10-K 0000721371-26-000038 (2026-08-11) vs 10-K 0000721371-25-000079 (2025-08-12)
| Section | Compared text | Words now | Changed |
|---|
| Risk Factors | Item 1A | 7,832 |
28.2% |
| MD&A | Item 7 | 10,272 |
29.5% |
| Legal Proceedings | Item 3, via Note 7 – Commitments, Contingent Liabilities, and Litigation | 1,851 |
43.9% |
| Accounting Policies | Item 8, Note 1 – Basis of Presentation and Summary of Significant Accounting Policies | 7,263 |
15.8% |
The redline: what was cut and what was added
In each section, the paragraph that changed most, marked against last year's 10-K:
cut words struck through, new words highlighted and underlined.
MD&A 243 words changed in this paragraph; it is 64% similar to last year's version.
(in millions, except per common share amounts) Operating Earnings Operating Earnings Growth Rate Earnings Before Income Taxes Provision for Income Taxes Net Earnings (Earnings)/Loss Attributable to Non-controlling Interests Net Earnings1 Earnings(1) Net Earnings1 Earnings(1) Growth Rate Effective Tax Rate Diluted EPS1 EPS(1) Diluted EPS1 EPS(1) Growth Rate Fiscal Year 2026 GAAP $ 2,613 15% $ 2,174 $ 469 $ 9 $ 1,714 10% 21.6% $ 7.23 12% State opioid assessment related to prior fiscal years (17) (17) (4) — (13) (0.05) Restructuring and employee severance 106 106 24 — 82 0.34 Amortization and other acquisition-related costs 469 469 120 — 349 1.47 Acquisition-related cash and share-based compensation costs 287 287 12 — 275 1.16 Impairments and (gain)/loss on disposal of assets, net (2) 177 177 22 (23) 132 0.56 Litigation (recoveries)/charges, net (10) (10) (19) — 9 0.04 Impairment of equity interest in Outcomes (3) — 122 3 — 119 0.50 Non-GAAP $ 3,624 30% $ 3,308 $ 628 $ (13) $ 2,667 34% 19.0% $ 11.26 37% Fiscal Year 2025 GAAP $ 2,275 83% $ 2,101 $ 532 $ (8) $ 1,561 83% 25.3% $ 6.45 87% Restructuring and employee severance 88 88 21 — 67 0.28 Amortization and other acquisition-related costs 464 464 104 — 360 1.49 Acquisition-related cash and share-based compensation costs 126 126 1 — 125 0.51 Impairments and (gain)/loss on disposal of assets, net 18 18 5 — 13 0.05 Litigation (recoveries)/charges, net (185) (185) (54) — (131) (0.54) Non-GAAP $ 2,786 15% $ 2,612 $ 609 $ (8) $ 1,995 7% 23.3% $ 8.24 9% Fiscal Year 2024 GAAP $ 1,243 65% $ 1,201 $ 348 $ (1) $ 852 N.M. 28.9% $ 3.45 N.M. Shareholder cooperation agreement costs 1 1 — — 1 — Restructuring and employee severance 175 175 41 — 134 0.54 Amortization and other acquisition-related costs 284 284 74 — 210 0.85 Impairments and (gain)/loss on disposal of assets, net 2 (4) 634 634 47 — 587 2.38 Litigation (recoveries)/charges, net 78 78 5 — 73 0.30 Non-GAAP $ 2,414 16% $ 2,372 $ 515 $ (1) $ 1,856 21% 21.7% $ 7.53 29% Fiscal Year 2023 GAAP $ 752 N.M. $ 663 $ 332 $ (1) $ 330 N.M. 50.0% $ 1.26 N.M. State opioid assessment related to prior fiscal years (6) (6) (2) (4) (0.02) Shareholder cooperation agreement costs 8 8 2 6 0.02 Restructuring and employee severance 95 95 21 74 0.28 Amortization and other acquisition-related costs 285 285 74 211 0.80 Impairments and (gain)/loss on disposal of assets, net 2 1,246 1,246 108 1,138 4.35 Litigation (recoveries)/charges, net (304) (304) (83) (221) (0.84) Non-GAAP $ 2,076 5% $ 1,987 $ 452 $ (1) $ 1,534 8% 22.8% $ 5.85 15%
Source: Item 7, 10-K 0000721371-26-000038 vs Item 7, 10-K 0000721371-25-000079
Risk Factors 130 words changed in this paragraph; it is 44% similar to last year's version.
Uncertainty surrounding possible changes to the healthcare environment, including changes to regulatory enforcement priorities, may directly or indirectly adversely affect us. The recently issued Executive Order titled "Delivering Most-Favored Nation Prescription Drug Pricing to American Patients" Patients," may impact the sales or profitability of branded pharmaceutical products; however, the extent of the impact may vary depending on the timeline for implementation and the number of pharmaceutical drugs that are impacted. Additionally, it is possible that the adoption of the OBBBA could reduce participation products. And any reduction in Medicare and Medicaid programs, resulting programs as a result of The One Big Beautiful Bill Act, could result in a change in utilization of the healthcare system. This system that may adversely affect demand for our products and services and could have an effect on our results of operations and financial condition. We have not experienced a negative impact to our profit as a result of these initiatives; however, we expect changes in manufacturer prices to continue to adversely impact our revenue and may, in the future, result in adverse impacts to our profitability.
Source: Item 1A, 10-K 0000721371-26-000038 vs Item 1A, 10-K 0000721371-25-000079
Legal Proceedings 111 words changed in this paragraph; it is 40% similar to last year's version.
West Virginia subdivisions and Native American tribes were not a part of the NOSA. In July 2022, a judgment in favor of the Distributors was entered in a bench trial before a federal judge in West Virginia in a case brought by Cabell County and City of Huntington Plaintiffs have appealed this decision to Huntington. In October 2025, the United States Court of Appeals for the Fourth Circuit Court of Appeals. vacated the district court's judgment and remanded the case for further proceedings. In July 2022, we entered into separate agreements May 2026, the parties submitted additional briefing to settle the opioid-related claims of the majority of remaining West Virginia subdivisions district court and Native American Tribes for approximately $124 million over eleven years and $136 million over five years, respectively. a ruling is pending. We intend to continue to vigorously defend ourselves in this matter.
Source: Item 3, via Note 7 – Commitments, Contingent Liabilities, and Litigation, 10-K 0000721371-26-000038 vs Item 3, via Note 8 – Commitments, Contingent Liabilities, and Litigation, 10-K 0000721371-25-000079
Accounting Policies 99 words changed in this paragraph; it is 45% similar to last year's version.
A portion of our inventories (52 percent and 50 percent at both June 30, 2025 2026 and 2024, respectively) 2025) are valued at the lower of cost, using the last-in, first-out ("LIFO") method, or market. These inventories are included within the core pharmaceutical distribution facilities of our Pharma segment (“distribution facilities”) and are primarily merchandise inventories. The LIFO method presumes that the most recent inventory purchases are the first items sold, so LIFO helps us better match current costs and revenue. We believe that the average cost method of inventory valuation provides a reasonable approximation of the current cost of replacing inventory within the distribution facilities. As such, the LIFO reserve is the difference between (a) inventory at the lower of LIFO cost or market and (b) inventory at replacement cost determined using the average cost method of inventory valuation.
Source: Item 8, Note 1 – Basis of Presentation and Summary of Significant Accounting Policies, 10-K 0000721371-26-000038 vs Item 8, Note 1 – Basis of Presentation and Summary of Significant Accounting Policies, 10-K 0000721371-25-000079
Every change, by type
Sentences and paragraphs of CAH's Risk Factors and MD&A, 10-K 2026-08-11 against 10-K 2025-08-12.
Each links to the text at sec.gov.
Quiet changes are sentences kept from last year with one to four words changed, at least one of them a hedge, a modal or a qualifier
(may, could, will, not, significant, material…). A year or date rolling forward is not counted.
The full word list
adverse, adversely, all, although, anticipate, anticipates, any, approximately, believe, believes, can, cannot, certain, could, expect, expects, generally, however, if, intend, intends, largely, likely, many, material, materially, may, might, most, must, never, no, not, possible, primarily, probable, should, significant, significantly, some, substantial, substantially, unlikely, will, would
AddedRisk Factors
During fiscal 2026, we received two Notices of Proposed Adjustment ("NOPA") from the IRS in connection with their audit of our fiscal years 2015-2020. Under one of these NOPAs, the IRS is challenging the tax deductibility of self-insurance pre-tax losses and related carryback claims taken under the Coronavirus Aid, Relief and Economic Security Act, which could result in approximately $400 million in additional tax expense (plus interest) and approximately $1.4 billion in additional tax liability (plus interest). Under the other, the IRS asserts that a restructuring transaction in connection with our July 2017 acquisition of the Patient Recovery business should be recharacterized in a manner that could create additional federal income tax liability of approximately $160 million, plus interest.
Read it in 10-K 2026-08-11 at sec.gov ↗
AddedRisk Factors
certain opioid-related lawsuits, which may have implications for the loss reserves related to opioid litigation recorded by our captive insurance company and could negatively impact our cash flow.
Read it in 10-K 2026-08-11 at sec.gov ↗
AddedRisk Factors
There have been increasing efforts in the United States by Congress, the Executive Branch and state and federal agencies, including state boards of pharmacy, departments of health, the FDA, DEA, FTC and others to regulate the pharmaceutical supply chain in an attempt to prevent diversion and the introduction of counterfeit, adulterated and mislabeled pharmaceutical products into the pharmaceutical distribution system and to ensure the integrity of products in the supply chain. Consequently, we are subject to the risk of changes in various laws, which may require changes to our operational, record keeping or security practices. We may be required to incur increased costs in order to comply with any new regulations. In addition, we could be subject to monetary or operational penalties if we are alleged to not comply with new regulatory requirements.
Read it in 10-K 2026-08-11 at sec.gov ↗
AddedRisk Factors
Additionally, many governmental bodies at the Federal and State level, including the U.S. Congress and Executive Branch have adopted, published or proposed updates intended to increase transparency in prescription pharmaceutical pricing, which may impact us in a number of ways. For example, there are a number of U.S. government policy initiatives that have been adopted or are being considered that have or may directly impact manufacturer prices for pharmaceutical products. The Inflation Reduction Act has and will continue to adversely impact our revenue by capping prices for certain drugs. The Executive Order titled "Delivering
Read it in 10-K 2026-08-11 at sec.gov ↗
AddedRisk Factors
From time to time, we determine that products we distribute, source, manufacture or market do not meet our specifications, regulatory requirements, or published standards. While we investigate and seek to take corrective action when we or a regulatory agency identify a potential quality or regulatory issue, there is no assurance that the issue will be resolved to the satisfaction of the regulator. Such actions have led to product recalls, costs to repair or replace affected products, temporary interruptions in product sales, restrictions on importation, 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.
Read it in 10-K 2026-08-11 at sec.gov ↗
AddedRisk Factors
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 and take appropriate corrective action.
Read it in 10-K 2026-08-11 at sec.gov ↗
AddedRisk Factors
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 corrective actions or sanctions.
Read it in 10-K 2026-08-11 at sec.gov ↗
AddedRisk Factors
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.
Read it in 10-K 2026-08-11 at sec.gov ↗
AddedRisk Factors
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
Read it in 10-K 2026-08-11 at sec.gov ↗
AddedRisk Factors
and related disclosures are adequate. The amount of ultimate loss may differ from these estimates.
Read it in 10-K 2026-08-11 at sec.gov ↗
AddedRisk Factors
In February 2025, the United States imposed tariffs under the International Emergency Economic Powers Act (IEEPA) on certain goods, materials, and products imported into the United States from countries where we do business.
Read it in 10-K 2026-08-11 at sec.gov ↗
AddedRisk Factors
In February 2026, the U.S. Supreme Court ruled that the IEEPA tariffs were unlawful. In April 2026 and June 2026, the U.S. Government launched its program to administer refund requests under Phase 1 and Phase 2, respectively, and additional phases are expected to be communicated in the future. The majority of our refund requests fall under Phase 1 and Phase 2 and they have been submitted and accepted by the U.S. Government. The remainder of our refund requests will be submitted in later phases.
Read it in 10-K 2026-08-11 at sec.gov ↗
RemovedRisk Factors
our government contracts or our suspension or debarment from government contract work.
Read it in 10-K 2025-08-12 at sec.gov ↗
RemovedRisk Factors
Additionally, in connection with the accruals taken in connection with opioid-related lawsuits in fiscal year 2021, we recorded a net tax benefit, reflecting our then-current assessment of the estimated future deductibility of the amount that may be paid. We have made reasonable estimates and recorded amounts based on management's judgment and our current understanding of the Tax Act; however, the tax law governing deductibility was changed by the Tax Act, and these estimates require significant judgment and it is possible that they could be subject to challenges by the U.S. Internal Revenue Service ("IRS").
Read it in 10-K 2025-08-12 at sec.gov ↗
RemovedRisk Factors
In fiscal year 2021, our provision for income taxes reflected a $424 million benefit from the tax benefits of a self-insurance pre-tax net operating loss carryback under the Coronavirus Aid, Relief and Economic Security ("CARES") Act. Also, as a result of this net operating loss carryback, we received a U.S. federal income tax refund of $966 million. This fiscal year is being audited by the IRS, and it is possible that the IRS could challenge our tax position with respect to this self-insurance loss. If they do, our effective tax rate or cash flows could be adversely impacted. Additionally, laws governing insurance coverage vary by state and some state courts have interpreted laws and insurance policies in ways that may impact our self-insurance loss, which could negatively impact our financial position.
Read it in 10-K 2025-08-12 at sec.gov ↗
RemovedRisk Factors
We expect the U.S. healthcare industry to continue to change significantly in the future. Possible changes include changes in legislation or regulations governing prescription pharmaceutical pricing, healthcare services, U.S.-based medical product manufacturing, mandated benefits, efforts to promote increased transparency in the pharmaceutical supply chain, drug shortages, further reduction of or limitations on governmental funding at the state or federal level, or efforts by healthcare insurance companies to further limit payments for products and services. Federal, state, and local governmental entities have also continued to increase their scrutiny of the U.S. healthcare market.
Read it in 10-K 2025-08-12 at sec.gov ↗
RemovedRisk Factors
We might infringe intellectual property rights or our own intellectual property protections might be insufficient to protect our commercial interests.
Read it in 10-K 2025-08-12 at sec.gov ↗
RemovedRisk Factors
Third parties have in the past and may in the future assert infringement claims against us. Litigation and proceedings related to intellectual property are unpredictable, and we might be required to pay significant damages, develop non-infringing products or services, obtain a license, cease selling or using allegedly infringing products or services, or incur other restrictions on our operations. Trade secret, patent, copyright, and trademark laws, nondisclosure obligations, and other contractual provisions are critical to our business. Our efforts to protect our intellectual property might be insufficient, and non-infringing products or services equivalent or superior to ours might be developed by competitors.
Read it in 10-K 2025-08-12 at sec.gov ↗
RemovedRisk Factors
Additionally, almost all of our distribution services agreements with branded pharmaceutical manufacturers provide that we receive
Read it in 10-K 2025-08-12 at sec.gov ↗
RemovedRisk Factors
Employee attrition may have an adverse impact on our business, results of operations, or internal controls.
Read it in 10-K 2025-08-12 at sec.gov ↗
RemovedRisk Factors
Our ability to attract, retain, and develop qualified and experienced employees, including key executives, key employees at companies that we acquire, and other talent, is critical for us to meet our business objectives. We compete with many other businesses to attract and retain employees. It is possible that we could experience loss of key personnel for a variety of causes. If we do not adequately plan for succession of key roles or if we are not successful in attracting or retaining new talent, our operations, financial performance or internal control over financial reporting could be adversely impacted.
Read it in 10-K 2025-08-12 at sec.gov ↗
RemovedRisk Factors
Consolidation in the U.S. healthcare industry may negatively impact our results of operations.
Read it in 10-K 2025-08-12 at sec.gov ↗
RemovedRisk Factors
our ability to use acquisitions to expand or complement our existing businesses. If this consolidation trend continues, it could adversely affect our results of operations.
Read it in 10-K 2025-08-12 at sec.gov ↗
RemovedRisk Factors
legislation, that would limit, restrict or prohibit corporate entities from owning or managing physician practices, directly, or indirectly, through a managed services organization. If these regulations proliferate, our ability to continue to own certain of our recently acquired businesses in certain jurisdictions and our ability to execute on our strategy may be impacted.
Read it in 10-K 2025-08-12 at sec.gov ↗
RewordedRisk Factors
Additionally, our ability to successfully execute on providing physician practice support and management services, including through direct we could experience negative operational or indirect ownership of provider practices as permitted by applicable law, depends upon a number of factors, including: financial impacts associated with the ability to develop or acquire and integrate appropriate practice management and support expertise; the ability to support recruitment, integration, and retention of key personnel, including executive leadership and sufficient numbers of local providers and staff; staff, ensuring the alignment of interests between Cardinal Health and physicians; the ability to successfully support negotiations with vendors, suppliers, and payors; the reimbursement and regulatory environment; and competition from other healthcare organizations with greater depth of experience or market knowledge.
Read it in 10-K 2026-08-11 at sec.gov ↗
RewordedRisk Factors
Any compromise of our or a service provider's information systems, including unauthorized access to or use or disclosure of sensitive information, could result in the loss or misuse of our information, including personal data and sensitive data and adversely impact our operations, results of operations, or our ability to satisfy legal or regulatory requirements, including the EU general data protection regulation (GDPR) and those related to patient-identifiable health information and other sensitive personal and financial information at the state and U.S. federal level as further described in the Risk Factor titled “Our business is subject to other rigorous regulatory and licensing requirements,” above.
Read it in 10-K 2026-08-11 at sec.gov ↗
RewordedRisk Factors
Such new lines of business Our MSO businesses involve numerous risks and uncertainties that may be are different from or more significant than the risks and uncertainties facing our legacy businesses, including risks arising under or related to fraud, waste, and abuse laws, including the federal Anti-Kickback Statute, the federal self-referral law commonly known as the Stark Law and the federal False Claims Act. direct or indirect ownership of provider practices, litigation involving physicians, and risks from regulatory or legislative changes that may limit direct or indirect ownership of provider practices or our ability to provide physician practice support and management services.
Read it in 10-K 2026-08-11 at sec.gov ↗
RewordedRisk Factors
The recently issued Executive Order titled "Delivering Most-Favored Nation Prescription Drug Pricing to American Patients" Patients," may impact the sales or profitability of branded pharmaceutical products; however, the extent of the impact may vary depending on the timeline for implementation and the number of pharmaceutical drugs that are impacted. products.
Read it in 10-K 2026-08-11 at sec.gov ↗
RewordedRisk Factors
This And any reduction in Medicare and Medicaid programs as a result of The One Big Beautiful Bill Act, could result in a change in utilization of the healthcare system that may adversely affect demand for our products and services and could have an effect on our results of operations and financial condition.
Read it in 10-K 2026-08-11 at sec.gov ↗
RewordedRisk Factors
Any material interruption in our supply chain or inability to obtain key products from third parties in a timely and cost-effective manner, including as a result of trade or other restrictions, could adversely affect our business operations and results of operations, financial condition and cash flows.
Read it in 10-K 2026-08-11 at sec.gov ↗
RewordedRisk Factors
As a result of Through our recently announced acquisitions, MSO businesses, we are entering into new lines of business, including providing provide physician practice support and management services, services that complement our pre-existing legacy businesses.
Read it in 10-K 2026-08-11 at sec.gov ↗
RewordedRisk Factors
For example, following a facility inspection in December 2023, April 2024, the FDA issued a warning letter to Cardinal Health in April 2024 related to asserting that plastic syringes sourced from a third party manufacturer in China asserting these products did not have appropriate 510(k) clearance and restating some of the observations from the a December 2023 inspection.
Read it in 10-K 2026-08-11 at sec.gov ↗
RewordedRisk Factors
We also regularly review these estimates and assumptions from time Adjustments to time and adjust our accruals based on our review, resulting review could result in changes in our tax provisions/(benefit).
Read it in 10-K 2026-08-11 at sec.gov ↗
RewordedRisk Factors
Due to the nature of our business, which includes the distribution of controlled substances and other pharmaceutical products and the sourcing, marketing, and manufacturing of medical products, we regularly become involved in disputes, litigation, and regulatory matters.
Read it in 10-K 2026-08-11 at sec.gov ↗
RewordedRisk Factors
Noncompliance or concerns over noncompliance, including noncompliance by suppliers, has in the past, and may in the future result in suspension of our licenses or ability to distribute, import, manufacture, or source products, recalls, safety alerts or seizures, or criminal or civil sanctions, which, in turn, could result in product liability claims and lawsuits, legal action, including government investigations and enforcement actions and class actions. action lawsuits.
Read it in 10-K 2026-08-11 at sec.gov ↗
RewordedRisk Factors
Failure to comply with applicable rules or regulations or with contractual or other requirements may result in monetary damages and criminal or civil penalties as well as termination of our government contracts or our suspension or debarment from government contract work.
Read it in 10-K 2026-08-11 at sec.gov ↗
Quiet changesRisk Factors
Additionally, some Some of the products that we distribute or manufacture have been and may in the future be alleged to cause personal injury, subjecting us to product liability claims.
Read it in 10-K 2026-08-11 at sec.gov ↗
Quiet changesRisk Factors
For example, in fiscal year 2025, we completed several significant acquisitions in disparate businesses: the acquisition of Integrated Oncology Network and GI Alliance, which are part of our Specialty business, and the acquisition of Advanced Diabetes Supply Group, which is part of our Cardinal Health At-Home businesses.
Read it in 10-K 2026-08-11 at sec.gov ↗
AddedMD&A
(4)During fiscal 2026, we recognized a pre-tax impairment charge of $122 million in connection with the observed reduction of the estimated fair value of the Outcomes business, of which we hold a 16 percent equity interest.
Read it in 10-K 2026-08-11 at sec.gov ↗
AddedMD&A
Solaris Health includes more than 750 providers across more than 250 practice locations in 14 states. Solaris Health is part of The Specialty Alliance, our multi-specialty MSO platform, and its results are reported within our Pharma segment. With the closing of this transaction, we own approximately 76% of The Specialty Alliance. We funded the acquisition with a combination of cash proceeds from the recent debt financing and cash on hand. See Note 6 of the "Notes to Consolidated Financial Statements" for additional information on the debt financing.
Read it in 10-K 2026-08-11 at sec.gov ↗
AddedMD&A
An April 2026 proclamation issued by the President of the United States imposed tariffs on imports of branded pharmaceutical products and associated ingredients imported into the United States. If pharmaceutical manufacturers raise their prices or stop importing certain products, we could experience increased costs or supply disruptions which may impact our financial results.
Read it in 10-K 2026-08-11 at sec.gov ↗
AddedMD&A
With respect to GLP-1 medications, during fiscal 2026, we experienced increased demand, which positively impacted our Pharma segment revenue and consolidated revenue; however, increased GLP-1 sales did not meaningfully contribute to segment profit. Demand growth for GLP-1 medications began to moderate in fiscal year 2026 and we expect future demand growth moderation to continue; however, demand for these medications is unpredictable.
Read it in 10-K 2026-08-11 at sec.gov ↗
AddedMD&A
In February 2025, the United States imposed tariffs under the IEEPA on certain goods, materials, and products imported into the United States from countries where we do business. In February 2026, the U.S. Supreme Court ruled that the IEEPA tariffs were unlawful. Subsequent to this ruling, U.S. Customs and Border Protection (the "CBP") worked to establish a phased process to administer refunds required by the Supreme Court ruling. In April 2026 and June 2026, the U.S. Government launched its program to administer refund requests under Phase 1 and Phase 2, respectively, and additional phases are expected to be communicated in the future. The majority of our refund requests fall under Phase 2. Our refund requests under Phases 1 and 2 have been submitted and accepted by the CBP. We expect that the remainder of our refund requests will be submitted in later phases or through other established mechanics.
Read it in 10-K 2026-08-11 at sec.gov ↗
AddedMD&A
Since February 2025, we have paid approximately $200 million in IEEPA tariffs, related to products that we source, manufacture or distribute, primarily in our GMPD segment. After receiving refunds of IEEPA tariffs from the U.S. Government, we expect to return to customers the portion of those refunds that reflect the estimated increased prices paid related to IEEPA tariffs.
Read it in 10-K 2026-08-11 at sec.gov ↗
AddedMD&A
During the fourth quarter of fiscal 2026, we recorded a receivable of approximately $200 million in relation to the expected refund of IEEPA tariffs from the U.S. Government. This resulted in a net benefit to operating earnings of approximately $100 million during the three months ended June 30, 2026, primarily due to the recording of a corresponding expense related to the payments to customers. The net operating earnings impact was immaterial for fiscal 2026, due to the timing of tariff related expense recognition and the IEEPA tariff refund. The ultimate resolution of this matter could impact our results of operations in future periods, including GMPD segment profit and consolidated operating income.
Read it in 10-K 2026-08-11 at sec.gov ↗
AddedMD&A
It is also possible that our Pharma segment could be impacted by tariffs. An April 2026 proclamation issued by the President of the United States imposed tariffs on imports of branded pharmaceutical products and associated ingredients imported into the United States. If pharmaceutical manufacturers raise their prices or stop importing certain products, we could experience increased costs or supply disruptions which may impact our financial results.
Read it in 10-K 2026-08-11 at sec.gov ↗
AddedMD&A
Additionally, while generic pharmaceutical products are not currently subject to U.S. tariffs, the President recently issued a statement indicating that generic pharmaceutical products will be subject to 100% tariffs beginning in 2028 and 200% tariffs beginning in 2029. There remains significant uncertainty about the ultimate implementation of this proposal; however, these potential tariffs may impact our costs or decrease available supply, which could impact Pharma segment profit and consolidated operating earnings.
Read it in 10-K 2026-08-11 at sec.gov ↗
AddedMD&A
During fiscal 2026, we recognized a pre-tax impairment charge of $122 million in connection with the observed reduction of the estimated fair value of the Outcomes business, of which we hold a 16 percent equity interest.
Read it in 10-K 2026-08-11 at sec.gov ↗
AddedMD&A
In October 2025, we renewed the 364-Day revolving credit facility, under which we have access to $1.0 billion of committed liquidity through October 2026.
Read it in 10-K 2026-08-11 at sec.gov ↗
AddedMD&A
On August 7, 2026, we entered into a consolidated $4.0 billion 5-year revolving credit facility that expires in August 2031, in conjunction with the terminations of the existing $2.0 billion revolving credit facility, the $1.0 billion 364-Day revolving credit facility, and the $1.0 billion committed receivables sales facility.
Read it in 10-K 2026-08-11 at sec.gov ↗
RemovedMD&A
On April 1, 2025, we completed the acquisition of ADS, a diabetic medical supplies provider to patients in the home, for a purchase price of $1.1 billion in cash, subject to certain adjustments. ADS serves approximately 500,000 patients annually providing diabetes therapies from leading manufacturers. ADS is part of our at-Home Solutions operating segment and its results are reported in Other.
Read it in 10-K 2025-08-12 at sec.gov ↗
RemovedMD&A
On January 30, 2025, we completed the acquisition of a 73 percent ownership interest in GI Alliance ("GIA"), a management services organization ("MSO") primarily serving gastroenterologists, for a purchase price of approximately $2.8 billion in cash, subject to certain adjustments. Beginning on the third anniversary of the closing, we have the ability to exercise a call right to purchase up to 100 percent of the remaining outstanding equity. GIA's MSO provides services to over 900 physicians across 345 practice locations in 20 states.
Read it in 10-K 2025-08-12 at sec.gov ↗
RemovedMD&A
In recognition of the expansion into new practice areas, in June 2025, we announced that these businesses would be called The Specialty Alliance. We consolidate the results of The Specialty Alliance in our consolidated financial statements and report those consolidated results within our Pharma segment.
Read it in 10-K 2025-08-12 at sec.gov ↗
RemovedMD&A
We financed the acquisitions of GIA, Urology America, and ADS with a combination of cash on hand and cash proceeds from the new debt financing as described in Note 7 of the "Notes to Consolidated Financial Statements".
Read it in 10-K 2025-08-12 at sec.gov ↗
RemovedMD&A
On December 2, 2024, we completed the acquisition of ION, a physician-led independent community oncology network, for a purchase price of $1.1 billion in cash, subject to certain adjustments. ION is a management services organization that supports more than 50 practice sites in 10 states representing more than 100 providers. ION supports a continuum of care across its member sites including medical oncology, radiation oncology, urology, and other ancillary services. As part of the transaction, ION has been integrated into Navista, our managed services organization intended to enhance efficiency for providers and patients, enable additional capabilities, and increase practice profitability of independent community oncologists. We report ION results within our Pharma segment. We funded the acquisition with available cash on hand.
Read it in 10-K 2025-08-12 at sec.gov ↗
RemovedMD&A
These acquisitions have positively impacted their respective segment revenue and segment profit while increasing amortization and acquisition-related costs and acquisition-related cash and share-based compensation costs during fiscal 2025. Those impacts are expected to continue in fiscal 2026 and beyond.
Read it in 10-K 2025-08-12 at sec.gov ↗
RemovedMD&A
Recent U.S. tariffs imposed or threatened to be imposed on goods, materials, and products from countries where we do business and any retaliatory or responsive actions taken by such countries could result in us incurring substantial additional costs to source materials, directly and indirectly, from affected countries, and may require us to raise prices on certain products and seek alternative sources of supply. It is also possible that we could experience supply disruptions or shortages as a result of tariffs or other protective measures.
Read it in 10-K 2025-08-12 at sec.gov ↗
RemovedMD&A
In April 2024, we announced that our pharmaceutical distribution contracts with OptumRx would expire at the end of June 2024. Sales to OptumRx generated 17 percent of our consolidated revenue in fiscal 2024. The expiration of the OptumRx contracts and unwinding of the negative net working capital associated with the contracts adversely impacted our results of operations, including segment profit, financial condition, and cash flows, during fiscal 2025.
Read it in 10-K 2025-08-12 at sec.gov ↗
RemovedMD&A
The performance of BioPharma Solutions positively impacted the year-over-year comparison of Pharma segment profit during fiscal 2025. BioPharma Solutions consists of services to biopharmaceutical manufacturers and healthcare providers including, among other things, Specialty Networks, third-party logistics ("3PL"), group purchasing organizations ("GPOs"), our Sonexus patient access and support programs, regulatory and clinical consulting, and real world data and evidence.
Read it in 10-K 2025-08-12 at sec.gov ↗
RemovedMD&A
Cardinal Health brand medical products sales grew during fiscal 2025 and we expect further growth in fiscal 2026 and beyond. The timing, magnitude, and profit impact of this anticipated sales growth is subject to risks and uncertainties, including the signing of new customers or the expiration of customer contracts, and it is possible that sales volume may differ from our expectations and impact GMPD segment profit to a greater or lesser extent than we currently expect.
Read it in 10-K 2025-08-12 at sec.gov ↗
RemovedMD&A
A reconciliation of the provision based on the federal statutory income tax rate to our effective income tax rate from continuing operations is as follows (see Note 9 of the "Notes to Consolidated Financial Statements" for additional information):
Read it in 10-K 2025-08-12 at sec.gov ↗
RemovedMD&A
2025 2024 Provision at Federal statutory rate 21.0% 21.0% State and local income taxes, net of federal benefit 4.0 3.1 Tax effect of foreign operations 0.2 (1.6) Nondeductible/nontaxable items 0.7 (0.1) Withholding Taxes 0.3 1.0 Change in Valuation Allowances 0.1 (1.1) US Taxes on International Income (1) (1.3) (2.1) Impact of Resolutions with IRS and other related matters (0.1) 0.4 Opioid litigation 0.2 1.0 Goodwill Impairment — 8.7 Specialty Alliance Share-based Compensation 1.4 — Other (1.2) (1.4) Effective income tax rate 25.3% 28.9%
Read it in 10-K 2025-08-12 at sec.gov ↗
RewordedMD&A
(in millions, except per common share amounts) Operating Earnings Operating Earnings Growth Rate Earnings Before Income Taxes Provision for Income Taxes Net Earnings (Earnings)/Loss Attributable to Non-controlling Interests Net Earnings1 Earnings(1) Net Earnings1 Earnings(1) Growth Rate Effective Tax Rate Diluted EPS1 EPS(1) Diluted EPS1 EPS(1) Growth Rate Fiscal Year 2026 GAAP $ 2,613 15% $ 2,174 $ 469 $ 9 $ 1,714 10% 21.6% $ 7.23 12% State opioid assessment related to prior fiscal years (17) (17) (4) — (13) (0.05) Restructuring and employee severance 106 106 24 — 82 0.34 Amortization and other acquisition-related costs 469 469 120 — 349 1.47 Acquisition-related cash and share-based compensation costs 287 287 12 — 275 1.16 Impairments and (gain)/loss on disposal of assets, net (2) 177 177 22 (23) 132 0.56 Litigation (recoveries)/charges, net (10) (10) (19) — 9 0.04 Impairment of equity interest in Outcomes (3) — 122 3 — 119 0.50 Non-GAAP $ 3,624 30% $ 3,308 $ 628 $ (13) $ 2,667 34% 19.0% $ 11.26 37% Fiscal Year 2025 GAAP $ 2,275 83% $ 2,101 $ 532 $ (8) $ 1,561 83% 25.3% $ 6.45 87% Restructuring and employee severance 88 88 21 — 67 0.28 Amortization and other acquisition-related costs 464 464 104 — 360 1.49 Acquisition-related cash and share-based compensation costs 126 126 1 — 125 0.51 Impairments and (gain)/loss on disposal of assets, net 18 18 5 — 13 0.05 Litigation (recoveries)/charges, net (185) (185) (54) — (131) (0.54) Non-GAAP $ 2,786 15% $ 2,612 $ 609 $ (8) $ 1,995 7% 23.3% $ 8.24 9% Fiscal Year 2024 GAAP $ 1,243 65% $ 1,201 $ 348 $ (1) $ 852 N.M. 28.9% $ 3.45 N.M.
Read it in 10-K 2026-08-11 at sec.gov ↗
RewordedMD&A
($ per share) 2026 (2) 2025 (2) 2024 (2) Change GAAP diluted EPS (1) $ 7.23 $ 6.45 $ 3.45 87% 12% State opioid assessment related to prior fiscal years (0.05) — Restructuring and employee severance 0.34 0.28 0.54 Amortization and other acquisition-related costs 1.47 1.49 0.85 Acquisition-related cash and share-based compensation costs 1.16 0.51 — Impairments and (gain)/loss on disposal of assets, net (3) 0.56 0.05 2.38 Litigation (recoveries)/charges, net 0.04 (0.54) 0.30 Impairment of equity interest in Outcomes (4) 0.50 — Non-GAAP diluted EPS (1) $ 11.26 $ 8.24 $ 7.53 9% 37%
Read it in 10-K 2026-08-11 at sec.gov ↗
RewordedMD&A
During fiscal 2025, GAAP and non-GAAP diluted EPS for fiscal 2026 increased 87 12 percent to $6.45 and 9 percent to $8.24, respectively, $7.23 from the prior year year, primarily due to the factors impacting GAAP operating earnings discussed in the preceding section, section and favorable changes in discrete tax items, partially offset by increased interest expense. expense and the impairment of our equity interest in Outcomes.
Read it in 10-K 2026-08-11 at sec.gov ↗
RewordedMD&A
We have taken action to reduce the potential impact of tariffs on our costs; however, at this time, the countries which will be subject to tariffs and the The tariff rate that may be imposed on each country is uncertain and environment remains dynamic and we do not expect to be able to establish alternative sources of supply or otherwise mitigate the potential impact of tariffs on all of the products that we source, manufacture, or distribute.
Read it in 10-K 2026-08-11 at sec.gov ↗
RewordedMD&A
The increases increase in both GAAP and non-GAAP operating earnings were was driven by the increased contribution from branded and specialty pharmaceutical products pharmaceuticals and the performance of our generics program in our Pharma segment, the impact of the acquisitions of MSO platforms and ADS, partially offset by the expiration of the OptumRx contracts. and growth from existing customers in our GMPD segment.
Read it in 10-K 2026-08-11 at sec.gov ↗
RewordedMD&A
(in millions) 2026 2025 2024 Change GAAP operating earnings $ 2,613 $ 2,275 $ 1,243 83% Shareholder cooperation agreement costs 15% State opioid assessment related to prior fiscal years (17) — 1 Restructuring and employee severance 106 88 175 Amortization and other acquisition-related costs 469 464 284 Acquisition-related cash and share-based compensation costs 287 126 — Impairments and (gain)/loss on disposal of assets, net 177 18 634 Litigation (recoveries)/charges, net (10) (185) 78 Non-GAAP operating earnings $ 3,624 $ 2,786 $ 2,414 15% 30%
Read it in 10-K 2026-08-11 at sec.gov ↗
RewordedMD&A
Additionally, the recently issued Executive Order titled “Delivering Most-Favored Nation Prescription Drug Pricing to American Patients” and other administrative policies or actions may impact sales or profitability of branded pharmaceutical products, including GLP-1 products; however, the extent of the impact is uncertain and may vary depending on the timeline for implementation and the extent of any price reductions. products.
Read it in 10-K 2026-08-11 at sec.gov ↗
RewordedMD&A
Additionally, the recently issued Executive Order titled “Delivering Most-Favored Nation Prescription Drug Pricing to American Patients” may impact sales or profitability of branded pharmaceutical products, including GLP-1 products; however, the The extent of the impact any future impacts is uncertain and may vary depending on the timeline for implementation and the extent of any price reductions.
Read it in 10-K 2026-08-11 at sec.gov ↗
RewordedMD&A
Gross margin SG&A expenses for fiscal 2025 2026 increased 10 14 percent to $8.2 $6.1 billion from the prior year, primarily due to the acquisitions of MSO platforms and ADS, increased contribution from branded and specialty pharmaceutical products, and BioPharma Solutions, partially offset by the expiration of the OptumRx contracts. ADS.
Read it in 10-K 2026-08-11 at sec.gov ↗
RewordedMD&A
During fiscal 2025, GAAP and non-GAAP Non-GAAP diluted EPS for fiscal 2026 increased 87 37 percent to $6.45 and 9 percent to $8.24, respectively, $11.26 from the prior year due to the factors impacting non-GAAP operating earnings discussed in the preceding section, section and favorable changes in discrete tax items, partially offset by increased interest expense.
Read it in 10-K 2026-08-11 at sec.gov ↗
RewordedMD&A
Pharma segment profit for fiscal 2025 2026 increased 12 23 percent to $2.3 $2.8 billion from the prior year, primarily due to the increased contribution from branded and specialty pharmaceutical products, BioPharma Solutions, the performance of our generics program, and the acquisition of MSO platforms acquisitions, partially offset by the expiration of the OptumRx contracts. platforms.
Read it in 10-K 2026-08-11 at sec.gov ↗
RewordedMD&A
Revenue decreased 2 Pharma segment revenue for fiscal 2026 increased 15 percent to $222.6 $234.8 billion for fiscal 2025 from the prior year, primarily due to the expiration of the Pharma segment OptumRx contracts, partially offset by branded and specialty pharmaceutical sales growth from existing and new customers.
Read it in 10-K 2026-08-11 at sec.gov ↗
Quiet changesMD&A
The proceeds of the notes issued, net of discounts, premiums, and debt issuance costs, were $2.9 approximately $1.0 billion.
Read it in 10-K 2026-08-11 at sec.gov ↗
