Cardinal Health (CAH) risk factors, FY2026 10-K

What changed since the prior 10-K

New

• New

  Modification of Certain Software Systems

  Pharma’s supply-chain system modifications could disrupt operations or weaken internal control over financial reporting if implementation fails.

• New

  ( 2,584 ) ( 5,593 ) ( 1,849 )

  Financing activities used $1.602 billion, including $1.358 billion for treasury-share purchases, affecting liquidity and capital allocation.

• New

  Since February 2025, we have paid approximately $ 200 million in International Emergency Economic Powers Act ("IEEPA") tariffs, related to products that we source, manufacture or distribute, primarily in our GMPD segment

  IEEPA tariffs have cost approximately $200 million since February 2025, although a government refund receivable is recorded and expected to be passed to customers.

• New

  Notes to Financial Statements

  Capitalized internal-use software reached $2.036 billion, increasing exposure to depreciation, useful-life, and investment judgments.

• New

  Property and equipment, net $ 3,031 $ 2,858

  Acquisition accounting depends on difficult valuations of customer relationships, trade names, technology, future cash flows, discount rates, and useful lives.

• New

  As of June 30, 2026, our reporting units are: Pharmaceutical and Specialty Solutions (excluding Navista & ION and The Specialty Alliance), Navista & ION, The Specialty Alliance, GMPD, Nuclear and Precision Health Solutions, at-Home Solutions, and OptiFreight® Logistics

  Goodwill valuations rely on forecasts and risk-adjusted discount rates of 8% to 12%, creating impairment risk if performance or outlook deteriorates.

• New

  additional impairments recorded during the three months ended June 30, 2026

  GMPD previously incurred $675 million of goodwill impairment charges, leaving no GMPD goodwill balance as of March 31, 2024.

• New

  There were tax benefits related to the goodwill impairment charges in fiscal 2026 and fiscal 2024, see Note 8 for additional information

  Indefinite- and finite-lived intangible valuations depend on significant judgments about fair value, impairment indicators, cash flows, and useful lives.

• New

  Cardinal Health, Inc. Plan

  Performance-share valuations use Monte Carlo assumptions, including 2026 risk-free interest of 3.70% and expected volatility of 23.60%.

• New

  provided to the customer, reduced by contractual adjustments to third-party payors, discounts and implicit price concessions to customers. Revenues derived from services from all segments are immaterial for all periods presented

  Revenue is generally recorded gross because Cardinal Health typically controls products or services before transferring them to customers.

• New

  Disaggregation of Income Statement Expenses

  Future FASB expense-disaggregation rules may require new disclosures beginning with Cardinal Health’s fiscal 2028 Form 10-K.

• New

  Accounting for Internal-Use Software

  New internal-use software accounting rules and the approximately $1.9 billion Solaris Health acquisition add future accounting and integration complexity.

• New

  The allocation of the purchase price for the acquisition of Solaris Health is not yet finalized and is subject to adjustment as we complete the valuation analysis of this acquisition

• New

  (4) At June 30, 2026 and 2025, the Nuclear and Precision Health Solutions accumulated goodwill impairment loss was $ 829 million

• New

  benefits from the expected growth from new customers, the assembled workforce of the acquired entities and synergies of integrating these businesses. Substantially all of the goodwill recorded is expected to be non-deductible for income tax purposes

• New

  The increase in gross definite-life intangibles is primarily due to the Solaris acquisition. Total amortization of intangible assets was $ 361 million, $ 303 million, and $ 264 million for fiscal 2026, 2025, and 2024, respectively

• New

  (1) Increases in the right-of-use asset and liability balances are primarily due to acquisitions

• New

  During fiscal 2026, we made a partial principal payment of $ 100 million for the Floating Rate Term Loan due 2028 with available cash and repaid the full principal of $ 500 million of the 3.75% Notes due 2025 at maturity with available cash

• New

  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 6, 2026

• New

  amount outstanding was approximately $ 2.0 billion. The average combined daily amount outstanding for fiscal 2026 was $ 44 million

• New

  As of June 30, 2026, we have $ 4.3 billion accrued for the opioid-related matters described below, of which $ 468 million is included

• New

  Through July 2026, we have paid the Settling Governmental Entities approximately $ 2.6 billion and we expect to pay Settling Governmental Entities additional amounts up to $ 3.7 billion through 2038

• New

  outcome in this matter may result in a change in loss reserves related to opioid litigation recorded by our captive insurance company, which would negatively impact cash flow

• New

  We have been named as a defendant in product liability lawsuits involving claims by plaintiffs that allege personal injuries associated with the use of IVC filter products. These lawsuits sought a variety of remedies, including unspecified monetary damages

• New

  Net Operating Loss Carryback

• New

  Patient Recovery Restructuring

• New

  Income Taxes Paid, Net of Refunds

• New

  During fiscal 2026, we received two NOPAs from the IRS in connection with their audit of our fiscal years 2015-2020. See Note 7 for additional information regarding these matters

• New

  (in millions) Level 1 Level 2 Level 3 Total

• New

  Changes in Level 3 Recurring Fair Value Measurements

• New

  Balance at end of period $ 1,277 $ 843

• New

  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

• New

  In March 2026, we terminated the € 68 million ($ 73 million) cross-currency swaps entered into in March 2023 and paid a settlement in cash of $ 7 million, recorded in proceeds from/(payments for) net investment hedge terminations in our consolidated statements of cash flows

• New

  statements of earnings. The principal currencies managed through foreign currency contracts are the Canadian dollar, Chinese renminbi, Mexican peso, Brazilian real, and Singapore dollar

• New

  Foreign currency contracts $ 194 Jul 2025

• New

  The carrying amounts of cash and equivalents, trade receivables, net, accounts payable, and other accrued liabilities at June 30, 2026 and 2025 approximate fair value due to their short-term maturities

• New

  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

• New

  dividend equivalents that are payable upon vesting of the awards

• New

  Nonvested at June 30, 2026 1.2 $ 117.07

• New

  Vested at June 30, 2026 835 $ 1.53

• New

  $ 720 $ 2,317 $ — $ ( 2,360 ) $ 677

• New

  Mr. Mason has served as Chief Executive Officer, GMPD segment since August 2019

• New

  Form of 5.150% Notes due 2035 (included in Exhibit 4.2.19)

Dropped

• Dropped

  OptumRx — 17 % 16 % — 6 %

• Dropped

  ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation

• Dropped

  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 the indefinite-lived intangible asset is less than its carrying amount

• Dropped

  We apply a practical expedient for short-term leases whereby we do not recognize a lease liability and right-of-use asset for leases with a term of less than 12 months. Short-term lease expense recognized in fiscal 2025, 2024, and 2023 was immaterial

• Dropped

  compensation. Self-insurance accruals include an estimate for expected settlements or pending claims, defense costs, administrative fees, claim adjustment costs, and an estimate for claims incurred but not reported

• Dropped

  with a future service requirement are recognized on a straight-line basis over the requisite service period

• Dropped

  We have accounted for the acquisition of the ownership interest in GIA as a business combination in accordance with ASC 805. We consolidate the results of GIA in our consolidated financial statements and report those consolidated results within our Pharma segment

• Dropped

  Integrated Oncology Network ("ION")

• Dropped

  Transaction and integration costs associated with the Specialty Network acquisition were $7 million and $16 million during fiscal 2025 and 2024, respectfully

• Dropped

  Fair Value of Assets Acquired and Liabilities Assumed

• Dropped

  The noncontrolling interest for ION was recognized at the acquisition-date fair value of $151 million

• Dropped

  (3) Comprised of the remaining operating segments, Nuclear and Precision Health Solutions, at-Home Solutions, and OptiFreight® Logistics

• Dropped

  During fiscal 2025, we did not identify any indicators of impairment within our reporting units

• Dropped

  (gain)/loss on disposal of assets, net in our consolidated statements of earnings

• Dropped

  Total other intangible assets $ 5,248 $ 3,523 $ 1,725

• Dropped

  New finance leases 107 55 42

• Dropped

  November 15, 2034, and $650 million aggregate principal amount of 5.75% Notes that mature on November 15, 2054. The proceeds of the notes issued, net of discounts, premiums, and debt issuance costs, were $2.9 billion

• Dropped

  During fiscal 2025, we had a daily maximum amount outstanding under our commercial paper and committed receivables programs of $633 million

• Dropped

  Opioid Lawsuits and Investigations

• Dropped

  settlement agreements with the City of Baltimore and classes of third-party payors and acute care hospitals

• Dropped

  Cordis IVC Filter Matters

• Dropped

  Generic Pharmaceutical Pricing Antitrust Litigation

• Dropped

  Tax Effects of Goodwill Impairment Charges

• Dropped

  (2)Included in deferred income taxes and other liabilities in the consolidated balance sheets

• Dropped

  Other investments (1) 108 — — 108

  Revenue concentration among Vizient and Premier GPO members.

• Dropped

  Forward contracts (2) — (87) — (87)

  Inventory obsolescence reserves based on sales, expiration, and manufacturer-return estimates.

• Dropped

  Commodity Price Risk Management

• Dropped

  manage the price risk associated with certain forecasted purchases

• Dropped

  We enter into commodity contracts to manage the price risk associated with forecasted purchases of certain commodities used in our GMPD segment

  Testing finite-lived intangible assets for recoverability after adverse events or changed circumstances.

• Dropped

  Cross-currency swaps designated as net investment hedges are marked-to-market using the current spot exchange rate as of the

  Short-term lease accounting, long-term lease terms, and vendor disputes over payment deductions.

• Dropped

  Fair Value of Financial Instruments

• Dropped

  During fiscal 2025, we paid $15 million for excise taxes related to the completion of prior ASR programs and we retired 56 million of common stock shares without par value

• Dropped

  During fiscal 2024, we modified the equity incentive awards of four employees to amend provisions over involuntary termination. We recognized incremental share-based compensation expense of $9 million

• Dropped

  Nonvested at June 30, 2025 1.5 $ 99.45

  Unpredictable litigation, contingency, and self-insurance claims requiring reserve judgments.

• Dropped

  The total fair value of GIA Units vested during fiscal 2025 was $82 million. During fiscal 2025, we recognized an increase in the fair value of the liability, resulting in expense of $41 million, related to the vested GIA Units, which is recognized in acquisition-related cash and share-based compensation costs

• Dropped

  $ 832 $ 2,382 $ — $ (2,494) $ 720

Reworded

• 100% rewritten

  Total current $ 378 $ 289 $ 452

  Tax disclosure now presents fiscal 2026 categories under ASU 2023-09; tax provision declined from $532 million to $469 million.

  Was: Total current $ 289 $ 452 $ 372

• 100% rewritten

  In September 2023, we terminated the ¥ 38 billion ($ 300 million) cross-currency swaps entered into in January 2023 and received net settlement in cash of $ 28 million, recorded in proceeds from/(payments for) net investment hedge terminations in our consolidated statements of cash flows

  Historical cross-currency swap transactions were replaced by current net-investment-hedge accounting, including a $34 million 2026 gain and $33 million 2025 loss.

  Was: In September 2023, we terminated the ¥38 billion ($300 million) cross-currency swaps entered into in January 2023 and received net settlement in cash of $28 million, recorded in proceeds from net investment hedge terminations in our consolidated statements of cash flows

• 100% rewritten

  Total assets $ 57,299 $ 53,122

  Geographic property disclosures were replaced with segment and Corporate depreciation and amortization, totaling $956 million in 2026.

  Was: Total assets $ 53,122 $ 45,121

• 99% rewritten

  Foreign currency contracts $ — $ 11 $ ( 7 )

  Derivative disclosure shifted from economic foreign-currency contract gains and losses to cash-flow-hedge amounts reclassified into revenue, product costs, SG&A, and interest.

  Was: Foreign currency contracts $ 178 Jul 2024

• 99% rewritten

  Total additions to property and equipment $ 649 $ 547 $ 511

  The disclosure now reports property and equipment by geography, with U.S. net property increasing to $2.607 billion in 2026.

  Was: Total additions to property and equipment $ 547 $ 511 $ 481

• 98% rewritten

  We performed annual impairment testing in fiscal 2026, 2025, and 2024 for our reporting units. We concluded that there were no impairments of goodwill for the reporting units, excluding Navista & ION and GMPD, as the estimated fair value of each reporting unit exceeded its carrying amount

  The updated disclosure reports a $184 million Navista & ION impairment charge for the quarter ended March 31, 2026.

  Was: We concluded that there were no impairments of goodwill for the remaining reporting units, excluding GMPD, in fiscal 2025, 2024, and 2023 as the estimated fair value of each reporting unit exceeded its carrying amount

• 95% rewritten

  States & Political Subdivisions

  Opioid claims are now resolved for all 50 states, Washington, D.C., and five territories, rather than describing future payments through 2038.

• 95% rewritten

  Total indefinite-life intangibles 13 — 13

  Definite-lived intangible assets increased to $6.318 billion, with Non-Competition Agreements separately reported at $72 million.

  Was: Total indefinite-life intangibles 12 — 12

• 92% rewritten

  Earnings before Income Taxes and Provision for Income Taxes

• 90% rewritten

  Foreign currency contracts $ 381 Jul 2025 - Jun 2026

  Was: Foreign currency contracts $ 401 Jul 2024 - Jun 2025

• 89% rewritten

  Financing cash flows paid for finance leases 57 53 36

  Was: Financing cash flows paid for finance leases 53 36 31

• 89% rewritten

  Variable lease cost primarily includes payments for property taxes, maintenance, and insurance

• 88% rewritten

  Net cash provided by operating activities 5,174 2,397 3,762

  Was: Net cash provided by operating activities 2,397 3,762 2,844

• 87% rewritten

  Recently Issued Financial Accounting Standards and Disclosure Rules Not Yet Adopted

• 87% rewritten

  Gross margin 9,774 8,168 7,414

  Was: Gross margin 8,168 7,414 6,874

• 86% rewritten

  (1) Reflects 18, 13, and 11, common shares purchased in April, May, and June 2026, respectively, through a rabbi trust as investments of participants in our Deferred Compensation Plan

  Was: (1)Reflects 7, 6, and 7 common shares purchased in April, May, and June 2025, respectively, through a rabbi trust as investments of participants in our Deferred Compensation Plan

• 86% rewritten

  Other Financing Arrangements

• 86% rewritten

  Number Exhibit Description

• 85% rewritten

  Total indefinite-life intangibles 24 — 24 N/A

  Was: Total indefinite-life intangibles 13 — 13 N/A

• 85% rewritten

  Liabilities and Shareholders’ Deficit

• 84% rewritten

  Net deferred income tax assets $ 1,075 $ 976

  Was: Net deferred income tax assets $ 976 $ 1,191

• 82% rewritten

  Currency Exchange Risk Management

• 82% rewritten

  Advanced Diabetes Supply Group ("ADS")

• 82% rewritten

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

  Was: 7. Long-Term Obligations and Other Short-Term Borrowings

• 81% rewritten

  Provision for bad debts 74 53 36

  Was: Provision for bad debts 53 36 55

• 80% rewritten

  Purchased goodwill and intangible assets with indefinite lives are not amortized, but instead are tested for impairment annually or when indicators of impairment exist

• 80% rewritten

  3. Restructuring and Employee Severance

  Was: 4. Restructuring and Employee Severance

• 79% rewritten

  performance and the obligation to absorb losses or the right to receive benefits of the VIE and, as a result, are considered the primary beneficiary of the VIE

  Was: We consolidate a VIE when we have the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits of the VIE and, as a result, are considered the primary beneficiary of the VIE

• 78% rewritten

  (in millions) 2026 2025 2024

  Was: (in millions) 2025 2024 2023

• 78% rewritten

  During fiscal 2024, we reached agreements to settle claims brought by classes of third-party payors and acute care hospitals, and the City of Baltimore

• 76% rewritten

  We maintain cash depository accounts with major banks, and we invest in high quality, short-term liquid instruments, and in marketable securities. Our short-term liquid instruments mature within three months and we have not historically incurred any related losses

• 76% rewritten

  Deferred income taxes arise from temporary differences between financial reporting and tax reporting bases of assets and liabilities and operating loss and tax credit carryforwards for tax purposes

• 74% rewritten

  The Specialty Alliance Share-Based Compensation

  Was: GIA Share-Based Compensation

• 71% rewritten

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

• 70% rewritten

  Information About Our Executive Officers

• 69% rewritten

  Financial Statements and Supplementary Data

• 67% rewritten

  Gains 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 $ 6 million

  Was: Gains 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 $5 million

• 67% rewritten

  Antitrust Litigation Proceeds

• 66% rewritten

  11. Shareholders' Deficit

  Was: 12. Shareholders' Deficit

• 66% rewritten

  The fair value of the non-compete intangibles acquired from Solaris Health and GIA were determined by applying the differential cash flow method which compares the present value of cash flows with and without the non-compete agreements in place

  Was: The fair value of the non-compete intangibles acquired from GIA were determined by applying the differential cash flow method which compares the present value of cash flows with and without the non-compete agreements in place

• 66% rewritten

  (1) Maturities are presented on a calendar year basis

• 66% rewritten

  12. Earnings Per Share Attributable to Cardinal Health, Inc

  Was: 13. Earnings Per Share Attributable to Cardinal Health, Inc

• 66% rewritten

  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 June 30, 2026, we were in compliance with this financial covenant

  Was: 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 June 30, 2025, we were in compliance with this financial covenant

• 64% rewritten

  (2) Includes the tax impact of the Foreign-Derived Intangible Income deduction offset by Global Intangible Low-Taxed Income tax, and other foreign income that is taxable under the U.S. tax code

  Was: (1) Includes the tax impact of the Foreign-Derived Intangible Income ("FDII") deduction offset by Global Intangible Low-Taxed Income ("GILTI") tax, and other foreign income that is taxable under the U.S. tax code

• 64% rewritten

  14. Share-Based Compensation

  Was: 15. Share-Based Compensation

• 64% rewritten

  Changes in Internal Control Over Financial Reporting

• 63% rewritten

  Cash and equivalents at end of period $ 4,856 $ 3,874 $ 5,133

  Was: Cash and equivalents at end of period $ 3,874 $ 5,133 $ 4,076

• 63% rewritten

  Unrecognized Tax Benefits

• 62% rewritten

  Our effective tax rate has benefits from negotiated lower than statutory tax rates in select foreign jurisdictions which individually are not material to our effective tax rate but in aggregate had a favorable tax impact of approximately $ 14 million and $ 17 million during fiscal 2026 and 2025, respectively

  Was: Our effective tax rate has benefits from negotiated lower than statutory tax rates in select foreign jurisdictions which individually are not material to our effective tax rate but in aggregate had a favorable tax impact of approximately $17 million during fiscal 2025

• 61% rewritten

  Employee Retirement Savings Plans

• 61% rewritten

  Total restructuring and employee severance $ 106 $ 88 $ 175

  Was: Total restructuring and employee severance $ 88 $ 175 $ 95

• 60% rewritten

  At July 31, 2026, there were approximately 5,598 shareholders of record of our common shares

  Was: At July 31, 2025, there were approximately 5,917 shareholders of record of our common shares

• 59% rewritten

  We recognize revenue in an amount that reflects the consideration to which we expect to be entitled in exchange for the transfer of goods or services to customers

• 59% rewritten

  Authorized— 500 thousand shares, Issued— none

• 56% rewritten

  (3) The weighted-average useful life of non-competition agreements is 5 years

  Was: (4) The weighted-average useful life of non-competition agreements is 4 years

• 55% rewritten

  Five Year Performance Graph

• 53% rewritten

  Nonvested at June 30, 2026 1.1 $ 85.89

  Was: Nonvested at June 30, 2025 1.4 $ 86.30

• 52% rewritten

  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

• 52% rewritten

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

• 52% rewritten

  9. Fair Value Measurements

  Was: 10. Fair Value Measurements

• 47% rewritten

  Description of the Matter

• 47% rewritten

  Accumulated Other Comprehensive Loss

• 46% rewritten

  Weighted-average common shares–diluted 237 242 247

  Was: Weighted-average common shares–diluted 242 247 262

• 46% rewritten

  Exhibits, Financial Statement Schedules

• 39% rewritten

  Ms. Mayer has served as Chief Legal and Compliance Officer since March 2019

• 36% rewritten

  The business experience summaries provided below for our executive officers describe positions held during the last five years (unless otherwise indicated)

• 36% rewritten

  Economic (Non-Designated) Hedges

• 35% rewritten

  Pay-floating interest rate swaps $ 1,600 Jun 2027 - Feb 2031

• 35% rewritten

  Amortization and Other Acquisition-Related Costs

• 32% rewritten

  In February 2025, we terminated the € 100 million ($ 107 million) cross-currency swaps entered into in March 2023 and received net settlement in cash of $ 2 million, recorded in proceeds from/(payments for) net investment hedge terminations in our consolidated statements of cash flows

  Was: In February 2025, we terminated the €100 million ($107 million) cross-currency swaps entered into in March 2023 and received net settlement in cash of $2 million, recorded in proceeds from net investment hedge terminations in our consolidated statements of cash flows

• 30% rewritten

  New York Opioid Stewardship Act

• 29% rewritten

  All derivative instruments are recognized at fair value on the consolidated balance sheets and all changes in fair value are recognized in net earnings or shareholders’ equity through AOCI, net of tax

• 28% rewritten

  1. Basis of Presentation and Summary of Significant Accounting Policies

• 27% rewritten

  Weighted-average common shares–basic 236 241 245

  Was: Weighted-average common shares–basic 241 245 261

• 27% rewritten

  Receivables and Allowance for Doubtful Accounts

• 25% rewritten

  Translation of Foreign Currencies

• 24% rewritten

  Sales Returns and Allowances

• 24% rewritten

  Opinion on Internal Control over Financial Reporting

• 21% rewritten

  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

• 21% rewritten

  Variable Interest Entities

All 143 risk factors

Headings as the filing states them, in filing order.

Other Cardinal Health 10-Ks

• FY2025 10-K risk factors

  136 risks

  The company faces legal and regulatory risks, particularly concerning opioid litigation and product liability claims like the Cordis OptEase and TrapEase devices. Credit risk is concentrated in large customers and group purchasing organizations like Vizient and Premier. Goodwill and intangible asset impairments pose ongoing risks to reported financial results.

  Filed Aug 12, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.