Cardinal Health 2011 Annual Report Download - page 39

o
perating activities—in a particular location. We may not be able to enter into hedges or obtain insurance t
o
protect us aga
i
nst t
h
ese r
i
s
k
s, an
d
any
h
e
d
ges t
h
at we enter
i
nto or
i
nsurance t
h
at we are a
bl
etoo
b
ta
i
n may
be
expensive and ma
y
not successfull
y
miti
g
ate these risks.
Ris
k
s associate
d
wit
h
t
h
eS
p
in-O
ff
.
CareFusion may not satisfy all of its contractual obligations. We entered into a number of agreements wit
h
C
areFus
i
on t
h
at govern t
h
er
i
g
h
ts an
d
o
bli
gat
i
ons o
f
t
h
e part
i
es
f
o
ll
ow
i
ng t
h
eSp
i
n-O
ff
.We
h
ave certa
i
nr
i
g
h
ts
u
nder those a
g
reements, includin
g
indemnification a
g
ainst certain liabilities allocated to CareFusion. The failur
e
o
f CareFusion to perform its obligations under the agreements could have an adverse effect on our financial
con
di
t
i
on an
d
resu
l
ts o
f
operat
i
ons.
T
he transaction may have unexpected tax consequences. In connection with the Spin-Off, we received a
pr
i
vate
l
etter ru
li
ng
f
rom t
h
e Interna
l
Revenue Serv
i
ce (“IRS”) to t
h
ee
ff
ect t
h
at t
h
e contr
ib
ut
i
on
b
yuso
f
t
h
e
a
ssets of the clinical and medical
p
roducts businesses to CareFusion and the distribution of CareFusion shares to
o
ur shareholders would qualify as a tax-free transaction under Sections 3
55
and 368(a)(1)(D) of the Internal
R
evenue Co
d
e(t
h
e “Co
d
e”). In a
ddi
t
i
on, we rece
i
ve
d
op
i
n
i
ons o
f
tax counse
l
to t
h
ee
ff
ect t
h
at t
h
eSp
i
n-O
ff
would qualif
y
as a transaction that is described in Sections 3
55
(a) and 368(a)(1)(D) of the Code. The IRS private
l
etter ruling and the opinions of counsel rely on certain facts, assumptions, representations and undertakings fro
m
u
san
d
CareFus
i
on regar
di
ng t
h
e past an
df
uture con
d
uct o
f
t
h
e compan
i
es’ respect
i
ve
b
us
i
nesses an
d
ot
h
e
r
matters. If an
y
of these facts, assumptions, representations or undertakin
g
s is incorrect or not otherwise satisfied,
we and our shareholders may not be able to rely on the IRS ruling or the opinions of tax counsel. Similarly, th
e
I
RS cou
ld d
eterm
i
ne on au
di
tt
h
at t
h
eSp
i
n-O
ff i
s taxa
bl
e
if i
t
d
eterm
i
nes t
h
at any o
f
t
h
e
f
acts, assumpt
i
ons,
representations or undertakin
g
s are not correct or have been violated or if the IRS disa
g
rees with the conclusion
s
in the opinions of counsel that are not covered by the private letter ruling or for other reasons, including as a
resu
l
to
f
certa
i
ns
i
gn
ifi
cant c
h
anges
i
n stoc
k
owners
hi
po
f
e
i
t
h
er Car
di
na
l
Hea
l
t
h
or CareFus
i
on. I
f
t
h
eSp
i
n-O
ff
is determined to be taxable for United States federal income tax
p
ur
p
oses, we and our shareholders that ar
e
subject to United States federal income tax could incur significant tax liabilities
.
I
t
e
m 1B: Unreso
l
ve
d
Sta
ff
Comments
Not app
li
ca
bl
e
.
I
tem
2
:
P
ropert
i
es
I
n the United States, the Pharmaceutical se
g
ment operates 24 pharmaceutical distribution facilities and one
national logistics center; four specialty distribution facilities; and 168 nuclear pharmacy laboratory,
manufacturing and distribution facilities. The Medical segment operates 50 medical-surgical distribution,
a
ssembl
y
, manufacturin
g
, and research operation facilities. Our United States operatin
g
facilities are located i
n
4
5
states and in Puerto Rico
.
O
ur Pharmaceutical se
g
ment also operates 13 pharmaceutical distribution facilities in China, and our
Medical segment operates 17 facilities in Canada, the Dominican Republic, Malaysia, Malta, Mexico, and
Th
a
il
an
d
t
h
at engage
i
n manu
f
actur
i
ng,
di
str
ib
ut
i
on or researc
h
.
We own 67 operating facilities and lease 210 operating facilities. Our principal executive offices are
h
ea
d
quartere
di
n an owne
df
our-story
b
u
ildi
ng
l
ocate
d
at 7000 Car
di
na
l
P
l
ace
i
nDu
bli
n, O
hi
o.
We consider our operating properties to be in satisfactory condition and adequate to meet our present needs
.
H
owever, we regu
l
ar
l
y eva
l
uate operat
i
ng propert
i
es an
d
may ma
k
e
f
urt
h
er a
ddi
t
i
ons an
di
mprovements o
r
consolidate locations as we seek o
pp
ortunities to ex
p
and our business
.
13