Cardinal Health 2010 Annual Report Download - page 28

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P
A
RT I
I
tem
1
:Bu
si
n
ess
G
enera
l
Cardinal Health, Inc. is an Ohio cor
p
oration formed in 1979. As used in this re
p
ort, “we,” “our,” “us” and
similar
p
ronouns refer to Cardinal Health, Inc. and its subsidiaries, unless the context re
q
uires otherwise. We are
a global healthcare solutions company providing products and services that help hospitals, physician offices and
p
harmacies reduce costs, improve safety and productivity, and deliver better care to patients. Except as otherwise
s
p
ecified, information in this Annual Re
p
ort on Form 10-K is
p
rovided as of June 30, 2010, which is the end of
o
ur 2010 fiscal year.
Sp
in-O
ff
o
f
CareFusion Cor
p
oration
On August 31, 2009, we separated the clinical and medical products businesses from our other businesses
through a pro rata distribution to shareholders of 81% of the then outstanding common stock of a wholly-owned
subsidiary, CareFusion Corporation (“CareFusion”). We refer to this transaction as the “Spin-Off.” CareFusion’
s
p
roduct lines are in the areas of intravenous, infusion, medication and supply dispensing, respiratory care,
infection prevention and surgical instruments. We retained 19% of CareFusion common stock, which we ar
e
r
equired to dispose of before August 31, 2014, pursuant to the private letter ruling we received from the Interna
l
R
evenue Service (the “IRS”) in connection with the Spin-Off. As of June 30, 2010, we owned approximatel
y
30.
5
million CareFusion shares. As
p
art of the S
p
in-Off, Cardinal Health and CareFusion entered into
a
separation agreement and various other agreements relating to the separation, including a transition service
s
agreement, a tax matters agreement, an employee matters agreement, intellectual property agreements and certain
o
ther commercial agreements
.
Business Segment
s
F
or fiscal 2009, we reported financial information in three segments: Healthcare Supply Chain Services,
Clinical and Medical Products, and All Other. From July 1, 2009 to August 31, 2009, we reported financial
information in three different segments: Pharmaceutical, Medical and CareFusion. The Pharmaceutical segment
included the businesses that were previously within the Healthcare Supply Chain Services segment tha
t
distributed
p
harmaceutical, radio
p
harmaceutical and over-the-counter healthcare
p
roducts, as well as the
businesses previously within the All Other segment. The Medical segment included the remaining businesse
s
within the Healthcare Supply Chain Services segment and certain surgical and exam gloves, surgical drapes and
apparel and fluid management businesses that were previously within the Clinical and Medical Product
s
segment. The CareFusion segment included the businesses previously within the Clinical and Medical Product
s
segment but not the above-referenced surgical and exam gloves, surgical drapes and apparel and fluid
management businesses. All businesses in the CareFusion segment were part of the Spin-Off
.
Once the Spin-Off was completed, our remaining businesses were organized into our current two segments:
Pharmaceutical and Medical. The following business discussion is based on the two segments as they were
structured for fiscal 2010.
P
h
armaceutica
l
Segmen
t
The Pharmaceutical segment:
• distributes branded and generic pharmaceutical, over-the-counter healthcare, and consumer product
s
t
hrough its pharmaceutical distribution business
;
• operates nuclear pharmacies and cyclotron facilities that prepare and deliver radiopharmaceuticals for
use in nuclear imaging and other procedures in hospitals and clinics
;
2