially offset by sales growth in at-Home solutions.

Cost of Products Sold

Cost of products sold for the three and nine months ended March 31, 2022 increased 15 percent to $43.2 billion and 13 percent to $129.3 billion, respectively, compared to the respective prior-year periods as a result of the factors affecting the changes in revenue and gross margin.

 9 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

MD&A Results of Operations

Gross Margin

	Three Months Ended March 31,						Nine Months Ended March 31,
(in millions)	2022		2021		Change		2022		2021		Change
Gross margin	$	1,682	$	1,812	(7)	%	$	4,940	$	5,303	(7)	%

Gross margin during the three and nine months ended March 31, 2022 was adversely impacted due to the divestiture of the Cordis business and increased costs in the Medical segment due to inflationary impacts and the adverse impact of global supply chain constraints, partially offset by the performance of our generics program, which includes an improvement in volumes compared to the prior-year periods.

Gross margin rate declined 86 basis points and 74 basis points during the three and nine months ended March 31, 2022, respectively, mainly due to changes in overall product mix resulting primarily from increased pharmaceutical distribution branded sales, which have a dilutive impact on our overall gross margin rate. The performance of Medical segment products and distribution, which reflects the divestiture of the Cordis business and increased costs due to inflationary impacts and the adverse impact of global supply chain constraints, also had an adverse impact on gross margin rate.

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

	Three Months Ended March 31,						Nine Months Ended March 31,
(in millions)	2022		2021		Change		2022		2021		Change
SG&A expenses	$	1,137	$	1,120	2	%	$	3,402	$	3,404	—	%

During the three and nine months ended March 31, 2022, SG&A expenses were adversely impacted by higher operations expenses and increased expenses related to investments in information technology infrastructure, mostly offset by the divestiture of the Cordis business.

During the nine months ended March 31, 2022, the year-over-year comparison was also favorably impacted by the prior-year $41 million accrual for our estimated portion of the assessment on prescription opioid medications that were sold or distributed in New York state in calendar year 2017 and 2018, which was recognized during the three months ended September 30, 2020. See Note 6 of the "Notes to Condensed Consolidated Financial Statements" for additional information on the New York Opioid Stewardship Act.

 10 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

MD&A Results of Operations

Segment Profit

We evaluate segment performance based on segment profit, among other measures. See Note 12 of the "Notes to Condensed Consolidated Financial Statements" for additional information on segment profit.

	Three Months Ended March 31,						Nine Months Ended March 31,
(in millions)	2022		2021		Change		2022		2021		Change
Pharmaceutical	$	487	$	511	(5)	%	$	1,319	$	1,326	(1)	%
Medical	59		174		(66)	%	232		640		(64)	%
Total segment profit	546		685		(20)	%	1,551		1,966		(21)	%
Corporate	(643)		(212)		N.M.		(2,183)		(1,656)		N.M
Total consolidated operating earnings/(loss)	$	(97)	$	473	N.M.		$	(632)	$	310	N.M

Pharmaceutical Segment Profit

During the three and nine months ended March 31, 2022, Pharmaceutical segment profit decreased due to increased expenses related to investments in information technology infrastructure and higher operations expenses, partially offset by the performance of our generics program. Pharmaceutical segment profit during the nine months ended March 31, 2022 was also positively impacted by improvement in volumes compared to the prior-year period.

Pharmaceutical segment profit includes opioid-related litigation defense and compliance costs, but does not include a one-time contingent attorney fee of $18 million incurred during the three and nine months ended March 31, 2022 related to the finalization of the Settlement Agreement. Due to the unique nature and significance of the Settlement Agreement, and the one-time, contingent nature of the fee, this related fee was included in litigation (recoveries)/charges, net in the condensed consolidated statements of earnings/(loss).

Pharmaceutical segment profit during the nine months ended March 31, 2022 was positively impacted by a $16 million judgment for lost profits related to an ordinary course intellectual property rights claim.

Medical Segment Profit

Medical segment profit decreased during the three and nine months ended March 31, 2022 largely due to increased inflationary costs, primarily related to transportation and commodities, and the adverse impact of global supply chain constraints. Medical segment profit during the nine months ended March 31, 2022 also reflects an adverse impact related to the prior-year net positive impact of PPE.

Corporate

The changes in Corporate during the three and nine months ended March 31, 2022 were due to the factors discussed in the Other Components of Consolidated Operating Earnings/(Loss) section that follows.

 11 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

MD&A Results of Operations

Other Components of Consolidated Operating Earnings/(Loss)

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

	Three Months Ended March 31,				Nine Months Ended March 31,
(in millions)	2022		2021		2022		2021
Restructuring and employee severance	$	31	$	24	$	56	$	81
Amortization and other acquisition-related costs	79		111		237		345
Impairments and (gain)/loss on disposal of assets, net	471		69		1,764		78
Litigation (recoveries)/charges, net	61		15		113		1,085

Restructuring and Employee Severance

Restructuring costs during both the three and nine months ended March 31, 2022 and 2021 were primarily related to the implementation of certain enterprise-wide cost-savings measures, which includes facility exit costs related to decreasing our overall office space, and the divestiture of the Cordis business.

Amortization and Other Acquisition-Related Costs

Amortization of acquisition-related intangible assets was $78 million and $109 million for the three months ended March 31, 2022 and 2021, respectively, and $235 million and $337 million for the nine months ended March 31, 2022 and 2021, respectively. The decrease in amortization of acquisition-related intangible assets was primarily due to the divestiture of the Cordis business.

Impairments and (Gain)/Loss on Disposal of Assets, Net

During the three and nine months ended March 31, 2022, we recognized $474 million and $1.8 billion pre-tax non-cash goodwill impairment charges related to our Medical segment, respectively, as discussed further in the "Critical Accounting Policies and Sensitive Accounting Estimates" section of this MD&A and Note 4 of the "Notes to Condensed Consolidated Financial Statements."

During the three and nine months ended March 31, 2021 we recognized a $58 million pre-tax write-down of the assets held for sale from the divestiture of the Cordis business.

Litigation (Recoveries)/Charges, Net

During the nine months ended March 31, 2021, we recognized a pre-tax charge of $1.02 billion associated with certain opioid matters. See the Significant Developments in Fiscal 2022 and Trends section in this MD&A and Note 6 of the "Notes to Condensed Consolidated Financial Statements" for additional information.

During the three and nine months ended March 31, 2022, we incurred a one-time contingent attorney fee of $18 million related to the finalization of the Settlement Agreement resulting in the settlement of the vast majority of opioid lawsuits filed by state and local governmental entities. Due to the unique nature and significance of the Settlement Agreement, and the one-time, contingent nature of the fee, this related fee was included in litigation (recoveries)/charges, net.

We recognized estimated losses and legal defense costs associated with the IVC filter product liability claims of $24 million and $12 million during the three months ended March 31, 2022 and 2021, respectively, and $63 million and $40 million during the nine months ended March 31, 2022 and 2021, respectively. See Note 6 of the "Notes to Condensed Consolidated Financial Statements" for additional information.

During the nine months ended March 31, 2022, we recognized income of $17 million for recoveries in class action antitrust lawsuits in which we were a class member.

During the nine months ended March 31, 2021, we recognized a $13 million charge in connection with a civil investigation by the United States Attorney’s Office for the District of Massachusetts related to discounts and rebates offered or provided to certain Specialty Solutions customers, as described further in Note 6 of the "Notes to Condensed Consolidated Financial Statements."

Earnings/(Loss) Before Income Taxes

In addition to the items discussed above, earnings/(loss) before income taxes were impacted by the following:

 12 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

MD&A Results of Operations

	Three Months Ended March 31,						Nine Months Ended March 31,
(in millions)	2022		2021		Change		2022		2021		Change
Other (income)/expense, net	$	3	$	(12)	N.M		$	(14)	$	(31)	N.M
Interest expense, net	38		45		(16)	%	115		136		(15)	%
Loss on early extinguishment of debt	—		—		N.M		10		1		N.M
(Gain)/loss on sale of equity interest in naviHealth	(1)		—		N.M		(2)		—		N.M

Other (Income)/Expense, Net

During the three and nine months ended March 31, 2022, other (income)/expense, net was unfavorable compared to the prior-year periods primarily due to a decrease in the value of our deferred compensation plan investments, which offsets fluctuations included within SG&A expenses as discussed further in Note 8 of the "Notes to Condensed Consolidated Financial Statements." The year-over-year comparison was also unfavorably impacted by gains on investments in non-marketable equity securities during the three months ended March 31, 2021.

Interest Expense, Net

The decrease in interest expense during the three and nine months ended March 31, 2022 was primarily due to less debt outstanding.

Loss on Early Extinguishment of Debt

During nine months ended March 31, 2022, we recognized a $10 million loss in connection with the debt redemption as described further in Note 5 of the “Notes to Condensed Consolidated Financial Statements.”

Provision for/(Benefit from) Income Taxes

During the three and nine months ended March 31, 2022, the effective tax rate was (916.5) percent and (44.4) percent, respectively, and reflects the impact of the tax effect of the year-to-date goodwill impairment charges recognized during the nine months ended March 31, 2022.

During the three and nine months ended March 31, 2021, the effective tax rate was 72.8 percent and (143.3) percent, respectively, and included the impact related to the treatment of the tax effect of opioid litigation charges, adjustments to our provision for the resolution of all open matters with the IRS for fiscal years 2008 to 2010 as well as certain transfer pricing matters for fiscal years 2011 to 2014, which also impacted reserves for later years, and withholding taxes for planned distributions from foreign subsidiaries. During the nine months ended March 31, 2021, the effective tax rate included the benefit from a net operating loss carryback primarily related to a self-insurance pre-tax loss.

Tax Effects of Goodwill Impairment Charge

During the nine months ended March 31, 2022, we recognized year-to-date pre-tax charges of $1.8 billion for goodwill impairments related to the Medical segment. The net tax benefit related to these charges is $126 million for fiscal 2022.

Unless an item is considered discrete because it is unusual or infrequent, the tax impact of the item is included in our estimated annual effective tax rate. When items are recognized through our estimated annual effective tax rate, we apply our estimated annual effective tax rate to the earnings/(loss) before income taxes for the year-to-date period to compute our benefit from income taxes for the current quarter and year-to-date period. The tax impacts of discrete items are recognized in their entirety in the period in which they occur.

The tax effect of the goodwill impairment charges during the nine months ended March 31, 2022 was included in our estimated annual effective tax rate because it was not considered unusual or infrequent, given that we recorded goodwill impairment in prior fiscal years. The impact of the non-deductible goodwill significantly decreased the estimated annual effective tax rate for fiscal 2022. Applying the lower tax rate to the year-to-date loss resulted in recognizing an interim tax expense of approximately $1.2 billion, which impacted the provision for income taxes in the condensed consolidated statements of earnings/(loss) during the three and nine months ended March 31, 2022 and prepaid expenses and other assets in the condensed consolidated balance sheet at March 31, 2022.

 13 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

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; current and projected debt service requirements, dividends and share repurchases; and opioid litigation settlement payments associated with the Settlement Agreement, the state agreements and Cherokee Nation and Native American tribes agreements. If we decide to engage in one or more 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 $2.4 billion at March 31, 2022 compared to $3.4 billion at June 30, 2021. At March 31, 2022, our cash and equivalents were held in cash depository accounts with major banks or invested in high quality, short-term liquid investments.

During the nine months ended March 31, 2022, net cash provided by operating activities was $130 million, which includes $348 million of payments related to the Settlement Agreement, payments under the separate New York, Ohio and Rhode Island settlements, as well as certain payments under Cherokee Nation settlement and Native American term sheet. Net cash provided by operating activities was also adversely impacted by the timing of collections of customer receivables and the day of the week on which a fiscal period ends. We deployed $1.0 billion for share repurchases, $597 million for debt repayment, and $425 million for cash dividends. We also received proceeds of $923 million, net of cash transferred, from the divestiture of the Cordis business.

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.

The cash and equivalents balance at March 31, 2022 includes $652 million of cash held by subsidiaries outside of the United States.

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 at March 31, 2022 include a $2.0 billion commercial paper program, backed by a $2.0 billion revolving credit facility. We also have a $1.0 billion committed receivables sales facility. At March 31, 2022, we had no amounts outstanding under our commercial paper program, revolving credit facility, or our committed receivables sales facility. During the nine months ended March 31, 2022, we had a daily maximum amount outstanding under our commercial paper and committed receivables programs of $1.2 billion and an average daily amount outstanding of $25 million.

Our revolving credit and committed receivables sales facilities require us to maintain a consolidated net leverage ratio of no more than 3.75-to-1. As of March 31, 2022, we were in compliance with this financial covenant.

Long-Term Debt and Other Short-Term Borrowings

At March 31, 2022 and June 30, 2021, we had total long-term obligations, including the current portion and other short-term borrowings, of $5.6 billion and $6.2 billion, respectively. During the nine months ended March 31, 2022, we redeemed $572 million of the 2.616% Notes due June 2022 with available cash. In connection with this redemption, we recorded a $10 million loss on early extinguishment of debt. The early redemption was funded with available cash.

 14 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

MD&A Liquidity and Capital Resources

Capital Resources

Tax Effects of Self-Insurance Pre-tax Loss

In connection with a tax benefit from the net operating loss carryback primarily related to a self-insurance pre-tax loss as described further in our 2021 Form 10-K, we filed for a refund of $974 million. Because we expected to receive the refund within 12 months, we had a current asset for this amount on our condensed consolidated balance sheets at both March 31, 2022 and June 30, 2021. In April 2022, we received a payment for $966 million, which is net of certain adjustments. See Note 7 of the "Notes to Condensed Consolidated Financial Statements for additional detail.

Capital Deployment

Opioid Litigation Settlement Agreement

We had $6.70 billion accrued at March 31, 2022 related to certain opioid litigation, as further described within the Significant Developments in Fiscal 2022 and Trends section in this MD&A and Note 6 of the "Notes to Condensed Consolidated Financial Statements." We expect the majority of the payment amounts to be spread over 18 years. During the nine months ended March 31, 2022, we paid our first annual payment under the Settlement Agreement, which is reflected in prepaid expenses and other assets in our condensed consolidated balance sheets. We also made certain payments under the separate New York and Ohio settlements. The effective date of the Settlement Agreement is April 2, 2022. We expect to make subsequent annual payments under the Settlement Agreement every July for the term of the Settlement Agreement beginning in July 2022. The amounts of these future payments may differ from the payment made during the nine months ended March 31, 2022.

Capital Expenditures

Capital expenditures during the nine months ended March 31, 2022 and 2021 were $223 million and $274 million, respectively.

Dividends

On each of May 5, 2021, August 4, 2021, November 4, 2021 and February 8, 2022, our Board of Directors approved a quarterly dividend of $0.4908 per share, or $1.96 per share on an annualized basis, which were paid on July 15, 2021, October 15, 2021, January 15, 2022 and April 15, 2022 to shareholders of record on July 1, 2021, October 1, 2021, January 3, 2022 and April 1, 2022 respectively.

Share Repurchases

During the nine months ended March 31, 2022, we repurchased $1.0 billion of our common shares, in the aggregate, under accelerated share repurchase ("ASR") programs. See Note 10 of the "Notes to Condensed Consolidated Financial Statements" for additional information.

On November 4, 2021, our Board of Directors approved a $3.0 billion share repurchase program, which will expire on December 31, 2024. As of April 30, 2022, we had $2.7 billion remaining authorized for share repurchases under this program.

 15 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

MD&A Other Items

Other Items

The MD&A in our 2021 Form 10-K addresses our contractual obligations and off-balance sheet arrangements, as of and for the fiscal year ended June 30, 2021. There have been no subsequent material changes outside the ordinary course of business to those items.

Critical Accounting Policies and Sensitive Accounting Estimates

The discussion and analysis presented below is a supplemental disclosure to the critical accounting policies and sensitive accounting estimates specified in our consolidated balance sheet at June 30, 2021. This discussion and analysis should be read in conjunction with the Critical Accounting Policies and Sensitive Accounting Estimates included in our 2021 Form 10-K and our Form 10-Q for the quarters ended September 30, 2021 and December 31, 2021.

Critical accounting policies are those accounting policies that (i) can have a significant impact on our financial condition and results of operations and (ii) require the use of complex and subjective estimates based upon past experience and management’s judgment. Other people applying reasonable judgment to the same facts and circumstances could develop different estimates. Because estimates are inherently uncertain, actual results may differ, including due to the risks discussed in "Risk Factors" and other risks discussed in our 2021 Form 10-K and our other filings with the SEC since June 30, 2021.

Inventory

A portion of our inventories are valued at the lower of cost, using the last-in, first-out ("LIFO") method, or market. These are primarily merchandise inventories at the core pharmaceutical distribution facilities within our Pharmaceutical segment (“distribution facilities”).

Our remaining inventory, including inventory in our Medical segment, that is not valued at the lower of LIFO cost or market is stated at the lower of cost, using the first-in, first-out method ("FIFO"), or net realizable value. We reserve for the lower of cost or net realizable value using the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Due to the unprecedented demand for certain PPE as a result of COVID-19, our Medical segment manufactured and sourced inventory at higher costs than

in periods prior to COVID-19. As selling prices and customer demand decreased compared to the peak of COVID-19, we recorded a reserve of $197 million in fiscal 2021, primarily related to certain categories of gloves, to reduce the carrying value of certain PPE to its net realizable value.

We continued to monitor and assess changes in selling prices and customer demand related to PPE during the nine months ended March 31, 2022. While we consider that our assumptions continue to be reasonable and appropriate, our estimates for selling prices and demand are inherently uncertain and if our assumptions decline in the future, additional inventory reserves may be required.

Goodwill

Purchased goodwill is tested for impairment annually or when indicators of impairment exist. Goodwill impairment testing involves a comparison of the estimated fair value of reporting units to the respective carrying amount, which may be performed utilizing either a qualitative or quantitative assessment. Qualitative factors are first assessed to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If it is determined that it is more likely than not that the fair value does not exceed the carrying amount, then a quantitative test is performed. The quantitative goodwill impairment test involves a comparison of the estimated fair value of the reporting unit to the respective carrying amount. A reporting unit is defined as an operating segment or one level below an operating segment (also known as a component).

Our reporting units are: Pharmaceutical operating segment (excluding our Nuclear and Precision Health Solutions division);

Nuclear and Precision Health Solutions division; Medical operating segment (excluding our Cardinal Health at-Home Solutions division) (“Medical Unit”); and Cardinal Health at-Home Solutions division.

Goodwill impairment testing involves judgment, including the identification of reporting units, qualitative evaluation of events and circumstances to determine if it is more likely than not that an impairment exists, and, if necessary, the estimation of the fair value of the applicable reporting unit. Our qualitative evaluation considers the weight of evidence and significance of all identified events and circumstances and most relevant drivers of fair value, both positive and negative, in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

 16 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

MD&A Other Items

Medical Unit Goodwill

During the three and nine months ended March 31, 2022, the Medical Unit continued to experience adverse financial results related to inflationary impacts and the adverse impact of global supply chain constraints. Due to the risks and uncertainties related to these impacts, we elected to bypass the qualitative assessment in the second and third quarters of fiscal 2022 and perform interim goodwill impairment testing for the Medical Unit. This quantitative testing resulted in the carrying amount of the Medical Unit exceeding the fair value, resulting in pre-tax impairment charges of $474 million and $1.3 billion, which were recognized during the three months ended March 31, 2022 and December 31, 2021, respectively, and are included in impairments and (gain)/loss on disposal of assets in our condensed consolidated statements of earnings/(loss).

Our determination of the estimated fair value of the Medical Unit is based on a combination of the income-based approach (using a terminal growth rate of 2 percent), and the market-based approach. For the income-based approach, we also used discount rates of 9.5 percent and 9 percent for the interim testing at March 31, 2022 and December 31, 2021, respectively. The increase in the discount rate was primarily due to an increase in the risk-free interest rate.

In connection with the interim testing performed at December 31, 2021, we updated our assumptions from prior periods to include the increased magnitude and breadth of the inflationary impacts to supply chain and commodities costs as well as adverse impacts due to global supply chain constraints. In addition, our planned price increases did not impact the second quarter of fiscal 2022 and therefore, we updated our assumptions to reflect a longer duration to implement such actions.

In connection with the interim testing performed at March 31, 2022, we further updated our assumptions for the adverse impact of global supply chain constraints, the timing of inflationary impacts and lower volumes from PPE. These changes did not have a meaningful impact on the fair value of the Medical Unit. The decrease in the fair value of the Medical Unit at March 31, 2022 was due to the increase in the discount rate described above.

The carrying value of the Medical Unit at March 31, 2022 after recognizing the impairment charge was $7.6 billion, of which $2.3 billion was goodwill. See Note 4 of the "Notes to Condensed Consolidated Financial Statements" for further discussion.

While we consider these assumptions to be reasonable and appropriate, they are complex and subjective, and additional adverse changes in one key assumption or a combination of key assumptions may significantly affect future estimates. These assumptions include, among other things, a failure to meet expected earnings or other financial plans, or unanticipated events and circumstances, such as changes in assumptions about the duration and magnitude of increased supply chain and commodities costs and our planned efforts to mitigate such impact, including price increases or surcharges; further disruptions in the supply chain; the impact of the Cordis divestiture; the COVID-19 pandemic, including estimated demand and selling prices for PPE; an increase in the discount rate; a decrease in the terminal growth rate; increases in tax rates (including potential tax reform); or a significant change in industry or economic trends. Adverse changes in key assumptions may result in further decline in fair value below the carrying value in the future and therefore, an impairment of our Medical Unit goodwill in future periods, which could adversely affect our results of operations. For example, if we were to increase the discount rate by a hypothetical 0.5 percent or decrease the terminal growth rate by a hypothetical 1.5 percent, the fair value for the Medical Unit would have further decreased by approximately $400 million.

 17 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

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, 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

Management believes it is useful to exclude the following items from the non-GAAP measures presented in this report for its own and for investors’ assessment of the business for the reasons identified below:

•LIFO charges and credits are excluded 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. The exclusion of LIFO charges and credits from non-GAAP metrics facilitates comparison of our current financial results to our historical financial results and to our peer group companies’ financial results. We did not recognize any LIFO charges or credits during the periods presented.

•Surgical gown recall costs or income includes inventory write-offs and certain remediation and supply disruption costs, net of related insurance recoveries, arising from the January 2020 recall of select Association for the Advancement of Medical Instrumentation ("AAMI") Level 3 surgical gowns and voluntary field actions (a recall of some packs and a corrective action allowing overlabeling of other packs) for Presource Procedure Packs containing affected gowns. Income from surgical gown recall costs represents insurance recoveries of these certain costs. We have excluded these costs from our non-GAAP metrics to allow investors to better understand the underlying operating results of the business and to facilitate comparison of our current financial results to our historical financial results and to our peer group companies’ financial results.

•State opioid assessments related to prior fiscal years is the portion of state assessments for prescription opioid medications that were sold or distributed in periods prior to the period in which the expense is incurred. This portion is excluded from non-GAAP financial measures because it is retrospectively applied to sales in prior fiscal years and inclusion would obscure analysis of the current fiscal year results of our underlying, ongoing business. Additionally, while states' laws may require us to make payments on an ongoing basis, the portion of the assessment related to sales in prior periods are contemplated to be one-time, nonrecurring items. Income from state opioid assessments related to prior fiscal years represents reversals of accruals when the underlying assessments were invalidated by a Court or reimbursed by manufacturers.

•Restructuring and employee severance costs are excluded because they are not part of the ongoing operations of our underlying business.

•Amortization and other acquisition-related costs, which include transaction costs, integration costs, and changes in the fair value of contingent consideration obligations, are excluded because they are not part of the ongoing operations of our underlying business and to facilitate comparison of our current financial results to our historical financial results and to our peer group companies' financial results. Additionally, costs for amortization of acquisition-related intangible assets are non-cash amounts, which are variable in amount and frequency and are significantly impacted by the timing and size of acquisitions, so their exclusion facilitates comparison of historical, current and forecasted financial results. We also exclude other acquisition-related costs, which 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. These costs are also significantly impacted by the timing, complexity and size of acquisitions.

 18 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

Explanation and Reconciliation of Non-GAAP Financial Measures

•Impairments and gain or loss on disposal of assets are excluded because they do not occur in or reflect the ordinary course of our ongoing business operations and are inherently unpredictable in timing and amount, and in the case of impairments, are non-cash amounts, so their exclusion facilitates comparison of historical, current and forecasted financial results.

•Litigation recoveries or charges, net are excluded because they 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. During fiscal 2021, we incurred a tax benefit related to a carryback of a net operating loss. Some pre-tax amounts, which contributed to this loss, relate to litigation charges. As a result, we allocated substantially all of the tax benefit to litigation charges. During fiscal 2022, we incurred a one-time contingent attorney fee of $18 million related to the finalization of the settlement agreement (the “Settlement Agreement”) resulting in the settlement of the vast majority of opioid lawsuits filed by state and local governmental entities. Due to the unique nature and significance of the Settlement Agreement, and the one-time, contingent nature of the fee, this related fee was included in litigation recoveries or charges, net. Additionally, during fiscal 2022 our Pharmaceutical segment profit was positively impacted by a $16 million judgment for lost profits. This judgment was the result of an ordinary course intellectual property rights claim and, therefore, is not adjusted in calculating the litigation recoveries or charges, net adjustment.

•Loss on early extinguishment of debt is excluded because it 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 this type of charge is not consistent and is significantly impacted by the timing and size of debt extinguishment transactions.

•(Gain)/Loss on sale of equity interest in naviHealth was incurred in connection with the sale of our remaining equity interest in naviHealth in fiscal 2020. The equity interest was retained in connection with the initial sale of our majority interest in naviHealth during fiscal 2019. We exclude this significant gain because gains or losses on investments of this magnitude do not typically occur in the normal course of business and are similar in nature to a gain or loss from a divestiture of a majority interest, which we exclude from non-GAAP results. The gain on the initial sale of our majority interest in naviHealth in fiscal 2019 was also excluded from our non-GAAP measures.

•Transitional tax benefit, net related to the Tax Cuts and Jobs Act is excluded because it results from the one-time impact of a very significant change in the U.S. federal corporate tax rate and, due to the significant size of the benefit, obscures analysis of trends and financial performance. The transitional tax benefit includes the initial estimate and subsequent adjustments for the re-measurement of deferred tax assets and liabilities due to the reduction of the U.S. federal corporate income tax rate and the repatriation tax on undistributed foreign earnings.

The tax effect for each of the items listed above, other than the transitional tax benefit item, 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.

Definitions

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

Non-GAAP operating earnings: operating earnings/(loss) excluding (1) LIFO charges/(credits), (2) surgical gown recall costs/(income), (3) state opioid assessment related to prior fiscal years, (4) restructuring and employee severance, (5) amortization and other acquisition-related costs, (6) impairments and (gain)/loss on disposal of assets, and (7) litigation (recoveries)/charges, net.

Non-GAAP earnings before income taxes: earnings/(loss) before income taxes excluding (1) LIFO charges/(credits), (2) surgical gown recall costs/(income), (3) state opioid assessment related to prior fiscal years, (4) restructuring and employee severance, (5) amortization and other acquisition-related costs, (6) impairments and (gain)/loss on disposal of assets, (7) litigation (recoveries)/charges, net, (8) loss on early extinguishment of debt and (9) (gain)/loss on sale of equity interest in naviHealth.

Non-GAAP net earnings attributable to Cardinal Health, Inc.: net earnings/(loss) attributable to Cardinal Health, Inc. excluding (1) LIFO charges/(credits), (2) surgical gown recall costs/(income), (3) state opioid assessment related to prior fiscal years, (4) restructuring and employee severance, (5) amortization and other acquisition-related costs, (6) impairments and (gain)/loss on disposal of assets, (7) litigation (recoveries)/charges, net, (8) loss on early extinguishment of debt and (9) (gain)/loss on sale of equity interest in naviHealth, each net of tax, and (10) transitional tax benefit, net.

Non-GAAP effective tax rate: provision for/(benefit from) income taxes adjusted for (1) LIFO charges/(credits), (2) surgical gown recall costs/(income), (3) state opioid assessment related to prior fiscal years, (4) restructuring and employee severance, (5) amortization and other acquisition-related costs, (6) impairments and (gain)/loss on disposal of assets, (7) litigation (recoveries)/charges, net, (8) loss on

 19 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

Explanation and Reconciliation of Non-GAAP Financial Measures

early extinguishment of debt and (9) (gain)/loss on sale of equity interest in naviHealth, each net of tax, and (10) transitional tax benefit, net divided by (earnings/(loss) before income taxes adjusted for the first nine items).

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

 20 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

Explanation and Reconciliation of Non-GAAP Financial Measures

GAAP to Non-GAAP Reconciliation

(in millions, except per common share amounts)	Operating Earnings/(Loss)		Operating Earnings Growth Rate		Earnings/(Loss) Before Income Taxes		Provision for/ (Benefit from) Income Taxes		Net Earnings/(Loss)1		Net Earnings1 Growth Rate		Diluted EPS1,2		Diluted EPS1 Growth Rate
	Three Months Ended March 31, 2022
GAAP	$	(97)	N.M.		$	(137)	$	1,253	$	(1,391)	N.M.		$	(5.05)	N.M.
Restructuring and employee severance	31				31		8		23				0.08
Amortization and other acquisition-related costs	79				79		20		59				0.21
Impairments and (gain)/loss on disposal of assets, net 3	471				471		(1,189)		1,660				6.03
Litigation (recoveries)/charges, net 4	61				61		10		51				0.18
(Gain)/Loss on sale of equity interest in naviHealth	—				(1)		—		(1)				—
Non-GAAP	$	545	(21)	%	$	504	$	101	$	402	(11)	%	$	1.45	(5)	%
	Three Months Ended March 31, 2021
GAAP	$	473	(16)	%	$	440	$	320	$	119	N.M		$	0.40	N.M
Surgical gown recall costs/(income)	(1)				(1)		—		(1)				—
State opioid assessment related to prior fiscal years	(2)				(2)		(1)		(1)				—
Restructuring and employee severance	24				24		6		18				0.06
Amortization and other acquisition-related costs	111				111		28		83				0.28
Impairments and (gain)/loss on disposal of assets, net	69				69		(4)		73				0.25
Litigation (recoveries)/charges, net 6	15				15		(144)		159				0.54
Non-GAAP	$	689	(4)	%	$	657	$	205	$	451	(5)	%	$	1.53	(6)	%
	Nine Months Ended March 31, 2022
GAAP	$	(632)	N.M.		$	(741)	$	328	$	(1,071)	N.M.		$	(3.82)	N.M.
Surgical gown recall costs/(income)	1				1		—		1				—
Restructuring and employee severance	56				56		14		42				0.15
Amortization and other acquisition-related costs	237				237		61		176				0.63
Impairments and (gain)/loss on disposal of assets, net 3	1,764				1,764		(119)		1,883				6.71
Litigation (recoveries)/charges, net (4) (5)	113				113		19		94				0.33
Loss on early extinguishment of debt	—				10		3		7				0.03
(Gain)/Loss on sale of equity interest in naviHealth	—				(2)		—		(2)				—
Non-GAAP	$	1,540	(20)	%	$	1,438	$	306	$	1,131	(20)	%	$	4.01	(16)	%
	Nine Months Ended March 31, 2021
GAAP	$	310	N.M.		$	204	$	(293)	$	495	N.M.		$	1.68	N.M.
Surgical gown recall costs/(income)	(3)				(3)		(1)		(2)				—
State opioid assessment related to prior fiscal years	39				39		9		30				0.10
Restructuring and employee severance	81				81		20		61				0.21
Amortization and other acquisition-related costs	345				345		86		259				0.88
Impairments and (gain)/loss on disposal of assets, net	78				78		12		66				0.22
Litigation (recoveries)/charges, net 6	1,085				1,085		584		501				1.70
Loss on early extinguishment of debt	—				1		—		1				—
Non-GAAP	$	1,935	—	%	$	1,830	$	417	$	1,411	9	%	$	4.79	9	%

 21 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

Explanation and Reconciliation of Non-GAAP Financial Measures

1    Attributable to Cardinal Health, Inc.

2    For the three and nine months ended March 31, 2022, GAAP diluted loss per share attributable to Cardinal Health, Inc. ("GAAP diluted EPS") and the EPS impact from the GAAP to non-GAAP per share reconciling items are calculated using a weighted average of 275 million and 281 million common shares, respectively, which excludes potentially dilutive securities from the denominator due to their anti-dilutive effects resulting from our GAAP net loss for the periods. For the three and nine months ended March 31, 2022, non-GAAP diluted EPS is calculated using a weighted average of 277 million and 282 million common shares, which includes potentially dilutive shares.

3    Impairments and (gain)/loss on disposals of assets, net includes pre-tax goodwill impairment charges of $474 million and $1.8 billion related to our Medical segment recorded in the third quarter and year-to-date periods of fiscal 2022, respectively. For fiscal 2022, the estimated net tax benefit related to these impairments is $126 million and is included in the annual effective tax rate. As a result, the amount of tax expense in the current quarter and year-to-date periods increased by approximately $1.2 billion and approximately $180 million, respectively, and is expected to lower the provision for income taxes during the fourth quarter of fiscal 2022 by approximately $180 million.

4    Litigation (recoveries)/charges, net includes a one-time contingent attorney fee of $18 million recorded during the third quarter of fiscal 2022 related to the finalization of the settlement agreement (the “Settlement Agreement”) resulting in the settlement of the vast majority of opioid lawsuits filed by state and local governmental entities. Due to the unique nature and significance of the Settlement Agreement, and the one-time, contingent nature of the fee, this related fee was included in litigation (recoveries)/charges, net.

5    Litigation (recoveries)/charges, net for fiscal 2022 does not include a $16 million judgement for lost profits related to an ordinary course intellectual property claim, which positively impacted Pharmaceutical segment profit.

.

6    Litigation (recoveries)/charges, net includes a pre-tax charge of $1.02 billion recorded in the first quarter of fiscal 2021 related to the opioid litigation. For fiscal 2021, the amount of tax expense increased by approximately $140 million during the three months ended March 31, 2021 while the amount of tax benefit increased by approximately $180 million during the nine months ended March 31, 2021 compared to the tax impacts that would have been recognized without the opioid litigation charge. The net tax benefit associated with the opioid litigation charges was $228 million for fiscal 2021.

    Litigation(recoveries)/charges, net also includes a tax benefit recorded during the nine months ended March 31, 2021 related to a net operating loss carryback. Our wholly-owned insurance subsidiary recorded a self-insurance pre-tax loss in its fiscal 2020 statutory financial statements primarily related to opioid litigation. This self-insurance pre-tax loss, which did not impact our pre-tax consolidated results, was deducted on our fiscal 2020 consolidated federal income tax return and contributed to a significant net operating loss for tax purposes. The net operating loss was carried back and adjusted our taxable income for fiscal 2015, 2016, 2017 and 2018 as permitted under the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. During the nine months ended March 31, 2021, the total net benefit was $419 million; however, for purposes of reconciling Non-GAAP financial measures, we allocated $385 million of the benefit to litigation (recoveries)/charges, net, which is excluded from non-GAAP measures, based on the relative amount of the self-insurance pre-tax loss related to opioid litigation claims versus separate tax adjustments. The tax benefit allocated to the separate tax adjustments of $34 million is included in non-GAAP measures.

The sum of the components and certain computations may reflect rounding adjustments.

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

 22 Cardinal Health | Q3 Fiscal 2022 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 2021 Form 10-K since the end of fiscal 2021 through March 31, 2022.

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 March 31, 2022. Based on this evaluation, our principal executive officer and principal financial officer have concluded that as of March 31, 2022, 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

As explained below, there were changes in our internal control over financial reporting during the quarter ended March 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Pharmaceutical Segment Information Technology Initiative

The Pharmaceutical segment is in a multi-year project to implement a replacement of certain finance and operating information systems. During the three and nine months ended March 31, 2022, we transitioned selected processes to the new systems which affected our internal control over financial reporting. It is possible that ongoing transitions to new systems may adversely impact internal control over financial reporting.

 23 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

Other

Legal Proceedings

In addition to the proceeding described below, the legal proceedings described in Note 6 of the "Notes to Condensed Consolidated Financial Statements" are incorporated in this "Legal Proceedings" section by reference.

In June 2019, Melissa Cohen, a purported shareholder, filed an action on behalf of Cardinal Health, Inc. in the U.S. District Court for the Southern District of Ohio against certain current and former members of our Board of Directors alleging that the defendants breached their fiduciary duties by failing to effectively monitor Cardinal Health's distribution of controlled substances and approving certain payments of executive compensation. In December 2019 and January 2020, similar complaints were filed in the U.S. District Court for the Southern District of Ohio by purported shareholders, Stanley M. Malone and Michael Splaine, respectively. In January, 2020, the court consolidated the derivative cases under the caption In re Cardinal Health, Inc. Derivative Litigation and in March 2020, plaintiffs filed an amended complaint. The amended consolidated derivative complaint seeks, among other things, unspecified money damages against the defendants and an award of attorneys' fees. In February 2021, the court granted in part and denied in part defendants' motion to dismiss. The court dismissed the claim with respect to executive compensation but declined to dismiss the failure to monitor claim.

Subject to definitive documentation and court approval and notice process, in December 2021, the parties reached an agreement in principle to resolve these lawsuits. Under this agreement, our director and officer's liability insurance carriers, on behalf of the defendants, would pay Cardinal Health $124 million, less any attorneys' fees and expenses awarded by the court to plaintiffs' counsel. This settlement does not include any admission of liability.

 24 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

Other

Risk Factors

You should carefully consider the information in this Form 10-Q, including the risk factors below, and the risk factors discussed in "Risk Factors" and other risks discussed in our 2021 Form 10-K and our filings with the SEC since June 30, 2021. 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.

We depend on direct and indirect suppliers to make their products and raw materials available to us and are subject to fluctuations in costs, availability and regulatory risk associated with these products and raw materials.

Our manufacturing businesses use oil-based resins, pulp, cotton, latex and other commodities as raw materials in many products. Prices of oil and gas also affect our distribution and transportation costs. Prices of these commodities are volatile and can fluctuate significantly, causing our costs to produce and distribute our products to fluctuate. Beginning in the fourth quarter of fiscal year 2021, we have experienced higher supply chain costs, primarily related to international freight and commodities, which had a negative impact on Medical segment profit in fiscal 2021 and the first three quarters of fiscal 2022. Supply chain constraints have also had a negative impact on sales within our Medical segment. We expect these cost increases and supply chain constraints to continue to have a negative impact on segment profit, primarily in the Medical segment, in fiscal 2022. Due to competitive dynamics and contractual limitations, passing along cost increases is challenging and it unlikely that we will be able to offset the impact of these costs increases through higher prices. If we continue to have challenges sufficiently offsetting these cost increases through other cost reductions, or recovering these costs through price increases or surcharges, Medical segment profit could be negatively impacted to a greater extent than we currently anticipate.

We depend on others to manufacture some products that we market and distribute. Our operations are also dependent on various components, compounds, raw materials and energy supplied by others. We purchase many of these components, raw materials and energy, and source certain products from numerous suppliers in various countries. In some instances, for reasons of quality assurance, cost effectiveness, or availability, we procure certain components and raw materials from a sole supplier. Our supplier relationships could be interrupted, become less favorable to us or be terminated and the supply of these components, compounds, raw materials or products could be interrupted or become insufficient. These supply interruptions or other disruptions in manufacturing processes could be caused by events

beyond our control, including natural disasters, supplier facility shut-downs, defective raw materials, the impact of epidemics or pandemics, such as COVID-19, and actions by U.S. or international governments, including export restrictions or tariffs.

In addition, due to the stringent regulatory requirements regarding the manufacture and sourcing of our products, we may not be able to quickly establish additional or replacement sources for certain components, materials or products. A sustained supply reduction or interruption, and an inability to develop alternative and additional sources for such supply, could result in lost sales, increased cost, damage to our reputation, and may have an adverse effect on our business.

Our goodwill may become further impaired, which could require us to record additional significant charges to earnings in accordance with generally accepted accounting principles.

U.S. GAAP requires us to test our goodwill for impairment on an annual basis, or more frequently if indicators for potential impairment exist. As a result of adverse financial results in our Medical Unit resulting from inflationary impacts and global supply chain constraints, we performed interim goodwill impairment testing for the Medical Unit for the periods ended December 31, 2021 and March 31, 2022. As a result of both of these interim tests, we recorded an aggregate $1.8 billion impairment to goodwill related to our Medical Unit in the nine months ended March 31, 2022. This testing involves estimates and significant judgments by management. We believe our assumptions and estimates are reasonable and appropriate; however additional adverse changes in key assumptions, including a failure to meet expected earnings or other financial plans, unanticipated events and circumstances such as changes in assumptions about the duration and magnitude of increased supply chain and commodities costs and our planned efforts to mitigate such impacts, further disruptions in the supply chain, the impact of the Cordis divestiture, estimated demand and selling prices for PPE, a further increase in the discount rate, a decrease in the terminal growth rate, increases in tax rates (including potential tax reform) or a significant change in industry or economic trends could affect the accuracy or validity of such estimates and may result in an additional goodwill impairment in our Medical Unit. It is also possible that we may record significant charges related to other reporting units. Any charge or charges could adversely affect our results of operations. See "Critical Accounting Policies and Sensitive Accounting Estimates" in MD&A above for more information regarding goodwill impairment testing.

 25 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

Other

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 (2,3)		Total Number of Shares Purchased as Part of Publicly Announced Programs (2,3,4)	Approximate Dollar Value of Shares That May Yet be Purchased Under the Program (4) (in millions)
January 2022	1,304,012	$	46.05	1,303,017	$	2,943
February 2022	226	53.01		—	2,943
March 2022	2,962,630	54.01		2,962,414	2,783
Total	4,266,868	$	51.58	4,265,431	$	2,783

(1)Reflects 995, 226, and 216 common shares purchased in January, February, and March 2022, respectively, through a rabbi trust as investments of participants in our Deferred Compensation Plan.

(2)On November 10, 2021, we entered into an ASR program to purchase common shares for an aggregate purchase price of $300 million and received an initial delivery of 4.8 million common shares using a reference price of $50.30. The program concluded on January 31, 2022 at a volume weighted average price per common share of $49.39 resulting in a final delivery of 1.3 million common shares. See Note 10 of the "Notes to Condensed Consolidated Financial Statements" for additional information.

(3)On February 28, 2022, we entered into an ASR program to purchase common shares for an aggregate purchase price of $200 million and received an initial delivery of 3.0 million common shares using a reference price of $54.01. The program concluded on April 18, 2022 at a volume weighted average price per common share of $56.02 resulting in a final delivery of 0.6 million common shares. See Note 10 of the "Notes to Condensed Consolidated Financial Statements" for additional information.

(4)On November 7, 2018, our Board of Directors approved a $1.0 billion share repurchase program that expired on December 31, 2021. On November 4, 2021, our Board of Directors approved a new $3.0 billion share repurchase program, which will expire on December 31, 2024. The ASR program with an aggregate purchase price of $200 million concluded on April 18, 2022, which reduced the amount remaining under our existing share repurchase authorization to $2.7 billion.

 26 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

Financial Statements

Condensed Consolidated Statements of Earnings/(Loss)

(Unaudited)

	Three Months Ended March 31,				Nine Months Ended March 31,
(in millions, except per common share amounts)	2022		2021		2022		2021
Revenue	$	44,836	$	39,275	$	134,261	$	119,881
Cost of products sold	43,154		37,463		129,321		114,578
Gross margin	1,682		1,812		4,940		5,303
Operating expenses:
Distribution, selling, general and administrative expenses	1,137		1,120		3,402		3,404
Restructuring and employee severance	31		24		56		81
Amortization and other acquisition-related costs	79		111		237		345
Impairments and (gain)/loss on disposal of assets, net	471		69		1,764		78
Litigation (recoveries)/charges, net	61		15		113		1,085
Operating earnings/(loss)	(97)		473		(632)		310
Other (income)/expense, net	3		(12)		(14)		(31)
Interest expense, net	38		45		115		136
Loss on early extinguishment of debt	—		—		10		1
(Gain)/loss on sale of equity interest in naviHealth	(1)		—		(2)		—
Earnings/(loss) before income taxes	(137)		440		(741)		204
Provision for/(benefit from) income taxes	1,253		320		328		(293)
Net earnings/(loss)	(1,390)		120		(1,069)		497
Less: Net earnings attributable to noncontrolling interests	(1)		(1)		(2)		(2)
Net earnings/(loss) attributable to Cardinal Health, Inc.	$	(1,391)	$	119	$	(1,071)	$	495
Earnings/(Loss) per common share attributable to Cardinal Health, Inc.:
Basic	$	(5.05)	$	0.41	$	(3.82)	$	1.69
Diluted	(5.05)		0.40		(3.82)		1.68
Weighted-average number of common shares outstanding:
Basic	275		292		281		293
Diluted	275		294		281		294
Cash dividends declared per common share	$	0.4908	$	0.4859	$	1.4724	$	1.4577

See notes to condensed consolidated financial statements.

 27 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

Financial Statements

Condensed Consolidated Statements of Comprehensive Income/(Loss)

(Unaudited)

	Three Months Ended March 31,				Nine Months Ended March 31,
(in millions)	2022		2021		2022		2021
Net earnings/(loss)	$	(1,390)	$	120	$	(1,069)	$	497
Other comprehensive income/(loss):
Foreign currency translation adjustments and other	(4)		9		(47)		42
Net unrealized gain/(loss) on derivative instruments, net of tax	12		(4)		4		14
Total other comprehensive income/(loss), net of tax	8		5		(43)		56
Total comprehensive income/(loss)	(1,382)		125		(1,112)		553
Less: comprehensive income attributable to noncontrolling interests	(1)		(1)		(2)		(2)
Total comprehensive income/(loss) attributable to Cardinal Health, Inc.	$	(1,383)	$	124	$	(1,114)	$	551

See notes to condensed consolidated financial statements.

 28 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

Financial Statements

Condensed Consolidated Balance Sheets

(in millions)	March 31, 2022		June 30, 2021
	(Unaudited)
Assets
Current assets:
Cash and equivalents	$	2,356	$	3,407
Trade receivables, net	10,250		9,103
Inventories, net	15,493		14,594
Prepaid expenses and other	2,785		2,843
Assets held for sale	—		1,101
Total current assets	30,884		31,048
Property and equipment, net	2,298		2,360
Goodwill and other intangibles, net	8,022		10,094
Other assets	907		951
Total assets	$	42,111	$	44,453
Liabilities and Shareholders’ Equity/(Deficit)
Current liabilities:
Accounts payable	$	24,821	$	23,700
Current portion of long-term obligations and other short-term borrowings	861		871
Other accrued liabilities	3,033		2,957
Liabilities related to assets held for sale	—		96
Total current liabilities	28,715		27,624
Long-term obligations, less current portion	4,751		5,365
Deferred income taxes and other liabilities	9,338		9,670
Shareholders’ equity/(deficit):
Preferred shares, without par value:
Authorized—500 thousand shares, Issued—none	—		—
Common shares, without par value:
Authorized—755 million shares, Issued—327 million shares at March 31, 2022 and June 30, 2021	2,761		2,806
Retained earnings/(accumulated deficit)	(281)		1,205
Common shares in treasury, at cost: 54 million shares and 36 million shares at March 31, 2022 and June 30, 2021, respectively	(3,100)		(2,186)
Accumulated other comprehensive loss	(77)		(34)
Total Cardinal Health, Inc. shareholders' equity/(deficit)	(697)		1,791
Noncontrolling interests	4		3
Total shareholders’ equity/(deficit)	(693)		1,794
Total liabilities and shareholders’ equity/(deficit)	$	42,111	$	44,453

See notes to condensed consolidated financial statements.

 29 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

Financial Statements

Condensed Consolidated Statements of Shareholders'

Equity/(Deficit)

(Unaudited)

	Common Shares					Treasury Shares			Accumulated Other Comprehensive Loss		Noncontrolling Interests		Total Shareholders’ Equity/ (Deficit)
(in millions)	Shares Issued	Amount		Retained Earnings/ (Accumulated Deficit)		Shares	Amount
	Three Months Ended March 31, 2022
Balance at December 31, 2021	327	$	2,721	$	1,245	(50)	$	(2,883)	$	(85)	$	4	$	1,002
Net earnings/(loss)				(1,391)							1		(1,390)
Other comprehensive income, net of tax									8				8
Employee stock plans activity, net of shares withheld for employee taxes	—	20					3						23
Share repurchase program activity		20				(4)	(220)						(200)
Dividends declared				(135)									(135)
Other											(1)		(1)
Balance at March 31, 2022	327	$	2,761	$	(281)	(54)	$	(3,100)	$	(77)	$	4	$	(693)

	Three Months Ended March 31, 2021
Balance at December 31, 2020	327	$	2,778	$	1,255	(33)	$	(2,009)	$	(53)	$	4	$	1,975
Net earnings				119							1		120
Other comprehensive income, net of tax									5				5
Employee stock plans activity, net of shares withheld for employee taxes	—	29				—	7						36
Share repurchase program activity						(4)	(200)						(200)
Dividends declared				(143)									(143)
Other				2		1					(1)		1
Balance at March 31, 2021	327	$	2,807	$	1,233	(36)	$	(2,202)	$	(48)	$	4	$	1,794

	Nine Months Ended March 31, 2022
Balance at June 30, 2021	327	$	2,806	$	1,205	(36)	$	(2,186)	$	(34)	$	3	$	1,794
Net earnings/(loss)				(1,071)							2		(1,069)
Other comprehensive loss, net of tax									(43)				(43)
Employee stock plans activity, net of shares withheld for employee taxes	—	(5)				1	46						41
Share repurchase program activity		(40)				(19)	(960)						(1,000)
Dividends declared				(415)									(415)
Other											(1)		(1)
Balance at March 31, 2022	327	$	2,761	$	(281)	(54)	$	(3,100)	$	(77)	$	4	$	(693)

	Nine Months Ended March 31, 2021
Balance at June 30, 2020	327	$	2,789	$	1,170	(35)	$	(2,066)	$	(104)	$	3	$	1,792
Net earnings				495							2		497
Other comprehensive income, net of tax									56				56
Employee stock plans activity, net of shares withheld for employee taxes	—	18				2	64						82
Share repurchase program activity						(4)	(200)						(200)
Dividends declared				(432)									(432)
Other						1					(1)		(1)
Balance at March 31, 2021	327	$	2,807	$	1,233	(36)	$	(2,202)	$	(48)	$	4	$	1,794

See notes to condensed consolidated financial statements.

 30 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

Financial Statements

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended March 31,
(in millions)	2022		2021
Cash flows from operating activities:
Net earnings/(loss)	$	(1,069)	$	497
Adjustments to reconcile net earnings/(loss) to net cash provided by operating activities:
Depreciation and amortization	513		603
Impairments and loss on sale of other investments	3		—
(Gain)/loss on sale of equity interest in naviHealth	(2)		—
Impairments and (gain)/loss on disposal of assets, net	1,764		78
Loss on early extinguishment of debt	10		1
Share-based compensation	65		84
Provision for bad debts	46		49
Change in operating assets and liabilities, net of effects from acquisitions and divestitures:
Increase in trade receivables	(1,193)		(511)
Increase in inventories	(922)		(1,323)
Increase in accounts payable	1,121		1,267
Other accrued liabilities and operating items, net	(206)		1,019
Net cash provided by operating activities	130		1,764
Cash flows from investing activities:
Proceeds from divestitures, net of cash transferred, and disposal of property and equipment	934		—
Acquisition of subsidiaries, net of cash acquired	—		(3)
Additions to property and equipment	(223)		(274)
Purchases of investments	(38)		(18)
Proceeds from investments	27		5
Proceeds from net investment hedge terminations	71		—
Net cash provided by/(used in) investing activities	771		(290)
Cash flows from financing activities:
Proceeds from interest rate swap terminations	—		18
Reduction of long-term obligations	(597)		(53)
Net tax withholdings from share-based compensation	(26)		(1)
Dividends on common shares	(425)		(432)
Purchase of treasury shares	(1,000)		(200)
Net cash used in financing activities	(2,048)		(668)
Effect of exchange rate changes on cash and equivalents	(13)		8
Cash and equivalents reclassified from/(to) assets held for sale	109		(86)
Net increase/(decrease) in cash and equivalents	(1,051)		728
Cash and equivalents at beginning of period	3,407		2,771
Cash and equivalents at end of period	$	2,356	$	3,499

See notes to condensed consolidated financial statements.

 31 Cardinal Health | Q3 Fiscal 2022 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. The results of businesses acquired or disposed of are included in the condensed consolidated financial statements from the date of the acquisition or up to the date of disposal, respectively.

References to "we," "our," and similar pronouns in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 (this "Form 10-Q") refer to Cardinal Health, Inc. and its majority-owned or controlled subsidiaries unless the context requires otherwise.

Our fiscal year ends on June 30. References to fiscal 2022 and 2021 in these condensed consolidated financial statements are to the fiscal years ending or ended June 30, 2022 and June 30, 2021, respectively.

Our condensed consolidated financial statements have been prepared in accordance with the U.S. Securities and Exchange Commission ("SEC") instructions to Quarterly Reports on Form 10-Q and include 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.

The COVID-19 pandemic ("COVID-19") continues to affect the U.S. and global economies, and as previously disclosed, the pandemic began to materially affect our businesses during the third quarter of fiscal 2020. The length and severity of the pandemic and its impacts on our businesses and results of operations are uncertain.

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 2022 interim period are not necessarily indicative of the results that may be expected for the full fiscal year ending June 30, 2022. 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, 2021 (the "2021 Form 10-K").

Recently Issued Financial Accounting Standards

Not Yet Adopted

We assess the adoption impacts of recently issued accounting standards by the Financial Accounting Standards Board ("FASB") on our condensed consolidated financial statements as well as material updates to previous assessments, if any, from our fiscal 2021 Form 10-K. There were no accounting standards issued in fiscal 2022 that will have a material impact on our condensed consolidated financial statements.

Recently Adopted Financial Accounting Standards

There were no new material accounting standards adopted in the nine months ended March 31, 2022.

2. Divestitures

In August 2021, we sold the Cordis business to Hellman & Friedman for proceeds of $923 million, net of cash transferred, and we retained certain working capital accounts and certain liabilities. The purchase price is subject to adjustments based on working capital requirements as set forth in the agreement. Cardinal Health will retain product liability associated with lawsuits and claims related to inferior vena cava ("IVC") filters in the U.S. and Canada, as well as authority for these matters discussed in Note 6. The Cordis business operated within our Medical segment.

 32 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

Notes to Financial Statements

3. Restructuring and Employee Severance

The following table summarizes restructuring and employee severance:

	Three Months Ended March 31,
(in millions)	2022		2021
Employee-related	$	12	$	13
Facility exit and other	19		11
Total restructuring and employee severance	$	31	$	24

	Nine Months Ended March 31,
(in millions)	2022		2021
Employee-related	$	22	$	45
Facility exit and other	34		36
Total restructuring and employee severance	$	56	$	81

Employee-related costs primarily consist of termination benefits provided to employees who have been involuntarily terminated, duplicate payroll costs and retention bonuses incurred during transition periods. Facility exit and other costs primarily consist of accelerated depreciation, lease costs associated with vacant facilities, professional, project management and other service fees to support divestitures, vendor transition fees, project consulting fees, and certain other divestiture-related costs.

Restructuring costs during both the three and nine months ended March 31, 2022 and 2021 were primarily related to the implementation of certain enterprise-wide cost-savings measures, which includes facility exit costs related to decreasing our overall office space, and the divestiture of the Cordis business.

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, 2021	$	53	$	26	$	79
Additions	34		1		35
Payments and other adjustments	(38)		(10)		(48)
Balance at March 31, 2022	$	49	$	17	$	66

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 (1)		Medical (2)		Total
Balance at June 30, 2021	$	2,659	$	5,330	$	7,989
Goodwill acquired, net of purchase price adjustments	—		—		—
Foreign currency translation adjustments and other	—		(41)		(41)
Goodwill impairment	—		(1,781)		(1,781)
Balance at March 31, 2022	$	2,659	$	3,508	$	6,167

(1)At March 31, 2022 and June 30, 2021, the Pharmaceutical segment accumulated goodwill impairment loss was $829 million.

(2)At March 31, 2022 and June 30, 2021, the Medical segment accumulated goodwill impairment loss was $3.2 billion and $1.4 billion, respectively.

During the three and nine months ended March 31, 2022, the Medical Unit, which is our Medical operating segment excluding our Cardinal Health at-Home Solutions division, continued to experience adverse financial results related to inflationary impacts and the adverse impact of global supply chain constraints. Due to the risks and uncertainties related to these impacts, we elected to bypass the qualitative assessment in the second and third quarters of fiscal 2022 and perform interim goodwill impairment testing for the Medical Unit. This quantitative testing resulted in the carrying amount of the Medical Unit exceeding the fair value, resulting in pre-tax impairment charges of $474 million and $1.3 billion, which were recognized during the three months ended March 31, 2022 and December 31, 2021, respectively, and are included in impairments and (gain)/loss on disposal of assets in our condensed consolidated statements of earnings/(loss). The goodwill balance of the Medical Unit, after recognizing the impairment, was $2.3 billion at March 31, 2022.

Our determination of the estimated fair value of the Medical Unit is based on a combination of the income-based approach (using a terminal growth rate of 2 percent), and the market-based approach. For the income-based approach, we also used discount rates of 9.5 percent and 9 percent for the interim testing at March 31, 2022 and December 31, 2021, respectively. The increase in the discount rate was primarily due to an increase in the risk-free interest rate. Our fair value estimates utilize significant unobservable inputs and thus represent Level 3 fair value measurements.

 33 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

Notes to Financial Statements

Other Intangible Assets

The following tables summarize other intangible assets by class at:

	March 31, 2022
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible		Weighted- Average Remaining Amortization Period (Years)
Indefinite-life intangibles:
Trademarks and patents	$	13	$	—	$	13	N/A
Total indefinite-life intangibles	13		—		13		N/A
Definite-life intangibles:
Customer relationships	3,293		2,130		1,163		10
Trademarks, trade names and patents	552		352		200		9
Developed technology and other	1,036		557		479		9
Total definite-life intangibles	4,881		3,039		1,842		10
Total other intangible assets	$	4,894	$	3,039	$	1,855	N/A

	June 30, 2021
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible
Indefinite-life intangibles:
Trademarks and patents	$	12	$	—	$	12
Total indefinite-life intangibles	12		—		12
Definite-life intangibles:
Customer relationships	3,330		1,989		1,341
Trademarks, trade names and patents	551		328		223
Developed technology and other	1,035		506		529
Total definite-life intangibles	4,916		2,823		2,093
Total other intangible assets	$	4,928	$	2,823	$	2,105

Total amortization of intangible assets was $78 million and $109 million for the three months ended March 31, 2022 and 2021, respectively, and $235 million and $337 million for the nine months ended March 31, 2022 and 2021, respectively. Estimated annual amortization of intangible assets for the remainder of fiscal 2022 through 2026 is as follows: $78 million, $284 million, $260 million, $235 million, and $208 million.

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

Long-Term Debt and Other Short-Term Borrowings

We had total long-term obligations, including the current portion and other short-term borrowings, of $5.6 billion and $6.2 billion at March 31, 2022 and June 30, 2021, respectively. All the notes represent unsecured obligations of Cardinal Health, Inc. and rank equally in right of payment with all of our existing and future unsecured and unsubordinated indebtedness. Interest is paid pursuant to the terms of the obligations. These notes are effectively subordinated to the liabilities of our subsidiaries, including trade payables of $24.8 billion and $23.7 billion at March 31, 2022 and June 30, 2021, respectively.

During the nine months ended March 31, 2022, we redeemed all outstanding $572 million principal amount of 2.616% Notes due June 2022 at a redemption price equal to 100% of the principal amount and accrued but unpaid interest, plus the make-whole premium applicable to the notes. In connection with this redemption, we recorded a $10 million loss on early extinguishment of debt. The early redemption was funded with available cash.

During the nine months ended March 31, 2021, we early repurchased a total of $40 million of the Floating Rate Notes due 2022 and $2 million of the 2.616% Notes due June 2022. The repurchases were funded with available cash. In connection with the early debt repurchases, we recorded a $1 million loss on early extinguishment of debt during the nine months ended March 31, 2021.

Other Financing Arrangements

In addition to cash and equivalents and operating cash flow, other sources of liquidity include a $2.0 billion commercial paper program backed by a $2.0 billion revolving credit facility. We also have a $1.0 billion committed receivables sales facility. At March 31, 2022, we had no amounts outstanding under our commercial paper program, revolving credit facility, or our committed receivables sales facility. During the nine months ended March 31, 2022, we had a daily maximum amount outstanding under our commercial paper and committed receivables programs of $1.2 billion and an average daily amount outstanding of $25 million.

In September 2019, we renewed our committed receivables sales facility program through Cardinal Health Funding, LLC (“CHF”) through September 30, 2022. CHF was organized for the sole purpose of buying receivables and selling undivided interests in those receivables to third-party purchasers. Although consolidated with Cardinal Health, Inc. in accordance with GAAP, CHF is a separate legal entity from Cardinal Health, Inc. and from our subsidiary that sells receivables to CHF. CHF is designed to be a special purpose, bankruptcy-remote entity whose assets are available solely to satisfy the claims of its creditors.

 34 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

Notes to Financial Statements

Our revolving credit and committed receivables sales facilities require us to maintain a consolidated net leverage ratio of no more than 3.75-to-1. As of March 31, 2022, we were in compliance with this financial covenant.

6. 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 its participants. In August 2021, we amended our agreement to extend the term through June 2029. We are required to make quarterly payments to CVS Health for the term of the arrangement.

Contingencies

New York Opioid Stewardship Act

In April 2018, the State of New York passed a budget which included the Opioid Stewardship Act (the "OSA"). The OSA created an aggregate $100 million annual assessment on all manufacturers and distributors licensed to sell or distribute opioids in New York. Under the OSA, each licensed manufacturer and distributor would be required to pay a portion of the assessment based on its share of the total morphine milligram equivalents sold or distributed in New York during the applicable calendar year, beginning in 2017.

The constitutionality of portions of the OSA has been challenged in court. In December 2018, the OSA was ruled unconstitutional by the U.S. district court for the Southern District of New York. Subsequently, New York passed a new statute that modified the assessment going forward and limited the OSA to two years (2017 and 2018). The U.S. Court of Appeals for the Second Circuit reversed the district court's decision on procedural grounds. In February 2021, the Second Circuit stayed the effect of the ruling pending a petition to the U.S. Supreme Court to review the Second Circuit's opinion. In October 2021, the U.S. Supreme Court declined to review the decision.

We accrue contingencies if it is probable that a liability has been incurred and the amount can be estimated. Because of the Second Circuit ruling, we recorded an aggregate accrual of $41 million for calendar year 2017 and 2018 during the nine months ended March 31, 2021 based on the probable estimated payment amount. In the three months ended December 31, 2021, we paid the State of New York $20 million, our portion of the assessment for calendar year 2017. As a result, as of March 31, 2022, we had an accrual of $20 million, which reflects our best estimate of the portion of the assessment that we may owe for sales during calendar year 2018.

Legal Proceedings

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

From time to time, we determine that products we source, manufacture or market do not meet our specifications, regulatory requirements, or published standards. When we or a regulatory agency identify a potential quality or regulatory issue, we investigate and take appropriate corrective action. Such actions have led to product recalls, costs to repair or replace affected products, temporary interruptions in product sales, product liability claims and lawsuits and can lead to action by regulators. Even absent an identified regulatory or quality issue or product recall, we can become subject to product liability claims and lawsuits.

From time to time, we become aware through employees, internal audits or other parties of possible compliance matters, such as complaints or concerns relating to accounting, internal accounting controls, financial reporting, auditing, or other ethical matters or relating to compliance with laws such as healthcare fraud and abuse, anti-corruption or anti-bribery laws. When we become aware of such possible compliance matters, we investigate internally and take appropriate corrective action. In addition, from time to time, we receive subpoenas or requests for information from various federal or state agencies relating to our business or to the business of a customer, supplier or other industry participants. Internal investigations, subpoenas or requests for information could directly or indirectly lead to the assertion of claims or the commencement of legal proceedings against us or result in sanctions.

We have been named from time to time in qui tam actions initiated by private third parties. In such actions, the private parties purport to act on behalf of federal or state governments, allege that false claims have been submitted for payment by the government and may receive an award if their claims are successful. 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 purporting to act on behalf of the government.

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.

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

 35 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

Notes to Financial Statements

We recognize estimated loss contingencies for certain litigation and regulatory matters and income from favorable resolution of litigation in litigation (recoveries)/charges in our condensed consolidated statements of earnings/(loss); however, losses and recoveries of lost profits from disputes that occur in the ordinary course of business are included within segment profit. For example, in the second quarter of fiscal year 2022, our Pharmaceutical segment profit was positively impacted by a $16 million judgment for lost profits related to an ordinary course intellectual property rights claim.

Opioid Lawsuits and Investigations

As of February 2022, pharmaceutical wholesale distributors, including us, were defendants in approximately 3,400 lawsuits relating to the distribution of prescription opioid pain medications. The lawsuits sought equitable relief and monetary damages based on a variety of legal theories including various common law claims, such as public nuisance, negligence and unjust enrichment as well as violations of controlled substance laws, the Racketeer Influenced and Corrupt Organizations Act and various other statutes. These lawsuits also name pharmaceutical manufacturers, retail pharmacy chains and other entities as defendants.

States & Political Subdivisions

Approximately 2,700 of these lawsuits were filed by counties, municipalities, cities and political subdivisions in various federal, state, and other courts. The vast majority of these lawsuits were filed in U.S. federal court and were transferred for consolidated pre-trial proceedings in a Multi-District Litigation proceeding in the U.S. District Court for the Northern District of Ohio (the “MDL”).

In addition, 25 state attorneys general filed lawsuits against distributors, including us, in various state courts. We have also received requests, civil investigative demands, subpoenas or requests for information from additional state attorneys general offices and governmental authorities.

In February 2022, we determined that there was sufficient participation to proceed with a settlement agreement (the "Settlement Agreement") to settle the vast majority of opioid lawsuits filed by state attorneys general and political subdivisions. This Settlement Agreement became effective on April 2, 2022.

In addition to us and two other national distributors, parties to the Settlement Agreement include 46 states, the District of Columbia and 5 U.S. territories. As of April 28, 2022, over 98 percent of political subdivisions (by population as calculated under the Settlement Agreement) that had brought opioid-related suits against us as calculated under the Settlement Agreement had chosen to join the Settlement Agreement or have had their claims addressed by state legislation.

Under this Settlement Agreement, we will pay up to approximately $6.0 billion, the majority of which will be paid over 18 years. The exact payment amount will depend on several factors, including the extent to which states take action to foreclose opioid lawsuits by political subdivisions (e.g., by passing laws barring or limiting opioid lawsuits by political subdivisions), and the extent to which

additional political subdivisions in participating states file additional opioid lawsuits against us.

The Settlement Agreement also includes injunctive relief terms related to distributors’ controlled substance anti-diversion programs, including with respect to: (1) governance; (2) independence and training of the personnel operating controlled substances monitoring programs; (3) due diligence for new and existing customers; (4) ordering limits for certain products; and (5) suspicious order monitoring. A monitor will be selected to oversee compliance with these provisions for a period of five years. In addition, we and the two other settling distributors will engage a third-party vendor to act as a clearinghouse for data aggregation and reporting, which distributors will fund the for ten years.

The participating states and the distributors are cooperating to obtain consent judgments embodying the terms of the Settlement Agreement in each participating state and the participating states and subdivisions are dismissing their lawsuits. As a result, as of April 28, 2022, approximately 2,000 lawsuits against us have been dismissed. We expect additional lawsuits to be dismissed over the coming months.

As previously disclosed, we had separately negotiated settlements with each of Florida, New York, Ohio, Rhode Island, Texas and their participating subdivisions; however, as contemplated, these states and their participating subdivisions are now participating in the Settlement Agreement.

During the nine months ended March 31, 2022, we paid into escrow the majority of our first annual payment under the Settlement Agreement, which is reflected in prepaid expenses and other assets in our condensed consolidated balance sheets. We also made certain payments under the separate New York, Ohio and Rhode Island settlements, as well as certain payments under Cherokee Nation settlement and Native American term sheet. During the nine months ended March 31, 2022, we paid $348 million in connection with these matters.

In May 2022, we and two other national distributors reached an agreement with the Washington Attorney General, under which we will pay up to approximately $160 million to the State of Washington and its participating subdivisions to resolve opioid-related claims. This amount is consistent with the amount that would have been allocated to Washington under the Settlement Agreement, had Washington agreed to participate, plus certain attorneys' fees and costs. The terms of this agreement in principle are substantially consistent with the Settlement Agreement. This agreement is subject to certain contingencies, including the rate of subdivision participation.

West Virginia subdivisions and Native American tribes were not a part of the broader settlement process and we have been involved in separate negotiations with these groups. In September 2021 we announced that we, along with two other national distributors, had reached an agreement with the Cherokee Nation in connection with ongoing negotiations toward a broader agreement with Native American tribes. In January 2022, we, along with two other

 36 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

Notes to Financial Statements

national distributors, entered into a term sheet with the Native American tribes.

The first phase of a bench trial in West Virginia State Court for a consolidated case brought by 63 West Virginia subdivisions against the Company and two other national distributors is scheduled to begin July 5, 2022. A bench trial before a federal judge in West Virginia brought by Cabell County and City of Huntington against us and two other national distributors concluded in July 2021. The judge has not yet issued a decision. Trials are inherently unpredictable and it is possible that the outcome of these trials could materially negatively impact our financial results, cash flows or results of operations.

The Settlement Agreement did not resolve all opioid lawsuits and claims brought by states and political subdivisions. The Attorney General of Oklahoma filed a lawsuit against us in January 2020, and did not agree to join the Settlement Agreement. As of April 28, 2022, we are still defendants in approximately 700 lawsuits brought by counties, municipalities and other political subdivisions; however, we expect this number to decline as additional cases are dismissed as a result of the Settlement Agreement.

In total, we have $6.70 billion accrued at March 31, 2022, of which $738 million is included in other accrued liabilities and the remainder is included in deferred income taxes and other liabilities in our condensed consolidated balance sheets. During the nine months ended March 31, 2021, we recorded total pre-tax charges of $1.02 billion in litigation (recoveries)/charges, net in our condensed consolidated statements of earnings/(loss).

Because loss contingencies are inherently unpredictable and unfavorable developments or resolutions can occur, the assessment is highly subjective and requires judgments about future events. We regularly review these opioid litigation matters to determine whether our accrual is adequate. The amount of ultimate loss may differ materially from this accrual, whether as a result of settlement discussions, a judicial decision or verdict or otherwise, but we are not able to estimate a range of reasonably possible additional losses for these matters. We continue to strongly dispute the allegations made in these lawsuits none of these agreements is an admission of liability or wrongdoing.

Department of Justice Investigations

We have received federal grand jury subpoenas issued in connection with investigations being conducted by the U.S. Attorney's Office for the Eastern District of New York and the Fraud Section of the U.S. Department of Justice ("DOJ"). We have also received civil requests for information from other DOJ offices. We believe that these investigations concern operation of our anti-diversion program, our anti-diversion policies and procedures, and distribution of certain controlled substances. We are cooperating with these investigations. We are unable to predict the outcome of any of these investigations.

Private Plaintiffs

The Settlement Agreement does not address claims by private parties, which includes unions and other health and welfare funds,

hospital systems and other healthcare providers, businesses and individuals alleging personal injury. Private parties had brought approximately 453 lawsuits as of May 4, 2022. Of these, 141 are purported class actions. The causes of action asserted by these plaintiffs are similar to those asserted by public plaintiffs.

A trial in a case involving 21 plaintiffs is scheduled to begin in state court in Georgia in July 2022. We are vigorously defending ourselves in all of these matters; however, trials are inherently unpredictable and it is possible that an unfavorable outcome in these matters, individually or in the aggregate, could have a negative impact on our financial results.

Insurance Litigation

We are involved in legal proceedings with two insurers related to the availability of insurance coverage for the lawsuits described above. In October 2020, we filed a complaint for declaratory judgment against National Union Fire Insurance Company of Pittsburgh, PA (“National Union”) seeking a declaration that National Union is obligated to reimburse us for defense costs incurred in connection with the lawsuits described above. In January 2021, Swiss Re International SE commenced an arbitration in London seeking a determination that it does not have an obligation to reimburse us for defense and indemnity expenses incurred in connection with the lawsuits described above. We have not recorded a receivable for any recoveries related to these insurance litigation matters as of March 31, 2022.

Cordis IVC Filter Matters

Product Liability Lawsuits

As of April 29, 2022, we are named as a defendant in 457 product liability lawsuits coordinated in Alameda County Superior Court in California involving claims by approximately 5,872 plaintiffs that allege personal injuries associated with the use of Cordis OptEase and TrapEase inferior vena cava ("IVC") filter products. Another 26 lawsuits involving similar claims by approximately 30 plaintiffs are pending in other jurisdictions. These lawsuits seek a variety of remedies, including unspecified monetary damages. In July 2021, we entered into an agreement to settle approximately 1,300 claims. We continue to vigorously defend ourselves in these lawsuits and are engaged in ongoing resolution discussions with certain plaintiffs.

At March 31, 2022, we had a total of $494 million net of estimated insurance recoveries, accrued for losses and legal defense costs, related to the Cordis IVC filter lawsuits in our condensed consolidated balance sheets. We believe there is a range of estimated losses with respect to these matters. Because no amount within the range is a better estimate than any other amount within the range, we have accrued the minimum amount in the range. We estimate the high end of the range to be approximately $1.05 billion, net of estimated insurance recoveries. The sale of the Cordis disposal group does not include product liability related to the IVC filters in the U.S. and Canada, which we retained.

 37 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

Notes to Financial Statements

New Mexico Attorney General Action

In August 2021, the Attorney General for the State of New Mexico filed an action against certain IVC filter manufacturers, including us, alleging claims under New Mexico's Unfair Practices Act, Medicaid Fraud Act and Fraud Against Taxpayers Act. The allegations made are similar to those made in the product liability lawsuits, described above. We intend to vigorously defend ourselves against these claims.

SEC Investigation

In February 2021, we received a subpoena from the U.S. Securities and Exchange Commission ("SEC") requesting the production of documents from 2015 through 2019 relating to inventory in the Cordis business, analysis of goodwill of the Medical segment and other matters. In March 2022, the SEC informed us that it had concluded its investigation and did not intend to recommend an enforcement action.

Shareholder Securities Litigation

In August 2019, the Louisiana Sheriffs' Pension & Relief Fund filed a purported class action complaint against Cardinal Health and certain current and former officers and employees in the United States District Court for the Southern District of Ohio purportedly on behalf of all purchasers of our common shares between March 2015 and May 2018. In June 2020, the court appointed 1199 SEIU Health Care Employees Pension Fund as lead plaintiff and a consolidated amended complaint was filed in September 2020. The amended complaint alleges that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by making misrepresentations and omissions related to the acquisition and integration of the Cordis business and inventory and supply chain problems within the Cordis business, and seeks to recover unspecified damages and equitable relief for the alleged misstatements and omissions. The complaint also alleges that one of the individual defendants violated Section 20A of the Exchange Act because he sold shares of Cardinal Health stock during the time period. In September 2021, the court denied our motion to dismiss. We are vigorously defending ourselves against these claims.

Specialty Solutions DOJ Investigation

In November 2018, the United States Attorney’s Office for the District of Massachusetts (the "USAO") commenced an investigation of Cardinal Health regarding possible violations of the U.S. healthcare fraud and abuse laws. The USAO sought, among other things, documents and information relating to discounts and rebates offered or provided to certain Specialty Solutions customers. In January 2022, without admitting liability, we settled this matter with the DOJ for approximately $13 million, which was recorded as expense within litigation (recoveries)/charges net in our consolidated statement of earnings/(loss) during the fiscal year ended June 30, 2021. Additionally, our Specialty Pharmaceutical Distribution business entered into a five-year corporate integrity agreement with the Department of Health and Human Services, Office of Inspector General, under which it agreed to certain remedial measures, including no longer offering term-based up-front discounts.

Other Civil Litigation

Generic Pharmaceutical Pricing Antitrust Litigation

In December 2019, pharmaceutical distributors including us were added as defendants in a civil class action lawsuit filed by indirect purchasers of generic drugs, such as hospitals and retail pharmacies. The indirect purchaser case is part of a multidistrict litigation consisting of multiple individual class action matters consolidated in the Eastern District of Pennsylvania. The indirect purchaser plaintiffs allege that pharmaceutical distributors encouraged manufacturers to increase prices, provided anti-competitive pricing information to manufacturers and improperly engaged in customer allocation. We have filed a motion to dismiss the complaints and we intend to vigorously defend ourselves.

Active Pharmaceutical Ingredient Impurity Litigation

Many participants in the pharmaceutical supply chain, including active pharmaceutical ingredient ("API") manufacturers, finished dose manufacturers, repackagers, distributors, and retailers have been named as defendants in lawsuits arising out of recalls of certain medications due to alleged impurities in the active pharmaceutical ingredients or finished product.

In February 2019, a Multidistrict Litigation was created in the U.S. District Court for the District of New Jersey (the “Sartan MDL”) alleging API impurities in certain generic blood pressure medications. We have been named as a defendant in the Sartan MDL. We are vigorously defending ourselves in this matter.

7. Income Taxes

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

Effective Tax Rate

During the three and nine months ended March 31, 2022, the effective tax rate was (916.5) percent and (44.4) percent,

 38 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

Notes to Financial Statements

respectively, and reflects the impact of the tax effect of the year-to-date goodwill impairment charges recognized during the nine months ended March 31, 2022.

During the three and nine months ended March 31, 2021, the effective tax rate was 72.8 percent and (143.3) percent, respectively, and included the impact related to the treatment of the tax effect of opioid litigation charges, the resolution of certain transfer pricing matters with the U.S. Internal Revenue Service ("IRS") and withholding taxes for planned distributions from foreign subsidiaries. During the nine months ended March 31, 2021, the effective tax rate included the benefit from a net operating loss carryback primarily related to a self-insurance pre-tax loss.

Tax Effects of Goodwill Impairment Charge

During the nine months ended March 31, 2022, we recognized year-to-date pre-tax charges of $1.8 billion for goodwill impairments related to the Medical Unit. The net tax benefit related to these charges is $126 million for fiscal 2022.

Unless an item is considered discrete because it is unusual or infrequent, the tax impact of the item is included in our estimated annual effective tax rate. When items are recognized through our estimated annual effective tax rate, we apply our estimated annual effective tax rate to the earnings/(loss) before income taxes for the year-to-date period to compute our benefit from income taxes for the current quarter and year-to-date period. The tax impacts of discrete items are recognized in their entirety in the period in which they occur.

The tax effect of the goodwill impairment charges during the nine months ended March 31, 2022 was included in our estimated annual effective tax rate because it was not considered unusual or infrequent, given that we recorded goodwill impairment in prior fiscal years. The impact of the non-deductible goodwill significantly decreased the estimated annual effective tax rate for fiscal 2022. Applying the lower tax rate to the year-to-date loss resulted in recognizing an interim tax expense of approximately $1.2 billion, which impacted the provision for income taxes in the condensed consolidated statements of earnings/(loss) during the three and nine months ended March 31, 2022 and prepaid expenses and other assets in the condensed consolidated balance sheet at March 31, 2022. Approximately $180 million of this interim tax expense will reverse in the fourth quarter of fiscal 2022.

Cordis Divestiture

During the nine months ended March 31, 2022, we completed the divestiture of the Cordis business. In connection with the closing, we recorded net tax expense of $9 million and $29 million during the three and nine months ended March 31, 2022, respectively. The tax effects of these matters during the nine months ended March 31, 2022 were included in our full year effective tax rate forecast. We currently estimate the tax expense associated with this matter for the full fiscal 2022 will be $38 million.

Tax Effects of Self-Insurance Pre-tax Loss

During the nine months ended March 31, 2021, our wholly-owned insurance subsidiary recorded a self-insurance pre-tax loss in its

fiscal 2020 statutory financial statements primarily related to opioid litigation. This self-insurance pre-tax loss, which did not impact our pre-tax consolidated results, was deducted on our fiscal 2020 consolidated federal income tax return and contributed to a significant net operating loss for tax purposes. The net operating loss was carried back and applied to adjust our taxable income for fiscal 2015, 2016, 2017, and 2018 as permitted under the Coronavirus Aid, Relief and Economic Security ("CARES") Act enacted by the United States Congress in March 2020.

Accordingly, our provision for income taxes during the nine months ended March 31, 2021 included a $419 million benefit from the net operating loss carryback primarily to reflect the difference between the federal statutory income tax rate during the fiscal years from 2015 to 2018 (35 percent for fiscal 2015, 2016, and 2017 and 28 percent for fiscal 2018) and the current federal statutory income tax rate of 21 percent.

In fiscal 2021, we filed for a refund of $974 million, which we expect to receive within 12 months. Accordingly, we had a current asset for this amounts on our condensed consolidated balance sheets at both March 31, 2022 and June 30, 2021. In April 2022, we received a payment for $966 million, which is net of certain adjustments. We also increased our non-current deferred tax liability by approximately $700 million during the nine months ended March 31, 2021 related to this matter.

We have made reasonable estimates and recorded amounts based on management's judgment and our current understanding of tax law; however, it is possible that the tax authorities could challenge these tax benefits. The actual amount of the tax benefit may differ materially from these estimates.

Tax Effects of Opioid Litigation Charges

In connection with the $1.02 billion pre-tax charges for the opioid litigation recorded during the nine months ended March 31, 2021, the net tax benefits were approximately $180 million for the nine months ended March 31, 2021 and $228 million for fiscal 2021. Our tax benefits are estimates, which reflect our current assessment of the estimated future deductibility of the amount that may be paid under the accrual taken in connection with the opioid litigation and are net of unrecognized tax benefits of $35 million during the nine months ended March 31, 2021, and $219 million for fiscal 2021. We have recognized no tax benefit associated with Opioid accruals made in fiscal 2022.

We have made reasonable estimates and recorded amounts based on management's judgment and our current understanding of the U.S. Tax Cuts and Jobs Act ("Tax Act"); however, these estimates require significant judgment since the U.S. tax law governing deductibility was changed by the Tax Act. Further, it is possible Congress or the tax authorities could challenge our interpretation of the Tax Act or the estimates and assumptions used to assess the future deductibility of these benefits. The actual amount of the tax benefit may differ materially from these estimates.

 39 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

Notes to Financial Statements

Unrecognized Tax Benefits

We had $938 million and $932 million of unrecognized tax benefits, at March 31, 2022 and June 30, 2021 respectively. The March 31, 2022 and June 30, 2021 balances include $856 million and $849 million of unrecognized tax benefits, respectively, that if recognized, would have an impact on the effective tax rate.

At March 31, 2022 and June 30, 2021, we had $46 million and $49 million, respectively, accrued for the payment of interest and penalties related to unrecognized tax benefits, which we recognize in the provision for/(benefit from) income taxes in the condensed consolidated statements of earnings/(loss). 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 IRS or other taxing authorities, possible settlement of IRS and other 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 up to $5 million, exclusive of penalties and interest.

Other Tax Matters

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 2015 through 2020.

Expiring or unusable loss and credit carryforwards and the required valuation allowances are adjusted quarterly based on available information. This information may support either an increase or a decrease in the required valuation allowance. After applying the valuation allowances, we do not anticipate any limitations on our use of any of the other net deferred income tax assets described above. We operate in a complex multinational tax environment and are subject to tax treaty arrangements and transfer pricing guidelines for intercompany transactions that are subject to interpretation. Uncertainty in a tax position may arise as tax laws are subject to interpretation.

We are a party to a tax matters agreement with CareFusion Corporation ("CareFusion"), a subsidiary of 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 $73 million at March 31, 2022 and $72 million at June 30, 2021, and is included in other assets in the condensed consolidated balance sheets.

As a result of the acquisition of the Patient Recovery Business, Medtronic plc is obligated to indemnify us for certain tax exposures and transaction taxes related to periods prior to the acquisition under the purchase agreement. The indemnification receivable was zero at March 31, 2022 and $12 million at June 30, 2021, respectively, and is included in other assets in the condensed consolidated balance sheets.

8. Fair Value Measurements

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

	March 31, 2022
(in millions)	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	671	$	—	$	—	$	671
Other investments (1)	112		—		—		112
Liabilities:
Forward contracts (2)	—		(12)		—		(12)

	June 30, 2021
(in millions)	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	1,883	$	—	$	—	$	1,883
Other investments (1)	126		—		—		126
Forward contracts (2)	—		42		—		42

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

(2)The fair value of interest rate swaps, foreign currency contracts, and net investment hedges 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 prepaid expenses and other, other assets, other accrued liabilities, and deferred income taxes and other liabilities within the condensed consolidated balance sheets.

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 current fair value through earnings at the end of each period. We are exposed to counterparty credit risk on all of our derivative

 40 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

Notes to Financial Statements

instruments. Accordingly, we have established and maintain strict counterparty credit guidelines and only enter into derivative instruments with major financial institutions that are rated investment grade or better. We do not have significant exposure to any one counterparty and we believe the risk of loss is remote. Additionally, we do not require collateral under these agreements.

Interest Rate Risk Management

We are exposed to the impact of interest rate changes. Our objective is to manage the impact of interest rate changes on cash flows and the market value of our borrowings. We utilize a mix of debt maturities along with both fixed-rate and variable-rate debt to manage changes in interest rates. In addition, we enter into interest rate swaps to further manage our exposure to interest rate variations related to our borrowings and to lower our overall borrowing costs.

Currency Exchange Risk Management

We conduct business in several major international currencies and are subject to risks associated with changing foreign exchange rates. Our objective is to reduce earnings and cash flow volatility associated with foreign exchange rate changes to allow management to focus its attention on business operations. Accordingly, we enter into various contracts that change in value as foreign exchange rates change to protect the value of existing foreign currency assets and liabilities, commitments and anticipated foreign currency revenue and expenses.

Commodity Price Risk Management

We are exposed to changes in the price of certain commodities. Our objective is to reduce earnings and cash flow volatility associated with forecasted purchases of these commodities to allow management to focus its attention on business operations. Accordingly, we enter into derivative contracts when possible to manage the price risk associated with certain forecasted purchases.

Fair Value Hedges

We enter into pay-floating interest rate swaps to hedge the changes in the fair value of fixed-rate debt resulting from fluctuations in interest rates. These contracts are designated and qualify as fair value hedges. Accordingly, the gain or loss recorded on the pay-floating interest rate swaps is directly offset by the change in fair value of the underlying debt. Both the derivative instrument and the underlying debt are adjusted to market value at the end of each period with any resulting gain or loss recorded in interest expense, net in the condensed consolidated statements of earnings/(loss). For the three and nine months ended March 31, 2022 and 2021, there was no gain or loss recorded to interest expense as changes in the market value of our derivative instruments offset changes in the market value of the underlying debt.

During the nine months ended March 31, 2022, we entered into pay-floating interest rate swaps with notional amounts of $100 million and $200 million. These swaps have been designated as fair value hedges of our fixed rate debt and are included in

deferred income taxes and other liabilities in the condensed consolidated balance sheets.

Cash Flow Hedges

We enter into derivative instruments to hedge our exposure to changes in cash flows attributable to interest rate, foreign currency and commodity price fluctuations associated with certain forecasted transactions. These derivative instruments are designated and qualify as cash flow hedges. Accordingly, the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive loss and reclassified into earnings in the same line item associated with the forecasted transaction and in the same period during which the hedged transaction affects earnings.

Pre-tax gains recognized in other comprehensive loss were $1 million and $13 million for the three months ended March 31, 2022 and 2021, respectively, and $4 million and $20 million for the nine months ended March 31, 2022 and 2021, respectively. Gains and losses recognized in accumulated other comprehensive loss and reclassified into earnings were immaterial for the three and nine months ended March 31, 2022 and 2021. All gains and losses currently included within accumulated other comprehensive loss associated with our cash flow hedges to be reclassified into net earnings within the next 12 months are immaterial.

Net Investment Hedges

We hedge the foreign currency risk associated with certain net investment positions in foreign subsidiaries. To accomplish this, we enter into cross-currency swaps that are designated as hedges of net investments.

During the three months ended March 31, 2022, we entered into a ¥24 billion ($200 million) cross-currency swap maturing in September 2025 and a ¥24 billion ($200 million) cross-currency swap maturing in June 2027.

During the three months ended March 31, 2022, we terminated the ¥64 billion ($600 million) cross-currency swap entered into in August 2019 and received a net settlement of $71 million in cash recorded in proceeds from net investment hedge terminations in our condensed consolidated statements of cash flows.

Cross-currency swaps designated as net investment hedges are marked to market using the current spot exchange rate as of the end of the period, with gains and losses included in the foreign currency translation component of accumulated other comprehensive loss until the sale or substantial liquidation of the underlying net investments. To the extent the cross-currency swaps designated as net investment hedges are not highly effective, changes in carrying value attributable to the change in spot rates are recorded in earnings.

Pre-tax gain and loss from net investment hedges recorded in the foreign currency translation component of accumulated other comprehensive loss was a $22 million gain and a $49 million gain during the three months ended March 31, 2022 and 2021, respectively, and a $44 million gain and a $3 million loss during the nine months ended March 31, 2022 and 2021, respectively. Gains

 41 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

Notes to Financial Statements

recognized in interest expense, net in the condensed consolidated statements of earnings/(loss) for the portion of the net investment hedges excluded from the assessment of hedge effectiveness were $5 million during both the three months ended March 31, 2022 and 2021 and $16 million and $14 million during the nine months ended March 31, 2022 and 2021, respectively.

Economic (Non-Designated) Hedges

We enter into foreign currency contracts to manage our foreign exchange exposure related to sales transactions, intercompany financing transactions and other balance sheet items subject to revaluation that do not meet the requirements for hedge accounting treatment. Accordingly, these derivative instruments are adjusted to current market value at the end of each period through earnings. The gain or loss recorded on these instruments is substantially offset by the remeasurement adjustment on the foreign currency denominated asset or liability. The settlement of the derivative instrument and the remeasurement adjustment on the foreign currency denominated asset or liability are both recorded in other (income)/expense, net. We recorded a $4 million loss and a $1 million gain during the three months ended March 31, 2022 and 2021, respectively, and an immaterial loss and $4 million loss during the nine months ended March 31, 2022 and 2021, respectively. The principal currencies managed through foreign currency contracts are Euro, Chinese renminbi, Canadian dollar.

Fair Value of Financial Instruments

The carrying amounts of cash and equivalents, trade receivables, accounts payable, and other accrued liabilities at March 31, 2022 and June 30, 2021 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)	March 31, 2022		June 30, 2021
Estimated fair value	$	5,645	$	6,751
Carrying amount	5,612		6,236

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. Shareholders' Equity/(Deficit)

We repurchased $1.0 billion of our common shares, in the aggregate, through share repurchase programs during the nine months ended March 31, 2022. We funded the repurchases with available cash. The common shares repurchased are held in treasury to be used for general corporate purposes.

During the three months ended March 31, 2022, we entered into an accelerated share repurchase ("ASR") program to repurchase common shares for an aggregate purchase price of $200 million.

We received an initial delivery of 3.0 million common shares using a reference price of $54.01. The program concluded on April 18, 2022 at a volume weighted average price per common share of $56.02 resulting in a final delivery of 0.6 million common shares.

During the three months ended December 31, 2021, we entered into an ASR program to repurchase common shares for an aggregate purchase price of $300 million. We received an initial delivery of 4.8 million common shares using a reference price of $50.30. The program concluded on January 31, 2022 at a volume weighted average price per common share of $49.39 resulting in a final delivery of 1.3 million common shares.

During the three months ended September 30, 2021, we entered into an ASR program to repurchase common shares for an aggregate purchase price of $500 million. We received an initial delivery of 7.8 million common shares using a reference price of $51.53. The program concluded on October 4, 2021 at a volume weighted average price per common share of $51.10 resulting in a final delivery of 2.0 million common shares.

During the three months ended March 31, 2021, we entered into an ASR program to repurchase common shares for an aggregate purchase price of $200 million. The program began on February 9, 2021 and concluded on March 31, 2021. The average price paid per common share was $54.40, resulting in a total delivery of 3.7 million common shares.

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, 2021	$	(46)	$	12	$	(34)
Other comprehensive loss, before reclassifications	(47)		9		(38)
Amounts reclassified to earnings	—		(5)		(5)
Total other comprehensive loss attributable to Cardinal Health, Inc. net of tax	(47)		4		(43)
Balance at March 31, 2022	$	(93)	$	16	$	(77)

 42 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

Notes to Financial Statements

11. Earnings/(Loss) Per Share Attributable to Cardinal Health, Inc.

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

	Three Months Ended March 31,
(in millions)	2022	2021
Weighted-average common shares–basic	275	292
Effect of dilutive securities:
Employee stock options, restricted share units and performance share units	—	2
Weighted-average common shares–diluted	275	294

	Nine Months Ended March 31,
(in millions)	2022	2021
Weighted-average common shares–basic	281	293
Effect of dilutive securities:
Employee stock options, restricted share units and performance share units	—	1
Weighted-average common shares–diluted	281	294

The potentially dilutive employee stock options, restricted share units and performance share units that were antidilutive were 5 million for both the three and nine months March 31, 2022. For the three and nine months ended March 31, 2022, there were 2 million and 1 million potentially dilutive employee stock options, restricted share units and performance share units, respectively, not included in the computation of diluted loss per common share attributable to Cardinal Health, Inc. because their effect would have been anti-dilutive as a result of the net loss during those periods.

The potentially dilutive employee stock options, restricted share units and performance share units that were antidilutive were 3 million for the three months ended March 31, 2021 and 4 million for the nine months ended March 31, 2021.

12. Segment Information

Our operations are principally managed on a products and services basis and are comprised of two operating segments, which are the same as our reportable segments: Pharmaceutical and Medical. The factors for determining the reportable segments include the manner in which management evaluates performance for purposes of allocating resources and assessing performance combined with the nature of the individual business activities.

Our Pharmaceutical segment distributes branded and generic pharmaceutical, specialty pharmaceutical and over-the-counter healthcare and consumer products in the United States. This segment also provides services to pharmaceutical manufacturers and healthcare providers for specialty pharmaceutical products; operates nuclear pharmacies and radiopharmaceutical manufacturing facilities; provides pharmacy management services to hospitals as well as medication therapy management and patient outcomes services to hospitals, other healthcare providers and payers; and repackages generic pharmaceuticals and over-the-counter healthcare products.

Our Medical segment manufactures, sources and distributes Cardinal Health branded medical, surgical and laboratory products, which are sold in the United States, Canada, Europe, Asia and other markets. In addition to distributing Cardinal Health branded products, this segment also distributes a broad range of national brand products and provides supply chain services and solutions to hospitals, ambulatory surgery centers, clinical laboratories and other healthcare providers in the United States and Canada. This segment also distributes medical products to patients' homes in the United States through our Cardinal Health at-Home Solutions division.

Revenue

The following tables present revenue for each reportable segment and disaggregated revenue within our two reportable segments and Corporate:

	Three Months Ended March 31,
(in millions)	2022		2021
Pharmaceutical Distribution and Specialty Solutions (1) (2)	$	40,723	$	34,903
Nuclear and Precision Health Solutions	234		201
Pharmaceutical segment revenue	40,957		35,104
Medical distribution and products (3)	3,283		3,638
Cardinal Health at-Home Solutions	601		536
Medical segment revenue	3,884		4,174
Total segment revenue	44,841		39,278
Corporate (4)	(5)		(3)
Total revenue	$	44,836	$	39,275

 43 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

Notes to Financial Statements

	Nine Months Ended March 31,
(in millions)	2022		2021
Pharmaceutical Distribution and Specialty Solutions (1) (2)	$	121,501	$	106,859
Nuclear and Precision Health Solutions	653		593
Pharmaceutical segment revenue	122,154		107,452
Medical distribution and products (3)	10,296		10,805
Cardinal Health at-Home Solutions	1,822		1,636
Medical segment revenue	12,118		12,441
Total segment revenue	134,272		119,893
Corporate (4)	(11)		(12)
Total revenue	$	134,261	$	119,881

(1)Products and services offered by our Specialty Solutions division are referred to as “specialty pharmaceutical products and services."

(2)Comprised of all Pharmaceutical segment businesses except for Nuclear and Precision Health Solutions division.

(3)Comprised of all Medical segment businesses except for Cardinal Health at-Home Solutions division.

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

The following tables present revenue by geographic area:

	Three Months Ended March 31,
(in millions)	2022		2021
United States	$	43,710	$	38,089
International	1,131		1,189
Total segment revenue	44,841		39,278
Corporate (1)	(5)		(3)
Total revenue	$	44,836	$	39,275

	Nine Months Ended March 31,
(in millions)	2022		2021
United States	$	130,933	$	116,425
International	3,339		3,468
Total segment revenue	134,272		119,893
Corporate (1)	(11)		(12)
Total revenue	$	134,261	$	119,881

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

Segment Profit

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

methodologies. The results attributable to noncontrolling interests are recorded within segment profit.

We do not allocate the following items to our segments:

•last-in first-out, or ("LIFO"), inventory charges/(credits);

•surgical gown recall costs/(income);

•restructuring and employee severance;

•amortization and other acquisition-related costs;

•impairments and (gain)/loss on disposal of assets;

•litigation (recoveries)/charges, net;

•state opioid assessment related to prior fiscal years;

•other (income)/expense, net;

•interest expense, net;

•loss on early extinguishment of debt;

•(gain)/loss on sale of equity interest in naviHealth; or

•provision for income taxes

In addition, certain investment spending, certain portions of enterprise-wide incentive compensation and other spending are not allocated to the segments. Investment spending generally includes the first-year spend for certain projects that require incremental investments in the form of additional operating expenses. Because approval for these projects is dependent on executive management, we retain these expenses at Corporate. Investment spending within Corporate was $20 million and $4 million for the three months ended March 31, 2022 and 2021, and $38 million and $15 million for the nine months ended March 31, 2022 and 2021, respectively.

In connection with the interim goodwill impairment testing for the Medical Unit as discussed further in Note 4, we recognized goodwill impairment charges of $474 million and $1.8 billion during the three and nine months ended March 31, 2022, respectively, which were retained at Corporate.

In connection with the opioid litigation as discussed further in Note 6, we recognized a pre-tax charge of $1.02 billion during the nine months ended March 31, 2021 which was retained at Corporate.

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

	Three Months Ended March 31,
(in millions)	2022		2021
Pharmaceutical (1)	$	487	$	511
Medical	59		174
Total segment profit	546		685
Corporate	(643)		(212)
Total operating earnings/(loss)	$	(97)	$	473

 44 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

Notes to Financial Statements

	Nine Months Ended March 31,
(in millions)	2022		2021
Pharmaceutical (1)	$	1,319	$	1,326
Medical	232		640
Total segment profit	1,551		1,966
Corporate	(2,183)		(1,656)
Total operating earnings/(loss)	$	(632)	$	310

(1)Pharmaceutical segment profit includes opioid-related litigation defense and compliance costs, but does not include a one-time contingent attorney fee of $18 million incurred during the three and nine months ended March 31, 2022 related to the finalization of the Settlement Agreement. Due to the unique nature and significance of the Settlement Agreement, and the one-time, contingent nature of the fee, this related fee was included in litigation (recoveries)/charges, net in the condensed consolidated statements of earnings/(loss). Additionally, pharmaceutical segment profit during nine months ended March 31, 2022 was positively impacted by a $16 million judgment for lost profits related to an ordinary course intellectual property rights claim.

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

(in millions)	March 31, 2022		June 30, 2021
Pharmaceutical	$	25,470	$	23,624
Medical (1) (2)	12,166		15,408
Corporate	4,475		5,421
Total assets	$	42,111	$	44,453

(1)Assets of $1.1 billion classified as held for sale related to the Cordis divestiture were included within Medical at June 30, 2021.

(2)Medical reflects $1.8 billion of goodwill impairment charges recorded in connection with interim goodwill impairment testing for the Medical Unit at March 31, 2022, and December 31, 2021.

13. 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 March 31,
(in millions)	2022		2021
Restricted share unit expense	$	18	$	20
Performance share unit expense	5		13
Total share-based compensation	$	23	$	33

	Nine Months Ended March 31,
(in millions)	2022		2021
Restricted share unit expense	$	53	$	56
Performance share unit expense	12		28
Total share-based compensation	$	65	$	84

The total tax benefit related to share-based compensation was $3 million and $5 million for the three months ended March 31, 2022 and 2021, respectively, and $9 million and $12 million for the nine months ended March 31, 2022 and 2021, respectively.

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, 2021	3	$	49.05
Granted	2	51.78
Vested	(2)	49.61
Canceled and forfeited	—	—
Nonvested at March 31, 2022	3	$	45.99

At March 31, 2022, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested restricted share units not yet recognized was $89 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 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, 2021	4	$	68.46
Granted	—	—
Exercised	—	—
Canceled and forfeited	—	—
Outstanding at March 31, 2022	4	$	69.41
Exercisable at March 31, 2022	4	$	69.58

At March 31, 2022, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested stock options not yet recognized was $0.2 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)	March 31, 2022		June 30, 2021
Aggregate intrinsic value of outstanding options at period end	$	8	$	11
Aggregate intrinsic value of exercisable options at period end	7		11

 45 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

Notes to Financial Statements

(in years)	March 31, 2022	June 30, 2021
Weighted-average remaining contractual life of outstanding options	3	4
Weighted-average remaining contractual life of exercisable options	3	4

Performance Share Units

Performance share units vest over a 3-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 240 percent of the target award amount for the fiscal 2020 and 2021 grants and zero to 234 percent for the fiscal 2022 grant. 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, 2021	1.2	$	54.89
Granted	0.4	51.91
Vested	(0.3)	52.00
Canceled and forfeited	(0.1)	52.36
Nonvested at March 31, 2022	1.2	$	57.27

At March 31, 2022, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested performance share units not yet recognized was $25 million, which is expected to be recognized over a weighted-average period of two years if performance goals are achieved.

 46 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

Exhibits

Exhibits

Exhibit Number	Exhibit Description
3.1	Amended and Restated Articles of Incorporation of Cardinal Health, Inc., as amended (incorporated by reference to Exhibit 3.1 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, File No. 1-11373)
3.2	Cardinal Health, Inc. Restated Code of Regulations, as amended (incorporated by reference to Exhibit 3.2 to Cardinal Health’s Quarterly Report on Form 10-Q filed on November 9, 2021, File No. 1-11373)
10.1	Aircraft Time Sharing Agreement, effective as of January 1, 2022, by and between Cardinal Health, Inc. and Michael C. Kaufmann (incorporated by reference to Exhibit 10.7 to Cardinal Health's Quarterly Report on form 10-Q filed on February 3, 2022, File No. 1-11373)
10.2	First Amendment to the Cardinal Health Deferred Compensation Plan, as amended and restated on January 1, 2020
10.3	Distributor Settlement Agreement related to opioids claims, entered into on February 25, 2022, among the Settling States, the Settling Distributors and the Participating Subdivisions (as defined therein) (incorporated by reference to Exhibit 10.1 to AmerisourceBergen Corporation's current report on form 8-K filed on May 2, 2022, File No. 1-16671)
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	Inline XBRL Instance Document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File - formatted in Inline XBRL (included as Exhibit 101)

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 we post news releases, SEC filings and certain other information on its website.

 47 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

Form 10-Q Cross Reference Index

Form 10-Q Cross Reference Index

Item Number		Page
	Part I. Financial Information
Item 1	Financial Statements	27
Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	2
Item 3	Quantitative and Qualitative Disclosures about Market Risk	23
Item 4	Controls and Procedures	23
	Part II. Other Information
Item 1	Legal Proceedings	24
Item 1A	Risk Factors	25
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3	Defaults Upon Senior Securities	N/A
Item 4	Mine Safety Disclosures	N/A
Item 5	Other Information	N/A
Item 6	Exhibits	47
	Signatures	49

N/A Not applicable

 48 Cardinal Health | Q3 Fiscal 2022 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:	May 5, 2022	/s/ MICHAEL C. KAUFMANN
		Michael C. Kaufmann
		Chief Executive Officer
		/s/ JASON M. HOLLAR
		Jason M. Hollar
		Chief Financial Officer

 49 Cardinal Health | Q3 Fiscal 2022 Form 10-Q

EX-10.2

Exhibit 10.2

FIRST AMENDMENT

TO THE

CARDINAL HEALTH DEFERRED COMPENSATION PLAN

(As Amended and Restated January 1, 2020)

Background Information

A. Cardinal Health, Inc. (“Cardinal Health”) previously adopted and currently maintains the Cardinal Health Deferred Compensation Plan (the “Plan”) for the benefit of a select group of management and highly compensated employees of Cardinal Health and its subsidiaries and affiliates.

B. Section 7.1 of the Plan provides that the Plan may be amended at any time through a written resolution adopted or approved by the Financial Benefit Plans Committee (“FBPC”), with respect to any amendment that, when aggregated with any other amendment or amendments approved on the same date, is reasonably expected to have an annual financial impact on Cardinal Health of $5 million or less.

C. The FBPC has concluded that the amendment set forth below, when aggregated with any other amendments set to be approved on the same date, is reasonably expected to have an annual financial impact on Cardinal Health of less than $5 million.

D. The FBPC desires to amend the Plan to clarify that participants who are non-employee directors of Cardinal Health will continue to be treated as “Reporting Persons” for purposes of the dividend equivalent credit investment rules under Section 3.5 of the Plan.

Amendment of the Cardinal Health Deferred Compensation Plan

The Plan is hereby amended as set forth below, effective as of the date signed below.

1. Section 3.5 of the Plan is hereby amended to add the following sentence to the end thereof:

“For purposes of this paragraph and the immediately preceding paragraph, the term “Reporting Person” shall include a Participant who was a Director at the time of his or her Separation from Service, regardless of whether such Participant is a Director on the Dividend Payment Date.”

2. All other provisions of the Plan shall remain in full force and effect.

CARDINAL HEALTH, INC.

FINANCIAL BENEFIT PLANS COMMITTEE

By: /s/ Kendell Sherrer________________

Its: ________________________________

Date: 3/14/2022______________________

EX-31.1

Exhibit 31.1

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: May 5, 2022

/s/ MICHAEL C. KAUFMANN

Michael C. Kaufmann

Chief Executive Officer

EX-31.2

Exhibit 31.2

I, Jason M. Hollar, 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: May 5, 2022

/s/ JASON M. HOLLAR

Jason M. Hollar

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

Michael C. Kaufmann, Chief Executive Officer of Cardinal Health, Inc. (the “Company”) and Jason M. Hollar, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, that:

(1)the Periodic Report on Form 10-Q for the quarter ended March 31, 2022 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: May 5, 2022

/s/ MICHAEL C. KAUFMANN

Michael C. Kaufmann

Chief Executive Officer

/s/ JASON M. HOLLAR

Jason M. Hollar

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, 2021 (the “2021 Form 10-K”), and our quarterly reports on Form 10-Q, including this one, and 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, including materials posted on our website, 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:

•risks arising from the COVID-19 pandemic, including the possibility that we will experience additional inventory reserves as a result of future decreases in demand or selling price; the risk that we may not be able to offset significant cost increases for certain personal protective equipment (PPE) products or inflationary pressures impacting our Medical segment; the possibility that sustained reduced demand for generic pharmaceutical product may continue to adversely impact our pharmaceutical generics program; and the possibility that we could experience employee attrition as a result of our COVID-19 vaccine mandate or the expected governmental mandates;

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

•uncertainties relating to the pricing of and demand for generic pharmaceuticals;

•uncertainties relating to the timing, frequency and profitability of generic pharmaceutical launches or other components of our pharmaceutical generics program;

•changes in manufacturer approaches to pricing branded pharmaceutical products and risks related to our compensation under contractual arrangements with manufacturers being set as a percentage of the wholesale acquisition cost of branded pharmaceuticals and where a part of our compensation is based on branded pharmaceutical price appreciation, changes in the magnitude of such price appreciation;

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

•risks associated with the resolution and defense of the lawsuits and investigations in which we have been or will be named relating to the distribution of prescription opioid pain medication, including risks associated with the proposed settlement agreement and process designed to resolve lawsuits and claims brought by states and local governmental entities, including the risk that we could fail to reach a final resolution and that any injunctive or non-monetary relief that we may agree to could have unintended consequences; and the risk that the outcome of other opioid-related lawsuits and investigations could have a material adverse effect on our results of operations, financial condition, cash flows or liquidity or the operations of our business;

•potential damage to our reputation, adverse operational impacts or other effects that may result from the national opioid epidemic, the allegations that have been made about our role in such epidemic and the ongoing unfavorable publicity surrounding the lawsuits and investigations against us;

•risks associated with the tax benefit from our self-insurance loss claims, including risks associated with the letter certain industry participants, including us, received from the U.S. House of Representatives' Committee on Oversight and Reform questioning, among other things, our plans to take tax deductions for opioid-related losses, including the net operating loss carryback provisions under the CARES Act and deductibility under the Tax Act; the possibility that we may receive additional negative or unfavorable publicity or that the IRS may not agree with our underlying assumptions and judgments;

•potential adverse impact to our financial results from enacted and proposed state taxes or other assessments on the sale or distribution of opioid medications;

•our high sales concentration with certain key customers, including CVS Health Corporation and OptumRx;

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

•costs or claims resulting from quality issues, whether related to the manufacture of some of our sterile surgical gowns or pre-filled syringes, or other 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 recalls, remediation efforts, and related product liability claims and lawsuits, including class action lawsuits;

•actions of regulatory bodies and other governmental authorities, including the U.S. Drug Enforcement Administration, 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 authorities, 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;

•any compromise of our information systems or of those of a third-party service provider, including unauthorized access to or use or disclosure of company or customer information, disruption of access and ancillary risks associated with our ability to effectively manage any issues arising from any such compromise or disruption;

•significantly increased costs for commodities and other materials used in the Medical segment manufacturing, including various components, compounds, raw materials or energy such as oil-based resins, pulp, cotton, latex and other commodities and the possibility that we may not successfully offset or mitigate these increases;

•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;

•uncertainties related to our Medical segment's Cardinal Health Brand products, including our ability to manage cost, infrastructure and to retain margin or improve its performance;

•risks associated with the realignment of our Medical segment's supply chain and other businesses, including our ability to achieve the expected benefits from such realignment;

•uncertainties with respect to our cost-savings initiatives or IT infrastructure activities, including the ability to achieve the expected benefits from such initiatives, the risk that we could incur unexpected charges, and the risk that we may fail to retain key personnel;

•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 or maintaining requisite regulatory consents, whether our own or third parties', or approvals associated with those activities;

•manufacturing disruptions, whether due to regulatory action, including regulatory action to reduce Ethylene Oxide emissions, production quality deviations, safety issues or raw material shortages or defects, or because a key product is manufactured at a single manufacturing facility with limited alternate facilities;

•risks associated with industry reliance on ethylene oxide ("EtO") to sterilize certain medical products that we manufacture or distribute, including the possibility that regulatory actions to reduce EtO emissions could become more widespread, which may result in increased costs or supply shortages; and risks that the lawsuits against us alleging personal injury resulting from EtO exposure could become more widespread;

•the possibility that we could be subject to adverse changes in the tax laws or challenges to our tax positions, including the possibility that the corporate tax rate in the U.S. could be increased;

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

•risks arising from possible violations of the U.S. Foreign Corrupt Practices Act 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 other federal and state healthcare programs, such as state Medicaid programs and the federal 340B drug pricing program, which businesses are subject to accreditation and quality standards and other rules and regulations, including applicable reporting, billing, payment and record-keeping requirements;

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

•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, pricing changes, non-renewal, early termination, or delinquencies or defaults under contracts with key customers;

•unfavorable changes to the terms or with our ability to meet contractual obligations of key customer or supplier relationships, or changes in customer mix;

•risks arising from changes in U.S. or foreign tax laws and unfavorable challenges to our tax positions and payments to settle these challenges, which may adversely affect our effective tax rate or tax payments;

•uncertainties due to possible government healthcare reform, including proposals related to Medicare drug rebate arrangements, possible repeal or replacement of major parts of the Patient Protection and Affordable Care Act, proposals related to prescription drug pricing transparency and the possible adoption of Medicare-For-All;

•reductions or limitations on governmental funding at the state or federal level or efforts by healthcare insurance companies to limit payments for products and services;

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

•changes in legislation or regulations governing prescription drug pricing, healthcare services or mandated benefits;

•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;

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

•continuing 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, damage or lack of access to, or failure of, our or our third-party service providers' information systems, our critical facilities, including our national logistics center, or our distribution networks;

•risks to our business and information and controls systems in the event that business process improvements, infrastructure modernizations or initiatives to use third-party service providers for key systems and processes are not effectively implemented;

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

•possible losses relating to product liability lawsuits and claims regarding products for which we cannot obtain product liability insurance or for which such insurance may not be adequate to cover our losses, including the product liability lawsuits we are currently defending relating to alleged personal injuries associated with the use of Cordis inferior vena cava filter products;

•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 associated with the divestiture of the Cordis business, including the risk that the costs associated with exit or disposal activities could ultimately be greater than we currently expect or that we could incur greater stranded costs than expected;

•our ability to manage and complete divestitures or other strategic business combination transactions, including our ability to find buyers or other strategic exit opportunities and risks associated with the possibility that we could experience greater dis-synergies than anticipated or otherwise fail to achieve our strategic objectives;

•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;

•uncertainties with respect to U.S. or international trade policies, tariffs, excise or border taxes and their impact on our ability to source products or materials that we need to conduct our business;

•risks associated with our use of and reliance on the global capital and credit markets, including our ability to access credit and our cost of credit, which may adversely affect our ability to efficiently fund our operations or undertake certain expenditures;

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

•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 2021 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.

XML

Cover Page - shares	9 Months Ended
	Mar. 31, 2022	Apr. 30, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2022
Document Transition Report	false
Entity File Number	1-11373
Entity Registrant Name	Cardinal Health, Inc.
Entity Central Index Key	0000721371
Current Fiscal Year End Date	--06-30
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Incorporation, State or Country Code	OH
Entity Tax Identification Number	31-0958666
Entity Address, Address Line One	7000 Cardinal Place
Entity Address, City or Town	Dublin
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	43017
City Area Code	(614)
Local Phone Number	757-5000
Title of 12(b) Security	Common shares (without par value)
Trading Symbol	CAH
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		272,427,362

XML

Condensed Consolidated Statements of Earnings - USD ($) shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2022	Mar. 31, 2021
Income Statement [Abstract]
Revenue	$ 44,836	$ 39,275	$ 134,261	$ 119,881
Cost of products sold	43,154	37,463	129,321	114,578
Gross margin	1,682	1,812	4,940	5,303
Operating expenses:
Distribution, selling, general and administrative expenses	1,137	1,120	3,402	3,404
Restructuring and employee severance	31	24	56	81
Amortization and other acquisition-related costs	79	111	237	345
Impairments and (gain)/loss on disposal of assets, net	471	69	1,764	78
Litigation (recoveries)/charges, net	61	15	113	1,085
Operating earnings/(loss)	(97)	473	(632)	310
Other (income)/expense, net	3	(12)	(14)	(31)
Interest expense, net	38	45	115	136
Loss on Extinguishment of Debt	0	0	10	1
(Gain)/Loss on sale of equity interest in naviHealth	(1)	0	(2)	0
Earnings/(loss) before income taxes	(137)	440	(741)	204
Provision for/(benefit from) income taxes	1,253	320	328	(293)
Net earnings/(loss)	(1,390)	120	(1,069)	497
Less: Net earnings attributable to noncontrolling interests	(1)	(1)	(2)	(2)
Net earnings/(loss) attributable to Cardinal Health, Inc.	$ (1,391)	$ 119	$ (1,071)	$ 495
Earnings/(Loss) per common share attributable to Cardinal Health, Inc.:
Basic (in shares)	$ (5.05)	$ 0.41	$ (3.82)	$ 1.69
Income (Loss) from Continuing Operations, Per Diluted Share	$ (5.05)	$ 0.40	$ (3.82)	$ 1.68
Weighted-average number of common shares outstanding:
Basic (in shares)	275	292	281	293
Diluted (in shares)	275	294	281	294
Cash dividends declared per common share	$ 0.4908	$ 0.4859	$ 1.4724	$ 1.4577

XML

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2022	Mar. 31, 2021
Statement of Comprehensive Income [Abstract]
Net earnings/(loss)	$ (1,390)	$ 120	$ (1,069)	$ 497
Other comprehensive income/(loss):
Foreign currency translation adjustments and other	(4)	9	(47)	42
Net unrealized gain/(loss) on derivative instruments, net of tax	12	(4)	4	14
Total other comprehensive income/(loss), net of tax	8	5	(43)	56
Total comprehensive income/(loss)	(1,382)	125	(1,112)	553
Less: Net earnings attributable to noncontrolling interests	(1)	(1)	(2)	(2)
Total comprehensive income attributable to Cardinal Health, Inc.	$ (1,383)	$ 124	$ (1,114)	$ 551

XML

Condensed Consolidated Balance Sheets - USD ($) shares in Thousands, $ in Millions	Mar. 31, 2022	Jun. 30, 2021
Current assets:
Cash and equivalents	$ 2,356	$ 3,407
Trade receivables, net	10,250	9,103
Inventories, net	15,493	14,594
Prepaid expenses and other	2,785	2,843
Total assets held for sale	0	1,101
Total current assets	30,884	31,048
Property and equipment, net	2,298	2,360
Goodwill and other intangibles, net	8,022	10,094
Other assets	907	951
Total assets	42,111	44,453
Current liabilities:
Accounts payable	24,821	23,700
Current portion of long-term obligations and other short-term borrowings	861	871
Other accrued liabilities	3,033	2,957
Disposal Group, Including Discontinued Operation, Liabilities	0	96
Total current liabilities	28,715	27,624
Long-term obligations, less current portion	4,751	5,365
Deferred income taxes and other liabilities	9,338	9,670
Preferred shares, without par value:
Authorized—500 thousand shares, Issued—none	0	0
Common shares, without par value:
Authorized—755 million shares, Issued—327 million shares at March 31, 2022 and June 30, 2021	2,761	2,806
Retained earnings/(accumulated deficit)	(281)	1,205
Common shares in treasury, at cost: 54 million shares and 36 million shares at March 31, 2022 and June 30, 2021, respectively	(3,100)	(2,186)
Accumulated other comprehensive loss	(77)	(34)
Total Cardinal Health, Inc. shareholders' equity	(697)	1,791
Noncontrolling interests	4	3
Total shareholders’ equity/(deficit)	(693)	1,794
Total liabilities and shareholders’ equity/(deficit)	$ 42,111	$ 44,453
Preferred shares, authorized	500	500
Preferred shares, issued	0	0
Common shares, authorized	755,000	755,000
Common shares, issued	327,000	327,000
Common shares in treasury	54,000	36,000

XML

Condensed Consolidated Balance Sheets (Parenthetical) - shares shares in Thousands	Mar. 31, 2022	Jun. 30, 2021
Statement of Financial Position [Abstract]
Preferred shares, authorized	500	500
Preferred shares, issued	0	0
Common shares, authorized	755,000	755,000
Common shares, issued	327,000	327,000
Common shares in treasury	54,000	36,000

XML

Condensed Consolidated Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Millions	Total	Common Stock	Retained Earnings	Treasury Stock	Accumulated Other Comprehensive Income/(Loss)	Noncontrolling Interest
Balance at beginning of period (in shares) at Jun. 30, 2020		327,000
Balance at beginning of period at Jun. 30, 2020	$ 1,792	$ 2,789	$ 1,170		$ (104)	$ 3
Treasury, balance at beginning of period (in shares) at Jun. 30, 2020				(35,000)
Treasury, balance at beginning of period at Jun. 30, 2020				$ (2,066)
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	497					2
Net Income (Loss) Attributable to Parent	495
Other Comprehensive Income (Loss), Net of Tax	56
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	56				56
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture		0		2,000
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture	82	$ 18		$ 64
Purchase of treasury shares	(200)
Treasury shares acquired (in shares)				(4,000)
Dividends	(432)		(432)
Stockholders' Equity, Other Shares				(1,000)
Other	1					1
Balance at end of period (in shares) at Mar. 31, 2021		327,000
Balance at end of period at Mar. 31, 2021	1,794	$ 2,807	1,233		(48)	4
Treasury, balance at end of period (in shares) at Mar. 31, 2021				(36,000)
Treasury, balance at end of period at Mar. 31, 2021				$ (2,202)
Treasury Stock, Value, Acquired, Cost Method	(200)			$ (200)
Balance at beginning of period (in shares) at Dec. 31, 2020		327,000
Balance at beginning of period at Dec. 31, 2020	1,975	$ 2,778	1,255		(53)	4
Treasury, balance at beginning of period (in shares) at Dec. 31, 2020				(33,000)
Treasury, balance at beginning of period at Dec. 31, 2020				$ (2,009)
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	120					1
Net Income (Loss) Attributable to Parent	119
Other Comprehensive Income (Loss), Net of Tax	5
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	5				5
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture		0		0
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture	36	$ 29		$ 7
Purchase of treasury shares	(200)
Treasury shares acquired (in shares)				(3,700)
Dividends	(143)		(143)
Stockholders' Equity, Other Shares				(1,000)
Other	(1)		2			1
Balance at end of period (in shares) at Mar. 31, 2021		327,000
Balance at end of period at Mar. 31, 2021	1,794	$ 2,807	1,233		(48)	4
Treasury, balance at end of period (in shares) at Mar. 31, 2021				(36,000)
Treasury, balance at end of period at Mar. 31, 2021				$ (2,202)
Treasury Stock, Value, Acquired, Cost Method	$ (200)			$ (200)
Balance at beginning of period (in shares) at Jun. 30, 2021	327,000	327,000
Balance at beginning of period at Jun. 30, 2021	$ 1,794	$ 2,806	1,205		(34)	3
Treasury, balance at beginning of period (in shares) at Jun. 30, 2021	(36,000)			36,000
Treasury, balance at beginning of period at Jun. 30, 2021	$ (2,186)			$ 2,186
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	(1,069)					2
Net Income (Loss) Attributable to Parent	(1,071)
Other Comprehensive Income (Loss), Net of Tax	(43)
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	$ (43)				(43)
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture	1,000	0
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture	$ 41	$ (5)		$ 46
Purchase of treasury shares	(1,000)	$ 40
Treasury shares acquired (in shares)				(19,000)
Dividends	(415)		(415)
Stockholders' Equity, Other Shares
Other	$ 1					1
Balance at end of period (in shares) at Mar. 31, 2022	327,000	327,000
Balance at end of period at Mar. 31, 2022	$ (693)	$ 2,761	(281)		(77)	4
Treasury, balance at end of period (in shares) at Mar. 31, 2022	(54,000)			(54,000)
Treasury, balance at end of period at Mar. 31, 2022	$ (3,100)			$ (3,100)
Treasury Stock, Value, Acquired, Cost Method	(1,000)			$ (960)
Balance at beginning of period (in shares) at Dec. 31, 2021		327,000
Balance at beginning of period at Dec. 31, 2021	1,002	$ 2,721	1,245		(85)	4
Treasury, balance at beginning of period (in shares) at Dec. 31, 2021				50,000
Treasury, balance at beginning of period at Dec. 31, 2021				$ 2,883
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	(1,390)					1
Net Income (Loss) Attributable to Parent	(1,391)
Other Comprehensive Income (Loss), Net of Tax	8
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	8
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture		0
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture	23	$ 20		$ 3
Purchase of treasury shares		(20)
Treasury shares acquired (in shares)				(4,000)
Dividends	(135)		(135)
Stockholders' Equity, Other Shares
Other	$ 1					(1)
Balance at end of period (in shares) at Mar. 31, 2022	327,000	327,000
Balance at end of period at Mar. 31, 2022	$ (693)	$ 2,761	$ (281)		$ (77)	$ 4
Treasury, balance at end of period (in shares) at Mar. 31, 2022	(54,000)			(54,000)
Treasury, balance at end of period at Mar. 31, 2022	$ (3,100)			$ (3,100)
Treasury Stock, Value, Acquired, Cost Method	$ (200)			$ (220)

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions	9 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Cash flows from operating activities:
Net earnings/(loss)	$ (1,069)	$ 497
Adjustments to reconcile net earnings/(loss) to net cash provided by operating activities:
Depreciation and amortization	513	603
Impairments and Loss on Sale of Other Investments	3	0
(Gain)/Loss on sale of equity interest in naviHealth	(2)	0
Impairments and (gain)/loss on disposal of assets, net	1,764	78
Loss on Extinguishment of Debt	10	1
Share-based compensation	65	84
Provision for bad debts	46	49
Change in operating assets and liabilities, net of effects from acquisitions and divestitures:
Increase in trade receivables	(1,193)	(511)
Increase in inventories	(922)	(1,323)
Increase in accounts payable	1,121	1,267
Other accrued liabilities and operating items, net	(206)	1,019
Net cash provided by operating activities	130	1,764
Cash flows from investing activities:
Proceeds from divestitures and disposal of property and equipment and held for sale assets	934	0
Acquisition of subsidiaries, net of cash acquired	0	(3)
Additions to property and equipment	(223)	(274)
Purchases of investments	(38)	(18)
Proceeds from investments	27	5
Proceeds from Hedge, Investing Activities	71	0
Net cash provided by/(used in) investing activities	771	(290)
Cash flows from financing activities:
Proceeds from interest rate swap terminations	0	18
Reduction of long-term obligations	(597)	(53)
Net proceeds/(tax withholdings) from share-based compensation	(26)	(1)
Dividends on common shares	(425)	(432)
Purchase of treasury shares	(1,000)	(200)
Net cash used in financing activities	(2,048)	(668)
Effect of Exchange Rate on Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Continuing Operations	(13)	8
Cash and equivalents reclassified from/(to) assets held for sale	109	(86)
Net increase/(decrease) in cash and equivalents	(1,051)	728
Cash and equivalents at beginning of period	3,407	2,771
Cash and equivalents at end of period	$ 2,356	$ 3,499

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Basis of Presentation and Summary of Significant Accounting Policies

9 Months Ended

Mar. 31, 2022

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. The results of businesses acquired or disposed of are included in the condensed consolidated financial statements from the date of the acquisition or up to the date of disposal, respectively.

References to "we," "our," and similar pronouns in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 (this "Form 10-Q") refer to Cardinal Health, Inc. and its majority-owned or controlled subsidiaries unless the context requires otherwise.

Our fiscal year ends on June 30. References to fiscal 2022 and 2021 in these condensed consolidated financial statements are to the fiscal years ending or ended June 30, 2022 and June 30, 2021, respectively.

Our condensed consolidated financial statements have been prepared in accordance with the U.S. Securities and Exchange Commission ("SEC") instructions to Quarterly Reports on Form 10-Q and include 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.

The COVID-19 pandemic ("COVID-19") continues to affect the U.S. and global economies, and as previously disclosed, the pandemic began to materially affect our businesses during the third quarter of fiscal 2020. The length and severity of the pandemic and its impacts on our businesses and results of operations are uncertain.

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 2022 interim period are not necessarily indicative of the results that may be expected for the full fiscal year ending June 30, 2022. 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, 2021 (the "2021 Form 10-K").

Recently Issued Financial Accounting Standards

Not Yet Adopted

We assess the adoption impacts of recently issued accounting standards by the Financial Accounting Standards Board ("FASB") on our condensed consolidated financial statements as well as material updates to previous assessments, if any, from our fiscal 2021 Form 10-K. There were no accounting standards issued in fiscal 2022 that will have a material impact on our condensed consolidated financial statements.

Recently Adopted Financial Accounting Standards

There were no new material accounting standards adopted in the nine months ended March 31, 2022.

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Divestitures

9 Months Ended

Mar. 31, 2022

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure

2. Divestitures

In August 2021, we sold the Cordis business to Hellman & Friedman for proceeds of $923 million, net of cash transferred, and we retained certain working capital accounts and certain liabilities. The purchase price is subject to adjustments based on working capital requirements as set forth in the agreement. Cardinal Health will retain product liability associated with lawsuits and claims related to inferior vena cava ("IVC") filters in the U.S. and Canada, as well as authority for these matters discussed in Note 6. The Cordis business operated within our Medical segment.

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Restructuring and Employee Severance

9 Months Ended

Mar. 31, 2022

Restructuring Charges [Abstract]

Restructuring and Employee Severance

3. Restructuring and Employee Severance

The following table summarizes restructuring and employee severance:

	Three Months Ended March 31,
(in millions)	2022		2021
Employee-related	$	12	$	13
Facility exit and other	19		11
Total restructuring and employee severance	$	31	$	24

	Nine Months Ended March 31,
(in millions)	2022		2021
Employee-related	$	22	$	45
Facility exit and other	34		36
Total restructuring and employee severance	$	56	$	81

Employee-related costs primarily consist of termination benefits provided to employees who have been involuntarily terminated, duplicate payroll costs and retention bonuses incurred during transition periods. Facility exit and other costs primarily consist of accelerated depreciation, lease costs associated with vacant facilities, professional, project management and other service fees to support divestitures, vendor transition fees, project consulting fees, and certain other divestiture-related costs.

Restructuring costs during both the three and nine months ended March 31, 2022 and 2021 were primarily related to the implementation of certain enterprise-wide cost-savings measures, which includes facility exit costs related to decreasing our overall office space, and the divestiture of the Cordis business.

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, 2021	$	53	$	26	$	79
Additions	34		1		35
Payments and other adjustments	(38)		(10)		(48)
Balance at March 31, 2022	$	49	$	17	$	66

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Goodwill and Other Intangible Assets

9 Months Ended

Mar. 31, 2022

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 (1)		Medical (2)		Total
Balance at June 30, 2021	$	2,659	$	5,330	$	7,989
Goodwill acquired, net of purchase price adjustments	—		—		—
Foreign currency translation adjustments and other	—		(41)		(41)
Goodwill impairment	—		(1,781)		(1,781)
Balance at March 31, 2022	$	2,659	$	3,508	$	6,167

(1)At March 31, 2022 and June 30, 2021, the Pharmaceutical segment accumulated goodwill impairment loss was $829 million.

(2)At March 31, 2022 and June 30, 2021, the Medical segment accumulated goodwill impairment loss was $3.2 billion and $1.4 billion, respectively.

During the three and nine months ended March 31, 2022, the Medical Unit, which is our Medical operating segment excluding our Cardinal Health at-Home Solutions division, continued to experience adverse financial results related to inflationary impacts and the adverse impact of global supply chain constraints. Due to the risks and uncertainties related to these impacts, we elected to bypass the qualitative assessment in the second and third quarters of fiscal 2022 and perform interim goodwill impairment testing for the Medical Unit. This quantitative testing resulted in the carrying amount of the Medical Unit exceeding the fair value, resulting in pre-tax impairment charges of $474 million and $1.3 billion, which were recognized during the three months ended March 31, 2022 and December 31, 2021, respectively, and are included in impairments and (gain)/loss on disposal of assets in our condensed consolidated statements of earnings/(loss). The goodwill balance of the Medical Unit, after recognizing the impairment, was $2.3 billion at March 31, 2022.

Our determination of the estimated fair value of the Medical Unit is based on a combination of the income-based approach (using a terminal growth rate of 2 percent), and the market-based approach. For the income-based approach, we also used discount rates of 9.5 percent and 9 percent for the interim testing at March 31, 2022 and December 31, 2021, respectively. The increase in the discount rate was primarily due to an increase in the risk-free interest rate. Our fair value estimates utilize significant unobservable inputs and thus represent Level 3 fair value measurements.

Other Intangible Assets

The following tables summarize other intangible assets by class at:

	March 31, 2022
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible		Weighted- Average Remaining Amortization Period (Years)
Indefinite-life intangibles:
Trademarks and patents	$	13	$	—	$	13	N/A
Total indefinite-life intangibles	13		—		13		N/A
Definite-life intangibles:
Customer relationships	3,293		2,130		1,163		10
Trademarks, trade names and patents	552		352		200		9
Developed technology and other	1,036		557		479		9
Total definite-life intangibles	4,881		3,039		1,842		10
Total other intangible assets	$	4,894	$	3,039	$	1,855	N/A

	June 30, 2021
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible
Indefinite-life intangibles:
Trademarks and patents	$	12	$	—	$	12
Total indefinite-life intangibles	12		—		12
Definite-life intangibles:
Customer relationships	3,330		1,989		1,341
Trademarks, trade names and patents	551		328		223
Developed technology and other	1,035		506		529
Total definite-life intangibles	4,916		2,823		2,093
Total other intangible assets	$	4,928	$	2,823	$	2,105

Total amortization of intangible assets was $78 million and $109 million for the three months ended March 31, 2022 and 2021, respectively, and $235 million and $337 million for the nine months ended March 31, 2022 and 2021, respectively. Estimated annual amortization of intangible assets for the remainder of fiscal 2022 through 2026 is as follows: $78 million, $284 million, $260 million, $235 million, and $208 million.

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Long-Term Obligations and Other Short-Term Borrowings

9 Months Ended

Mar. 31, 2022

Long-Term Obligations and Other Short-Term Borrowings [Abstract]

Long-Term Obligations and Other Short-Term Borrowings

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

Long-Term Debt and Other Short-Term Borrowings

We had total long-term obligations, including the current portion and other short-term borrowings, of $5.6 billion and $6.2 billion at March 31, 2022 and June 30, 2021, respectively. All the notes represent unsecured obligations of Cardinal Health, Inc. and rank equally in right of payment with all of our existing and future unsecured and unsubordinated indebtedness. Interest is paid pursuant to the terms of the obligations. These notes are effectively subordinated to the liabilities of our subsidiaries, including trade payables of $24.8 billion and $23.7 billion at March 31, 2022 and June 30, 2021, respectively.

During the nine months ended March 31, 2022, we redeemed all outstanding $572 million principal amount of 2.616% Notes due June 2022 at a redemption price equal to 100% of the principal amount and accrued but unpaid interest, plus the make-whole premium applicable to the notes. In connection with this redemption, we recorded a $10 million loss on early extinguishment of debt. The early redemption was funded with available cash.

During the nine months ended March 31, 2021, we early repurchased a total of $40 million of the Floating Rate Notes due 2022 and $2 million of the 2.616% Notes due June 2022. The repurchases were funded with available cash. In connection with the early debt repurchases, we recorded a $1 million loss on early extinguishment of debt during the nine months ended March 31, 2021.

Other Financing Arrangements

In addition to cash and equivalents and operating cash flow, other sources of liquidity include a $2.0 billion commercial paper program backed by a $2.0 billion revolving credit facility. We also have a $1.0 billion committed receivables sales facility. At March 31, 2022, we had no amounts outstanding under our commercial paper program, revolving credit facility, or our committed receivables sales facility. During the nine months ended March 31, 2022, we had a daily maximum amount outstanding under our commercial paper and committed receivables programs of $1.2 billion and an average daily amount outstanding of $25 million.

In September 2019, we renewed our committed receivables sales facility program through Cardinal Health Funding, LLC (“CHF”) through September 30, 2022. CHF was organized for the sole purpose of buying receivables and selling undivided interests in those receivables to third-party purchasers. Although consolidated with Cardinal Health, Inc. in accordance with GAAP, CHF is a separate legal entity from Cardinal Health, Inc. and from our subsidiary that sells receivables to CHF. CHF is designed to be a special purpose, bankruptcy-remote entity whose assets are available solely to satisfy the claims of its creditors.

Our revolving credit and committed receivables sales facilities require us to maintain a consolidated net leverage ratio of no more than 3.75-to-1. As of March 31, 2022, we were in compliance with this financial covenant.

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Commitments, Contingent Liabilities and Litigation

9 Months Ended

Mar. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments, Contingent Liabilities and Litigation

6. 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 its participants. In August 2021, we amended our agreement to extend the term through June 2029. We are required to make quarterly payments to CVS Health for the term of the arrangement.

Contingencies

New York Opioid Stewardship Act

In April 2018, the State of New York passed a budget which included the Opioid Stewardship Act (the "OSA"). The OSA created an aggregate $100 million annual assessment on all manufacturers and distributors licensed to sell or distribute opioids in New York. Under the OSA, each licensed manufacturer and distributor would be required to pay a portion of the assessment based on its share of the total morphine milligram equivalents sold or distributed in New York during the applicable calendar year, beginning in 2017.

The constitutionality of portions of the OSA has been challenged in court. In December 2018, the OSA was ruled unconstitutional by the U.S. district court for the Southern District of New York. Subsequently, New York passed a new statute that modified the assessment going forward and limited the OSA to two years (2017 and 2018). The U.S. Court of Appeals for the Second Circuit reversed the district court's decision on procedural grounds. In February 2021, the Second Circuit stayed the effect of the ruling pending a petition to the U.S. Supreme Court to review the Second Circuit's opinion. In October 2021, the U.S. Supreme Court declined to review the decision.

We accrue contingencies if it is probable that a liability has been incurred and the amount can be estimated. Because of the Second Circuit ruling, we recorded an aggregate accrual of $41 million for calendar year 2017 and 2018 during the nine months ended March 31, 2021 based on the probable estimated payment amount. In the three months ended December 31, 2021, we paid the State of New York $20 million, our portion of the assessment for calendar year 2017. As a result, as of March 31, 2022, we had an accrual of $20 million, which reflects our best estimate of the portion of the assessment that we may owe for sales during calendar year 2018.

Legal Proceedings

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

From time to time, we determine that products we source, manufacture or market do not meet our specifications, regulatory requirements, or published standards. When we or a regulatory agency identify a potential quality or regulatory issue, we investigate and take appropriate corrective action. Such actions have led to product recalls, costs to repair or replace affected products, temporary interruptions in product sales, product liability claims and lawsuits and can lead to action by regulators. Even absent an identified regulatory or quality issue or product recall, we can become subject to product liability claims and lawsuits.

From time to time, we become aware through employees, internal audits or other parties of possible compliance matters, such as complaints or concerns relating to accounting, internal accounting controls, financial reporting, auditing, or other ethical matters or relating to compliance with laws such as healthcare fraud and abuse, anti-corruption or anti-bribery laws. When we become aware of such possible compliance matters, we investigate internally and take appropriate corrective action. In addition, from time to time, we receive subpoenas or requests for information from various federal or state agencies relating to our business or to the business of a customer, supplier or other industry participants. Internal investigations, subpoenas or requests for information could directly or indirectly lead to the assertion of claims or the commencement of legal proceedings against us or result in sanctions.

We have been named from time to time in qui tam actions initiated by private third parties. In such actions, the private parties purport to act on behalf of federal or state governments, allege that false claims have been submitted for payment by the government and may receive an award if their claims are successful. 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 purporting to act on behalf of the government.

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.

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

We recognize estimated loss contingencies for certain litigation and regulatory matters and income from favorable resolution of litigation in litigation (recoveries)/charges in our condensed consolidated statements of earnings/(loss); however, losses and recoveries of lost profits from disputes that occur in the ordinary course of business are included within segment profit. For example, in the second quarter of fiscal year 2022, our Pharmaceutical segment profit was positively impacted by a $16 million judgment for lost profits related to an ordinary course intellectual property rights claim.

Opioid Lawsuits and Investigations

As of February 2022, pharmaceutical wholesale distributors, including us, were defendants in approximately 3,400 lawsuits relating to the distribution of prescription opioid pain medications. The lawsuits sought equitable relief and monetary damages based on a variety of legal theories including various common law claims, such as public nuisance, negligence and unjust enrichment as well as violations of controlled substance laws, the Racketeer Influenced and Corrupt Organizations Act and various other statutes. These lawsuits also name pharmaceutical manufacturers, retail pharmacy chains and other entities as defendants.

States & Political Subdivisions

Approximately 2,700 of these lawsuits were filed by counties, municipalities, cities and political subdivisions in various federal, state, and other courts. The vast majority of these lawsuits were filed in U.S. federal court and were transferred for consolidated pre-trial proceedings in a Multi-District Litigation proceeding in the U.S. District Court for the Northern District of Ohio (the “MDL”).

In addition, 25 state attorneys general filed lawsuits against distributors, including us, in various state courts. We have also received requests, civil investigative demands, subpoenas or requests for information from additional state attorneys general offices and governmental authorities.

In February 2022, we determined that there was sufficient participation to proceed with a settlement agreement (the "Settlement Agreement") to settle the vast majority of opioid lawsuits filed by state attorneys general and political subdivisions. This Settlement Agreement became effective on April 2, 2022.

In addition to us and two other national distributors, parties to the Settlement Agreement include 46 states, the District of Columbia and 5 U.S. territories. As of April 28, 2022, over 98 percent of political subdivisions (by population as calculated under the Settlement Agreement) that had brought opioid-related suits against us as calculated under the Settlement Agreement had chosen to join the Settlement Agreement or have had their claims addressed by state legislation.

Under this Settlement Agreement, we will pay up to approximately $6.0 billion, the majority of which will be paid over 18 years. The exact payment amount will depend on several factors, including the extent to which states take action to foreclose opioid lawsuits by political subdivisions (e.g., by passing laws barring or limiting opioid lawsuits by political subdivisions), and the extent to which

additional political subdivisions in participating states file additional opioid lawsuits against us.

The Settlement Agreement also includes injunctive relief terms related to distributors’ controlled substance anti-diversion programs, including with respect to: (1) governance; (2) independence and training of the personnel operating controlled substances monitoring programs; (3) due diligence for new and existing customers; (4) ordering limits for certain products; and (5) suspicious order monitoring. A monitor will be selected to oversee compliance with these provisions for a period of five years. In addition, we and the two other settling distributors will engage a third-party vendor to act as a clearinghouse for data aggregation and reporting, which distributors will fund the for ten years.

The participating states and the distributors are cooperating to obtain consent judgments embodying the terms of the Settlement Agreement in each participating state and the participating states and subdivisions are dismissing their lawsuits. As a result, as of April 28, 2022, approximately 2,000 lawsuits against us have been dismissed. We expect additional lawsuits to be dismissed over the coming months.

As previously disclosed, we had separately negotiated settlements with each of Florida, New York, Ohio, Rhode Island, Texas and their participating subdivisions; however, as contemplated, these states and their participating subdivisions are now participating in the Settlement Agreement.

During the nine months ended March 31, 2022, we paid into escrow the majority of our first annual payment under the Settlement Agreement, which is reflected in prepaid expenses and other assets in our condensed consolidated balance sheets. We also made certain payments under the separate New York, Ohio and Rhode Island settlements, as well as certain payments under Cherokee Nation settlement and Native American term sheet. During the nine months ended March 31, 2022, we paid $348 million in connection with these matters.

In May 2022, we and two other national distributors reached an agreement with the Washington Attorney General, under which we will pay up to approximately $160 million to the State of Washington and its participating subdivisions to resolve opioid-related claims. This amount is consistent with the amount that would have been allocated to Washington under the Settlement Agreement, had Washington agreed to participate, plus certain attorneys' fees and costs. The terms of this agreement in principle are substantially consistent with the Settlement Agreement. This agreement is subject to certain contingencies, including the rate of subdivision participation.

West Virginia subdivisions and Native American tribes were not a part of the broader settlement process and we have been involved in separate negotiations with these groups. In September 2021 we announced that we, along with two other national distributors, had reached an agreement with the Cherokee Nation in connection with ongoing negotiations toward a broader agreement with Native American tribes. In January 2022, we, along with two other

national distributors, entered into a term sheet with the Native American tribes.

The first phase of a bench trial in West Virginia State Court for a consolidated case brought by 63 West Virginia subdivisions against the Company and two other national distributors is scheduled to begin July 5, 2022. A bench trial before a federal judge in West Virginia brought by Cabell County and City of Huntington against us and two other national distributors concluded in July 2021. The judge has not yet issued a decision. Trials are inherently unpredictable and it is possible that the outcome of these trials could materially negatively impact our financial results, cash flows or results of operations.

The Settlement Agreement did not resolve all opioid lawsuits and claims brought by states and political subdivisions. The Attorney General of Oklahoma filed a lawsuit against us in January 2020, and did not agree to join the Settlement Agreement. As of April 28, 2022, we are still defendants in approximately 700 lawsuits brought by counties, municipalities and other political subdivisions; however, we expect this number to decline as additional cases are dismissed as a result of the Settlement Agreement.

In total, we have $6.70 billion accrued at March 31, 2022, of which $738 million is included in other accrued liabilities and the remainder is included in deferred income taxes and other liabilities in our condensed consolidated balance sheets. During the nine months ended March 31, 2021, we recorded total pre-tax charges of $1.02 billion in litigation (recoveries)/charges, net in our condensed consolidated statements of earnings/(loss).

Because loss contingencies are inherently unpredictable and unfavorable developments or resolutions can occur, the assessment is highly subjective and requires judgments about future events. We regularly review these opioid litigation matters to determine whether our accrual is adequate. The amount of ultimate loss may differ materially from this accrual, whether as a result of settlement discussions, a judicial decision or verdict or otherwise, but we are not able to estimate a range of reasonably possible additional losses for these matters. We continue to strongly dispute the allegations made in these lawsuits none of these agreements is an admission of liability or wrongdoing.

Department of Justice Investigations

We have received federal grand jury subpoenas issued in connection with investigations being conducted by the U.S. Attorney's Office for the Eastern District of New York and the Fraud Section of the U.S. Department of Justice ("DOJ"). We have also received civil requests for information from other DOJ offices. We believe that these investigations concern operation of our anti-diversion program, our anti-diversion policies and procedures, and distribution of certain controlled substances. We are cooperating with these investigations. We are unable to predict the outcome of any of these investigations.

Private Plaintiffs

The Settlement Agreement does not address claims by private parties, which includes unions and other health and welfare funds,

hospital systems and other healthcare providers, businesses and individuals alleging personal injury. Private parties had brought approximately 453 lawsuits as of May 4, 2022. Of these, 141 are purported class actions. The causes of action asserted by these plaintiffs are similar to those asserted by public plaintiffs.

A trial in a case involving 21 plaintiffs is scheduled to begin in state court in Georgia in July 2022. We are vigorously defending ourselves in all of these matters; however, trials are inherently unpredictable and it is possible that an unfavorable outcome in these matters, individually or in the aggregate, could have a negative impact on our financial results.

Insurance Litigation

We are involved in legal proceedings with two insurers related to the availability of insurance coverage for the lawsuits described above. In October 2020, we filed a complaint for declaratory judgment against National Union Fire Insurance Company of Pittsburgh, PA (“National Union”) seeking a declaration that National Union is obligated to reimburse us for defense costs incurred in connection with the lawsuits described above. In January 2021, Swiss Re International SE commenced an arbitration in London seeking a determination that it does not have an obligation to reimburse us for defense and indemnity expenses incurred in connection with the lawsuits described above. We have not recorded a receivable for any recoveries related to these insurance litigation matters as of March 31, 2022.

Cordis IVC Filter Matters

Product Liability Lawsuits

As of April 29, 2022, we are named as a defendant in 457 product liability lawsuits coordinated in Alameda County Superior Court in California involving claims by approximately 5,872 plaintiffs that allege personal injuries associated with the use of Cordis OptEase and TrapEase inferior vena cava ("IVC") filter products. Another 26 lawsuits involving similar claims by approximately 30 plaintiffs are pending in other jurisdictions. These lawsuits seek a variety of remedies, including unspecified monetary damages. In July 2021, we entered into an agreement to settle approximately 1,300 claims. We continue to vigorously defend ourselves in these lawsuits and are engaged in ongoing resolution discussions with certain plaintiffs.

At March 31, 2022, we had a total of $494 million net of estimated insurance recoveries, accrued for losses and legal defense costs, related to the Cordis IVC filter lawsuits in our condensed consolidated balance sheets. We believe there is a range of estimated losses with respect to these matters. Because no amount within the range is a better estimate than any other amount within the range, we have accrued the minimum amount in the range. We estimate the high end of the range to be approximately $1.05 billion, net of estimated insurance recoveries. The sale of the Cordis disposal group does not include product liability related to the IVC filters in the U.S. and Canada, which we retained.

New Mexico Attorney General Action

In August 2021, the Attorney General for the State of New Mexico filed an action against certain IVC filter manufacturers, including us, alleging claims under New Mexico's Unfair Practices Act, Medicaid Fraud Act and Fraud Against Taxpayers Act. The allegations made are similar to those made in the product liability lawsuits, described above. We intend to vigorously defend ourselves against these claims.

SEC Investigation

In February 2021, we received a subpoena from the U.S. Securities and Exchange Commission ("SEC") requesting the production of documents from 2015 through 2019 relating to inventory in the Cordis business, analysis of goodwill of the Medical segment and other matters. In March 2022, the SEC informed us that it had concluded its investigation and did not intend to recommend an enforcement action.

Shareholder Securities Litigation

In August 2019, the Louisiana Sheriffs' Pension & Relief Fund filed a purported class action complaint against Cardinal Health and certain current and former officers and employees in the United States District Court for the Southern District of Ohio purportedly on behalf of all purchasers of our common shares between March 2015 and May 2018. In June 2020, the court appointed 1199 SEIU Health Care Employees Pension Fund as lead plaintiff and a consolidated amended complaint was filed in September 2020. The amended complaint alleges that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by making misrepresentations and omissions related to the acquisition and integration of the Cordis business and inventory and supply chain problems within the Cordis business, and seeks to recover unspecified damages and equitable relief for the alleged misstatements and omissions. The complaint also alleges that one of the individual defendants violated Section 20A of the Exchange Act because he sold shares of Cardinal Health stock during the time period. In September 2021, the court denied our motion to dismiss. We are vigorously defending ourselves against these claims.

Specialty Solutions DOJ Investigation

In November 2018, the United States Attorney’s Office for the District of Massachusetts (the "USAO") commenced an investigation of Cardinal Health regarding possible violations of the U.S. healthcare fraud and abuse laws. The USAO sought, among other things, documents and information relating to discounts and rebates offered or provided to certain Specialty Solutions customers. In January 2022, without admitting liability, we settled this matter with the DOJ for approximately $13 million, which was recorded as expense within litigation (recoveries)/charges net in our consolidated statement of earnings/(loss) during the fiscal year ended June 30, 2021. Additionally, our Specialty Pharmaceutical Distribution business entered into a five-year corporate integrity agreement with the Department of Health and Human Services, Office of Inspector General, under which it agreed to certain remedial measures, including no longer offering term-based up-front discounts.

Other Civil Litigation

Generic Pharmaceutical Pricing Antitrust Litigation

In December 2019, pharmaceutical distributors including us were added as defendants in a civil class action lawsuit filed by indirect purchasers of generic drugs, such as hospitals and retail pharmacies. The indirect purchaser case is part of a multidistrict litigation consisting of multiple individual class action matters consolidated in the Eastern District of Pennsylvania. The indirect purchaser plaintiffs allege that pharmaceutical distributors encouraged manufacturers to increase prices, provided anti-competitive pricing information to manufacturers and improperly engaged in customer allocation. We have filed a motion to dismiss the complaints and we intend to vigorously defend ourselves.

Active Pharmaceutical Ingredient Impurity Litigation

Many participants in the pharmaceutical supply chain, including active pharmaceutical ingredient ("API") manufacturers, finished dose manufacturers, repackagers, distributors, and retailers have been named as defendants in lawsuits arising out of recalls of certain medications due to alleged impurities in the active pharmaceutical ingredients or finished product.

In February 2019, a Multidistrict Litigation was created in the U.S. District Court for the District of New Jersey (the “Sartan MDL”) alleging API impurities in certain generic blood pressure medications. We have been named as a defendant in the Sartan MDL. We are vigorously defending ourselves in this matter.

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Income Taxes

9 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

7. Income Taxes

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

Effective Tax Rate

During the three and nine months ended March 31, 2022, the effective tax rate was (916.5) percent and (44.4) percent,

respectively, and reflects the impact of the tax effect of the year-to-date goodwill impairment charges recognized during the nine months ended March 31, 2022.

During the three and nine months ended March 31, 2021, the effective tax rate was 72.8 percent and (143.3) percent, respectively, and included the impact related to the treatment of the tax effect of opioid litigation charges, the resolution of certain transfer pricing matters with the U.S. Internal Revenue Service ("IRS") and withholding taxes for planned distributions from foreign subsidiaries. During the nine months ended March 31, 2021, the effective tax rate included the benefit from a net operating loss carryback primarily related to a self-insurance pre-tax loss.

Tax Effects of Goodwill Impairment Charge

During the nine months ended March 31, 2022, we recognized year-to-date pre-tax charges of $1.8 billion for goodwill impairments related to the Medical Unit. The net tax benefit related to these charges is $126 million for fiscal 2022.

Unless an item is considered discrete because it is unusual or infrequent, the tax impact of the item is included in our estimated annual effective tax rate. When items are recognized through our estimated annual effective tax rate, we apply our estimated annual effective tax rate to the earnings/(loss) before income taxes for the year-to-date period to compute our benefit from income taxes for the current quarter and year-to-date period. The tax impacts of discrete items are recognized in their entirety in the period in which they occur.

The tax effect of the goodwill impairment charges during the nine months ended March 31, 2022 was included in our estimated annual effective tax rate because it was not considered unusual or infrequent, given that we recorded goodwill impairment in prior fiscal years. The impact of the non-deductible goodwill significantly decreased the estimated annual effective tax rate for fiscal 2022. Applying the lower tax rate to the year-to-date loss resulted in recognizing an interim tax expense of approximately $1.2 billion, which impacted the provision for income taxes in the condensed consolidated statements of earnings/(loss) during the three and nine months ended March 31, 2022 and prepaid expenses and other assets in the condensed consolidated balance sheet at March 31, 2022. Approximately $180 million of this interim tax expense will reverse in the fourth quarter of fiscal 2022.

Cordis Divestiture

During the nine months ended March 31, 2022, we completed the divestiture of the Cordis business. In connection with the closing, we recorded net tax expense of $9 million and $29 million during the three and nine months ended March 31, 2022, respectively. The tax effects of these matters during the nine months ended March 31, 2022 were included in our full year effective tax rate forecast. We currently estimate the tax expense associated with this matter for the full fiscal 2022 will be $38 million.

Tax Effects of Self-Insurance Pre-tax Loss

During the nine months ended March 31, 2021, our wholly-owned insurance subsidiary recorded a self-insurance pre-tax loss in its

fiscal 2020 statutory financial statements primarily related to opioid litigation. This self-insurance pre-tax loss, which did not impact our pre-tax consolidated results, was deducted on our fiscal 2020 consolidated federal income tax return and contributed to a significant net operating loss for tax purposes. The net operating loss was carried back and applied to adjust our taxable income for fiscal 2015, 2016, 2017, and 2018 as permitted under the Coronavirus Aid, Relief and Economic Security ("CARES") Act enacted by the United States Congress in March 2020.

Accordingly, our provision for income taxes during the nine months ended March 31, 2021 included a $419 million benefit from the net operating loss carryback primarily to reflect the difference between the federal statutory income tax rate during the fiscal years from 2015 to 2018 (35 percent for fiscal 2015, 2016, and 2017 and 28 percent for fiscal 2018) and the current federal statutory income tax rate of 21 percent.

In fiscal 2021, we filed for a refund of $974 million, which we expect to receive within 12 months. Accordingly, we had a current asset for this amounts on our condensed consolidated balance sheets at both March 31, 2022 and June 30, 2021. In April 2022, we received a payment for $966 million, which is net of certain adjustments. We also increased our non-current deferred tax liability by approximately $700 million during the nine months ended March 31, 2021 related to this matter.

We have made reasonable estimates and recorded amounts based on management's judgment and our current understanding of tax law; however, it is possible that the tax authorities could challenge these tax benefits. The actual amount of the tax benefit may differ materially from these estimates.

Tax Effects of Opioid Litigation Charges

In connection with the $1.02 billion pre-tax charges for the opioid litigation recorded during the nine months ended March 31, 2021, the net tax benefits were approximately $180 million for the nine months ended March 31, 2021 and $228 million for fiscal 2021. Our tax benefits are estimates, which reflect our current assessment of the estimated future deductibility of the amount that may be paid under the accrual taken in connection with the opioid litigation and are net of unrecognized tax benefits of $35 million during the nine months ended March 31, 2021, and $219 million for fiscal 2021. We have recognized no tax benefit associated with Opioid accruals made in fiscal 2022.

We have made reasonable estimates and recorded amounts based on management's judgment and our current understanding of the U.S. Tax Cuts and Jobs Act ("Tax Act"); however, these estimates require significant judgment since the U.S. tax law governing deductibility was changed by the Tax Act. Further, it is possible Congress or the tax authorities could challenge our interpretation of the Tax Act or the estimates and assumptions used to assess the future deductibility of these benefits. The actual amount of the tax benefit may differ materially from these estimates.

Unrecognized Tax Benefits

We had $938 million and $932 million of unrecognized tax benefits, at March 31, 2022 and June 30, 2021 respectively. The March 31, 2022 and June 30, 2021 balances include $856 million and $849 million of unrecognized tax benefits, respectively, that if recognized, would have an impact on the effective tax rate.

At March 31, 2022 and June 30, 2021, we had $46 million and $49 million, respectively, accrued for the payment of interest and penalties related to unrecognized tax benefits, which we recognize in the provision for/(benefit from) income taxes in the condensed consolidated statements of earnings/(loss). 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 IRS or other taxing authorities, possible settlement of IRS and other 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 up to $5 million, exclusive of penalties and interest.

Other Tax Matters

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 2015 through 2020.

Expiring or unusable loss and credit carryforwards and the required valuation allowances are adjusted quarterly based on available information. This information may support either an increase or a decrease in the required valuation allowance. After applying the valuation allowances, we do not anticipate any limitations on our use of any of the other net deferred income tax assets described above. We operate in a complex multinational tax environment and are subject to tax treaty arrangements and transfer pricing guidelines for intercompany transactions that are subject to interpretation. Uncertainty in a tax position may arise as tax laws are subject to interpretation.

We are a party to a tax matters agreement with CareFusion Corporation ("CareFusion"), a subsidiary of 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 $73 million at March 31, 2022 and $72 million at June 30, 2021, and is included in other assets in the condensed consolidated balance sheets.

As a result of the acquisition of the Patient Recovery Business, Medtronic plc is obligated to indemnify us for certain tax exposures and transaction taxes related to periods prior to the acquisition under the purchase agreement. The indemnification receivable was zero at March 31, 2022 and $12 million at June 30, 2021, respectively, and is included in other assets in the condensed consolidated balance sheets.

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Fair Value Measurements

9 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

Fair Value Disclosures

8. Fair Value Measurements

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

	March 31, 2022
(in millions)	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	671	$	—	$	—	$	671
Other investments (1)	112		—		—		112
Liabilities:
Forward contracts (2)	—		(12)		—		(12)

	June 30, 2021
(in millions)	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	1,883	$	—	$	—	$	1,883
Other investments (1)	126		—		—		126
Forward contracts (2)	—		42		—		42

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

(2)The fair value of interest rate swaps, foreign currency contracts, and net investment hedges 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 prepaid expenses and other, other assets, other accrued liabilities, and deferred income taxes and other liabilities within the condensed consolidated balance sheets.

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Financial Instruments

9 Months Ended

Mar. 31, 2021

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 current fair value through earnings at the end of each period. We are exposed to counterparty credit risk on all of our derivative

instruments. Accordingly, we have established and maintain strict counterparty credit guidelines and only enter into derivative instruments with major financial institutions that are rated investment grade or better. We do not have significant exposure to any one counterparty and we believe the risk of loss is remote. Additionally, we do not require collateral under these agreements.

Interest Rate Risk Management

We are exposed to the impact of interest rate changes. Our objective is to manage the impact of interest rate changes on cash flows and the market value of our borrowings. We utilize a mix of debt maturities along with both fixed-rate and variable-rate debt to manage changes in interest rates. In addition, we enter into interest rate swaps to further manage our exposure to interest rate variations related to our borrowings and to lower our overall borrowing costs.

Currency Exchange Risk Management

We conduct business in several major international currencies and are subject to risks associated with changing foreign exchange rates. Our objective is to reduce earnings and cash flow volatility associated with foreign exchange rate changes to allow management to focus its attention on business operations. Accordingly, we enter into various contracts that change in value as foreign exchange rates change to protect the value of existing foreign currency assets and liabilities, commitments and anticipated foreign currency revenue and expenses.

Commodity Price Risk Management

We are exposed to changes in the price of certain commodities. Our objective is to reduce earnings and cash flow volatility associated with forecasted purchases of these commodities to allow management to focus its attention on business operations. Accordingly, we enter into derivative contracts when possible to manage the price risk associated with certain forecasted purchases.

Fair Value Hedges

We enter into pay-floating interest rate swaps to hedge the changes in the fair value of fixed-rate debt resulting from fluctuations in interest rates. These contracts are designated and qualify as fair value hedges. Accordingly, the gain or loss recorded on the pay-floating interest rate swaps is directly offset by the change in fair value of the underlying debt. Both the derivative instrument and the underlying debt are adjusted to market value at the end of each period with any resulting gain or loss recorded in interest expense, net in the condensed consolidated statements of earnings/(loss). For the three and nine months ended March 31, 2022 and 2021, there was no gain or loss recorded to interest expense as changes in the market value of our derivative instruments offset changes in the market value of the underlying debt.

During the nine months ended March 31, 2022, we entered into pay-floating interest rate swaps with notional amounts of $100 million and $200 million. These swaps have been designated as fair value hedges of our fixed rate debt and are included in

deferred income taxes and other liabilities in the condensed consolidated balance sheets.

Cash Flow Hedges

We enter into derivative instruments to hedge our exposure to changes in cash flows attributable to interest rate, foreign currency and commodity price fluctuations associated with certain forecasted transactions. These derivative instruments are designated and qualify as cash flow hedges. Accordingly, the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive loss and reclassified into earnings in the same line item associated with the forecasted transaction and in the same period during which the hedged transaction affects earnings.

Pre-tax gains recognized in other comprehensive loss were $1 million and $13 million for the three months ended March 31, 2022 and 2021, respectively, and $4 million and $20 million for the nine months ended March 31, 2022 and 2021, respectively. Gains and losses recognized in accumulated other comprehensive loss and reclassified into earnings were immaterial for the three and nine months ended March 31, 2022 and 2021. All gains and losses currently included within accumulated other comprehensive loss associated with our cash flow hedges to be reclassified into net earnings within the next 12 months are immaterial.

Net Investment Hedges

We hedge the foreign currency risk associated with certain net investment positions in foreign subsidiaries. To accomplish this, we enter into cross-currency swaps that are designated as hedges of net investments.

During the three months ended March 31, 2022, we entered into a ¥24 billion ($200 million) cross-currency swap maturing in September 2025 and a ¥24 billion ($200 million) cross-currency swap maturing in June 2027.

During the three months ended March 31, 2022, we terminated the ¥64 billion ($600 million) cross-currency swap entered into in August 2019 and received a net settlement of $71 million in cash recorded in proceeds from net investment hedge terminations in our condensed consolidated statements of cash flows.

Cross-currency swaps designated as net investment hedges are marked to market using the current spot exchange rate as of the end of the period, with gains and losses included in the foreign currency translation component of accumulated other comprehensive loss until the sale or substantial liquidation of the underlying net investments. To the extent the cross-currency swaps designated as net investment hedges are not highly effective, changes in carrying value attributable to the change in spot rates are recorded in earnings.

Pre-tax gain and loss from net investment hedges recorded in the foreign currency translation component of accumulated other comprehensive loss was a $22 million gain and a $49 million gain during the three months ended March 31, 2022 and 2021, respectively, and a $44 million gain and a $3 million loss during the nine months ended March 31, 2022 and 2021, respectively. Gains

recognized in interest expense, net in the condensed consolidated statements of earnings/(loss) for the portion of the net investment hedges excluded from the assessment of hedge effectiveness were $5 million during both the three months ended March 31, 2022 and 2021 and $16 million and $14 million during the nine months ended March 31, 2022 and 2021, respectively.

Economic (Non-Designated) Hedges

We enter into foreign currency contracts to manage our foreign exchange exposure related to sales transactions, intercompany financing transactions and other balance sheet items subject to revaluation that do not meet the requirements for hedge accounting treatment. Accordingly, these derivative instruments are adjusted to current market value at the end of each period through earnings. The gain or loss recorded on these instruments is substantially offset by the remeasurement adjustment on the foreign currency denominated asset or liability. The settlement of the derivative instrument and the remeasurement adjustment on the foreign currency denominated asset or liability are both recorded in other (income)/expense, net. We recorded a $4 million loss and a $1 million gain during the three months ended March 31, 2022 and 2021, respectively, and an immaterial loss and $4 million loss during the nine months ended March 31, 2022 and 2021, respectively. The principal currencies managed through foreign currency contracts are Euro, Chinese renminbi, Canadian dollar.

Fair Value of Financial Instruments

The carrying amounts of cash and equivalents, trade receivables, accounts payable, and other accrued liabilities at March 31, 2022 and June 30, 2021 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)	March 31, 2022		June 30, 2021
Estimated fair value	$	5,645	$	6,751
Carrying amount	5,612		6,236

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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Shareholders' Equity

9 Months Ended

Mar. 31, 2022

Equity [Abstract]

Shareholders' Equity

10. Shareholders' Equity/(Deficit)

We repurchased $1.0 billion of our common shares, in the aggregate, through share repurchase programs during the nine months ended March 31, 2022. We funded the repurchases with available cash. The common shares repurchased are held in treasury to be used for general corporate purposes.

During the three months ended March 31, 2022, we entered into an accelerated share repurchase ("ASR") program to repurchase common shares for an aggregate purchase price of $200 million.

We received an initial delivery of 3.0 million common shares using a reference price of $54.01. The program concluded on April 18, 2022 at a volume weighted average price per common share of $56.02 resulting in a final delivery of 0.6 million common shares.

During the three months ended December 31, 2021, we entered into an ASR program to repurchase common shares for an aggregate purchase price of $300 million. We received an initial delivery of 4.8 million common shares using a reference price of $50.30. The program concluded on January 31, 2022 at a volume weighted average price per common share of $49.39 resulting in a final delivery of 1.3 million common shares.

During the three months ended September 30, 2021, we entered into an ASR program to repurchase common shares for an aggregate purchase price of $500 million. We received an initial delivery of 7.8 million common shares using a reference price of $51.53. The program concluded on October 4, 2021 at a volume weighted average price per common share of $51.10 resulting in a final delivery of 2.0 million common shares.

During the three months ended March 31, 2021, we entered into an ASR program to repurchase common shares for an aggregate purchase price of $200 million. The program began on February 9, 2021 and concluded on March 31, 2021. The average price paid per common share was $54.40, resulting in a total delivery of 3.7 million common shares.

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, 2021	$	(46)	$	12	$	(34)
Other comprehensive loss, before reclassifications	(47)		9		(38)
Amounts reclassified to earnings	—		(5)		(5)
Total other comprehensive loss attributable to Cardinal Health, Inc. net of tax	(47)		4		(43)
Balance at March 31, 2022	$	(93)	$	16	$	(77)

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Earnings Per Share Attributable to Cardinal Health, Inc.

9 Months Ended

Mar. 31, 2022

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

11. Earnings/(Loss) Per Share Attributable to Cardinal Health, Inc.

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

	Three Months Ended March 31,
(in millions)	2022	2021
Weighted-average common shares–basic	275	292
Effect of dilutive securities:
Employee stock options, restricted share units and performance share units	—	2
Weighted-average common shares–diluted	275	294

	Nine Months Ended March 31,
(in millions)	2022	2021
Weighted-average common shares–basic	281	293
Effect of dilutive securities:
Employee stock options, restricted share units and performance share units	—	1
Weighted-average common shares–diluted	281	294

The potentially dilutive employee stock options, restricted share units and performance share units that were antidilutive were 5 million for both the three and nine months March 31, 2022. For the three and nine months ended March 31, 2022, there were 2 million and 1 million potentially dilutive employee stock options, restricted share units and performance share units, respectively, not included in the computation of diluted loss per common share attributable to Cardinal Health, Inc. because their effect would have been anti-dilutive as a result of the net loss during those periods.

The potentially dilutive employee stock options, restricted share units and performance share units that were antidilutive were 3 million for the three months ended March 31, 2021 and 4 million for the nine months ended March 31, 2021.

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Segment Information

9 Months Ended

Mar. 31, 2022

Segment Reporting [Abstract]

Segment Information

12. Segment Information

Our operations are principally managed on a products and services basis and are comprised of two operating segments, which are the same as our reportable segments: Pharmaceutical and Medical. The factors for determining the reportable segments include the manner in which management evaluates performance for purposes of allocating resources and assessing performance combined with the nature of the individual business activities.

Our Pharmaceutical segment distributes branded and generic pharmaceutical, specialty pharmaceutical and over-the-counter healthcare and consumer products in the United States. This segment also provides services to pharmaceutical manufacturers and healthcare providers for specialty pharmaceutical products; operates nuclear pharmacies and radiopharmaceutical manufacturing facilities; provides pharmacy management services to hospitals as well as medication therapy management and patient outcomes services to hospitals, other healthcare providers and payers; and repackages generic pharmaceuticals and over-the-counter healthcare products.

Our Medical segment manufactures, sources and distributes Cardinal Health branded medical, surgical and laboratory products, which are sold in the United States, Canada, Europe, Asia and other markets. In addition to distributing Cardinal Health branded products, this segment also distributes a broad range of national brand products and provides supply chain services and solutions to hospitals, ambulatory surgery centers, clinical laboratories and other healthcare providers in the United States and Canada. This segment also distributes medical products to patients' homes in the United States through our Cardinal Health at-Home Solutions division.

Revenue

The following tables present revenue for each reportable segment and disaggregated revenue within our two reportable segments and Corporate:

	Three Months Ended March 31,
(in millions)	2022		2021
Pharmaceutical Distribution and Specialty Solutions (1) (2)	$	40,723	$	34,903
Nuclear and Precision Health Solutions	234		201
Pharmaceutical segment revenue	40,957		35,104
Medical distribution and products (3)	3,283		3,638
Cardinal Health at-Home Solutions	601		536
Medical segment revenue	3,884		4,174
Total segment revenue	44,841		39,278
Corporate (4)	(5)		(3)
Total revenue	$	44,836	$	39,275

	Nine Months Ended March 31,
(in millions)	2022		2021
Pharmaceutical Distribution and Specialty Solutions (1) (2)	$	121,501	$	106,859
Nuclear and Precision Health Solutions	653		593
Pharmaceutical segment revenue	122,154		107,452
Medical distribution and products (3)	10,296		10,805
Cardinal Health at-Home Solutions	1,822		1,636
Medical segment revenue	12,118		12,441
Total segment revenue	134,272		119,893
Corporate (4)	(11)		(12)
Total revenue	$	134,261	$	119,881

(1)Products and services offered by our Specialty Solutions division are referred to as “specialty pharmaceutical products and services."

(2)Comprised of all Pharmaceutical segment businesses except for Nuclear and Precision Health Solutions division.

(3)Comprised of all Medical segment businesses except for Cardinal Health at-Home Solutions division.

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

The following tables present revenue by geographic area:

	Three Months Ended March 31,
(in millions)	2022		2021
United States	$	43,710	$	38,089
International	1,131		1,189
Total segment revenue	44,841		39,278
Corporate (1)	(5)		(3)
Total revenue	$	44,836	$	39,275

	Nine Months Ended March 31,
(in millions)	2022		2021
United States	$	130,933	$	116,425
International	3,339		3,468
Total segment revenue	134,272		119,893
Corporate (1)	(11)		(12)
Total revenue	$	134,261	$	119,881

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

Segment Profit

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

methodologies. The results attributable to noncontrolling interests are recorded within segment profit.

We do not allocate the following items to our segments:

•last-in first-out, or ("LIFO"), inventory charges/(credits);

•surgical gown recall costs/(income);

•restructuring and employee severance;

•amortization and other acquisition-related costs;

•impairments and (gain)/loss on disposal of assets;

•litigation (recoveries)/charges, net;

•state opioid assessment related to prior fiscal years;

•other (income)/expense, net;

•interest expense, net;

•loss on early extinguishment of debt;

•(gain)/loss on sale of equity interest in naviHealth; or

•provision for income taxes

In addition, certain investment spending, certain portions of enterprise-wide incentive compensation and other spending are not allocated to the segments. Investment spending generally includes the first-year spend for certain projects that require incremental investments in the form of additional operating expenses. Because approval for these projects is dependent on executive management, we retain these expenses at Corporate. Investment spending within Corporate was $20 million and $4 million for the three months ended March 31, 2022 and 2021, and $38 million and $15 million for the nine months ended March 31, 2022 and 2021, respectively.

In connection with the interim goodwill impairment testing for the Medical Unit as discussed further in Note 4, we recognized goodwill impairment charges of $474 million and $1.8 billion during the three and nine months ended March 31, 2022, respectively, which were retained at Corporate.

In connection with the opioid litigation as discussed further in Note 6, we recognized a pre-tax charge of $1.02 billion during the nine months ended March 31, 2021 which was retained at Corporate.

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

	Three Months Ended March 31,
(in millions)	2022		2021
Pharmaceutical (1)	$	487	$	511
Medical	59		174
Total segment profit	546		685
Corporate	(643)		(212)
Total operating earnings/(loss)	$	(97)	$	473

	Nine Months Ended March 31,
(in millions)	2022		2021
Pharmaceutical (1)	$	1,319	$	1,326
Medical	232		640
Total segment profit	1,551		1,966
Corporate	(2,183)		(1,656)
Total operating earnings/(loss)	$	(632)	$	310

(1)Pharmaceutical segment profit includes opioid-related litigation defense and compliance costs, but does not include a one-time contingent attorney fee of $18 million incurred during the three and nine months ended March 31, 2022 related to the finalization of the Settlement Agreement. Due to the unique nature and significance of the Settlement Agreement, and the one-time, contingent nature of the fee, this related fee was included in litigation (recoveries)/charges, net in the condensed consolidated statements of earnings/(loss). Additionally, pharmaceutical segment profit during nine months ended March 31, 2022 was positively impacted by a $16 million judgment for lost profits related to an ordinary course intellectual property rights claim.

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

(in millions)	March 31, 2022		June 30, 2021
Pharmaceutical	$	25,470	$	23,624
Medical (1) (2)	12,166		15,408
Corporate	4,475		5,421
Total assets	$	42,111	$	44,453

(1)Assets of $1.1 billion classified as held for sale related to the Cordis divestiture were included within Medical at June 30, 2021.

(2)Medical reflects $1.8 billion of goodwill impairment charges recorded in connection with interim goodwill impairment testing for the Medical Unit at March 31, 2022, and December 31, 2021.

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Share-Based Compensation

3 Months Ended

Mar. 31, 2021

Share-Based Payment Arrangement [Abstract]

Share-Based Compensation

13. 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 March 31,
(in millions)	2022		2021
Restricted share unit expense	$	18	$	20
Performance share unit expense	5		13
Total share-based compensation	$	23	$	33

	Nine Months Ended March 31,
(in millions)	2022		2021
Restricted share unit expense	$	53	$	56
Performance share unit expense	12		28
Total share-based compensation	$	65	$	84

The total tax benefit related to share-based compensation was $3 million and $5 million for the three months ended March 31, 2022 and 2021, respectively, and $9 million and $12 million for the nine months ended March 31, 2022 and 2021, respectively.

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, 2021	3	$	49.05
Granted	2	51.78
Vested	(2)	49.61
Canceled and forfeited	—	—
Nonvested at March 31, 2022	3	$	45.99

At March 31, 2022, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested restricted share units not yet recognized was $89 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 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, 2021	4	$	68.46
Granted	—	—
Exercised	—	—
Canceled and forfeited	—	—
Outstanding at March 31, 2022	4	$	69.41
Exercisable at March 31, 2022	4	$	69.58

At March 31, 2022, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested stock options not yet recognized was $0.2 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)	March 31, 2022		June 30, 2021
Aggregate intrinsic value of outstanding options at period end	$	8	$	11
Aggregate intrinsic value of exercisable options at period end	7		11

(in years)	March 31, 2022	June 30, 2021
Weighted-average remaining contractual life of outstanding options	3	4
Weighted-average remaining contractual life of exercisable options	3	4

Performance Share Units

Performance share units vest over a 3-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 240 percent of the target award amount for the fiscal 2020 and 2021 grants and zero to 234 percent for the fiscal 2022 grant. 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, 2021	1.2	$	54.89
Granted	0.4	51.91
Vested	(0.3)	52.00
Canceled and forfeited	(0.1)	52.36
Nonvested at March 31, 2022	1.2	$	57.27

At March 31, 2022, the total pre-tax compensation cost, net of estimated forfeitures, related to nonvested performance share units not yet recognized was $25 million, which is expected to be recognized over a weighted-average period of two years if performance goals are achieved.

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

9 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Recent Financial Accounting Standards

Recently Issued Financial Accounting Standards

Not Yet Adopted

We assess the adoption impacts of recently issued accounting standards by the Financial Accounting Standards Board ("FASB") on our condensed consolidated financial statements as well as material updates to previous assessments, if any, from our fiscal 2021 Form 10-K. There were no accounting standards issued in fiscal 2022 that will have a material impact on our condensed consolidated financial statements.

Recently Adopted Financial Accounting Standards

There were no new material accounting standards adopted in the nine months ended March 31, 2022.

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. The results of businesses acquired or disposed of are included in the condensed consolidated financial statements from the date of the acquisition or up to the date of disposal, respectively.

References to "we," "our," and similar pronouns in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 (this "Form 10-Q") refer to Cardinal Health, Inc. and its majority-owned or controlled subsidiaries unless the context requires otherwise.

Our fiscal year ends on June 30. References to fiscal 2022 and 2021 in these condensed consolidated financial statements are to the fiscal years ending or ended June 30, 2022 and June 30, 2021, respectively.

Our condensed consolidated financial statements have been prepared in accordance with the U.S. Securities and Exchange Commission ("SEC") instructions to Quarterly Reports on Form 10-Q and include 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.

The COVID-19 pandemic ("COVID-19") continues to affect the U.S. and global economies, and as previously disclosed, the pandemic began to materially affect our businesses during the third quarter of fiscal 2020. The length and severity of the pandemic and its impacts on our businesses and results of operations are uncertain.

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 2022 interim period are not necessarily indicative of the results that may be expected for the full fiscal year ending June 30, 2022. 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, 2021 (the "2021 Form 10-K").

Recently Issued Financial Accounting Standards

Not Yet Adopted

We assess the adoption impacts of recently issued accounting standards by the Financial Accounting Standards Board ("FASB") on our condensed consolidated financial statements as well as material updates to previous assessments, if any, from our fiscal 2021 Form 10-K. There were no accounting standards issued in fiscal 2022 that will have a material impact on our condensed consolidated financial statements.

Recently Adopted Financial Accounting Standards

There were no new material accounting standards adopted in the nine months ended March 31, 2022.

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Restructuring and Employee Severance (Tables)

9 Months Ended

Mar. 31, 2022

Restructuring Charges [Abstract]

Summary of Restructuring and Employee Severance

The following table summarizes restructuring and employee severance:

	Three Months Ended March 31,
(in millions)	2022		2021
Employee-related	$	12	$	13
Facility exit and other	19		11
Total restructuring and employee severance	$	31	$	24

	Nine Months Ended March 31,
(in millions)	2022		2021
Employee-related	$	22	$	45
Facility exit and other	34		36
Total restructuring and employee severance	$	56	$	81

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, 2021	$	53	$	26	$	79
Additions	34		1		35
Payments and other adjustments	(38)		(10)		(48)
Balance at March 31, 2022	$	49	$	17	$	66

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Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Mar. 31, 2022

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 (1)		Medical (2)		Total
Balance at June 30, 2021	$	2,659	$	5,330	$	7,989
Goodwill acquired, net of purchase price adjustments	—		—		—
Foreign currency translation adjustments and other	—		(41)		(41)
Goodwill impairment	—		(1,781)		(1,781)
Balance at March 31, 2022	$	2,659	$	3,508	$	6,167

(1)At March 31, 2022 and June 30, 2021, the Pharmaceutical segment accumulated goodwill impairment loss was $829 million.

(2)At March 31, 2022 and June 30, 2021, the Medical segment accumulated goodwill impairment loss was $3.2 billion and $1.4 billion, respectively.

Schedule of Finite-Lived Intangible Assets

The following tables summarize other intangible assets by class at:

	March 31, 2022
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible		Weighted- Average Remaining Amortization Period (Years)
Indefinite-life intangibles:
Trademarks and patents	$	13	$	—	$	13	N/A
Total indefinite-life intangibles	13		—		13		N/A
Definite-life intangibles:
Customer relationships	3,293		2,130		1,163		10
Trademarks, trade names and patents	552		352		200		9
Developed technology and other	1,036		557		479		9
Total definite-life intangibles	4,881		3,039		1,842		10
Total other intangible assets	$	4,894	$	3,039	$	1,855	N/A

	June 30, 2021
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible
Indefinite-life intangibles:
Trademarks and patents	$	12	$	—	$	12
Total indefinite-life intangibles	12		—		12
Definite-life intangibles:
Customer relationships	3,330		1,989		1,341
Trademarks, trade names and patents	551		328		223
Developed technology and other	1,035		506		529
Total definite-life intangibles	4,916		2,823		2,093
Total other intangible assets	$	4,928	$	2,823	$	2,105

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Fair Value Measurements (Tables)

9 Months Ended

Mar. 31, 2022

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:

	March 31, 2022
(in millions)	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	671	$	—	$	—	$	671
Other investments (1)	112		—		—		112
Liabilities:
Forward contracts (2)	—		(12)		—		(12)

	June 30, 2021
(in millions)	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	1,883	$	—	$	—	$	1,883
Other investments (1)	126		—		—		126
Forward contracts (2)	—		42		—		42

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

(2)The fair value of interest rate swaps, foreign currency contracts, and net investment hedges 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 prepaid expenses and other, other assets, other accrued liabilities, and deferred income taxes and other liabilities within the condensed consolidated balance sheets.

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Financial Instruments (Tables)

9 Months Ended

Mar. 31, 2022

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)	March 31, 2022		June 30, 2021
Estimated fair value	$	5,645	$	6,751
Carrying amount	5,612		6,236

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Shareholders' Equity (Tables)

9 Months Ended

Mar. 31, 2022

Equity [Abstract]

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

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, 2021	$	(46)	$	12	$	(34)
Other comprehensive loss, before reclassifications	(47)		9		(38)
Amounts reclassified to earnings	—		(5)		(5)
Total other comprehensive loss attributable to Cardinal Health, Inc. net of tax	(47)		4		(43)
Balance at March 31, 2022	$	(93)	$	16	$	(77)

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

9 Months Ended

Mar. 31, 2022

Earnings Per Share [Abstract]

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

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

	Three Months Ended March 31,
(in millions)	2022	2021
Weighted-average common shares–basic	275	292
Effect of dilutive securities:
Employee stock options, restricted share units and performance share units	—	2
Weighted-average common shares–diluted	275	294

	Nine Months Ended March 31,
(in millions)	2022	2021
Weighted-average common shares–basic	281	293
Effect of dilutive securities:
Employee stock options, restricted share units and performance share units	—	1
Weighted-average common shares–diluted	281	294

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Segment Information (Tables)

9 Months Ended

Mar. 31, 2022

Segment Reporting [Abstract]

Disaggregation of Revenue [Table Text Block]

	Three Months Ended March 31,
(in millions)	2022		2021
Pharmaceutical Distribution and Specialty Solutions (1) (2)	$	40,723	$	34,903
Nuclear and Precision Health Solutions	234		201
Pharmaceutical segment revenue	40,957		35,104
Medical distribution and products (3)	3,283		3,638
Cardinal Health at-Home Solutions	601		536
Medical segment revenue	3,884		4,174
Total segment revenue	44,841		39,278
Corporate (4)	(5)		(3)
Total revenue	$	44,836	$	39,275

	Nine Months Ended March 31,
(in millions)	2022		2021
Pharmaceutical Distribution and Specialty Solutions (1) (2)	$	121,501	$	106,859
Nuclear and Precision Health Solutions	653		593
Pharmaceutical segment revenue	122,154		107,452
Medical distribution and products (3)	10,296		10,805
Cardinal Health at-Home Solutions	1,822		1,636
Medical segment revenue	12,118		12,441
Total segment revenue	134,272		119,893
Corporate (4)	(11)		(12)
Total revenue	$	134,261	$	119,881

(1)Products and services offered by our Specialty Solutions division are referred to as “specialty pharmaceutical products and services."

(2)Comprised of all Pharmaceutical segment businesses except for Nuclear and Precision Health Solutions division.

(3)Comprised of all Medical segment businesses except for Cardinal Health at-Home Solutions division.

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

Revenue from External Customers by Geographic Areas [Table Text Block]

The following tables present revenue by geographic area:

	Three Months Ended March 31,
(in millions)	2022		2021
United States	$	43,710	$	38,089
International	1,131		1,189
Total segment revenue	44,841		39,278
Corporate (1)	(5)		(3)
Total revenue	$	44,836	$	39,275

	Nine Months Ended March 31,
(in millions)	2022		2021
United States	$	130,933	$	116,425
International	3,339		3,468
Total segment revenue	134,272		119,893
Corporate (1)	(11)		(12)
Total revenue	$	134,261	$	119,881

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

Segment Profit by Reportable Segment

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

	Three Months Ended March 31,
(in millions)	2022		2021
Pharmaceutical (1)	$	487	$	511
Medical	59		174
Total segment profit	546		685
Corporate	(643)		(212)
Total operating earnings/(loss)	$	(97)	$	473

	Nine Months Ended March 31,
(in millions)	2022		2021
Pharmaceutical (1)	$	1,319	$	1,326
Medical	232		640
Total segment profit	1,551		1,966
Corporate	(2,183)		(1,656)
Total operating earnings/(loss)	$	(632)	$	310

(1)Pharmaceutical segment profit includes opioid-related litigation defense and compliance costs, but does not include a one-time contingent attorney fee of $18 million incurred during the three and nine months ended March 31, 2022 related to the finalization of the Settlement Agreement. Due to the unique nature and significance of the Settlement Agreement, and the one-time, contingent nature of the fee, this related fee was included in litigation (recoveries)/charges, net in the condensed consolidated statements of earnings/(loss). Additionally, pharmaceutical segment profit during nine months ended March 31, 2022 was positively impacted by a $16 million judgment for lost profits related to an ordinary course intellectual property rights claim.

Assets by Reportable Segment

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

(in millions)	March 31, 2022		June 30, 2021
Pharmaceutical	$	25,470	$	23,624
Medical (1) (2)	12,166		15,408
Corporate	4,475		5,421
Total assets	$	42,111	$	44,453

(1)Assets of $1.1 billion classified as held for sale related to the Cordis divestiture were included within Medical at June 30, 2021.

(2)Medical reflects $1.8 billion of goodwill impairment charges recorded in connection with interim goodwill impairment testing for the Medical Unit at March 31, 2022, and December 31, 2021.

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Share-Based Compensation (Tables)

9 Months Ended

Mar. 31, 2022

Share-Based Payment Arrangement [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 March 31,
(in millions)	2022		2021
Restricted share unit expense	$	18	$	20
Performance share unit expense	5		13
Total share-based compensation	$	23	$	33

	Nine Months Ended March 31,
(in millions)	2022		2021
Restricted share unit expense	$	53	$	56
Performance share unit expense	12		28
Total share-based compensation	$	65	$	84

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, 2021	4	$	68.46
Granted	—	—
Exercised	—	—
Canceled and forfeited	—	—
Outstanding at March 31, 2022	4	$	69.41
Exercisable at March 31, 2022	4	$	69.58

Schedule of Additional Data Related to Stock Option Activity

The following tables provide additional detail related to stock options:

(in millions)	March 31, 2022		June 30, 2021
Aggregate intrinsic value of outstanding options at period end	$	8	$	11
Aggregate intrinsic value of exercisable options at period end	7		11

(in years)	March 31, 2022	June 30, 2021
Weighted-average remaining contractual life of outstanding options	3	4
Weighted-average remaining contractual life of exercisable options	3	4

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, 2021	3	$	49.05
Granted	2	51.78
Vested	(2)	49.61
Canceled and forfeited	—	—
Nonvested at March 31, 2022	3	$	45.99

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, 2021	1.2	$	54.89
Granted	0.4	51.91
Vested	(0.3)	52.00
Canceled and forfeited	(0.1)	52.36
Nonvested at March 31, 2022	1.2	$	57.27

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Discontinued Operations and Disposal Groups (Details) $ in Millions	9 Months Ended
	Mar. 31, 2022 USD ($)
Cordis Divestiture
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from Divestiture of Businesses	$ 923

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Restructuring and Employee Severance (Activity Related to Restructuring and Employee Severance Costs) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2022	Mar. 31, 2021
Restructuring Charges [Abstract]
Employee-related costs	$ 12	$ 13	$ 22	$ 45
Facility Exit and Other Costs	19	11	34	36
Total restructuring and employee severance	$ 31	$ 24	$ 56	$ 81

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Restructuring and Employee Severance (Liabilities Associated with Restructuring and Employee Severance Activities) (Details) $ in Millions	9 Months Ended
	Mar. 31, 2022 USD ($)
Restructuring Reserve [Roll Forward]
Beginning Balance	$ 79
Additions	35
Payments and other adjustments	(48)
Ending Balance	66
Employee- Related Costs
Restructuring Reserve [Roll Forward]
Beginning Balance	53
Additions	34
Payments and other adjustments	(38)
Ending Balance	49
Facility Exit and Other Costs
Restructuring Reserve [Roll Forward]
Beginning Balance	26
Additions	1
Payments and other adjustments	(10)
Ending Balance	$ 17

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Restructuring and Employee Severance Narative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2022	Mar. 31, 2021
Restructuring Cost and Reserve [Line Items]
Employee-related costs	$ 12	$ 13	$ 22	$ 45
Facility Exit and Other Costs	$ 19	$ 11	$ 34	$ 36

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Goodwill and Other Intangible Assets (Schedule of Goodwill by Reportable Segment) (Details) $ in Millions	9 Months Ended
	Mar. 31, 2022 USD ($)	Jun. 30, 2021 USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 7,989
Goodwill, Transfers	0
Foreign currency translation adjustments and other	41
Goodwill, Impairment Loss	1,781
Ending balance	6,167
Pharmaceutical
Goodwill [Roll Forward]
Beginning balance	2,659
Goodwill, Transfers	0
Foreign currency translation adjustments and other	0
Goodwill, Impairment Loss	0
Ending balance	2,659
Goodwill, Impaired, Accumulated Impairment Loss	829	$ 829
Medical
Goodwill [Roll Forward]
Beginning balance	5,330
Goodwill, Transfers	0
Foreign currency translation adjustments and other	41
Goodwill, Impairment Loss	1,781
Ending balance	3,508
Goodwill, Impaired, Accumulated Impairment Loss	$ 3,200	$ 1,400

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Goodwill and Other Intangible Assets (Schedule of Intangible Assets) (Details) - USD ($) $ in Millions	9 Months Ended
	Mar. 31, 2022	Jun. 30, 2021
Indefinite-lived Intangible Assets [Line Items]
Net Intangible	$ 13	$ 12
Finite-Lived Intangible Assets [Line Items]
Gross Intangible	4,881	4,916
Accumulated Amortization	3,039	2,823
Net Intangible	$ 1,842	2,093
Weighted- Average Remaining Amortization Period (Years)	10 years
Gross Intangible, Total other intangible assets	$ 4,894	4,928
Net Intangible, Total other intangible assets	1,855	2,105
Trademarks and patents
Indefinite-lived Intangible Assets [Line Items]
Net Intangible	13	12
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Intangible	3,293	3,330
Accumulated Amortization	2,130	1,989
Net Intangible	$ 1,163	1,341
Weighted- Average Remaining Amortization Period (Years)	10 years
Trademarks, trade names and patents
Finite-Lived Intangible Assets [Line Items]
Gross Intangible	$ 552	551
Accumulated Amortization	352	328
Net Intangible	$ 200	223
Weighted- Average Remaining Amortization Period (Years)	9 years
Developed technology and other
Finite-Lived Intangible Assets [Line Items]
Gross Intangible	$ 1,036	1,035
Accumulated Amortization	557	506
Net Intangible	$ 479	$ 529
Weighted- Average Remaining Amortization Period (Years)	9 years

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Goodwill and Other Intangible Assets (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended			9 Months Ended
	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021	Mar. 31, 2022	Mar. 31, 2021	Jun. 30, 2021
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization of intangible assets	$ 78		$ 109	$ 235	$ 337
Estimated annual amortization of intangible assets - Remainder of Fiscal Year	78			78
Estimated annual amortization of intangible assets - Year One	284			284
Estimated annual amortization of intangible assets - Year Two	260			260
Estimated annual amortization of intangible assets - Year Three	235			235
Estimated annual amortization of intangible assets - Year Four	208			208
Goodwill [Line Items]
Goodwill	6,167			6,167		$ 7,989
Goodwill, Impairment Loss				1,781
Medical
Goodwill [Line Items]
Goodwill	3,508			3,508		$ 5,330
Goodwill, Impairment Loss				1,781
Medical Unit
Goodwill [Line Items]
Goodwill	2,300			2,300
Goodwill, Impairment Loss	$ 474	$ 1,300		$ 1,800
Discount Rate, Fair Value Input	9.50%	9.00%
Terminal Growth Rate, Fair Value Input	2.00%	2.00%

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Long-Term Obligations and Other Short-Term Borrowings (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2022	Mar. 31, 2021	Jun. 30, 2021
Debt Instrument [Line Items]
Total Long-Term and Short-Term Obligations	$ 5,600		$ 5,600		$ 6,200
Gain (Loss) on Extinguishment of Debt	0	$ 0	10	$ 1
Accounts Payable	24,800		24,800		$ 23,700
Line of Credit Facility, Maximum Amount Outstanding During Period			1,200
Line of Credit Facility, Average Outstanding Amount			25
Commercial Paper [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	2,000		2,000
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	2,000		2,000
Short Term Credit Facilities Member
Debt Instrument [Line Items]
Other Short-term Borrowings	0		0
2.616% Notes due 2022 [Member]
Debt Instrument [Line Items]
Gain (Loss) on Extinguishment of Debt			10
Repayments of Notes Payable			572	2
Committed Receivables Sales Facility Program [Member] | Short Term Credit Facilities Member
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 1,000		$ 1,000
Floating Rate Notes due 2022 [Member]
Debt Instrument [Line Items]
Repayments of Notes Payable				$ 40

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Long-Term Obligations and Other Short-Term Borrowings Summary of Debt (Details) - USD ($) $ in Millions	Mar. 31, 2022	Jun. 30, 2021
Debt Instrument [Line Items]
Total Long-Term and Short-Term Obligations	$ 5,600	$ 6,200
Long-term Debt and Lease Obligation, Current	861	871
Long-term Debt and Lease Obligation	$ 4,751	$ 5,365

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Commitments, Contingent Liabilities and Litigation (Details) $ in Millions					3 Months Ended			9 Months Ended
	Apr. 29, 2022 lawsuit plaintiff	Apr. 28, 2022 numberOfUSTerritories StateAG lawsuit plaintiff states	Jul. 31, 2021 lawsuit	Jul. 31, 2014	Mar. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Mar. 31, 2021 USD ($)	Mar. 31, 2022 USD ($)	Mar. 31, 2021 USD ($)	May 04, 2022 lawsuit	May 02, 2022 USD ($)	Feb. 28, 2022 lawsuit	Apr. 30, 2018 USD ($)
Loss Contingencies [Line Items]
Loss Related to Litigation Settlement					$ 61		$ 15	$ 113	$ 1,085
Pharmaceutical
Loss Contingencies [Line Items]
Judgment for lost profits						$ 16
Product Liability Lawsuits | Subsequent Event
Loss Contingencies [Line Items]
Loss Contingency, New Claims Filed, Number | lawsuit	457
Product Liability Lawsuits
Loss Contingencies [Line Items]
Loss Contingency, Claims Settled, Number | lawsuit			1,300
Product Liability Lawsuits | Minimum
Loss Contingencies [Line Items]
Loss Contingency Accrual					494			494
Product Liability Lawsuits | Maximum
Loss Contingencies [Line Items]
Loss Contingency Accrual					1,050			1,050
Total Opioid Litigation [Member]
Loss Contingencies [Line Items]
Loss Contingency, Estimate of Possible Loss					6,000			6,000
Estimated Litigation Liability					6,700			6,700
Estimated Litigation Liability, Current					738			738
Litigation Settlement, Expense									1,020
Payments for Legal Settlements								348
Total Opioid Litigation [Member] | Subsequent Event
Loss Contingencies [Line Items]
Settling States | states		46
Settling U.S Territories | numberOfUSTerritories		5
Loss Contingency Claims Settled Percent		98.00%
New York Opioid Stewardship Act [Member]
Loss Contingencies [Line Items]
Aggregate Annual Assessment													$ 100
Estimated Liability for New York Opioid Stewardship Act									41
Loss Contingency Accrual, Payments						$ 20
Loss Contingency Accrual					$ 20			$ 20
Opioid Lawsuits [Member]
Loss Contingencies [Line Items]
Loss Contingency, Lawsuits, Number | lawsuit												3,400
Opioid Lawsuits [Member] | Subsequent Event
Loss Contingencies [Line Items]
Number of State Attorneys General filing lawsuits | StateAG		25
Opioid Lawsuits [Member] | WEST VIRGINIA | Subsequent Event
Loss Contingencies [Line Items]
Loss Contingency, Number of Plaintiffs | plaintiff		63
Opioid Lawsuits [Member] | WASHINGTON | Subsequent Event
Loss Contingencies [Line Items]
Loss Contingency, Estimate of Possible Loss											$ 160
Opioid Lawsuits [Member] | Private Parties [Member] | Subsequent Event
Loss Contingencies [Line Items]
Loss Contingency, Lawsuits, Number | lawsuit										453
Opioid Lawsuits [Member] | Private Parties [Member] | GEORGIA | Subsequent Event
Loss Contingencies [Line Items]
Loss Contingency, Number of Plaintiffs | plaintiff		21
Opioid Lawsuits [Member] | Class Action Lawsuits [Member] | Private Parties [Member] | Subsequent Event
Loss Contingencies [Line Items]
Loss Contingency, Lawsuits, Number | lawsuit										141
Opioid Lawsuits State [Member] | Subsequent Event
Loss Contingencies [Line Items]
Loss Contingency, Lawsuits, Number | lawsuit		2,700
Loss Contingency, Claims Settled, Number | lawsuit		2,000
Loss Contingency, Pending Claims, Number | lawsuit		700
Product Liability Lawsuits | Subsequent Event
Loss Contingencies [Line Items]
Loss Contingency, New Claims Filed, Number | lawsuit	26
Product Liability Lawsuits | Alameda County [Member] | Subsequent Event
Loss Contingencies [Line Items]
Loss Contingency, Number of Plaintiffs | plaintiff	5,872
Product Liability Lawsuits | Other Jurisdictions [Member] | Subsequent Event
Loss Contingencies [Line Items]
Loss Contingency, Number of Plaintiffs | plaintiff	30
DOJ Investigation [Member]
Loss Contingencies [Line Items]
Loss Related to Litigation Settlement									$ 13
CVS Health
Loss Contingencies [Line Items]
Long-term Purchase Commitment, Period				10 years

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Income Taxes (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended				9 Months Ended		12 Months Ended
	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021	Mar. 31, 2022	Mar. 31, 2021	Jun. 30, 2022	Jun. 30, 2021
Income Taxes
Income Tax Expense (Benefit)		$ 1,253		$ 320	$ 328	$ (293)
Goodwill, Impairment Loss					1,781
Unrecognized tax benefits		938			938			$ 932
Unrecognized tax benefits that would impact effective tax rate		856			856			849
Unrecognized tax benefits, interest and penalties accrued		$ 46			$ 46			49
Effective Income Tax Rate Reconciliation, Percent		(916.50%)		72.80%	(44.40%)	(143.30%)
Deferred income taxes and other liabilities		$ 9,338			$ 9,338			9,670
Medical Unit
Income Taxes
Goodwill, Impairment Loss		474	$ 1,300		1,800
Cordis Divestiture
Income Taxes
Discontinued Operation, Tax Effect of Gain (Loss) from Disposal of Discontinued Operation		9			29
Medical Unit Goodwill Impairment [Member]
Income Taxes
Income Tax Expense (Benefit)					1,200
Medical Unit Goodwill Impairment [Member] | Subsequent Event
Income Taxes
Income Tax Expense (Benefit)	$ (180)
Forecast [Member] | Cordis Divestiture
Income Taxes
Discontinued Operation, Tax Effect of Gain (Loss) from Disposal of Discontinued Operation							$ 38
Forecast [Member] | Medical Unit Goodwill Impairment [Member]
Income Taxes
Income Tax Expense (Benefit)							$ (126)
Net Operating Loss Carryback [Member]
Income Taxes
Income Tax Expense (Benefit)						$ (419)
Deferred income taxes and other liabilities				$ 700		700
Income Taxes Receivable								974
Net Operating Loss Carryback [Member] | Subsequent Event
Income Taxes
Proceeds from Income Tax Refunds	$ 966
Minimum
Income Taxes
Estimated range of decrease in unrecognized tax benefits within the next 12 months		0			0
Maximum
Income Taxes
Estimated range of decrease in unrecognized tax benefits within the next 12 months		5			5
Patient Recovery Business
Income Taxes
Indemnification Receivable		0			0			12
CareFusion [Member]
Income Taxes
Indemnification Receivable		73			73			72
Total Opioid Litigation [Member]
Income Taxes
Estimated Litigation Liability		$ 6,700			6,700
Income Tax Expense (Benefit)					$ 0	(180)		(228)
Unrecognized tax benefits that would impact effective tax rate				$ 35		35		$ 219
Litigation Settlement, Expense						$ 1,020

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Fair Value Measurements (Fair Value of Assets and Liabilities Measured on a Recurring Basis) (Details) - Recurring - USD ($) $ in Millions	Mar. 31, 2022	Jun. 30, 2021
Assets:
Cash equivalents	$ 671	$ 1,883
Other investments	112	126
Forward Contract	(12)	42
Liabilities:
Forward Contract	(12)	42
Level 1
Assets:
Cash equivalents	671	1,883
Other investments	112	126
Forward Contract	0	0
Liabilities:
Forward Contract	0	0
Level 2
Assets:
Cash equivalents	0	0
Other investments	0	0
Forward Contract	(12)	42
Liabilities:
Forward Contract	(12)	42
Level 3
Assets:
Cash equivalents	0	0
Other investments	0	0
Forward Contract	0	0
Liabilities:
Forward Contract	$ 0	$ 0

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Financial Instruments (Narrative) (Details) ¥ in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2022 USD ($)	Mar. 31, 2021 USD ($)	Mar. 31, 2022 USD ($)	Mar. 31, 2021 USD ($)	Mar. 31, 2022 JPY (¥)	Dec. 31, 2021 USD ($)	Sep. 30, 2021 USD ($)
Derivative [Line Items]
Change in Unrealized Gain (Loss) on Fair Value Hedging Instruments	$ 0	$ 0	$ 0	$ 0
Proceeds from Hedge, Investing Activities			71	0
Cash Flow Hedging [Member]
Derivative [Line Items]
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification and Tax	1	13	4	20
Foreign Exchange Contract [Member]
Derivative [Line Items]
Other Comprehensive Income (Loss), Net Investment Hedge, Gain (Loss), before Reclassification and Tax	22	(49)	44	(3)
Interest Income (Expense), Nonoperating, Net	5	5	16	14
Designated as Hedging Instrument | Fair Value Hedging | Interest Rate Swap
Derivative [Line Items]
Derivative Liability, Notional Amount						$ 200	$ 100
Designated as Hedging Instrument | Net Investment Hedging [Member] | Currency Swap [Member]
Derivative [Line Items]
Derivatives, Hedge Discontinuances, Termination of Hedging Instrument, Notional Amount	600		600		¥ 64,000
Designated as Hedging Instrument | Net Investment Hedging [Member] | Currency Swap [Member] | September 2025
Derivative [Line Items]
Derivative Liability, Notional Amount	200		200		24,000
Designated as Hedging Instrument | Net Investment Hedging [Member] | Currency Swap [Member] | June 2027
Derivative [Line Items]
Derivative Liability, Notional Amount	200		$ 200		¥ 24,000
Other Nonoperating Income (Expense) [Member] | Not Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member]
Derivative [Line Items]
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net	$ (4)	$ 1		$ (4)

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Financial Instruments Summary of Estimated Fair Value of Long-term Obligations and Other Short-term Borrowings (Details) - USD ($) $ in Millions	Mar. 31, 2022	Jun. 30, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount of Long-Term and other Short-Term Borrowings	$ 5,612	$ 6,236
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Estimated fair value	$ 5,645	$ 6,751

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Shareholders' Equity (Narrative) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended					9 Months Ended
	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021	Sep. 30, 2021	Mar. 31, 2021	Mar. 31, 2022	Mar. 31, 2021
Class of Stock [Line Items]
Purchase of treasury shares					$ 200	$ 1,000	$ 200
$500 million share repurchase program [Domain]
Class of Stock [Line Items]
Purchase of treasury shares				$ 500
$300 million share repurchase program [Member]
Class of Stock [Line Items]
Purchase of treasury shares			$ 300
$200 million share repurchase program
Class of Stock [Line Items]
Purchase of treasury shares		$ 200
Treasury Shares
Class of Stock [Line Items]
Treasury Stock, Shares, Acquired		(4.0)			(3.7)	(19.0)	(4.0)
Treasury shares acquired, average price per share (in usd per share)					$ 54.40
Treasury Shares | $500 million share repurchase program [Domain]
Class of Stock [Line Items]
Treasury Stock, Shares, Acquired			(2.0)	(7.8)
Treasury shares acquired, average price per share (in usd per share)			$ 51.10	$ 51.53
Treasury Shares | $300 million share repurchase program [Member]
Class of Stock [Line Items]
Treasury Stock, Shares, Acquired		(1.3)	(4.8)
Treasury shares acquired, average price per share (in usd per share)		$ 49.39	$ 50.30
Treasury Shares | $200 million share repurchase program
Class of Stock [Line Items]
Treasury Stock, Shares, Acquired		(3.0)
Treasury shares acquired, average price per share (in usd per share)		$ 54.01
Treasury Shares | $200 million share repurchase program | Subsequent Event
Class of Stock [Line Items]
Treasury Stock, Shares, Acquired	(0.6)
Treasury shares acquired, average price per share (in usd per share)	$ 56.02

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Shareholders' Equity (Changes in the Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2022	Mar. 31, 2021
AOCI, Net of Tax [Roll Forward]
Balance at beginning of period	$ 1,002	$ 1,975	$ 1,794	$ 1,792
Total other comprehensive income/(loss), net of tax	8	5	(43)	56
Balance at end of period	(693)	1,794	(693)	1,794
Foreign Currency Translation Adjustments
AOCI, Net of Tax [Roll Forward]
Balance at beginning of period			(46)
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax			(47)
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax			0
Total other comprehensive income/(loss), net of tax			(47)
Balance at end of period	(93)		(93)
Unrealized Gain/(Loss) on Derivatives, net of tax
AOCI, Net of Tax [Roll Forward]
Balance at beginning of period			12
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax			9
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax			(5)
Total other comprehensive income/(loss), net of tax			4
Balance at end of period	16		16
Accumulated Other Comprehensive Loss
AOCI, Net of Tax [Roll Forward]
Balance at beginning of period			(34)
Total other comprehensive income/(loss), net of tax			(43)
Balance at end of period	(77)		(77)
AOCI Attributable to Parent
AOCI, Net of Tax [Roll Forward]
Balance at beginning of period	(85)	(53)	(34)	(104)
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax			(38)
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax			(5)
Balance at end of period	$ (77)	$ (48)	$ (77)	$ (48)

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Earnings Per Share Attributable to Cardinal Health, Inc. (Narrative) (Details) - shares shares in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2022	Mar. 31, 2021
Earnings Per Share [Abstract]
Potentially dilutive employee stock options, restricted share units and performance share units that were antidilutive (in shares)	5	3	5	4
Shares that would be antidilutive as a result of net loss	2		1

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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		9 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2022	Mar. 31, 2021
Earnings Per Share [Abstract]
Weighted-average common shares–basic (in shares)	275	292	281	293
Effect of dilutive securities:
Employee stock options, restricted share units, and performance share units (in shares)	0	2	0	1
Weighted-average common shares–diluted (in shares)	275	294	281	294

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Segment Information (Narrative) (Details) $ in Millions	3 Months Ended			9 Months Ended
	Mar. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Mar. 31, 2021 USD ($)	Mar. 31, 2022 USD ($) segment	Mar. 31, 2021 USD ($)
Segment Reporting Information [Line Items]
Loss Related to Litigation Settlement	$ 61		$ 15	$ 113	$ 1,085
Project costs on investment and other spending	20		4	$ 38	15
Number of reportable segments | segment				2
Number of operating segments | segment				2
Goodwill, Impairment Loss				$ 1,781
Number of operating segments | segment				2
Number of reportable segments | segment				2
Project costs on investment and other spending	20		$ 4	$ 38	15
Medical Unit
Segment Reporting Information [Line Items]
Goodwill, Impairment Loss	$ 474	$ 1,300		1,800
Medical
Segment Reporting Information [Line Items]
Goodwill, Impairment Loss				$ 1,781
New York Opioid Stewardship Act [Member]
Segment Reporting Information [Line Items]
Estimated Liability for New York Opioid Stewardship Act					41
Total Opioid Litigation [Member]
Segment Reporting Information [Line Items]
Litigation Settlement, Expense					$ 1,020

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Segment Information (Revenue by Reportable Segment) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2022	Mar. 31, 2021
Segment Reporting Information [Line Items]
Total revenue	$ 44,836	$ 39,275	$ 134,261	$ 119,881
Operating Segments
Segment Reporting Information [Line Items]
Total revenue	44,841	39,278	134,272	119,893
Operating Segments | Pharmaceutical
Segment Reporting Information [Line Items]
Total revenue	40,957	35,104	122,154	107,452
Operating Segments | Medical
Segment Reporting Information [Line Items]
Total revenue	3,884	4,174	12,118	12,441
Corporate
Segment Reporting Information [Line Items]
Total revenue	(5)	(3)	(11)	(12)
Pharmaceutical Distribution and Specialty [Member] | Operating Segments | Pharmaceutical
Segment Reporting Information [Line Items]
Total revenue	40,723	34,903	121,501	106,859
Nuclear Precision Health Services [Member] | Operating Segments | Pharmaceutical
Segment Reporting Information [Line Items]
Total revenue	234	201	653	593
Medical distribution and products [Member] | Operating Segments | Medical
Segment Reporting Information [Line Items]
Total revenue	3,283	3,638	10,296	10,805
Cardinal Health At Home [Member] | Operating Segments | Medical
Segment Reporting Information [Line Items]
Total revenue	$ 601	$ 536	$ 1,822	$ 1,636

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Segment Information (Segment Profit by Reportable Segment) (Details) - USD ($) $ in Millions	3 Months Ended			9 Months Ended
	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021	Mar. 31, 2022	Mar. 31, 2021
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total operating earnings	$ (97)		$ 473	$ (632)	$ 310
Contingent Attorney Fee	18
Pharmaceutical
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Judgment for lost profits		$ 16
Operating Segments
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total operating earnings	546		685	1,551	1,966
Operating Segments | Pharmaceutical
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total operating earnings	487		511	1,319	1,326
Operating Segments | Medical
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total operating earnings	59		174	232	640
Corporate
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total operating earnings	$ (643)		$ (212)	$ (2,183)	$ (1,656)

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Segment Information Revenue From External Customers By Geographic Areas (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2022	Mar. 31, 2021
Segment Revenue from External Customers by Geographic Area [Line Items]
Revenue	$ 44,836	$ 39,275	$ 134,261	$ 119,881
UNITED STATES
Segment Revenue from External Customers by Geographic Area [Line Items]
Revenue	43,710	38,089	130,933	116,425
Non-US [Member]
Segment Revenue from External Customers by Geographic Area [Line Items]
Revenue	1,131	1,189	3,339	3,468
Operating Segments
Segment Revenue from External Customers by Geographic Area [Line Items]
Revenue	44,841	39,278	134,272	119,893
Corporate
Segment Revenue from External Customers by Geographic Area [Line Items]
Revenue	$ (5)	$ (3)	$ (11)	$ (12)

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Segment Information (Assets by Reportable Segment) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2022	Jun. 30, 2021
Segment Reporting Information [Line Items]
Total assets	$ 42,111		$ 42,111	$ 44,453
Total assets held for sale	0		0	1,101
Goodwill, Impairment Loss			1,781
Medical Unit
Segment Reporting Information [Line Items]
Goodwill, Impairment Loss	474	$ 1,300	1,800
Pharmaceutical
Segment Reporting Information [Line Items]
Goodwill, Impairment Loss			0
Medical
Segment Reporting Information [Line Items]
Goodwill, Impairment Loss			1,781
Medical | Cordis Divestiture
Segment Reporting Information [Line Items]
Total assets held for sale				1,100
Operating Segments | Pharmaceutical
Segment Reporting Information [Line Items]
Total assets	25,470		25,470	23,624
Operating Segments | Medical
Segment Reporting Information [Line Items]
Total assets	12,166		12,166	15,408
Corporate
Segment Reporting Information [Line Items]
Total assets	$ 4,475		$ 4,475	$ 5,421

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Share-Based Compensation (Narrative) (Details)	3 Months Ended		9 Months Ended
	Mar. 31, 2022 USD ($)	Mar. 31, 2021 USD ($)	Mar. 31, 2022 USD ($)	Mar. 31, 2021 USD ($)	Mar. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Tax benefit related to share-based compensation	$ 3,000,000	$ 5,000,000	$ 9,000,000	$ 12,000,000
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period (in years)			3 years
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount	200,000		$ 200,000
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition			2 years
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
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount	89,000,000		$ 89,000,000
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition			2 years
Performance Share Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting Period in years for Shares			3
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount	$ 25,000,000		$ 25,000,000
Share-based Payment Arrangement, Nonvested Award, 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%		0.00%
Performance Share Units | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Target performance goal (as a percent)			234.00%	240.00%	240.00%

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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		9 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2022	Mar. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation	$ 23	$ 33	$ 65	$ 84
Restricted Share Unit
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation	18	20	53	56
Performance Share Unit
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation	$ 5	$ 13	$ 12	$ 28

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Share-Based Compensation (Schedule of All Stock Option Transactions Under the Plans) (Details) shares in Millions	9 Months Ended
	Mar. 31, 2022 $ / shares shares
Stock Options
Outstanding at beginning of period (in shares) | shares	4
Granted (in shares) | shares	0
Exercised (in shares) | shares	0
Canceled and forfeited (in shares) | shares	0
Outstanding at end of period (in shares) | shares	4
Exercisable at end of period (in shares) | shares	4
Weighted-Average Exercise Price per Common Share
Outstanding at beginning of period (in usd per share) | $ / shares	$ 68.46
Granted (in usd per share) | $ / shares	0
Exercised (in usd per share) | $ / shares	0
Canceled and forfeited (in usd per share) | $ / shares	0
Outstanding at end of period (in usd per share) | $ / shares	69.41
Exercisable at end of period (in usd per share) | $ / shares	$ 69.58

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Share-Based Compensation (Schedule of Additional Data Related to Stock Options) (Details) - Stock Options - USD ($)	9 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Jun. 30, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount	$ 200,000
Aggregate intrinsic value of outstanding options at period end	8,000,000		$ 11,000,000
Aggregate intrinsic value of exercisable options at period end	$ 7,000,000		$ 11,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	3 years	4 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term	3 years	4 years

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Share-Based Compensation (Schedule of All Transactions Related to Restricted Share Units Under the Plans) (Details) $ / shares in Units, shares in Millions	9 Months Ended
	Mar. 31, 2022 USD ($) $ / shares shares
Restricted Share Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition	2 years
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $	$ 89,000,000
Restricted Share Units
Nonvested at beginning of period (in shares) | shares	3
Granted (in shares) | shares	2
Vested (in shares) | shares	(2)
Canceled and forfeited (in shares) | shares	0
Nonvested at end of period (in shares) | shares	3
Weighted-Average Grant Date Fair Value per Share
Nonvested at beginning of period (in usd per share) | $ / shares	$ 49.05
Granted (in usd per share) | $ / shares	51.78
Vested (in usd per share) | $ / shares	49.61
Canceled and forfeited (in usd per share) | $ / shares	0
Nonvested at end of period (in usd per share) | $ / shares	$ 45.99
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition	2 years
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $	$ 200,000

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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 Units, shares in Millions, $ in Millions	9 Months Ended
	Mar. 31, 2022 USD ($) $ / shares shares
Performance Share Units
Nonvested at beginning of period (in shares) | shares	1.2
Granted (in shares) | shares	0.4
Vested (in shares) | shares	(0.3)
Canceled and forfeited (in shares) | shares	(0.1)
Nonvested at end of period (in shares) | shares	1.2
Weighted-Average Grant Date Fair Value per Share
Nonvested at beginning of period (in usd per share) | $ / shares	$ 54.89
Granted (in usd per share) | $ / shares	51.91
Vested (in usd per share) | $ / shares	52.00
Canceled and forfeited (in usd per share) | $ / shares	52.36
Nonvested at end of period (in usd per share) | $ / shares	$ 57.27
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $	$ 25
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition	2 years