Cardinal Health 2008 Annual Report Download - page 26

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 report is provided as of June 30,
2008 (the end of the Company’s fiscal year).
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.
Recent Developments
On August 7, 2008, the Company publicly announced that its Board of Directors has supported a
management recommendation to actively explore a potential separation of the Company’s new Healthcare
Supply Chain Services and Clinical and Medical Products reportable segments, which management is proceeding
to do. The separation being explored could involve a tax-free spin-off of all or a portion of the businesses
comprising the Clinical and Medical Products reportable segment as a separate, publicly traded company. The
Company plans to announce its decision within approximately 60 to 90 days of August 7, 2008. No assurance
can be given as to whether the Company will decide to pursue a separation of these reportable segments, or as to
the timing or terms of any such transaction should the Company determine to proceed with a separation.
Reportable Segments
As of and for the fiscal year ended June 30, 2008, the Company reported financial information for four
reportable segments: Healthcare Supply Chain Services—Pharmaceutical; Healthcare Supply Chain Services—
Medical; Clinical Technologies and Services; and Medical Products and Technologies. As discussed below under
“Changes to Reportable Segments,” the Company will change its reportable segments effective July 1, 2008 so
that there are three reportable segments, of which two will be its primary operating and reportable segments. The
following business discussion is based on the four reportable segments as they were structured as of and for the
fiscal year ended June 30, 2008.
Healthcare Supply Chain Services—Pharmaceutical
General. Through its Healthcare Supply Chain Services—Pharmaceutical segment, the Company distributes
a broad line of branded and generic pharmaceutical products, over-the-counter healthcare products and consumer
products (collectively, “pharmaceutical products”). The Company’s pharmaceutical supply chain business (also
referred to as the pharmaceutical distribution business) is one of the country’s leading full-service wholesale
distributors to retail customers (including chain and independent drug stores and pharmacy departments of
supermarkets and mass merchandisers), hospitals and alternate care providers (including mail order pharmacies)
located throughout the United States. As a full-service wholesale distributor, the pharmaceutical supply chain
business complements its distribution activities by offering a broad range of support services to assist its
customers in maintaining and helping to improve the efficiency and quality of their services. These support
services include, among others:
• online procurement, fulfillment and information provided through cardinal.com;
• computerized order entry and order confirmation systems;
• generic sourcing programs;
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