CARDINAL HEALTH INC

Notes to Financial Statements

Notes to Condensed Consolidated Financial Statements

1. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

Our condensed consolidated financial statements include the accounts of all majority-owned or consolidated subsidiaries, and all significant intercompany transactions and amounts have been eliminated. The results of businesses acquired or disposed of are included in the condensed consolidated financial statements from the date of the acquisition or up to the date of disposal, respectively.

We report our financial results in 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.

References to "we," "our," and similar pronouns in this Quarterly Report on Form 10-Q for the quarter ended September 30, 2026 (this "Form 10-Q") are to Cardinal Health, Inc. and its majority-owned or consolidated subsidiaries unless the context requires otherwise.

Our fiscal year ends on June 30. References to fiscal 2027 and 2026 in these condensed consolidated financial statements are to the fiscal years ending or ended June 30, 2027 and June 30, 2026, respectively.

Our condensed consolidated financial statements have been prepared in accordance with the U.S. Securities and Exchange Commission ("SEC") instructions to Quarterly Reports on Form 10-Q and include the information and disclosures required by accounting principles generally accepted in the United States ("GAAP") for interim financial reporting. The preparation of financial statements in conformity with GAAP requires us to make estimates, judgments, and assumptions that affect amounts reported in the condensed consolidated financial statements and accompanying notes. Actual amounts may differ from these estimated amounts.

In our opinion, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included, all such adjustments are of a normal and recurring nature. In addition, financial results presented for this fiscal 2027 interim period are not necessarily indicative of the results that may be expected for the full fiscal year ending June 30, 2027. These condensed consolidated financial statements are unaudited and, accordingly, should be read in conjunction with the audited consolidated financial statements and related notes contained in

our Annual Report on Form 10-K for the fiscal year ended June 30, 2026 (the "2026 Form 10-K").

Variable Interest Entities

We evaluate our ownership, contractual, and other interests in entities to determine if they are a variable interest entity (“VIE”), if we have a variable interest in those entities, and the nature and extent of those interests. These evaluations may involve management judgment and the use of estimates and assumptions based on available historical information, among other factors. Based on our evaluations, if we determine we are the primary beneficiary of such VIEs, we consolidate such entities into our financial statements.

Consolidated Variable Interest Entities

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 that could be significant to the VIE and, as a result, are considered the primary beneficiary of the VIE.

We have concluded that The Specialty Alliance management services organization ("MSO") and Navista are the primary beneficiaries of certain physician practices and therefore the practices are consolidated as VIEs. The Specialty Alliance and Navista VIEs do not have a material impact on our consolidated statements of earnings or consolidated statements of cash flows. Total assets and liabilities included in the consolidated balance sheets for The Specialty Alliance and Navista VIEs were $1.3 billion and $1.1 billion, respectively, as of September 30, 2026.

Noncontrolling Interests

Noncontrolling interests represent the portion of net earnings, comprehensive income, and net assets that is not attributable to Cardinal Health, Inc. Noncontrolling interests as of September 30, 2026 primarily represents third-party equity interests in Navista.

Recently Issued Financial Accounting Standards And Disclosure Rules Not Yet Adopted

We assess the adoption impacts of recently issued accounting standards by the FASB on our consolidated financial statements as well as material updates to previous assessments, if any, from the 2026 Form 10-K.

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU 2024-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), which requires disaggregated disclosures of certain categories of expenses which are included in any relevant income statement expense caption on an annual and interim basis. Additionally, the guidance requires the disclosure of total selling expenses and, in annual reporting periods, an entity's definition of selling expenses. This guidance

Notes to Financial Statements

will be effective for us in our fiscal 2028 Form 10-K and should be applied on a prospective basis, with retrospective application permitted. We are currently evaluating the impact of adoption of this guidance on our disclosures.

Accounting for Internal-Use Software

In September 2025, the FASB issued ASU 2025-06 Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The guidance amends the accounting and the disclosure of software costs, including website development costs. This guidance will be effective in our fiscal 2029 Form 10-K and may be applied using a prospective, retrospective, or modified transition approach. Early adoption is permitted. We are currently evaluating the impact of adoption of this guidance on our accounting and disclosures.

Recently Adopted Financial Accounting Standards

There were no new material accounting standards adopted in the three months ended September 30, 2026.

2. Acquisitions

Solaris Health

On November 3, 2025, we, through The Specialty Alliance, completed the acquisition of Solaris Health, a urology MSO, for a purchase price of approximately $1.9 billion in cash, subject to certain adjustments. In connection with the closing of this transaction, we issued common units in the Specialty Alliance to certain physicians and management which are estimated to have a grant date fair value of approximately $500 million, a portion of which will be recognized as post-combination expense within acquisition-related cash and share-based compensation costs.

Transaction and integration costs associated with the Solaris acquisition were $3 million during the three months ended September 30, 2026.

Fair Value of Assets Acquired and Liabilities Assumed

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. The purchase price is also subject to adjustment based on working capital requirements as set forth in the acquisition agreement.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the acquisition date for Solaris Health:

(1) The useful life of trade names is 10 years.

(2) The useful life of non-competition agreements is 5 years.

The valuation of identifiable intangible assets utilizes significant unobservable inputs and thus represents a Level 3 nonrecurring fair value measurement. The discount rate used to arrive at the present value of the identifiable intangible assets for Solaris Health was 7 percent, and reflects the internal rate of return and uncertainty in the cash flow projections, which is reflective of market participant assumptions.

The fair value of the Solaris Health trade name intangible asset was determined utilizing the relief from royalty method, an income-based approach. Under this method, a royalty rate based on observed market royalties is applied to projected revenue supporting the trade name and discounted to present value using an appropriate discount rate.

The fair value of the non-compete intangibles acquired from Solaris Health 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.

The vested Specialty Alliance Units, issued in relation to the Solaris Health acquisition, were recognized at their acquisition date fair value of $210 million and are included in deferred income taxes and other liabilities in the condensed balance sheet. The valuation of The Specialty Alliance Units utilizes significant unobservable inputs and thus represents a recurring Level 3 fair value measurement. The fair value of The Specialty Alliance Units in relation to the Solaris Health acquisition was determined using a discount rate of 7.5 percent and an estimated weighted average service period offive years.

Notes to Financial Statements

3. Restructuring and Employee Severance

The following table summarizes restructuring and employee severance costs:

Employee-related costs primarily consist of termination benefits provided to employees who have been involuntarily terminated, duplicate payroll costs, and retention bonuses incurred during transition periods. Facility exit and other costs primarily consist of project consulting fees, accelerated depreciation, professional project management, and costs associated with vacant facilities.

During the three months ended September 30, 2026, restructuring and employee severance costs were primarily related to the implementation of cost-savings and other strategic initiatives. During the three months ended September 30, 2025, restructuring and employee severance costs were primarily related to the implementation of cost-savings initiatives.

The following table summarizes activity related to liabilities associated with restructuring and employee severance:

4. Goodwill and Other Intangible Assets

Goodwill

The following table summarizes the carrying amount of goodwill by segment and in total:

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

During the three months ended September 30, 2026, we did not identify any indicators of impairment within our reporting units.

Goodwill increased in the three months ended September 30, 2026 due to recent acquisitions as well as purchase accounting adjustments in the Pharma segment and at-Home Solutions.

Purchased goodwill is tested for impairment annually or when indicators of impairment exist. Goodwill impairment testing involves a comparison of the estimated fair value of reporting units to the respective carrying amount.

As described in Note 2, the purchase price and assumed fair value of acquisitions is allocated to specific assets, resulting in the carrying amount approximating the fair value as of the acquisition date. Accordingly, we expect minimal excess of estimated fair value over carrying value for recent acquisitions. We will continue to evaluate acquisitions and the related reporting units for indicators of impairment.

Other Intangible Assets

The following tables summarize other intangible assets by class at:

Notes to Financial Statements

Total amortization of intangible assets was $100 million and $87 million for the three months ended September 30, 2026 and 2025, respectively.

The following table summarizes the estimated annual amortization for intangible assets for the remainder of fiscal 2027 through fiscal 2031:

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

Long-Term Debt

We had total long-term obligations, including the current portion and other short-term borrowings, of $8.8 billion and $8.9 billion at September 30, 2026 and June 30, 2026, respectively. All the notes represent unsecured obligations of Cardinal Health, Inc. and rank equally in right of payment with all of our existing and future unsecured and unsubordinated indebtedness. Interest is paid pursuant to the terms of the obligations. These notes are effectively subordinated to the liabilities of our subsidiaries, including trade payables of $40.9 billion and $38.3 billion at September 30, 2026 and June 30, 2026, respectively.

Other Financing Arrangements

In addition to cash and equivalents and operating cash flow, other sources of liquidity at September 30, 2026 include a $4.0 billion commercial paper program, backed by a $4.0 billion revolving credit facility that expires in August 2031. At September 30, 2026, we hadno amounts outstanding under our commercial paper program or our revolving credit facility.

On August 7, 2026, we entered into a consolidated $4.0 billion 5-year revolving credit facility, in conjunction with the terminations of the $2.0 billion revolving credit facility, the $1.0 billion 364-Day revolving credit facility, and the $1.0 billion committed receivables sales facility.

On September 15, 2026, we also increased our commercial paper program to $4.0 billion. This program is backstopped by our revolving credit facility.

Between October 29 and November 2, 2026, we entered into $1 billion of uncommitted revolving credit facilities.

Our revolving credit facility requires us to maintain a consolidated net leverage ratio of no greater than 4.00-to-1.00. As of September 30, 2026, we were in compliance with this financial covenant.