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Goodwill and Other Intangible Assets
3 Months Ended
Sep. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets Disclosure
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)PharmaceuticalMedical (1)Total
Balance at June 30, 2023$2,649 $1,960 $4,609 
Foreign currency translation adjustments and other— (3)(3)
Goodwill impairment— (581)(581)
Balance at September 30, 2023$2,649 $1,376 $4,025 
(1)At September 30, 2023 and June 30, 2023, the Medical segment accumulated goodwill impairment loss was $5.3 billion and $4.7 billion, respectively.
Due to an increase in the risk-free interest rate used in the discount rate, we elected to bypass the qualitative assessment and perform quantitative goodwill impairment testing for the Medical operating segment (excluding our Cardinal Health at-Home Solutions division) (“Medical Unit”) at September 30, 2023. Our determination of the estimated fair value of the Medical Unit is based on a combination of the income-based approach (using a discount rate of 11 percent and a terminal growth rate of 2 percent), and market-based approaches. Additionally, we assigned a weighting of 80 percent to the discounted cash flow method, 10 percent to the guideline public company method, and 10 percent to the guideline transaction method. The carrying amount exceeded the fair value, which resulted in a pre-tax impairment charge of $581 million for the Medical Unit, which was recognized during the three months ended September 30, 2023 and is included in impairments and (gain)/loss on disposal of assets, net in our condensed consolidated statements of earnings. This impairment charge was driven by an increase of 1 percent in the discount rate primarily due to an increase in the risk-free interest rate. The discount rate used for the interim goodwill impairment testing at June 30, 2023 was 10 percent. The carrying value of the Medical
Unit at September 30, 2023 after recognizing the impairment charge was $5.3 billion, of which $141 million was goodwill.
During the three months ended September 30, 2022, we performed interim quantitative 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 a pre-tax impairment charge of $154 million.
Other Intangible Assets
The following tables summarize other intangible assets by class at:
September 30, 2023
(in millions)Gross
Intangible
Accumulated
Amortization
Net
Intangible
Weighted- Average Remaining Amortization Period (Years)
Indefinite-life intangibles:
Trademarks and patents$12 $ $12 N/A
Total indefinite-life intangibles12  12 N/A
Definite-life intangibles:
Customer relationships3,164 2,307 857 9
Trademarks, trade names and patents546 387 159 8
Developed technology and other1,021 642 379 8
Total definite-life intangibles4,731 3,336 1,395 9
Total other intangible assets$4,743 $3,336 $1,407 N/A
June 30, 2023
(in millions)Gross
Intangible
Accumulated
Amortization
Net
Intangible
Indefinite-life intangibles:
Trademarks and patents$11 $— $11 
Total indefinite-life intangibles11 — 11 
Definite-life intangibles:
Customer relationships3,174 2,274 900 
Trademarks, trade names and patents546 380 166 
Developed technology and other1,021 626 395 
Total definite-life intangibles4,741 3,280 1,461 
Total other intangible assets$4,752 $3,280 $1,472 
Total amortization of intangible assets was $64 million and $71 million for the three months ended September 30, 2023 and 2022, respectively. Estimated annual amortization of intangible assets for the remainder of fiscal 2024 through 2028 is as follows: $190
million, $228 million, $205 million, $173 million and $146 million.