Cardinal Health 2009 Annual Report Download - page 24

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PART I
Item 1: Business
General
Cardinal Health, Inc. is an Ohio corporation formed in 1979. As used in this report, the terms the
“Registrant,” the “Company” and “Cardinal Health” refer to Cardinal Health, Inc. and its subsidiaries, unless the
context requires otherwise. The Company is a leading provider of products and services that improve the safety
and productivity of healthcare. Except as otherwise specified, information in this Annual Report on Form 10-K
for the fiscal year ended June 30, 2009 (the “Form 10-K”) is provided as of June 30, 2009.
The description of the Company’s business in this Item 1 should be read in conjunction with the
consolidated financial statements and supplementary data included in this Form 10-K.
Spin-Off of CareFusion Corporation
On September 29, 2008, the Company announced that it intended to separate its clinical and medical
products businesses from its other businesses, including its healthcare supply chain services business, through a
pro rata distribution to its shareholders (the “distribution” or “Spin-Off”) of common stock of a wholly owned
subsidiary, CareFusion Corporation (“CareFusion”), formed for the purpose of holding the majority of its clinical
and medical products businesses. After the Spin-Off, the Company will retain certain surgical and exam gloves,
surgical drapes and apparel and fluid management businesses that were previously part of its Clinical and
Medical Products segment.
On July 10, 2009, the Company’s Board of Directors approved the distribution to its shareholders of 80.1%
or more of shares of CareFusion common stock on the basis of 0.5 shares of CareFusion common stock for each
common share of the Company. The distribution will be made after the close of trading on August 31, 2009 to
the Company’s shareholders of record as of 5 p.m. EDT on August 25, 2009. Following the Spin-Off, the
Company will retain no more than 19.9% of the outstanding CareFusion common stock. The Company is
required to dispose of the retained shares of CareFusion common stock within five years of the distribution.
The distribution is subject to a number of conditions, including, among others:
• the private letter ruling that the Company received from the IRS not being revoked or modified in any
material respect;
• the receipt of opinions from counsel to the Company to the effect that the contribution and distribution
involved in the Spin-Off will qualify as a transaction that is described in Sections 355(a) and
368(a)(1)(D) of the Internal Revenue Code of 1986, as amended (the “Code”);
• no rating agency action that is likely to result in either the Company or CareFusion being downgraded
below investment grade; and
• the making of a cash distribution from CareFusion to the Company prior to the distribution.
The Company cannot assure you that any or all of these conditions will be met.
Reportable Segments
Fiscal 2009 and 2010 Changes to Reportable Segments
For the fiscal year ended June 30, 2009, the Company reported financial information in three reportable
segments: Healthcare Supply Chain Services; Clinical and Medical Products; and All Other. As discussed below
under “Changes to Reportable Segments For Fiscal 2010,” effective July 1, 2009, the Company changed its
2