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Segment Information
3 Months Ended
Sep. 30, 2023
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; provides pharmacy management services to hospitals and operates a limited number of pharmacies, including pharmacies in community health centers; operates nuclear pharmacies and radiopharmaceutical manufacturing facilities; 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 medical, surgical and laboratory products known as 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 table presents revenue for each reportable segment, disaggregated revenue within our two reportable segments and Corporate:
Three Months Ended September 30,
(in millions)20232022
Pharmaceutical and Specialty Pharmaceutical Distribution and Services (1)
$50,682 $45,547 
Nuclear and Precision Health Solutions
324 281 
Pharmaceutical segment revenue
51,006 45,828 
Medical Products and Distribution (2)
3,076 3,140 
Cardinal Health at-Home Solutions684 638 
Medical segment revenue
3,760 3,778 
  Total segment revenue54,766 49,606 
Corporate (3)
(3)(3)
Total revenue$54,763 $49,603 
(1)Comprised of all Pharmaceutical segment businesses except for Nuclear and Precision Health Solutions division.
(2)Comprised of all Medical segment businesses except for Cardinal Health at-Home Solutions division.
(3)Corporate revenue consists of the elimination of inter-segment revenue and other revenue not allocated to the segments.
The following table presents revenue by geographic area:
Three Months Ended September 30,
(in millions)20232022
United States$53,557 $48,477 
International1,209 1,129 
  Total segment revenue54,766 49,606 
Corporate (1)(3)(3)
Total revenue$54,763 $49,603 
(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);
state opioid assessment related to prior fiscal years; in connection with the New York Opioid Stewardship Act as discussed further in Note 6;
shareholder cooperation agreement costs;
restructuring and employee severance;
amortization and other acquisition-related costs;
impairments and (gain)/loss on disposal of assets, net; in connection with goodwill impairment testing for the Medical Unit as discussed further in Note 4, we recognized pre-tax goodwill impairment charges of $581 million and $154 million during the three months ended September 2023 and 2022, respectively;
litigation (recoveries)/charges, net;
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/(benefit from) 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 $6 million for both the three months ended September 30, 2023 and 2022.
The following table presents segment profit by reportable segment and Corporate:
Three Months Ended September 30,
(in millions)20232022
Pharmaceutical$507 $431 
Medical71 (8)
Total segment profit578 423 
Corporate(592)(286)
Total operating earnings/(loss)
$(14)$137 
The following table presents total assets for each reportable segment and Corporate at:
(in millions)September 30, 2023June 30, 2023
Pharmaceutical$28,968 $28,077 
Medical9,425 10,130 
Corporate5,317 5,210 
Total assets$43,710 $43,417