Fair Value Measurements (Tables)

6 Months Ended

Dec. 31, 2025

Fair Value, Assets and Liabilities Measured on Recurring Basis

The following tables present the fair values for assets and (liabilities) measured on a recurring basis at:


	December 31, 2025
(in millions)	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	266	$	—	$	—	$	266

Other investments (1)	112		—		—		112

Liabilities:
Forward contracts (2)	—		(25)		—		(25)

Share-based awards (3)	—		—		(1,173)		(1,173)


	June 30, 2025
(in millions)	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	1,672	$	—	$	—	$	1,672

Other investments (1)	108		—		—		108
Liabilities:
Forward contracts (2)	—		(48)		—		(48)
Share-based awards (3)	—		—		(843)		(843)

(1)The other investments balance includes investments in mutual funds, which offset fluctuations in deferred compensation liabilities. These mutual funds invest in the equity securities of companies with both large and small market capitalization and high quality fixed income debt securities. The fair value of these investments is determined using quoted market prices.

(2)The fair value of interest rate swaps, foreign currency contracts, and net investment hedges is determined based on the present value of expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Observable Level 2 inputs are used to determine the present value of expected future cash flows. The fair value of these derivative contracts, which are subject to master netting arrangements under certain circumstances, is presented on a gross basis in prepaid expenses and other, other assets, other accrued liabilities, and deferred income taxes and other liabilities within the condensed consolidated balance sheets.

(3)The shared-based awards are liability-classified awards, as defined under ASC 718, resulting from acquisitions by The Specialty Alliance. These are presented in deferred income taxes and other liabilities within the condensed consolidated balance sheets. The fair value of The Specialty Alliance Units is determined using the discounted cash flow method which utilizes significant unobservable inputs, including the discount rate of 7.5%. Significant changes to assumptions used in the valuation may have a material impact on the fair value of The Specialty Alliance Units.

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

The following tables reconcile the changes in fair value for the liabilities classified within Level 3 of the fair value hierarchy for the three and six months ended December 31, 2025:


(in millions)	The Specialty Alliance Units
Fair Value at September 30, 2025	$	910
Acquisitions	213
Vesting (1)	66
Fair Value Adjustment (1)	(10)
Repurchases	(6)
Fair Value at December 31, 2025	$	1,173


(in millions)	The Specialty Alliance Units
Fair Value at June 30, 2025	$	843
Acquisitions	233
Vesting (1)	119
Fair Value Adjustment (1)	—
Repurchases	(22)
Fair Value at December 31, 2025	$	1,173

(1)For the three and six months ended December 31, 2025, there was $56 million and $119 million of expense, respectively, recorded to acquisition-related cash and share-based compensation costs in the condensed consolidated statements of earnings.

CARDINAL HEALTH INC 10-Q