Cardinal Health 2009 Annual Report Download - page 36

Environmental Laws
The Company’s operations are affected by federal, state and local environmental laws. The Company has
made, and intends to continue to make, necessary expenditures for compliance with applicable environmental
laws. The Company is participating in cleaning up environmental contamination at certain sites.
Health and Safety Laws
The Company is also subject to various federal, state and local laws, regulations and recommendations, both
in the United States and abroad, relating to safe working conditions, laboratory and manufacturing practices and
the use, transportation and disposal of hazardous or potentially hazardous substances.
Laws Relating to Foreign Trade
The Company is also subject to U.S. and international import and export laws and regulations that require
the Company to abide by certain standards relating to the importation and exportation of finished goods, raw
materials and supplies and the handling of information. The Company must also comply with various export
control and trade embargo laws and regulations, including those administered by the Department of Treasury’s
Office of Foreign Assets Control and the Department of Commerce’s Bureau of Industry and Security, which
may require licenses or other authorizations for transactions relating to certain countries and/or with certain
individuals identified by the U.S. government. The Company is also subject to certain laws and regulations
concerning the conduct of its foreign operations, including the U.S. Foreign Corrupt Practices Act, foreign anti-
bribery laws and laws pertaining to the accuracy of the Company’s internal books and records. The U.S. Foreign
Corrupt Practices Act and foreign anti-bribery laws generally prohibit companies and their intermediaries from
making improper payments to non-U.S. government officials for the purpose of obtaining or retaining business.
The Company operates in many parts of the world that have experienced governmental corruption to some
degree, and in certain circumstances strict compliance with anti-bribery laws may conflict with local customs and
practices
Despite the Company’s training and compliance program, the Company’s internal control policies and
procedures may not always protect it from reckless or criminal acts committed by employees or agents in
contravention of Company policies. The costs associated with complying with the various applicable federal
regulations, as well as state and foreign regulations and laws, could be significant and the failure to comply with
all such legal requirements could have an adverse effect on the Company’s results of operations and financial
condition.
Other Information
The Company’s distribution businesses are generally not required by its customers to maintain particular
inventory levels other than as may be required to meet service level requirements. Certain supply contracts with
U.S. government entities require the Company’s Healthcare Supply Chain Services and Clinical and Medical
Products segments to maintain sufficient inventory to meet emergency demands. The Company does not believe
that the requirements contained in these U.S. government supply contracts materially impact inventory levels.
The Company’s customer return policies generally require that the product be physically returned, subject to
restocking fees, and only allow customers to return products that can be added back to inventory and resold at
full value, or that can be returned to vendors for credit.
The Company’s practice is to offer market payment terms to its customers.
Research and Development
For information on company-sponsored research and development costs in the last three fiscal years, see
Note 1 of “Notes to Consolidated Financial Statements,” which is incorporated herein by reference.
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