filings.toolsCardinal Health (CAH) 10-K risk factor changes: FY2024 vs FY2023
The 2024-06-30 10-K against the 2023-06-30 one, compared heading by heading and sentence by sentence.
All filing items1,015 rewritten1,107 added406 removed2,156 unchanged
Summary
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- Sentence by sentence, 1,107 added, 406 removed, 1,015 rewritten and 2,156 unchanged across 1 item that differ.
Sentences by item
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| Item | Added | Removed | Rewritten | Unchanged |
|---|---|---|---|---|
| Full document | 1,107 | 406 | 1,015 | 2,156 |
Underlined words on a shaded ground are new in FY2024; struck-through words were in FY2023. Sentences that are wholly new or wholly gone are labelled rather than marked.
Full document
1,015 rewritten, 1,107 added, 406 removed, 2,156 unchanged
| [Table of [removed: Contents](#ibd360c6108934d33aa2a235dd3fdd8d8_7)] [added: Contents](#i95bc939b69b548cdb7c138c74042c589_4)] | | | | | | | | |
For the fiscal year ended June 30, [removed: 2023][added: 2024]
| If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. [removed: o] [added: þ] | | | | | | | | | | | | | | | | | |
| Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). [removed: o] [added: þ] | | | | | | | | | | | | | | | | | |
The aggregate market value of voting stock held by non-affiliates on December 31, [removed: 2022,] [added: 2023,] was the following: [removed: $19,775,475,828.][added: $24,413,491,673.]
The number of the registrant’s common shares, without par value, outstanding as of July 31, [removed: 2023,] [added: 2024,] was the following: [removed: 250,681,620.][added: 243,845,343.]
Portions of the registrant’s Definitive Proxy Statement to be filed for its [removed: 2023] [added: 2024] Annual Meeting of Shareholders are incorporated by reference into the sections of this Form 10-K addressing the requirements of Part III of Form 10-K.
| Cardinal Health Fiscal [removed: 2023] [added: 2024] Form 10-K | | |
| [added: Introduction] | | | [removed: [Introduction](#ibd360c6108934d33aa2a235dd3fdd8d8_10)] | | | [removed: [2](#ibd360c6108934d33aa2a235dd3fdd8d8_10)] | | |
[removed: | | | | [Management's] [added: Management's] Discussion and Analysis [added: ("MD&A")] of Financial Condition and Results of [removed: Operations](#ibd360c6108934d33aa2a235dd3fdd8d8_13) | | | [3](#ibd360c6108934d33aa2a235dd3fdd8d8_13) | | |][added: Operations]
| | | | [Explanation and Reconciliation of Non-GAAP Financial [removed: Measures](#ibd360c6108934d33aa2a235dd3fdd8d8_37)] [added: Measures](#i95bc939b69b548cdb7c138c74042c589_37)] | | | [removed: [21](#ibd360c6108934d33aa2a235dd3fdd8d8_37)] [added: [22](#i95bc939b69b548cdb7c138c74042c589_37)] | | |
| | | | [Quantitative and Qualitative Disclosures about Market [removed: Risk](#ibd360c6108934d33aa2a235dd3fdd8d8_46)] [added: Risk](#i95bc939b69b548cdb7c138c74042c589_46)] | | | [removed: [26](#ibd360c6108934d33aa2a235dd3fdd8d8_46)] [added: [25](#i95bc939b69b548cdb7c138c74042c589_46)] | | |
| [added: Risk Factors] | | | [removed: [Risk Factors](#ibd360c6108934d33aa2a235dd3fdd8d8_52)] | | | [removed: [36](#ibd360c6108934d33aa2a235dd3fdd8d8_52)] | | |
| | | | [Legal [removed: Proceedings](#ibd360c6108934d33aa2a235dd3fdd8d8_58)] [added: Proceedings](#i95bc939b69b548cdb7c138c74042c589_58)] | | | [removed: [44](#ibd360c6108934d33aa2a235dd3fdd8d8_58)] [added: [44](#i95bc939b69b548cdb7c138c74042c589_58)] | | |
| | | | [Market for Registrant's Common [removed: Equity](#ibd360c6108934d33aa2a235dd3fdd8d8_61)] [added: Equity](#i95bc939b69b548cdb7c138c74042c589_61)] | | | [removed: [45](#ibd360c6108934d33aa2a235dd3fdd8d8_61)] [added: [45](#i95bc939b69b548cdb7c138c74042c589_61)] | | |
| | | | [Financial Statements and Supplementary [removed: Data](#ibd360c6108934d33aa2a235dd3fdd8d8_76)] [added: Data](#i95bc939b69b548cdb7c138c74042c589_76)] | | | [removed: [51](#ibd360c6108934d33aa2a235dd3fdd8d8_76)] [added: [51](#i95bc939b69b548cdb7c138c74042c589_76)] | | |
| | | | [Directors, Executive [removed: Officers](#ibd360c6108934d33aa2a235dd3fdd8d8_154) [and] [added: Officers and] Corporate [removed: Governance](#ibd360c6108934d33aa2a235dd3fdd8d8_154)] [added: Governance](#i95bc939b69b548cdb7c138c74042c589_154)] | | | [removed: [82](#ibd360c6108934d33aa2a235dd3fdd8d8_154)] [added: [87](#i95bc939b69b548cdb7c138c74042c589_154)] | | |
| | | | [removed: [Exhibits](#ibd360c6108934d33aa2a235dd3fdd8d8_160)] [added: [Exhibits](#i95bc939b69b548cdb7c138c74042c589_160)] | | | [removed: [84](#ibd360c6108934d33aa2a235dd3fdd8d8_160)] [added: [89](#i95bc939b69b548cdb7c138c74042c589_160)] | | |
| | | | [Form 10-K Cross Reference [removed: Index](#ibd360c6108934d33aa2a235dd3fdd8d8_166)] [added: Index](#i95bc939b69b548cdb7c138c74042c589_166)] | | | [removed: [89](#ibd360c6108934d33aa2a235dd3fdd8d8_166)] [added: [94](#i95bc939b69b548cdb7c138c74042c589_166)] | | |
| | | | [removed: [Signatures](#ibd360c6108934d33aa2a235dd3fdd8d8_169)] [added: [Signatures](#i95bc939b69b548cdb7c138c74042c589_169)] | | | [removed: [90](#ibd360c6108934d33aa2a235dd3fdd8d8_169)] [added: [95](#i95bc939b69b548cdb7c138c74042c589_169)] | | |
| 1 | | | Cardinal Health \| Fiscal [removed: 2023] [added: 2024] Form 10-K | | | | | |
References to fiscal [added: 2025,] 2024, 2023, 2022, [removed: 2021, 2020] [added: 2021] and [removed: 2019] [added: 2020] are to the fiscal years ended June 30, [added: 2025,] 2024, 2023, 2022, [removed: 2021, 2020] [added: 2021] and [removed: 2019,] [added: 2020,] respectively.
Except as otherwise specified, information in this report is provided as of June 30, [removed: 2023.][added: 2024.]
[removed: Management's] [added: | | | | [Management's] Discussion and Analysis of Financial Condition and Results of [removed: Operations][added: Operations](#i95bc939b69b548cdb7c138c74042c589_13) | | | [3](#i95bc939b69b548cdb7c138c74042c589_13) | | |]
Our MD&A within this Form 10-K generally discusses fiscal [removed: 2023] [added: 2024] and fiscal [removed: 2022] [added: 2023] items and year-over-year comparisons between fiscal [removed: 2023] [added: 2024] and fiscal [removed: 2022.][added: 2023.]
| | | | Cardinal Health \| Fiscal [removed: 2023] [added: 2024] Form 10-K | | | 2 | | |
We connect patients, providers, payers, pharmacists and manufacturers for integrated care [removed: coordination and better patient management.][added: coordination.]
Pharmaceutical [added: and Specialty Solutions] Segment
Our Pharmaceutical [added: and Specialty Solutions] 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; [removed: operates nuclear pharmacies] and [removed: radiopharmaceutical manufacturing facilities; and] repackages generic pharmaceuticals and over-the-counter healthcare products.
Our [removed: Medical] [added: GMPD] segment manufactures, sources and distributes Cardinal Health [removed: branded] [added: brand] medical, surgical and laboratory products, which are sold in the United States, Canada, Europe, Asia and other markets.
[removed: This] [added: The GMPD] 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 [removed: Canada.][added: Canada and this segment also assembles and sells sterile and non-sterile procedure kits.]
| | | | Cardinal Health \| Fiscal [removed: 2023] [added: 2024] Form 10-K | | | 3 | | |
Fiscal [removed: 2023 Overview][added: 2024 Compared to Fiscal 2023]
| (in millions) | | | [removed: 2023] [added: 2024] | | | | | | [added: 2023 | | | | | |] 2022 | | | | | | [removed: Change] [added: 2024] | | | [added: | | | 2023 | | |]
| [removed: GAAP operating earnings/(loss)] [added: Operating earnings/(loss)] | | | [removed: $] | [removed: 727] | | [added: 727] | | | [removed: $] | [added: | | 25 | | | | | | 752 | | | | | |] (596) | | | | | [removed: N.M.] | [added: (11)] | | [added: | | | | (607) | | |]
| State opioid assessment related to prior fiscal years | | | [removed: (6)] [added: —] | | | | | | [added: (6) | | | | | |] — | | | | | | | | | [added: | | | | | |]
| Shareholder cooperation agreement costs | | | [removed: 8] [added: 1] | | | | | | [added: 8 | | | | | |] — | | | | | | | | | [added: | | | | | |]
| Restructuring and employee severance | | | [removed: 95] [added: 175] | | | | | | [added: 95 | | | | | |] 101 | | | | | | | | | [added: | | | | | |]
| Amortization and other acquisition-related costs | | | [removed: 285] [added: 284] | | | | | | [added: 285 | | | | | |] 324 | | | | | | | | | [added: | | | | | |]
| | | | [Introduction](#i95bc939b69b548cdb7c138c74042c589_7) | | | [2](#i95bc939b69b548cdb7c138c74042c589_7) | | |
| | | | [Risk Factors](#i95bc939b69b548cdb7c138c74042c589_52) | | | [34](#i95bc939b69b548cdb7c138c74042c589_52) | | |
| | | | [Cybersecurity](#i95bc939b69b548cdb7c138c74042c589_1702) | | | [43](#i95bc939b69b548cdb7c138c74042c589_1702) | | |
| | | | [Properties](#i95bc939b69b548cdb7c138c74042c589_55) | | | [44](#i95bc939b69b548cdb7c138c74042c589_55) | | |
| | | | [Reports](#i95bc939b69b548cdb7c138c74042c589_64) | | | [47](#i95bc939b69b548cdb7c138c74042c589_64) | | |
This Form 10-K also includes fiscal 2022 items and discussions of year-over-year comparisons between fiscal 2023 and fiscal 2022.
The periods discussed in this Form 10-K have been revised herein to correct an error identified during the preparation of this Form 10-K, as well as to correct other unrelated immaterial errors.
The revisions ensure comparability across all periods reflected herein.
Please refer to [Note 1](#i95bc939b69b548cdb7c138c74042c589_97) of the “Notes to the Consolidated Financial Statements” for additional information about these corrections.
Effective January 1, 2024, we began operating under an updated organizational structure and re-aligned our financial reporting structure under two reportable segments: Pharmaceutical and Specialty Solutions ("Pharma") segment and Global Medical Products and Distribution ("GMPD") segment.
All remaining operating segments that are not significant enough to require separate reportable segment disclosures are included in Other, which is comprised of Nuclear and Precision Health Solutions, at-Home Solutions and OptiFreight® Logistics.
Global Medical Products and Distribution Segment
In connection with the preparation of our Consolidated Financial Statements for fiscal 2024, we identified an accounting error related to revenue recognition from third party payors within the at-Home Solutions operating segment.
We evaluated the materiality of the error and determined that the impacts were not material, individually or in the aggregate, to our previously issued Consolidated Financial Statements for any of the prior quarters or annual periods in which they occurred.
In this report, we present revised prior period financial statements to correct this error, as well as other unrelated immaterial errors, including an adjustment to an uncertain tax position.
These other immaterial errors were previously corrected in the periods they were identified; however, they are now reflected in the periods they originated.
The revisions ensure comparability across all periods reflected herein.
Refer to [Note 1](#i95bc939b69b548cdb7c138c74042c589_97) of the "Notes to Consolidated Financial Statements" for additional information regarding the immaterial corrections to our results of prior periods.
Overview
Revenue increased 11 percent to $226.8 billion for fiscal 2024 and 13 percent to $205.0 billion for fiscal 2023 compared to their respective prior-year periods, primarily due to branded and specialty pharmaceutical sales growth from existing customers.
| GAAP operating earnings/(loss) | | | $ | 1,243 | | | | | $ | 752 | | | | | $ | (607) | | | | | 65 | | % | | | | N.M. | | |
| Non-GAAP operating earnings | | | $ | 2,414 | | | | | $ | 2,076 | | | | | $ | 1,973 | | | | | 16 | | % | | | | 5 | | % |
We had a GAAP operating loss of $607 million during fiscal 2022, which included $2.1 billion pre-tax non-cash goodwill impairment charges related to the GMPD segment.
GAAP and Non-GAAP operating earnings increased during fiscal 2024, driven by increases in GMPD and Pharmaceutical and Specialty Solutions segment profit as described further in the "Results of Operations" section of this MD&A.
| Litigation (recoveries)/charges, net | | | 0.30 | | | | | | (0.84) | | | | | | 0.28 | | | | | | | | | | | | | | |
| Non-GAAP diluted EPS (1) | | | $ | 7.53 | | | | | $ | 5.85 | | | | | $ | 5.07 | | | | | 29 | | % | | | | 15 | | % |
The increases in fiscal 2024 and 2023 GAAP diluted EPS were primarily due to the factors impacting GAAP operating earnings.
During fiscal 2024, non-GAAP diluted EPS increased 29 percent to $7.53 due to the factors impacting non-GAAP operating earnings described above and a lower share count.
Our cash and equivalents balance was $5.1 billion at June 30, 2024 compared to $4.1 billion at June 30, 2023.
During fiscal 2024, we issued additional long-term debt and received net proceeds of $1.14 billion, of which $200 million is invested in short-term time deposits with initial effective maturities of more than three months and classified as prepaid expenses and other in our consolidated balance sheet as of June 30, 2024.
In addition, during fiscal 2024 we deployed $1.2 billion for the Specialty Networks acquisition, $783 million for debt repayments, $750 million for share repurchases, $511 million for capital expenditures and $499 million for cash dividends.
Operating and Segment Reporting Structure Changes
Effective January 1, 2024, we began operating under an updated organizational structure and re-aligned our financial reporting structure under two reportable segments: Pharmaceutical and Specialty Solutions segment and GMPD segment.
All remaining operating segments that are not significant enough to require separate reportable segment disclosures are included in Other.
The following indicates the changes from the second quarter of fiscal 2024 to the new reporting structure:
- GMPD segment: This reportable segment is comprised of all businesses formerly within our Medical segment except at-Home Solutions and OptiFreight® Logistics.
- Other: This is comprised of the remaining operating segments, Nuclear and Precision Health Solutions, at-Home Solutions and OptiFreight® Logistics.
Our previously reported segment results have been recast to conform to our new reporting structure and reflect changes in the elimination of inter-segment revenue and allocated corporate technology and shared function expenses, which are driven by the reporting structure change.
Pharmaceutical and Specialty Solutions Segment
OptumRx Contracts
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| | | | [Business](#ibd360c6108934d33aa2a235dd3fdd8d8_49) | | | [28](#ibd360c6108934d33aa2a235dd3fdd8d8_49) | | |
| | | | [Properties](#ibd360c6108934d33aa2a235dd3fdd8d8_55) | | | [43](#ibd360c6108934d33aa2a235dd3fdd8d8_55) | | |
| | | | [Reports](#ibd360c6108934d33aa2a235dd3fdd8d8_64) | | | [47](#ibd360c6108934d33aa2a235dd3fdd8d8_64) | | |
Fiscal 2021 items and discussions of year-over-year comparisons between fiscal 2022 and fiscal 2021 that are not included in this Form 10-K can be found in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended June 30, 2022 (the "Fiscal 2022 Form 10-K").
| MD&A | | | About Cardinal Health | | | | | |
We manage our business and report our financial results in two segments: Pharmaceutical and Medical.
Medical Segment
This segment also distributes medical products to patients' homes in the United States through our Cardinal Health at-Home Solutions division.
Revenue for fiscal 2023 was $205.0 billion, a 13 percent increase from the prior year, primarily driven by Pharmaceutical segment sales growth.
| Surgical gown recall costs/(income) | | | — | | | | | | 1 | | | | | | | | |
See "Critical Accounting Policies and Sensitive
During fiscal 2023, GAAP diluted EPS was favorably impacted by litigation recoveries.
We expect these net inflationary impacts to continue to affect Medical segment profit in fiscal 2024 and beyond, but to a significantly lesser extent than in fiscal 2023 and prior periods, due to our mitigation actions, together with continued decreases in certain product-related costs.
Medical Unit Goodwill
Due to previously communicated changes in our long-term financial plan assumptions, including those related to Cardinal Health branded medical products sales growth, and increases in the risk-free interest rate, we performed goodwill impairment testing for the Medical operating segment (excluding our Cardinal Health at-Home Solutions division) (“Medical Unit”) during fiscal 2023.
Adverse changes in key assumptions or a significant change in industry or economic trends during fiscal 2024 could result in additional goodwill impairment.
resigns from, the Board.
See "Risk Factors" section for additional detail related to risks associated with the Cooperation Agreement.
| Pharmaceutical | | | $ | 190,009 | | | | | $ | 165,491 | | | | | 15 | | % |
| Medical | | | 15,014 | | | | | | 15,887 | | | | | | (5) | | % |
This decrease was partially offset by sales growth in at-Home Solutions, which increased revenue by $215 million.
| SG&A expenses | | | $ | 4,834 | | | | | $ | 4,557 | | | | | 6 | | % |
| Pharmaceutical | | | $ | 1,999 | | | | | $ | 1,770 | | | | | 13 | | % |
| Medical | | | 111 | | | | | | 216 | | | | | | (49) | | % |
| Total segment profit | | | 2,110 | | | | | | 1,986 | | | | | | 6 | | % |
| Corporate | | | (1,383) | | | | | | (2,582) | | | | | | N.M. | | |
Pharmaceutical Segment Profit
Medical Segment Profit
| | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| US Taxes on International Income (2) | | | (0.7) | | | | | | 3.2 | | |
| Other | | | (1.2) | | | | | | 0.8 | | |
During fiscal 2022, net cash provided by operating activities of $3.1 billion included a refund of $966 million for the tax benefit from the net operating loss carryback related to a self-insurance pre-tax loss.
We also received proceeds of $923 million, net of cash transferred, from the divestiture of the Cordis business and we deployed $1.0 billion for share repurchases, $885 million for debt repayments, $559 million for dividends and $387 million for capital expenditures.
During fiscal 2022, we redeemed all outstanding $572 million principal amount of 2.616% Notes due 2022 and recorded a $10 million loss on early extinguishment of debt.
We also repaid the full principal of the $282 million Floating Rate Notes due 2022 as they became due.
On August 9, 2023, our Board of Directors approved a quarterly dividend of $0.5006 per share, or $2.00 per share on an annualized basis, which will be paid on October 15, 2023, to shareholders of record on October 3, 2023.
| Long-term debt and short-term borrowings (1) | | | $ | 764 | | | | | $ | 917 | | | | | $ | 1,308 | | | | | $ | 1,626 | | | | | $ | 4,615 | |
| Interest on long-term debt | | | 218 | | | | | | 326 | | | | | | 215 | | | | | | 1,336 | | | | | | 2,095 | | |
An excerpt. Shown here: 40 of 1,015 rewritten, 40 of 1,107 added and 40 of 406 removed. The counts are complete. For every sentence, read Full document in the FY2024 filing and the FY2023 filing.