Cardinal Health 2010 Annual Report Download - page 38

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t
o federal or state government investigations and resulting civil and criminal penalties including the
l
oss of licenses or the ability to participate in Medicare, Medicaid and other federal and state healthcare
p
rograms. The scope or requirements of these laws or regulations may be interpreted or applied by
a
r
egulator, prosecutor or judge in a manner that could negatively impact or require us to change ou
r
op
erations
.
W
e could be sub
j
ect to adverse changes in the tax laws or challenges to our tax positions.
We are a
l
arge mu
l
t
i
nat
i
ona
l
corporat
i
on w
i
t
h
operat
i
ons
i
nt
h
eUn
i
te
d
States an
d
many
f
ore
i
gn countr
i
es.
As a resu
l
t, we are su
bj
ect to t
h
e tax
l
aws an
d
regu
l
at
i
ons o
f
many
j
ur
i
s
di
ct
i
ons. From t
i
me to t
i
me,
l
eg
i
s
l
at
i
v
e
i
n
i
t
i
at
i
ves are propose
d
,
i
nc
l
u
di
ng proposa
l
s to repea
l
LIFO (
l
ast-
i
n,
fi
rst-out) treatment o
fi
nventory, t
h
at cou
ld
a
d
verse
l
ya
ff
ect our tax pos
i
t
i
ons, e
ff
ect
i
ve tax rate or tax payments. Tax
l
aws an
d
regu
l
at
i
ons are extreme
ly
comp
l
ex an
d
su
bj
ect to vary
i
ng
i
nterpretat
i
ons. Tax aut
h
or
i
t
i
es
h
ave c
h
a
ll
enge
d
some o
f
our tax pos
i
t
i
ons an
di
t
i
s poss
ibl
et
h
at t
h
ey w
ill
c
h
a
ll
enge ot
h
ers. We may not
b
ea
bl
eto
d
e
f
en
d
t
h
ese c
h
a
ll
enges success
f
u
ll
y, w
hi
c
h
may a
d
verse
l
ya
ff
ect our e
ff
ect
i
ve tax rate or tax payments
.
Our
b
usiness an
d
operations
d
epen
d
on t
h
e proper functioning of information systems an
d
critica
l
faci
l
ities
.
We re
ly
on
i
n
f
ormat
i
on s
y
stems to o
b
ta
i
n, rap
idly
process, ana
ly
ze an
d
mana
g
e
d
ata to:
•
f
ac
ili
tate t
h
e purc
h
ase an
ddi
str
ib
ut
i
on o
f
t
h
ousan
d
so
fi
nventor
yi
tems
f
rom numerous
di
str
ib
ut
i
on
c
en
t
ers
;
• rece
i
ve, process an
d
s
hi
por
d
ers on a t
i
me
ly b
as
i
s;
• mana
g
et
h
e accurate
billi
n
g
an
d
co
ll
ect
i
ons
f
or t
h
ousan
d
so
f
customers
;
• process pa
y
ments to supp
li
ers
;
•
f
ac
ili
tate t
h
e manu
f
actur
i
n
g
an
d
assem
bly
o
f
me
di
ca
l
pro
d
ucts; an
d
•
g
enerate
fi
nanc
i
a
l
transact
i
ons an
di
n
f
ormat
i
on
.
Our
b
us
i
ness a
l
so
d
epen
d
sont
h
e proper
f
unct
i
on
i
ng o
f
our cr
i
t
i
ca
lf
ac
ili
t
i
es,
i
nc
l
u
di
ng our nat
i
ona
ll
og
i
st
i
cs
center. Our resu
l
ts o
f
operat
i
ons cou
ld b
ea
d
verse
l
ya
ff
ecte
dif
t
h
ese systems or
f
ac
ili
t
i
es are
i
nterrupte
d
,
d
amage
db
yun
f
oreseen events or act
i
ons o
f
t
hi
r
d
part
i
es, or
f
a
il f
or any exten
d
e
d
per
i
o
d
o
f
t
i
me
.
The Medical segment is working on a medical business transformation project, which includes a new
information system for supply chain and manufacturing related processes. The Medical segment is planning to
transition selected processes to the new system throughout fiscal 2012 and 2013. If the system is not effectivel
y
implemented or fails to operate as intended, it could adversely affect the Medical segment’s supply chain an
d
manufacturing operations and the effectiveness of our internal control over financial reporting.
Because of the nature of our business, we may become involved in legal proceedings that could adversel
y
i
mpact our cash flows or results of operations
.
Due to t
h
e nature o
f
our
b
us
i
nesses, w
hi
c
hi
nc
l
u
d
es t
h
e manu
f
acture an
ddi
str
ib
ut
i
on o
fh
ea
l
t
h
care pro
d
ucts
,
we may
f
rom t
i
me to t
i
me
b
ecome
i
nvo
l
ve
di
n
l
ega
l
procee
di
ngs. For
i
nstance, some o
f
t
h
epro
d
ucts we
manu
f
acture or
di
str
ib
ute may
b
ea
ll
ege
d
to cause persona
li
n
j
ury or v
i
o
l
ate t
h
e
i
nte
ll
ectua
l
property r
i
g
h
ts o
f
anot
h
er party, su
bj
ect
i
ng us to pro
d
uct
li
a
bili
ty or
i
n
f
r
i
ngement c
l
a
i
ms. W
hil
e we genera
ll
yo
b
ta
i
n
i
n
d
emn
i
ty r
i
g
h
t
s
f
rom t
h
e manu
f
acturers o
f
pro
d
ucts we
di
str
ib
ute, an
d
we carry pro
d
uct
li
a
bili
ty
i
nsurance,
i
t
i
s poss
ibl
et
h
at
li
a
bili
t
y
f
rom suc
h
c
l
a
i
ms cou
ld
excee
d
t
h
ose protect
i
ons. L
i
t
i
gat
i
on
i
s
i
n
h
erent
l
y unpre
di
cta
bl
ean
d
t
h
eun
f
avora
bl
e
r
eso
l
ut
i
on o
f
one or more o
f
t
h
ese
l
ega
l
procee
di
ngs cou
ld h
arm our cas
hfl
ows or resu
l
ts o
f
operat
i
ons.
12