Cardinal Health 2009 Annual Report Download - page 42

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companies generally limit the amount of available policy limits, require larger self-insured retentions and include
exclusions for certain products. Large self-insured retentions may also apply to certain professional liability risks.
There can be no assurance that a successful product or professional liability claim would be adequately covered
by the Company’s applicable insurance policies or by any applicable contractual indemnity and, as such, these
claims could adversely affect the Company’s results of operations and financial condition.
Circumstances associated with the Company’s acquisition and divestiture strategy could adversely affect the
Company’s results of operations and financial condition.
Historically, an important element of the Company’s growth strategy has been the pursuit of acquisitions of
other businesses that expand or complement the Company’s existing businesses. Acquisitions involve risks,
including the risk that the Company overpays for a business or is unable to realize in a timely manner, or at all,
the synergies and other expected benefits from acquiring a business. Integrating acquired businesses also
involves a number of special risks, including the following:
• the possibility that management’s attention may be diverted from regular business concerns by the need
to integrate operations;
• unforeseen difficulties in integrating operations and systems and realizing potential revenue synergies
and cost savings;
• problems assimilating and retaining the management or employees of the acquired company or the
Company’s employees following an acquisition;
• accounting issues that could arise in connection with, or as a result of, the acquisition of the acquired
company, including issues related to internal control over financial reporting;
• regulatory or compliance issues that could exist for an acquired company or business;
• challenges in retaining the customers of the combined businesses; and
• potential adverse effects on results of operations through increased costs or otherwise.
If the Company is unable to successfully complete and integrate strategic acquisitions in a timely manner,
its results of operations and financial condition could be adversely affected.
With respect to divestitures, the Company continues to evaluate the performance and strategic fit of its
businesses and may decide to sell a business or product line based on such an evaluation. Any divestitures may
result in significant write-offs, including those related to goodwill and other intangible assets, which could have
an adverse effect on the Company’s results of operations and financial condition. In addition, the Company may
encounter difficulty in finding buyers or alternative exit strategies at acceptable prices and terms and in a timely
manner. Divestitures could involve additional risks, including the following:
• difficulties in the separation of operations, services, products and personnel;
• the diversion of management’s attention from other business concerns;
• the need to agree to retain or assume certain current or future liabilities in order to complete the
divestiture;
• the disruption of the Company’s business; and
• the potential loss of key employees.
The Company may not be successful in managing these or any other significant risks that it may encounter
in divesting a business or product line.
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