10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2014

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-34273

CareFusion Corporation

(Exact name of Registrant as specified in its charter)

Delaware	26-4123274
(State or other jurisdiction of incorporation or organization)	(I.R.S Employer Identification No.)

3750 Torrey View Court

San Diego, CA 92130

Telephone: (858) 617-2000

(Address of principal executive offices, zip code and Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	ý	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  ý

The number of outstanding shares of the registrant’s common stock, as of October 24, 2014 was 203,918,151.

TABLE OF CONTENTS

IMPORTANT INFORMATION REGARDING FORWARD LOOKING STATEMENTS	3
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS	4
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)	4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)	5
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)	6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)	7
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	8
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	28
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	35
ITEM 4. CONTROLS AND PROCEDURES	36
PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS	36
ITEM 1A. RISK FACTORS	36
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	38
ITEM 6. EXHIBITS	39

2

Important Information Regarding Forward-Looking Statements

Portions of this Quarterly Report on Form 10-Q (including information incorporated by reference) include “forward-looking statements” based on our current beliefs, expectations and projections regarding our business strategies, market potential, future financial performance, industry and other matters. This includes, in particular, “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report on Form 10-Q as well as other portions of this Quarterly Report on Form 10-Q. The words “believe,” “expect,” “anticipate,” “project,” “could,” “would,” and similar expressions, among others, generally identify “forward-looking statements,” which speak only as of the date the statements were made. The matters discussed in these forward-looking statements are subject to risks, uncertainties and other factors that could cause our actual results to differ materially from those projected, anticipated or implied in the forward-looking statements. The most significant of these risks, uncertainties and other factors are described in “Item 1A—Risk Factors” of this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended June 30, 2014 filed with the Securities and Exchange Commission on August 11, 2014. Except to the limited extent required by applicable law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

3

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CAREFUSION CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Quarters Ended September 30,
(in millions, except per share amounts)	2014			2013
Revenue	$	922		$	830
Cost of Products Sold	465			407
Gross Profit	457			423
Selling, General and Administrative Expenses	265			248
Research and Development Expenses	49			48
Restructuring and Acquisition Integration Charges	19			11
Share of Net (Earnings) Loss of Equity Method Investee	(2		)	—
Operating Income	126			116
Interest Expense and Other, Net	28			20
Income Before Income Tax	98			96
Provision for Income Tax	22			18
Net Income	$	76		$	78
PER SHARE AMOUNTS:
Basic Earnings per Common Share:
Basic Earnings per Common Share	$	0.37		$	0.36
Diluted Earnings per Common Share:
Diluted Earnings per Common Share	$	0.37		$	0.36
Weighted-Average Number of Common Shares Outstanding:
Basic	204.1			214.0
Diluted	207.0			217.4

See accompanying notes to unaudited condensed consolidated financial statements

4

CAREFUSION CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Quarters Ended September 30,
(in millions)	2014			2013
Net Income	$	76		$	78
Other Comprehensive Income (Loss), Net of Tax:
Foreign Currency Translation Adjustments	(53		)	17
Unrealized Loss on Minimum Pension Liability	(1		)	—
Unrealized Gain on Derivatives	—			4
Comprehensive Income, Net of Tax	$	22		$	99

See accompanying notes to unaudited condensed consolidated financial statements

5

CAREFUSION CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in millions, except per share data)	September 30, 2014			June 30, 2014
ASSETS
Current Assets:
Cash and Cash Equivalents	$	1,736		$	2,303
Trade Receivables, Net	459			574
Current Portion of Net Investment in Sales-Type Leases	272			290
Inventories, Net	495			441
Prepaid Expenses	37			29
Other Current Assets	107			84
Total Current Assets	3,106			3,721
Property and Equipment, Net	437			448
Net Investment in Sales-Type Leases, Less Current Portion	961			970
Goodwill	3,315			3,311
Intangible Assets, Net	997			1,016
Investments in Unconsolidated Entities	102			99
Other Assets	89			90
Total Assets	$	9,007		$	9,655
LIABILITIES AND EQUITY
Current Liabilities:
Current Portion of Long-Term Obligations and Other Short-Term Borrowings	$	3		$	454
Accounts Payable	178			206
Deferred Revenue	96			95
Accrued Compensation and Benefits	126			194
Other Accrued Liabilities	223			246
Total Current Liabilities	626			1,195
Long-Term Obligations, Less Current Portion	1,988			1,990
Deferred Income Taxes	610			607
Other Liabilities	452			473
Total Liabilities	3,676			4,265
Commitments and Contingencies (Note 12)
Stockholders’ Equity:
Preferred Stock (50.0 Authorized Shares; $.01 Par Value) Issued – None	—			—
Common Stock (1,200.0 Authorized Shares; $.01 Par Value) Issued – 235.9 and 234.5 shares at September 30, 2014 and June 30, 2014, respectively	2			2
Treasury Stock, at cost, 32.4 and 30.1 shares at September 30, 2014 and June 30, 2014, respectively	(1,185		)	(1,082		)
Additional Paid-In Capital	5,070			5,048
Retained Earnings	1,541			1,465
Accumulated Other Comprehensive Loss	(97		)	(43		)
Total Stockholders’ Equity	5,331			5,390
Total Liabilities and Stockholders’ Equity	$	9,007		$	9,655

See accompanying notes to unaudited condensed consolidated financial statements

6

CAREFUSION CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Quarters Ended September 30,
(in millions)	2014			2013
Cash and Cash Equivalents at July 1	$	2,303		$	1,798
Cash Flows from Operating Activities:
Net Income	76			78
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation and Amortization	49			46
Other Non-Cash Items	24			36
Change in Operating Assets and Liabilities, Excluding Impact of Acquired Assets and Assumed Liabilities:
Trade Receivables	115			25
Inventories	(51		)	(23		)
Net Investment in Sales-Type Leases	27			39
Accounts Payable	(28		)	(23		)
Other Accrued Liabilities and Operating Items, Net	(144		)	(104		)
Net Cash Provided by Operating Activities	68			74
Cash Flows from Investing Activities:
Cash Paid for Acquisitions, Net of Cash Received	(32		)	—
Additions to Property and Equipment	(21		)	(18		)
Other Investing Activities	(4		)	—
Net Cash Used in Investing Activities	(57		)	(18		)
Cash Flows from Financing Activities:
Repayment of Current Portion of Long-Term Obligations	(452		)	(1		)
Share Repurchase Programs	(111		)	(114		)
Proceeds from Stock Option Exercises	17			34
Other Financing Activities	(9		)	(10		)
Net Cash Used in Financing Activities	(555		)	(91		)
Effect of Exchange Rate Changes on Cash	(23		)	10
Net Decrease in Cash and Cash Equivalents	(567		)	(25		)
Cash and Cash Equivalents at September 30, Attributable to Net Income	$	1,736		$	1,773
Non-Cash Investing and Financing Activities:
Asset Acquired by Entering into Capital Lease	$	—		$	4

See accompanying notes to unaudited condensed consolidated financial statements

7

CAREFUSION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. BASIS OF PRESENTATION

Basis of Presentation. Unless the context otherwise requires, references in these notes to the unaudited condensed consolidated financial statements to “CareFusion Corporation”, “CareFusion”, “we”, “us”, “our”, “the company” and “our company” refer to CareFusion Corporation and its consolidated subsidiaries. References in these notes to the unaudited condensed consolidated financial statements to “Cardinal Health” refer to Cardinal Health, Inc., an Ohio corporation, and its consolidated subsidiaries.

We were incorporated in Delaware on January 14, 2009, for the purpose of holding the clinical and medical products businesses of Cardinal Health in anticipation of spinning off from Cardinal Health. We completed the spinoff from Cardinal Health on August 31, 2009.

The unaudited condensed consolidated financial statements included in this Form 10-Q have been prepared in accordance with the U.S. Securities and Exchange Commission (“SEC”) instructions for Quarterly Reports on Form 10-Q. Accordingly, the condensed consolidated financial statements are unaudited and do not contain all the information required by U.S. Generally Accepted Accounting Principles (“GAAP”) to be included in a full set of financial statements. The unaudited condensed consolidated balance sheet at June 30, 2014, has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by GAAP for a complete set of financial statements. The audited consolidated financial statements for our fiscal year ended June 30, 2014, filed with the SEC with our Annual Report on Form 10-K on August 11, 2014, include a summary of our significant accounting policies and should be read in conjunction with this Form 10-Q. In the opinion of management, all material adjustments necessary to present fairly the results of operations for such periods have been included in this Form 10-Q. All such adjustments are of a normal recurring nature. The results of operations for interim periods are not necessarily indicative of the results of operations for the entire year.

We have evaluated subsequent events for recognition or disclosure through the date these financial statements were issued.

Our two global operating and reportable segments are Medical Systems and Procedural Solutions, which focus primarily on our medical equipment business lines and disposable products business lines, respectively:

Medical Systems. The Medical Systems segment is organized around our medical equipment business lines. Within the Medical Systems segment, we operate our Dispensing Technologies, Infusion Systems and Respiratory Technologies business lines. The Dispensing Technologies business line includes equipment and related services for medication and supply dispensing. The Infusion Systems business line includes infusion pumps and dedicated disposable infusion sets and accessories. The Respiratory Technologies business line includes respiratory ventilation and diagnostics equipment and dedicated consumables used during respiratory diagnostics and therapy. We also include our data mining surveillance service business within the Medical Systems segment, which we report as “Other.”

Procedural Solutions. The Procedural Solutions segment is organized around our disposable products and reusable surgical instruments business lines. Within the Procedural Solutions segment, we operate our Infection Prevention, Medical Specialties and Specialty Disposables business lines. The Infection Prevention business line includes single-use skin antiseptic and other patient-preparation products and specialty intravenous (“IV”) infusion valves, administration sets and accessories. The Medical Specialties business line includes interventional specialty products used for biopsy, drainage and other procedures, as well as reusable surgical instruments. The Specialty Disposables business line includes non-dedicated disposable ventilator circuits and oxygen masks used for providing respiratory therapy, as well as single-use consumables for respiratory care and anesthesiology.

8

CAREFUSION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

New Accounting Pronouncements (Adopted during fiscal year 2015)

ASU 2013-05. In March 2013, the FASB issued ASU 2013-05 – Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity (“ASU 2013-05”). ASU 2013-05 requires that the entire amount of a cumulative translation adjustment (“CTA”) related to an entity's investment in a foreign entity should be released when there has been (i) a sale of a subsidiary or a group of net assets within a foreign entity and the sale represents the substantially complete liquidation of the investment in the foreign entity, or (ii) loss of controlling financial interest in an investment on, or (iii) a step acquisition for a foreign entity. The adoption of ASU 2013-05 had no impact on our financial condition, results of operations or cash flows.

ASU 2013-11. In July 2013, the FASB issued ASU 2013-11 – Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU 2013-11”). ASU 2013-11 requires an entity to present an unrecognized tax benefit as a reduction to deferred tax assets for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward rather than as liabilities except when (i) the net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the governing tax law to settle any additional income taxes that would result from disallowance of the tax position or (ii) the entity does not intend to or the applicable jurisdiction does not require the entity to use the deferred tax asset for such purpose. The adoption of ASU 2013-11 had no impact on our financial condition, results of operations or cash flows.

9

CAREFUSION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 2. ACQUISITIONS

Acquisition of Vital Signs. On November 18, 2013, we announced the signing of a definitive agreement to acquire the Vital Signs business of General Electric Company’s Healthcare division (“Vital Signs”) for $500 million. Vital Signs is a leading manufacturer of single-use consumables for respiratory care and anesthesiology, and also markets products for temperature management and patient monitoring consumables. On December 30, 2013, we acquired the outstanding equity of certain entities included within the Vital Signs business and other business assets and liabilities in the U.S., China and certain other geographies using approximately $473 million of cash on hand. In March 2014, we completed additional closings for various countries using approximately $17 million of cash on hand. During the quarter ended September 30, 2014, we completed the closing of the Vital Signs business in Germany, using approximately $8 million of cash on hand. The payment of purchase prices in connection with each closing is subject to customary closing conditions and regulatory review. The results of operations of all closings completed as of September 30, 2014, for the Vital Signs transaction are included in the Procedural Solutions segment.

The transaction has been accounted for as a business combination and requires, among other things, that assets acquired and liabilities assumed are recognized at their fair values as of the acquisition date.

Based on our estimate for the net working capital adjustment, and net of cash and cash equivalents acquired, we determined a net purchase price associated with the fiscal year 2014 and the fiscal year 2015 closings, as set forth below. The following table summarizes the assignment of the net purchase price to the fair values of the tangible and identifiable intangible assets acquired and liabilities assumed in these closings, based on their estimated fair values at the applicable acquisition date. Balances are reflected in the accompanying condensed consolidated balance sheets as of September 30, 2014.

(in millions)	Fiscal Year 2014 Closings			Fiscal Year 2015 Closings
Cash Paid	$	492		$	8
Cash and Cash Equivalents Acquired, Net of Net Working Capital Adjustments	(2		)	—
Net Purchase Price	$	490		$	8

(in millions)	Fiscal Year 2014 Closings			Fiscal Year 2015 Closings
Trade Receivables	$	19		$	—
Inventories	40			7
Other Current Assets	15			—
Property and Equipment	37			—
Intangible Assets	298			—
Goodwill	228			1
Current Liabilities and Borrowings	(41		)	—
Deferred Income Taxes	(101		)	—
Other Long-Term Liabilities	(5		)	—
Net Assets Acquired	$	490		$	8

Intangible assets represent customer relationships ($257 million), developed technology ($31 million), and trademarks and patents ($10 million) which have estimated weighted average useful lives of 20 years, 7 years and 6 years, respectively. The intangible assets have a total estimated weighted average useful life of 18 years. The estimated fair value of the identifiable intangible assets was determined using the “income based approach,” which is a valuation technique that provides an estimate of the fair value of an asset based on market participant expectations of the cash flows an asset would generate over its remaining useful life. Some of the more significant assumptions inherent in the development of those asset valuations include the estimated net cash flows for each year for each asset or product (including net revenues, cost of sales, research and development expenses, selling and marketing costs and working capital/asset contributory asset charges), the appropriate

10

CAREFUSION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

discount rate to select in order to measure the risk inherent in each future cash flow stream, the assessment of each asset’s life cycle, competitive trends impacting the asset and each cash flow stream as well as other factors. The discount rates used to arrive at the present value of intangible assets as of the acquisition date ranged from 10.5% to 12.5% to reflect the internal rate of return and incremental commercial uncertainty in the cash flow projections. No assurances can be given that the underlying assumptions used to prepare the discounted cash flow analysis will not change. Actual results may vary significantly from estimated results.

Various factors contributed to the establishment of goodwill, including an expanded global footprint and scale, Vital Signs’ history of operating margins and profitability, and the opportunity for us to generate revenue by supplementing our existing respiratory and anesthesia consumables product portfolios. The goodwill recognized from the Vital Signs acquisition may be deductible for tax purposes to the extent related to the acquisition of identifiable intangible assets. All goodwill from the Vital Signs acquisition was assigned to the Procedural Solutions segment.

Deferred income taxes primarily result from fair value adjustments to identifiable intangible assets. In a stock acquisition associated with the purchase of a business, the fair value adjustments create excess book basis over the tax basis of those assets for which we record deferred income tax liabilities using the statutory tax rate for the jurisdiction in which the deferred income taxes exist.

For the quarter ended September 30, 2014, revenue associated with Vital Signs was $68 million. Pro forma results of operations have not been presented because the effect of the acquisition was not material to our unaudited condensed consolidated financial statements.

NOTE 3. INVESTMENTS IN UNCONSOLIDATED ENTITIES

Investments in unconsolidated entities reflect investments that we make from time to time in privately held companies. When an investment allows us to exert significant influence over the investee, we account for the investment under the equity method, and we record a share of the net earnings of the investee in our consolidated statements of income. When an investment does not allow us to exert significant influence, and it lacks a readily determinable fair value, we account for the investment under the cost method. The following table sets forth information relating to these investments:

(in millions)	September 30, 2014		June 30, 2014
Equity Method Investments
Cost	$	87	$	87
Share of Net Earnings of Equity Method Investee	5		3
Carrying Value of Equity Method Investments	$	92	$	90
Cost Method Investments
Carrying Value of Cost Method Investments	$	10	$	9
Total Investments in Unconsolidated Entities	$	102	$	99

As of September 30, 2014, our equity method investments consisted primarily of our investment in Caesarea Medical Electronics Ltd. (“CME”), a global infusion pump manufacturer. CME, headquartered in Israel, designs, manufactures and markets a range of infusion and syringe pumps as well as related accessories and disposable administration sets for both homecare and hospital settings. We completed this investment transaction in March 2014 and received a 40 percent non-controlling equity interest in CME for approximately $86 million, which we funded with existing cash on hand. CME continues to operate independently from us. Additionally, we have the right to increase our ownership percentage by purchasing an additional 40 percent equity interest of CME (“Call Option”), exercisable any time before March 2017. The seller also has the right to require CareFusion to acquire the remaining 60 percent of CME (“Put Option”), which is exercisable only upon certain conditions, one of which is if we fail to exercise our Call Option. The Call Option and Put Option were deemed to be freestanding financial instruments. The Call Option does not meet the definition of a derivative and the Put Option's fair value is not significant. The Company determined that CME did not meet the definition of a Variable Interest Entity (“VIE”).

11

CAREFUSION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 4. EARNINGS PER SHARE

For the quarters ended September 30, 2014 and 2013, basic earnings per common share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per common share is calculated to give effect to all dilutive securities, using the treasury stock method.

The following table sets forth the reconciliation of basic and diluted earnings per share for the quarters ended September 30, 2014 and 2013:

	Quarters Ended September 30,
(shares in millions)	2014	2013
Denominator for Basic Earnings per Share	204.1	214.0
Effect of Dilutive Securities:
Stock Options	1.9	2.1
Restricted Stock Units and Performance Stock Units	1.0	1.3
Denominator for Diluted Earnings per Share - Adjusted for Dilutive Securities	207.0	217.4

The potentially dilutive stock options, restricted stock units and performance stock units that would have been excluded because the effect would have been antidilutive for the quarters ended September 30, 2014 and 2013 were 0.8 million and 1.4 million, respectively. Basic and diluted earnings per share amounts are computed independently in the unaudited condensed consolidated statements of income. Therefore, the sum of per share components may not equal the per share amounts presented.

From time to time, our Board of Directors authorizes share repurchase programs for the repurchase of our common stock through open market and private transactions. The manner and pace of our repurchases under these programs is based on market conditions and other relevant factors.

In February 2012, we announced that our Board of Directors had approved a share repurchase program authorizing the repurchase of up to $500 million of our common stock. We completed this share repurchase program in June 2013 and as a result repurchased a total of 15.3 million shares of our common stock for an aggregate of $500 million (excluding commissions and fees).

In August 2013, we announced that our Board of Directors had approved a share repurchase program authorizing the repurchase of up to $750 million of our common stock. We have repurchased a total of 16.9 million shares of our common stock under this program for an aggregate of $680 million (excluding commissions and fees), of which we repurchased a total of 2.3 million shares for an aggregate of $103 million (excluding commissions and fees) during the quarter ended September 30, 2014.

In August 2014, our Board of Directors authorized the repurchase of an additional $750 million of our common stock through June 2016. We have not repurchased any shares under this program.

12

CAREFUSION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 5. RESTRUCTURING AND ACQUISITION INTEGRATION CHARGES

Restructuring liabilities are measured at fair value and recognized as incurred. Acquisition integration charges are expensed as incurred.

The following is a summary of restructuring and acquisition integration charges for the quarters ended September 30, 2014 and 2013:

	Quarters Ended September 30,
(in millions)	2014		2013
Restructuring Charges	$	10	$	11
Acquisition Integration Charges	9		—
Total Restructuring and Acquisition Integration Charges	$	19	$	11

Restructuring Charges

We periodically incur costs to implement restructuring efforts for specific operations, which are recorded within our unaudited condensed consolidated statements of income as they are incurred. Our restructuring efforts focus on various aspects of operations, including closing and consolidating certain manufacturing operations, rationalizing headcount, and aligning operations in the most strategic and cost-efficient structure.

The following tables include information regarding our current restructuring programs:

	Quarter Ended September 30, 2014
(in millions)	Accrued at June 30, 20141		Accrued Costs		Cash Payments			Accrued at September 30, 20141
Total Restructuring Programs	$	10	$	10	$	(9	)	$	11

________________

¹ Included within “Other Accrued Liabilities” in the unaudited condensed consolidated balance sheets.

	Quarter Ended September 30, 2013
(in millions)	Accrued at June 30, 20131		Accrued Costs		Cash Payments			Accrued at September 30, 20131
Total Restructuring Programs	$	7	$	11	$	(6	)	$	12

________________

¹ Included within “Other Accrued Liabilities” in the unaudited condensed consolidated balance sheets.

The following table segregates our restructuring charges into our reportable segments for the quarters ended September 30, 2014 and 2013:

	Quarters Ended September 30,
(in millions)	2014		2013
Medical Systems	$	7	$	7
Procedural Solutions	3		4
Total Restructuring Charges	$	10	$	11

13

CAREFUSION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Acquisition Integration Charges

Costs of integrating operations of various acquired companies are recorded as acquisition integration charges when incurred. The acquisition integration charges incurred during the quarter ended September 30, 2014 were primarily a result of the acquisition of Vital Signs.

Certain restructuring and acquisition costs are based upon estimates. Actual amounts paid may ultimately differ from these estimates. If additional costs are incurred or recognized amounts exceed costs, such changes in estimates will be recognized when they occur.

NOTE 6. INVENTORIES

Inventories, accounted for at the lower of cost or market on a first-in, first-out basis, consisted of the following:

(in millions)	September 30, 2014		June 30, 2014
Raw Materials	$	147	$	154
Work-in-Process	30		26
Finished Goods	318		261
Inventories, Net	$	495	$	441

The allowance for excess and obsolete inventories was $52 million and $52 million at September 30, 2014 and June 30, 2014, respectively.

NOTE 7. FINANCING RECEIVABLES

Our net investment in sales-type leases are considered financing receivables. As our portfolio of financing receivables primarily arise from the leasing of our dispensing equipment, the methodology for determining our allowance for credit losses is based on the collective population and not stratified by class or portfolio segment. Allowances for credit losses on the entire portfolio are based on historical experience loss rates and the potential impact of anticipated changes in business practices, market dynamics, and economic conditions. We also reserve individual balances based on the evaluation of customers’ specific circumstances. We write off amounts that are deemed uncollectible. Financing receivables are generally considered past due 30 days after the billing date. We do not accrue interest on past due financing receivables.

14

CAREFUSION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The change in the allowance for credit losses on financing receivables for the quarter ended September 30, 2014, consisted of the following:

(in millions)
Balance of allowance for credit losses at June 30, 2014	$	6
Charge-offs	—
Recoveries	—
Provisions	—
Balance of allowance for credit losses at September 30, 2014	$	6

The following table summarizes the credit losses and recorded investment in sales-type leases as of September 30, 2014:

(in millions)
Allowance for credit losses:
Balance at September 30, 2014	$	6
Balance: individually evaluated for impairment	$	2
Balance: collectively evaluated for impairment	$	4
Net Investment in Sales-Type Leases:
Balance at September 30, 2014	$	1,233
Balance: individually evaluated for impairment	$	2
Balance: collectively evaluated for impairment	$	1,231

NOTE 8. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

The following table summarizes the changes in the carrying amount of goodwill:

(in millions)	Total
Balance at June 30, 2014	$	3,311
Goodwill Acquired, Net of Purchase Price Adjustments	14
Foreign Currency Translation Adjustments	(10		)
Balance at September 30, 2014	$	3,315

As of September 30, 2014, goodwill for the Medical Systems segment and the Procedural Solutions segment was $2,102 million and $1,213 million, respectively. As of June 30, 2014, goodwill for the Medical Systems segment and the Procedural Solutions segment was $2,107 million and $1,204 million, respectively. The amount set forth above for goodwill acquired reflects the impact of business acquisitions. See note 2 for further information.

15

CAREFUSION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Intangible Assets

Intangible assets with definite lives are amortized over their useful lives which range from 3 to 20 years. The detail of intangible assets by class is as follows:

(in millions)	Weighted Average Life (years)	Gross Intangibles		Accumulated Amortization		Net Intangibles
September 30, 2014
Unamortized Intangibles:
Trademarks	Indefinite	$	307	$	—	$	307
Total Unamortized Intangibles		307		—		307
Amortized Intangibles:
Trademarks and Patents	10	99		57		42
Developed Technology	10	445		252		193
Customer Relationships	18	742		312		430
Other	6	67		42		25
Total Amortized Intangibles	14	1,353		663		690
Total Intangibles		$	1,660	$	663	$	997
June 30, 2014
Unamortized Intangibles:
Trademarks	Indefinite	$	307	$	—	$	307
Total Unamortized Intangibles		307		—		307
Amortized Intangibles:
Trademarks and Patents	10	100		55		45
Developed Technology	10	451		245		206
Customer Relationships	18	741		304		437
Other	7	61		40		21
Total Amortized Intangibles	14	1,353		644		709
Total Intangibles		$	1,660	$	644	$	1,016

Amortization expense is as follows:

	Quarters Ended September 30,
(in millions)	2014		2013
Amortization Expense	$	22	$	19

Amortization expense for each of the next five fiscal years is estimated to be:

(in millions)	2015		2016		2017		2018		2019
Amortization Expense	$	88	$	83	$	76	$	67	$	46

16

CAREFUSION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 9. RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME

The summary of activity of comprehensive income (loss) for the quarter ended September 30, 2014 and 2013, is as follows:

	Quarter Ended September 30, 2014
	Before-Tax Amount			Tax (Expense) or Benefit		Net-of-Tax Amount
(in millions)
Foreign Currency Translation Adjustments:
Translation Adjustments Arising During the Period	$	(54	)	$	1	$	(53	)
Reclassification Adjustments Recognized in Net Income	—			—		—
Net Foreign Currency Translation Adjustments	(54		)	1		(53		)
Minimum Pension Liability:
Net Loss on Minimum Pension Liability Arising During the Period	(1		)	—		(1		)
Reclassification Adjustments Recognized in Net Income	—			—		—
Net Loss on Minimum Pension Liability	(1		)	—		(1		)
Total Other Comprehensive Income (Loss)	$	(55	)	$	1	$	(54	)

	Quarter Ended September 30, 2013
	Before-Tax Amount		Tax (Expense) or Benefit			Net-of-Tax Amount
(in millions)
Foreign Currency Translation Adjustments:
Translation Adjustments Arising During the Period	$	19	$	(2	)	$	17
Reclassification Adjustments Recognized in Net Income	—		—			—
Net Foreign Currency Translation Adjustments	19		(2		)	17
Interest Rate Swaps:
Unrealized Gain (Loss) Arising During the Period	7		(3		)	4
Reclassification Adjustment Recognized in Net Income	—		—			—
Net Gain (Loss) on Interest Rate Swaps	7		(3		)	4
Total Other Comprehensive Income (Loss)	$	26	$	(5	)	$	21

Reclassification adjustment gains and losses are included in the unaudited condensed consolidated statements of income in

“Interest Expense and Other, Net”.

17

CAREFUSION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 10. BORROWINGS

Borrowings consisted of the following:

(in millions)	September 30, 2014		June 30, 2014
Senior Notes due 2014, 5.125% Less Unamortized Discount of $0.0 million at September 30, 2014 and $0.1 million at June 30, 2014, Effective Rate 5.360%	$	—	$	450
Senior Notes due 2019, 6.375% Less Unamortized Discount of $9.0 million at September 30, 2014 and $9.4 million June 30, 2014, Effective Rate 6.601%	691		691
Senior Notes due 2023, 3.300% Less Unamortized Discount of $1.9 million at September 30, 2014 and $2.0 million June 30, 2014, Effective Rate 3.311%	298		298
Senior Notes due 2017, 1.450% Less Unamortized Discount of $1.6 million at September 30, 2014 and $1.7 million June 30, 2014, Effective Rate 1.498%	298		298
Senior Notes due 2024, 3.875% Less Unamortized Discount of $3.2 million at September 30, 2014 and $3.2 million June 30, 2014, Effective Rate 3.895%	397		397
Senior Notes due 2044, 4.875% Less Unamortized Discount of $4.7 million at September 30, 2014 and $4.7 million June 30, 2014, Effective Rate 4.919%	295		295
Euro Denominated Debt, Interest Averaging 3.52% at both September 30, 2014 and June 30, 2014, Due in Varying Installments through 2020	8		10
Other Obligations; Interest Averaging 8.34% at September 30, 2014 and 8.07% at June 30, 2014, Due in Varying Installments through 2017	4		5
Total Borrowings	1,991		2,444
Less: Current Portion	3		454
Long-Term Portion	$	1,988	$	1,990

Senior Unsecured Notes. We have outstanding unsecured senior obligations, including those indicated as “Senior Notes” in the borrowings table above (collectively, the “Senior Notes”). The Senior Notes are unsecured obligations and the discount on sale of the Senior Notes is amortized to interest expense utilizing the effective interest rate method. The indentures under which the Senior Notes were issued contain customary covenants, all of which we were in compliance with at September 30, 2014. We use the net proceeds from the sale of these Senior Notes for general corporate purposes, which include the repayment of our existing indebtedness.

On August 1, 2014, we used $450 million of our cash balances to repay upon maturity the $450 million aggregate principal amount of 5.125% senior notes due 2014.

For additional information regarding the terms of the Senior Notes, refer to note 13 to the audited consolidated financial statements included in our 2014 Annual Report on Form 10-K for the fiscal year ended June 30, 2014, filed with the SEC on August 11, 2014.

Euro Denominated Debt. In connection with our acquisition of Rowa in August 2011, we assumed a 9 million Euro debt facility comprised of four tranches with annual interest rates ranging from 2.65% to 3.75%. These loans are subject to certain customary covenants and payable in quarterly or semi-annual installments, with the final payment due in September 30, 2020. The aggregate outstanding balance on these loans was $8 million and $10 million at September 30, 2014 and June 30, 2014, respectively.

Revolving Credit Facility. We maintain a $750 million senior unsecured revolving credit facility which is set to mature on February 13, 2019. The credit facility, subject to certain conditions, provides us the option to increase the commitments by up to $250 million.  At both September 30, 2014 and June 30, 2014, we had no amounts outstanding under the credit facility.

Borrowings under the credit facility bear interest at a rate per annum that is comprised of a reference rate, which is generally based upon the British Bankers Association LIBOR Rate, Federal Funds Rate, or prime rate, plus an applicable margin, which varies based upon CareFusion’s debt ratings. The credit facility also requires us to pay a quarterly commitment fee to

18

CAREFUSION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

the lenders under the credit facility on the amount of the lender’s unused commitments thereunder based upon CareFusion’s debt ratings. The credit facility also contains several customary covenants, all of which we were in compliance with at September 30, 2014. For additional information regarding the terms of the credit facility, refer to note 13 to the audited consolidated financial statements included in our 2014 Annual Report on Form 10-K, filed with the SEC on August 11, 2014.

Other Borrowings. We maintain other borrowings that consist primarily of additional notes, loans and capital leases, which totaled $4 million and $5 million at September 30, 2014 and June 30, 2014, respectively. Obligations related to capital leases are secured by the underlying assets.

Letters of Credit and Bank Guarantees. At both September 30, 2014 and June 30, 2014, we had $23 million of letters of credit and bank guarantees outstanding.

19

CAREFUSION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 11. INCOME TAXES

The effective tax rate was 22.8% and 18.5% for the quarters ended September 30, 2014 and 2013, respectively.

The difference between the effective tax rate for the quarter ended September 30, 2014, and the U.S. federal statutory rate of 35% is attributable to the favorable impact of foreign earnings taxed at less than the U.S. statutory rate partially offset by unfavorable adjustments related to the United States taxation of certain foreign earnings as Subpart F income.

During the quarter ended September 30, 2008, Cardinal Health received an IRS Revenue Agent’s Report for the fiscal years 2003 through 2005 that included Notices of Proposed Adjustment for additional taxes related to transfer pricing arrangements between foreign and domestic subsidiaries. During the quarter ended September 30, 2013, we and Cardinal Health entered into a closing agreement with the IRS to settle the remaining tax uncertainties for fiscal years 2003 through 2005. As part of the closing agreement, we agreed to pay $12 million ($11 million, net of tax) including $5 million of interest, which is reflected in our financial results for the quarter ended September 30, 2013.

During the quarter ended December 31, 2010, we received an IRS Revenue Agent’s Report for fiscal years 2006 and 2007 that included Notices of Proposed Adjustment for additional taxes related to transfer pricing arrangements between foreign and domestic subsidiaries. Additionally, during the quarter ended September 30, 2013, we received an IRS Revenue Agent’s Report for fiscal years 2008 and 2009 that included Notices of Proposed Adjustment for additional taxes related to certain foreign earnings. We and Cardinal Health disagree with the IRS regarding its application of the United States Treasury regulations to the arrangements under review and the valuations underlying such adjustments and intend to vigorously contest them. The tax matters agreement that we entered into with Cardinal Health in connection with the spinoff generally provides that the control of audit proceedings and payment of any additional liability related to our business is our responsibility. We are currently before the IRS Appeals office for fiscal years 2006 and 2007, and continue to engage in substantive discussions related to these fiscal years. We expect to appeal the Notices of Proposed Adjustment for fiscal years 2008 and 2009.

Subsequent to the quarter ended September 30, 2014, we entered into a settlement with the IRS in connection with an IRS Revenue Agent’s Report for the short period September 1, 2009 through June 30, 2010 that includes Notices of Proposed Adjustment for additional taxes related to various matters. As a result of the settlement, we agreed to pay $4 million ($3 million, net of tax) including $1 million of interest that will be reflected in our financial results for the quarter ended December 31, 2014. In addition, we received an IRS Revenue Agent’s Report for fiscal year 2010 that includes a Notice of Proposed Adjustment for additional taxes related to certain foreign earnings. We disagree with the IRS regarding its application of the United States Treasury regulations to the arrangements under review and we expect to appeal this Notice of Proposed Adjustment for fiscal year 2010.

We are currently subject to IRS audits for fiscal years 2011 through 2013.

It is reasonably possible that the amount of unrecognized tax benefits will significantly change due to one or more of the following events in the next twelve months: expiring statutes, audit activity, tax payments, other activity, or final decisions in matters that are the subject of controversy in various taxing jurisdictions in which we operate. The majority of this possible change relates to issues involving transfer pricing among our subsidiaries. Depending upon open tax examinations and/or the expiration of applicable statutes of limitation, we believe that the total amount of unrecognized tax benefits may decrease in an amount up to $160 million a portion of which, if recognized upon audit settlement, statute expiration, or other activity, would affect the 2015 effective tax rate. We believe up to $50 million may benefit the 2015 effective tax rate for the quarter ending December 31, 2014 as a result of various audit settlements, statute expirations and other activities.

We believe that we have provided adequate tax reserves for these matters. However, if upon the conclusion of these audits, the ultimate determination of taxes owed is for an amount that is materially different than our current reserves, our overall tax expense and effective tax rate may be materially impacted in the period of adjustment.

20

CAREFUSION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 12. COMMITMENTS AND CONTINGENCIES

In addition to commitments and obligations in the ordinary course of business, we are subject to various claims, other pending and potential legal actions for damages, investigations relating to governmental laws and regulations and other matters arising out of the normal conduct of our business. We assess contingencies to determine the degree of probability and range of possible loss for potential accrual or disclosure in our consolidated financial statements. An estimated loss contingency is accrued in our consolidated financial statements if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Because litigation is inherently unpredictable and unfavorable resolutions could occur, assessing contingencies is highly subjective and requires judgments about future events. When evaluating contingencies, we may be unable to provide a meaningful estimate due to a number of factors, including the procedural status of the matter in question, the presence of complex or novel legal theories, and/or the ongoing discovery and development of information important to the matters. In addition, damage amounts claimed in litigation against us may be unsupported, exaggerated or unrelated to reasonably possible outcomes, and as such are not meaningful indicators of our potential liability. We regularly review contingencies to determine the adequacy of our accruals and related disclosures. The amount of ultimate loss may differ from these estimates. It is possible that cash flows, financial position, or results of operations could be materially affected in any particular period by the unfavorable resolution of one or more of these contingencies. Whether any losses finally determined in any claim, action, investigation or proceeding could reasonably have a material effect on our business and financial condition will depend on a number of variables, including: the timing and amount of such losses; the structure and type and significance of any remedies; and the unique facts and circumstances of the particular matter that may give rise to additional factors.

Administrative Subpoenas. In April 2011, we received a federal administrative subpoena from the U.S. Department of Justice (“Department of Justice”) through the U.S. Attorney for the District of Kansas. In addition, in September 2011, we received a federal administrative subpoena from the Office of Inspector General (“OIG”) of the Department of Health and Human Services. In August 2012, we received another federal subpoena from the Department of Justice containing additional information requests. All three subpoenas requested documents and other materials that related primarily to our sales and marketing practices for our ChloraPrep skin preparation product and information regarding our relationships with healthcare professionals. In April 2013, we announced that we had reached an agreement in principle to pay the government approximately $41 million to resolve the government’s allegations. In connection with these matters, we also entered into a non-prosecution agreement and agreed to continue to cooperate with the government. During the year ended June 30, 2013, we recorded a charge to establish a reserve for the amount of the expected payment. In January 2014, we entered into a final settlement agreement with the government, and we paid the settlement.

FDA Consent Decree. We are operating under an amended consent decree with the FDA related to our infusion pump business in the United States. We entered into a consent decree with the FDA in February 2007 related to our Alaris SE pumps, and in February 2009, we and the FDA amended the consent decree to include all infusion pumps manufactured by or for CareFusion 303, Inc., our subsidiary that manufactures and sells infusion pumps in the United States. The amended consent decree does not apply to intravenous administration sets and accessories.

While we remain subject to the amended consent decree, which includes the requirements of the consent decree, we have made substantial progress in our compliance efforts. In accordance with the consent decree, we reconditioned Alaris SE pumps that had been seized by the FDA, remediated Alaris SE pumps in use by customers, and had an independent expert inspect the Alaris SE pump facilities and provide a certification to the FDA as to compliance. As a result of these efforts, in January 2010, we announced that the FDA had given us permission to resume the manufacturing and marketing of our Alaris SE pumps. In accordance with the amended consent decree, and in addition to the requirements of the original consent decree, we also implemented a corrective action plan to bring the Alaris System and all other infusion pumps in use in the United States market into compliance, had our infusion pump facilities inspected by an independent expert, and had our recall procedures and all ongoing recalls involving our infusion pumps inspected by an independent recall expert. In July 2010, the FDA notified us that we could proceed to the audit inspection phase of the amended consent decree, which included the requirement to retain an independent expert to conduct periodic audits of our infusion pump facilities over a four-year period. While we are no longer subject to these periodic audits, the FDA maintains the ability to conduct inspections of our infusion pump facilities. In addition, the amended consent decree authorizes the FDA, in the event of any violations in the future, to order us to cease manufacturing and distributing, recall products and take other actions. We may be required to pay

21

CAREFUSION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

damages of $15,000 per day per violation if we fail to comply with any provision of the amended consent decree, up to $15 million per year.

We cannot currently predict the outcome of this matter, whether additional amounts will be incurred to resolve this matter, if any, or the matter’s ultimate impact on our business. We may be obligated to pay more costs in the future because, among other things, the FDA may determine that we are not fully compliant with the amended consent decree and therefore impose penalties under the amended consent decree, and/or we may be subject to future proceedings and litigation relating to the matters addressed in the amended consent decree. As of September 30, 2014, we do not believe that a loss is probable in connection with the amended consent decree, and accordingly, we have no reserves associated with compliance with the amended consent decree.

Other Matters. In addition to the matters described above, we also become involved in other litigation and regulatory matters incidental to our business. These matters arise in the ordinary course and conduct of our business, and at times, as a result of our mergers, acquisitions and divestitures. They include, but are not limited to, product liability claims, employment matters, commercial disputes, intellectual property matters, inclusion as a potentially responsible party for environmental clean-up costs, and employment matters. As a result of our proposed merger transaction with Becton, Dickinson and Company (“BD”), we are also subject to putative class action lawsuits challenging the proposed merger transaction with BD. We intend to defend ourselves in any such matters.

We may also determine that products manufactured or marketed by us, or our sales and marketing practices for such products, do not meet our specifications, published standards or regulatory requirements. When a quality or regulatory issue is identified, we investigate the issue and take appropriate corrective action. We may be required to report such issues to regulatory authorities, which could result in fines, sanctions or other penalties. In some cases, we may also withdraw a product from the market, correct a product at the customer location, notify the customer of revised labeling and take other actions. We have recalled, and/or conducted field alerts relating to, certain of our products from time to time. These activities can lead to costs to repair or replace affected products, temporary interruptions in product sales and action by regulators, and can impact reported results of operations. We currently do not believe that these activities (other than those specifically disclosed herein) have had or will have a material adverse effect on our business or results of operations.

NOTE 13. FINANCIAL INSTRUMENTS

We use derivative instruments to partially mitigate our business exposure to foreign currency exchange and interest rate risk. We may enter into foreign currency forward contracts to offset some of the foreign exchange risk of expected future cash flows on certain forecasted revenues and expenses and on certain assets and liabilities. We hedge foreign currency exposure up to a maximum period of twelve months. We may also enter into interest rate swap agreements to manage variability of expected future cash flows and interest expense related to our existing debt, and future debt issuances.

We had no derivatives designated as hedging instruments as of September 30, 2014 and June 30, 2014.

Cash Flow Hedges. We may enter into foreign currency forward contracts to protect the value of anticipated foreign currency revenues and expenses associated with certain forecasted transactions. We also enter into interest rate swap contracts to manage the variability of expected future cash flows from changing interest rates. These derivative instruments are designated and qualify as cash flow hedges. Accordingly, the effective portion of the gain (loss) on the derivative instrument is reported as a component of Accumulated Other Comprehensive Income (“AOCI”) and reclassified into earnings in the same line item associated with the forecasted transaction and in the same period during which the hedged transaction affects earnings. The ineffective portion of the gain (loss) on the derivative instrument is recognized in earnings immediately. The impact of interest rate swap contract and foreign currency forward contract cash flow hedges is included in the unaudited condensed consolidated statements of cash flows in “Other Accrued Liabilities and Operating Items, Net”.

No foreign currency forward contracts were outstanding at September 30, 2014 and June 30, 2014.

No interest rate swap contracts were outstanding at September 30, 2014 and June 30, 2014.

The amounts reclassified from AOCI to the consolidated statements of income related to the interest rate swaps, which were settled in May 2014, were not material for the quarters ended September 30, 2014 and 2013.

22

CAREFUSION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Fair Value (Non-Designated) Hedges. We enter into foreign currency forward contracts to manage foreign exchange exposure related to intercompany financing transactions and other balance sheet items subject to revaluation that do not meet the requirements for hedge accounting treatment. Accordingly, these derivative instruments are adjusted to current market value at the end of each period. The gain (loss) recorded on these instruments is substantially offset by the remeasurement adjustment on the foreign currency denominated asset or liability. The settlement of the derivative instrument and the remeasurement adjustment on the foreign currency denominated asset or liability are both recorded in the unaudited condensed consolidated statements of income in “Interest Expense and Other, Net”. The maximum period of time that we hedge exposure for foreign currency fair value hedges is 31 days.

The following table summarizes the notional amount of the fair value hedges outstanding as of September 30, 2014 and June 30, 2014:

(in millions)	September 30, 2014		June 30, 2014
Foreign Currency Forward Contracts	$	58	$	60

The following table summarizes the gain (loss) recognized in earnings for fair value hedges outstanding for the quarters ended September 30, 2014 and 2013:

	For the Quarters Ended September 30,
(in millions)	2014		2013
Foreign Currency Forward Contracts	$	2	$	(2	)

NOTE 14. FAIR VALUE MEASUREMENTS

Assets and Liabilities Measured at Fair Value on a Recurring Basis. The following table presents information about our financial assets and liabilities that are measured at fair value on a recurring basis, and indicates the fair value hierarchy of the valuation techniques we utilize to determine such fair value as of September 30, 2014 and June 30, 2014:

	As of September 30, 2014
(in millions)	Total		Level 1		Level 2		Level 3
Financial Assets:
Cash Equivalents	$	1,416	$	1,416	$	—	$	—
Other Investments	27		23		4		—
Total Financial Assets	$	1,443	$	1,439	$	4	$	—
Financial Liabilities:
Contingent Consideration	$	—	$	—	$	—	$	—
Total Financial Liabilities	$	—	$	—	$	—	$	—

	As of June 30, 2014
(in millions)	Total		Level 1		Level 2		Level 3
Financial Assets:
Cash Equivalents	$	1,988	$	1,988	$	—	$	—
Other Investments	25		22		3		—
Total Financial Assets	$	2,013	$	2,010	$	3	$	—
Financial Liabilities:
Contingent Consideration	$	8	$	—	$	—	$	8
Total Financial Liabilities	$	8	$	—	$	—	$	8

23

CAREFUSION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The cash equivalents balance is comprised of highly liquid investments purchased with a maturity of three months or less from the original purchase date. The other investments balance includes investments in mutual funds classified as “Other Assets” in the unaudited condensed consolidated balance sheets, all related to our deferred compensation plan. Both the cash equivalents and other investments classified as Level 1 were valued based on quoted market prices for identical instruments. Assets classified as Level 2 relate to a portion of other investments not classified as Level 1. The fair value of other investments classified as Level 2 is determined based on quoted market prices for similar instruments or observable inputs other than quoted market prices. The amount of assets classified as Level 3 at September 30, 2014 and June 30, 2014 were not material. Liabilities classified as Level 3 relate to business combination contingent consideration arrangements and are recorded within either “Other Accrued Liabilities” or “Other Liabilities” in the unaudited condensed consolidated balance sheets based on the timing of the associated underlying payments. The corresponding purchase agreements require future payments based on the achievement of certain post-combination performance metrics of the acquired businesses, such as net revenues, gross profit, or date of first commercial sale. Following the quarter ended September 30, 2014 and prior to the date of this filing, the earn-out contingency was settled in full resulting in no additional consideration being paid.  As a result, we revised the corresponding amounts related to the earn-out contingency, as summarized in the table below for the quarter ended September 30, 2014.

The following table summarizes the changes in liabilities classified as contingent consideration:

(in millions)	Total
Future Gross Expected Payments at June 30, 2014	$	16
Carrying Value at June 30, 2014	$	8
Acquisition Date Fair Value of Contingent Consideration	—
Change in Fair Value Included in Expense	(8		)
Payments	—
Carrying Value at September 30, 2014	$	—
Future Gross Expected Payments at September 30, 2014	$	—

Other Instruments. The estimated fair value of our long-term obligations and other short-term borrowings was $2,100 million and $2,588 million as of September 30, 2014 and June 30, 2014, respectively, as compared to the net carrying amounts of $1,991 million and $2,444 million at September 30, 2014 and June 30, 2014, respectively. The fair value of our senior notes at September 30, 2014 and June 30, 2014 was based on quoted market prices, which involved the use of Level 1 inputs. The fair value of the other obligations at September 30, 2014 and June 30, 2014, was based on the quoted market prices for either the same or similar debt, which involved the use of observable Level 2 inputs. The fair value of the Rowa debt facility at September 30, 2014 and June 30, 2014 were determined using a discounted cash flow analysis, which approximated its carrying value. We considered the interest rates of European instruments with similar maturity dates, which involved the use of significant unobservable Level 3 inputs. See note 10 for further information.

24

CAREFUSION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 15. PRODUCT WARRANTIES

We offer warranties on certain products for various periods of time. We accrue for the estimated cost of product warranties at the time revenue is recognized. Our product warranty liability reflects management’s best estimate of probable liability based on current and historical product sales data and warranty costs incurred.

The tables below summarize the changes in the carrying amount of the liability for product warranties for the quarters ended September 30, 2014 and 2013:

(in millions)
Balance at June 30, 2014	$	16
Warranty Accrual	5
Warranty Claims Paid	(4		)
Adjustments to Preexisting Accruals	(1		)
Balance at September 30, 2014	$	16

(in millions)
Balance at June 30, 2013	$	18
Warranty Accrual	3
Warranty Claims Paid	(2		)
Adjustments to Preexisting Accruals	(2		)
Balance at September 30, 2013	$	17

As of September 30, 2014 and 2013, approximately $2 million and $6 million, respectively, of the ending liability balances related to accruals for product recalls.

NOTE 16. SEGMENT INFORMATION

Our operations are principally managed on a products and services basis, and the Medical Systems and Procedural Solutions segments focus primarily on our medical equipment business lines and disposable products business lines, respectively.

We report segment information based on the management approach. The management approach designates the internal reporting used by the Chief Operating Decision Maker (“CODM”), for making decisions and assessing performance as the source of our reportable segments. The CODM is our Chief Executive Officer. The CODM allocates resources to and assesses the performance of each operating segment using information about its revenues and operating income (loss) before interest and taxes. We have determined our reportable segments as follows based on the information used by the CODM.

Medical Systems. The Medical Systems segment is organized around our medical equipment business lines. Within the Medical Systems segment, we operate our Dispensing Technologies, Infusion Systems and Respiratory Technologies business lines. The Dispensing Technologies business line includes equipment and related services for medication and supply dispensing. The Infusion Systems business line includes infusion pumps and dedicated disposable infusion sets and accessories. The Respiratory Technologies business line includes respiratory ventilation and diagnostics equipment and dedicated consumables used during respiratory diagnostics and therapy. We also include our data mining surveillance service business within the Medical Systems segment, which we report as “Other.”

Procedural Solutions. The Procedural Solutions segment is organized around our disposable products and reusable surgical instruments business lines. Within the Procedural Solutions segment, we operate our Infection Prevention, Medical Specialties and Specialty Disposables business lines. The Infection Prevention business line includes single-use skin antiseptic and other patient-preparation products and specialty IV infusion valves, administration sets and accessories. The Medical Specialties business line includes interventional specialty products used for biopsy, drainage and other procedures, as well as reusable surgical instruments. The Specialty Disposables business line includes non-dedicated disposable ventilator circuits and oxygen masks used for providing respiratory therapy, as well as single-use consumables for respiratory care and anesthesiology.

25

CAREFUSION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

We evaluate the performance of our operating segments based upon, among other things, segment profit. Segment profit is segment revenue less segment cost of products sold, SG&A expenses, research and development expenses and restructuring and acquisition integration charges. With the exception of testing for goodwill impairment, we do not identify or allocate assets by operating segment; accordingly, certain segment related disclosures with respect to assets have been omitted. See note 8.

The following table presents information about our reportable segments for the quarters ended September 30, 2014 and 2013:

(in millions)	Medical Systems		Procedural Solutions		Total
September 30, 2014:
External Revenues	$	528	$	394	$	922
Depreciation and Amortization	$	28	$	21	$	49
Operating Income	$	84	$	42	$	126
September 30, 2013:
External Revenues	$	524	$	306	$	830
Depreciation and Amortization	$	32	$	14	$	46
Operating Income	$	74	$	42	$	116

The following table presents revenue and net property and equipment by geographic area:

	Revenue				Property and Equipment, Net
	Quarters Ended September 30,				As of September 30,		As of June 30,
(in millions)	2014		2013		2014		2014
United States	$	695	$	649	$	322	$	329
International	227		181		115		119
Total	$	922	$	830	$	437	$	448

The following table presents the revenue information for select business lines within each of the segments for the quarters ended September 30, 2014 and 2013:

	Quarters Ended September 30,
(in millions)	2014		2013
Medical Systems
Dispensing Technologies	$	225	$	211
Infusion Systems	213		219
Respiratory Technologies	85		88
Other	5		6
Total Medical Systems	$	528	$	524
Procedural Solutions
Infection Prevention	$	167	149
Medical Specialties	91		89
Specialty Disposables	136		68
Total Procedural Solutions	$	394	$	306
Total CareFusion	$	922	$	830

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CAREFUSION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 17. SUBSEQUENT EVENTS

On October 5, 2014, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Becton, Dickinson and Company, a New Jersey corporation (“BD”), and Griffin Sub, Inc., a Delaware corporation and wholly owned subsidiary of BD (“Merger Corp”).  The Merger Agreement provides, among other things, that, upon the terms and subject to the conditions set forth therein, Merger Corp will merge with and into our company, with our company surviving as a wholly-owned subsidiary of BD (the “Merger”). In the Merger, holders of our common stock will receive (i) $49.00 in cash, without interest and (ii) 0.0777 of a share of common stock, par value $1.00 per share, of BD.  Completion of the Merger is subject to customary closing conditions, including, among others, (1) the adoption of the Merger Agreement by our stockholders, (2) declaration of the effectiveness by the SEC of the Registration Statement on Form S-4 to be filed with the SEC by BD in connection with the registration of the shares of BD Stock to be issued in the Merger, (3) approval for listing on the New York Stock Exchange of the BD Stock to be issued in the Merger, (4) obtaining antitrust approvals in the United States and Europe, (5) subject to certain exceptions, the accuracy of the representations and warranties of the other party and (6) material compliance by the other party with its obligations under the Merger Agreement.  For additional information related to the Merger Agreement, please refer to our Current Report on Form 8-K filed with the SEC on October 6, 2014 (the “October 6th Form 8-K”). The foregoing description of the Merger Agreement is qualified in its entirety by reference to the full text of the Merger Agreement attached as Exhibit 2.1 to the October 6th Form 8-K.

In addition, the entering into of the Merger Agreement constituted an event of default under our $750 million senior unsecured revolving credit facility.  We have obtained a waiver for this event of default from the lenders under the credit facility.

Subsequent to the quarter ended September 30, 2014, we entered into a settlement with the IRS in connection with an IRS Revenue Agent’s Report for the short period September 1, 2009 through June 30, 2010 that includes Notices of Proposed Adjustment for additional taxes related to various matters. As a result of the settlement, we agreed to pay $4 million ($3 million, net of tax) including $1 million of interest that will be reflected in our financial results for the quarter ended December 31, 2014. As a result of the settlement, we recognized a tax benefit, which is expected to benefit the 2015 effective tax rate for the quarter ending December 31, 2014, by approximately $50 million.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This management’s discussion and analysis of financial condition and results of operations (“MD&A”) contains forward-looking statements that involve risks and uncertainties. Please see “Important Information Regarding Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions that may cause our actual results to differ materially from those discussed in the forward-looking statements. This discussion should be read in conjunction with our unaudited condensed consolidated financial statements and related notes thereto and the other disclosures contained elsewhere in this Quarterly Report on Form 10-Q, and our audited consolidated financial statements and related notes thereto for the fiscal year ended June 30, 2014, which were included in our Form 10-K, filed with the U.S. Securities and Exchange Commission (“SEC”) on August 11, 2014.

The results of operations for the periods reflected herein are not necessarily indicative of results that may be expected for future periods.

Basis of Presentation

Unless the context otherwise requires, references in this MD&A to “CareFusion Corporation,” “CareFusion,” “we,” “us,” “our,” “the company” and “our company” refer to CareFusion Corporation and its consolidated subsidiaries. References in this MD&A to “Cardinal Health” refers to Cardinal Health, Inc. and its consolidated subsidiaries.

We were incorporated in Delaware on January 14, 2009, for the purpose of holding the clinical and medical products businesses of Cardinal Health in anticipation of spinning off from Cardinal Health. We completed the spinoff from Cardinal Health on August 31, 2009.

The unaudited condensed consolidated financial statements included in this Form 10-Q have been prepared in accordance with the SEC instructions for Quarterly Reports on Form 10-Q. Accordingly, the condensed consolidated financial statements presented elsewhere in this Form 10-Q and discussed below are unaudited and do not contain all the information required by U.S. generally accepted accounting principles (“GAAP”) to be included in a full set of financial statements. The unaudited condensed consolidated balance sheet at June 30, 2014, has been derived from our audited consolidated financial statements at that date but does not include all of the information and footnotes required by GAAP for a complete set of financial statements. The audited consolidated financial statements for our fiscal year ended June 30, 2014, filed with the SEC on Form 10-K on August 11, 2014, include a summary of our significant accounting policies and should be read in conjunction with this Form 10-Q. In the opinion of management, all material adjustments necessary to present fairly the results of operations for such periods have been included in this Form 10-Q. All such adjustments are of a normal recurring nature. The results of operations for interim periods are not necessarily indicative of the results of operations for the entire year.

Our two global operating and reportable segments are Medical Systems and Procedural Solutions, which focus primarily on our medical equipment business lines and disposable products business lines, respectively:

Medical Systems. The Medical Systems segment is organized around our medical equipment business lines. Within the Medical Systems segment, we operate our Dispensing Technologies, Infusion Systems and Respiratory Technologies business lines. The Dispensing Technologies business line includes equipment and related services for medication and supply dispensing. The Infusion Systems business line includes infusion pumps and dedicated disposable infusion sets and accessories. The Respiratory Technologies business line includes respiratory ventilation and diagnostics equipment and dedicated consumables used during respiratory diagnostics and therapy. We also include our data mining surveillance service business within the Medical Systems segment, which we report as “Other.”

Procedural Solutions. The Procedural Solutions segment is organized around our disposable products and reusable surgical instruments business lines. Within the Procedural Solutions segment, we operate our Infection Prevention, Medical Specialties and Specialty Disposables business lines. The Infection Prevention business line includes single-use skin antiseptic and other patient-preparation products and specialty IV infusion valves, administration sets and accessories. The Medical Specialties business line includes interventional specialty products used for biopsy, drainage and other procedures, as well as reusable surgical instruments. The Specialty Disposables business line includes non-dedicated disposable ventilator

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circuits and oxygen masks used for providing respiratory therapy, as well as single-use consumables for respiratory care and anesthesiology.

Overview

Proposed Merger with Becton, Dickinson and Company

On October 5, 2014, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Becton, Dickinson and Company, a New Jersey corporation (“BD”), and Griffin Sub, Inc., a Delaware corporation and wholly owned subsidiary of BD (“Merger Corp”).  The Merger Agreement provides, among other things, that, upon the terms and subject to the conditions set forth therein, Merger Corp will merge with and into our company, with our company surviving as a wholly-owned subsidiary of BD (the “Merger”). In the Merger, holders of our common stock will receive (i) $49.00 in cash, without interest and (ii) 0.0777 of a share of common stock, par value $1.00 per share, of BD.  Completion of the Merger is subject to customary closing conditions, including, among others, (1) the adoption of the Merger Agreement by our stockholders, (2) declaration of the effectiveness by the Securities and Exchange Commission (the “SEC”) of the Registration Statement on Form S-4 to be filed with the SEC by BD in connection with the registration of the shares of BD Stock to be issued in the Merger, (3) approval for listing on the New York Stock Exchange of the BD Stock to be issued in the Merger, (4) obtaining antitrust approvals in the United States and Europe, (5) subject to certain exceptions, the accuracy of the representations and warranties of the other party and (6) material compliance by the other party with its obligations under the Merger Agreement.  

For additional information related to the Merger Agreement, please refer to our Current Report on Form 8-K filed with the SEC on October 6, 2014 (the “October 6th Form 8-K”). The foregoing description of the Merger Agreement is qualified in its entirety by reference to the full text of the Merger Agreement attached as Exhibit 2.1 to the October 6th Form 8-K. In connection with the Merger, we intend to file relevant materials with the SEC, including our proxy statement. Our stockholders are urged to read all relevant documents filed with the SEC, including CareFusion Corporation’s definitive proxy statement, because they will contain important information about the proposed transaction. Investors and security holders are able to obtain the documents (once available) free of charge at the SEC’s web site, http://www.sec.gov, or for free by contacting CareFusion’s Investor Relations department by e-mail at ir@carefusion.com or by phone at (858) 617-4621. Such documents are not currently available.

Our Business

We are a global medical technology company with proven and industry-leading products and services designed to measurably improve the safety, quality, efficiency and cost of healthcare. We offer a comprehensive portfolio of products in the areas of medication management, infection prevention, operating room and procedural effectiveness, and respiratory care. Our offerings include established brands used in hospitals throughout the United States and approximately 130 countries worldwide. Our strategy is to enhance growth by focusing on healthcare safety and productivity, driving innovation and clinical differentiation, accelerating our global growth and pursuing strategic opportunities.

Healthcare-related industries are generally less susceptible than some other industries to fluctuations in the overall economic

environment. However, some of our businesses rely on capital spending from our customers (primarily hospitals), which can be influenced by a variety of economic factors, including interest rates, access to financing and endowment fluctuations.

Significant changes in these economic factors can affect the sales of our capital equipment products, such as infusion pumps,

dispensing equipment and ventilators. Additionally, sales volumes for some of our businesses are dependent on hospital

admissions. Changes in admissions due to difficult economic times can affect our results for surgical and single-use products,

such as infusion and respiratory disposable sets, surgical instruments and skin antiseptic products.

Healthcare providers globally are focused on reducing the rising costs to deliver care. As a result, hospitals have prioritized and, in some cases, constrained their capital equipment purchases. Despite seeing some improvement during fiscal year 2013 and a stable environment in fiscal year 2014, we continue to anticipate it will take time before significant market improvements are realized. Even in this environment, we believe our Medical Systems business is well positioned, and will strengthen with improvements in hospital capital equipment spending.

Procedural volumes in acute care facilities represent one indicator for the demand of the disposable products sold within our Procedural Solutions operating segment and have remained relatively stable since fiscal year 2012. In addition to procedural volumes, demand for many of our Procedural Solutions products is created when physicians convert their existing practices

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away from legacy methods and adopt our clinically differentiated products. As a result, our clinically differentiated product revenue has consistently outperformed trends in acute care facility procedural volumes.

Consolidated Results of Operations

Quarter Ended September 30, 2014 Compared to the Quarter Ended September 30, 2013

Below is a summary of results of operations and a more detailed discussion of results for the quarters ended September 30, 2014 and 2013:

	Quarters Ended September 30,
(in millions)	2014			2013		Change
Revenue	$	922		$	830	$	92
Cost of Products Sold	465			407		58
Gross Profit	457			423		34
Selling, General and Administrative Expenses	265			248		17
Research and Development Expenses	49			48		1
Restructuring and Acquisition Integration Charges	19			11		8
Share of Net (Earnings) Loss of Equity Method Investee	(2		)	—		(2		)
Operating Income	126			116		10
Interest Expense and Other, Net	28			20		8
Income Before Income Taxes	98			96		2
Provision for Income Taxes	22			18		4
Net Income	$	76		$	78	$	(2	)

Revenue

The following table presents the revenue information for select business lines within each of our reportable segments for the quarters ended September 30, 2014 and 2013:

	Quarters Ended September 30,
(in millions)	2014		2013		Change
Medical Systems
Dispensing Technologies	$	225	$	211	$	14
Infusion Systems	213		219		(6		)
Respiratory Technologies	85		88		(3		)
Other	5		6		(1		)
Total Medical Systems	$	528	$	524	$	4
Procedural Solutions
Infection Prevention	$	167	$	149	$	18
Medical Specialties	91		89		2
Specialty Disposables	136		68		68
Total Procedural Solutions	$	394	$	306	$	88
Total CareFusion	$	922	$	830	$	92

Revenue in our Medical Systems segment increased 1% to $528 million for the quarter ended September 30, 2014, compared to the prior fiscal year. The increase was primarily a result of increased revenues in the Dispensing Technologies business line. Revenue in the Dispensing Technologies business line increased $14 million to $225 million, primarily due to increased

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sales associated with the continued launch of a new product release in our Pyxis product line and increased international sales associated with our Rowa product line.

Revenue in our Procedural Solutions segment increased 29% to $394 million for the quarter ended September 30, 2014, compared to the prior fiscal year. The increase in Procedural Solutions revenue was primarily due to growth in the Specialty Disposables ($68 million) and Infection Prevention ($18 million) business lines.

Revenue in the Specialty Disposables business line increased by $68 million to $136 million, primarily as a result of revenues associated with Vital Signs, which we acquired in December 2013. Revenue in the Infection Prevention business line increased by $18 million to $167 million, as a result of revenues associated with Sendal, which we acquired in October 2013, increased sales of our clinically differentiated skin preparation products, and increased sales of our specialty IV infusion valves.

Gross Profit and Cost of Products Sold

Gross profit increased 8% to $457 million during the quarter ended September 30, 2014, compared to the prior fiscal year. As a percentage of revenue, gross margin was 49.6% and 51.0% for the quarters ended September 30, 2014 and 2013, respectively.

The decrease in gross margin during the quarter ended September 30, 2014, was primarily due to increased sales in lower margin product lines associated with our acquisition of Sendal and Vital Signs and higher installation costs associated with increased installation volumes for our Pyxis product line, partially offset by higher margins associated with the infusion product line.

Selling, General and Administrative and Research and Development Expenses

Selling, General and Administrative (“SG&A”) expenses increased 7% to $265 million during the quarter ended September 30, 2014, compared to the prior fiscal year. The increase was primarily due to costs associated with the operations of Vital Signs, partially offset by cost saving initiatives.

Research and Development (“R&D”) expenses increased by $1 million to $49 million during the quarter ended September 30, 2014, compared to the prior year. As we continue to invest in next generation platforms for Medical Systems and Procedural Solutions, R&D expense for Procedural Solutions has increased modestly and Medical Systems has decreased due to the current phase of our product development life cycle.

Restructuring and Acquisition Integration Charges

Restructuring and acquisition integration charges increased by $8 million to $19 million during the quarter ended September 30, 2014, compared to the prior fiscal year. Restructuring plans focus on various aspects of operations, including closing and consolidating certain manufacturing operations, rationalizing headcount, and aligning operations in the most strategic and cost-efficient structure. Acquisition integration charges of $9 million associated with the acquisition of Vital Signs were incurred during the quarter ended September 30, 2014.

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Share of Net Earnings of Equity Method Investee

In March 2014, we acquired a 40 percent non-controlling equity interest in CME, a global infusion pump manufacturer. Share of net earnings of equity method investee of $2 million during the quarter ended September 30, 2014, is associated with earnings from CME. See note 3 for further information.

Operating Income

Operating income increased $10 million, or 9%, to $126 million during the quarter ended September 30, 2014, compared to the prior fiscal year.

Segment profit in our Medical Systems segment increased by $10 million to $84 million during the quarter ended September 30, 2014, compared to the prior fiscal year. The increase in segment profit was attributable to the impact of higher margins in the Infusion Systems business line.

Segment profit in our Procedural Solutions segment remained unchanged at $42 million during the quarter ended September 30, 2014, compared to the prior fiscal year.

Interest Expense and Other, Net

Interest expense and other, net increased 40% to $28 million during the quarter ended September 30, 2014, compared to the quarter ended September 30, 2013. This increase was primarily due to the impact of higher interest expenses associated with a larger aggregate principal amount of our senior notes compared to the prior fiscal year.

Provision for Income Tax

Income tax expense increased by $4 million to $22 million for the quarter ended September 30, 2014 compared to $18 million for the quarter ended September 30, 2013. The effective tax rate for the quarter ended September 30, 2014 was 22.8% compared to 18.5% for the quarter ended September 30, 2013. The increase in the effective tax rate was primarily due to the favorable settlement of tax matters under appeal with the IRS related to fiscal years 2003 through 2005, partially offset by adjustments of prior year uncertain tax benefits related to transfer pricing, both of which were recognized during the quarter ended September 30, 2013.

For additional detail regarding the provision for income taxes, see note 11 to the unaudited condensed consolidated financial statements.

Liquidity and Capital Resources

Overview

Historically, we have generated, and expect to continue to generate, positive cash flow from operations. Cash flows from operations primarily represent inflows from net income (adjusted for depreciation and other non-cash items) and outflows from investment in sales-type leases entered into, as we sell and install dispensing equipment, and other increases in working capital needed to grow the business. Cash flows from investing activities represent our investment in intellectual property and capital equipment required to grow our business, as well as acquisitions. Cash flows from financing activities primarily represent net proceeds from debt issuance, settlement of long-term borrowings and outflows related to the share repurchase programs, as discussed below.

Our cash and cash equivalents balance at September 30, 2014 was $1,736 million. Of this balance, $1,140 million is held outside of the United States and is denominated in United States dollars as well as other currencies. In May 2014, we issued $1 billion aggregate principal amount of notes and received net proceeds of approximately $990 million. In August 2014, we used a portion of the net proceeds of the May 2014 issuance to repay upon maturity $450 million our outstanding senior notes.

We believe that our current domestic cash flow from operations, domestic cash balances, and senior unsecured revolving credit facility provides us with sufficient liquidity to meet domestic operating needs. It is our intention to indefinitely reinvest

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all foreign earnings in order to ensure sufficient working capital and expand existing operations outside the United States. To the extent our foreign operations have generated previously taxed income that will not be subject to additional United States federal income tax, we may decide to repatriate such earnings to the United States. Additionally, we intend to fund foreign acquisitions primarily through the use of unrepatriated cash held by foreign subsidiaries. However, should our domestic cash needs exceed our current or future domestic cash flows, we could repatriate foreign cash or utilize our senior unsecured revolving credit facility, both of which would result in increased expense, tax or interest.

We believe that our future cash from operations together with our access to funds available under our senior unsecured revolving credit facility and the capital markets will provide adequate resources to fund both short-term and long-term operating requirements, capital expenditures, acquisitions and new business development activities.

From time to time, our Board of Directors authorizes share repurchase programs for the repurchase of our common stock through open market and private transactions. During the quarter ended September 30, 2014, we repurchased a total of 2.3 million shares for an aggregate of $103 million (excluding commissions and fees) in the open market as part of these programs. For additional detail regarding our share repurchase programs, see note 4 to the unaudited condensed consolidated financial statements.

Sources and Uses of Cash

The following table summarizes our unaudited condensed consolidated statements of cash flows from continuing operations:

	Quarters Ended September 30,
(in millions)	2014			2013			Change
Cash Flow (Used in)/Provided by:
Operating Activities	$	68		$	74		$	(6	)
Investing Activities	$	(57	)	$	(18	)	$	(39	)
Financing Activities	$	(555	)	$	(91	)	$	(464	)

Quarters Ended September 30, 2014 and 2013

Net operating cash flow from continuing operations decreased $6 million to $68 million for the quarter ended September 30, 2014, compared to the prior year. The decrease in cash flow provided by continuing operations was driven by a decrease in net income adjusted for non-cash items ($11 million), inventory ($28 million), net investment in sales type leases ($12 million), accounts payable ($5 million), and other operating activities ($40 million). These activities were offset by an increase in trade receivables ($90 million).

Net cash used in continuing operations from investing activities increased $39 million for the quarter ended September 30, 2014, compared to the quarter ended September 30, 2013. This increase was primarily attributable to the closing of the acquisition of the Vital Signs business in Germany, as well as other acquisitions during the quarter.

Net cash used in continuing operations from financing activities for the quarter ended September 30, 2014 increased $464 million compared to the prior year. This is largely a result of the repayment of $450 million of our outstanding senior notes upon maturity in August 2014. During the quarter ended September 30, 2014, less cash was generated from stock options exercises ($17 million) as compared to the prior year.

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Capital Resources

Senior Unsecured Notes. The following table summarizes the aggregate principal amount of our outstanding senior unsecured notes as of September 30, 2014:

(in millions)		For Quarter Ended September 30, 2014
1.450% senior notes due 2017	$	300
6.375% senior notes due 2019		700
3.300% senior notes due 2023		300
3.875% senior notes due 2024		400
4.875% senior notes due 2044		300
Total senior notes	$	2,000

The indentures governing the senior notes limit, among other things, our ability to incur certain secured debt, enter into certain sale and leaseback transactions and merge or consolidate with other companies. In accordance with the indentures, we may redeem the senior notes prior to maturity at a price that would equal or exceed the outstanding principal balance, as defined. In addition, if we undergo a change of control and experience a below investment grade rating event, we may be required to repurchase all of the senior notes at a purchase price equal to 101% of the principal balance plus any accrued and unpaid interest.

Revolving Credit Facility. We maintain a $750 million senior unsecured revolving credit facility which is set to mature on February 13, 2019. The credit facility, subject to certain conditions, provides us the option to increase the commitments by up to $250 million. At both September 30, 2014 and June 30, 2014, we had no amounts outstanding under the credit facility.

Borrowings under the credit facility bear interest at a rate per annum that is comprised of a reference rate, which is generally based upon the British Bankers Association LIBOR Rate, Federal Funds Rate, or prime rate, plus an applicable margin, which varies based upon CareFusion’s debt ratings. The credit facility also requires us to pay a quarterly commitment fee to the lenders under the credit facility on the amount of the lender’s unused commitments thereunder based upon CareFusion’s debt ratings. The credit facility also contain several customary covenants, all of which we were in compliance with at September 30, 2014. For additional information regarding the terms of the credit facility, refer to note 13 to the audited consolidated financial statements included in our 2014 Annual Report on Form 10-K, filed with the SEC on August 11, 2014.

The entering into of the Merger Agreement with BD on October 5, 2014 constituted an event of default under the credit facility. We have obtained a waiver for this event of default from the lenders under the credit facility.

Dividends

We currently intend to retain any earnings to finance research and development, acquisitions and the operation and expansion of our business and do not anticipate paying any cash dividends in the foreseeable future. In addition, we use our excess cash to fund our share repurchase program. The declaration and payment of any dividends in the future by us will be subject to the sole discretion of our board of directors and will depend upon many factors, including our financial condition, earnings, capital requirements of our operating subsidiaries, covenants associated with certain of our debt obligations, legal requirements, regulatory constraints and other factors deemed relevant by our board of directors. Moreover, should we pay any dividend in the future, there can be no assurance that we will continue to pay such dividends.

Off-Balance Sheet Arrangements and Contractual Obligations

As of September 30, 2014, we did not have any off-balance sheet arrangements and we had no material changes related to contractual obligations since June 30, 2014. For information on contractual obligations, see the table of Contractual Obligations in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2014 Annual Report on Form 10-K, filed with the SEC on August 11, 2014,

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In the normal course of business, our operations are exposed to risks associated with changes in interest rates and foreign exchange rates. We seek to manage these risks using hedging strategies that involve the use of derivative instruments. We do not enter into any derivative agreements for trading or speculative purposes.

While we believe we have designed an effective risk management program, there are inherent limitations in our ability to forecast our exposures, and therefore, we cannot guarantee that our programs will completely mitigate all risks associated with unfavorable movement in either foreign exchange rates or interest rates.

Additionally, the timing of the recognition of gains and losses related to derivative instruments can be different from the recognition of the underlying economic exposure. This may impact our consolidated operating results and financial position.

Interest Rate Risk

Interest income and expense on variable-rate instruments are sensitive to fluctuations in interest rates across the world. Changes in interest rates primarily affect the interest earned on our cash and cash equivalents and to a significantly lesser extent the interest expense on our debt. We seek to manage our interest rate risk by using derivative instruments such as swaps with financial institutions to hedge our risks on a portion of our probable future debt issuances. In general, we may hedge material interest rate exposures up to several years before the forecasted transaction; however, we may choose not to hedge some exposures for a variety of reasons including prohibitive economic costs.

To the extent that forward interest rate swap agreements qualify for hedge accounting, the gain (loss) will be recorded to Accumulated Other Comprehensive Income (“AOCI”) and reclassified into earnings in the same line item associated with the forecasted transaction and in the same period during which the hedged transaction affects earnings. The ineffective portion of the gain (loss) on the derivative instrument is recognized in earnings immediately.

As of September 30, 2014 and June 30, 2014, we had no forward interest rate swap derivative instruments outstanding.

As of September 30, 2014, substantially all of our outstanding debt balances are fixed rate debt. While changes in interest rates will have no impact on the interest we pay on this debt, interest on any borrowings under our five year senior unsecured revolving credit facility will be exposed to interest rate fluctuations as the rate on this facility is variable. As of September 30, 2014, there were no outstanding amounts under our amended and restated five year senior unsecured revolving credit facility. In May 2014, we issued $1 billion aggregate principal amount of senior notes and received net proceeds of approximately $990 million. In August 2014, we used a portion of the net proceeds of the this issuance to repay upon maturity $450 million of our outstanding senior notes.

Foreign Currency Risk

We are a global company with operations in multiple countries and are a net recipient of currencies other than the United States dollar (USD). Accordingly, a strengthening of the USD will negatively impact revenues and gross margins expressed in consolidated USD terms.

Currently, we have foreign exchange risk associated with currency exposure related to existing assets and liabilities, committed transactions, forecasted future cash flows and net investments in foreign subsidiaries. We seek to manage our foreign exchange risk by using derivative instruments such as forwards, swaps and options with financial institutions to hedge our risks. In general, we may hedge material foreign exchange exposures up to twelve months in advance; however, we may choose not to hedge some exposures for a variety of reasons including prohibitive economic costs.

The realized and unrealized gains and losses of foreign currency forward contracts and the re-measurement of foreign currency denominated receivables, payables and loans are recorded in the unaudited condensed consolidated statements of income. To the extent that cash flow hedges qualify for hedge accounting, the gain or loss on the forward contract will be recorded to AOCI. As the forecasted exposures affect earnings, the realized gain or loss on the forward contract will be moved from AOCI to the unaudited condensed consolidated statements of income.

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ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, our management, including our Chief Executive Officer and our Chief Financial Officer, have concluded that our disclosure controls and procedures were effective as of the end of such period.

Changes in Internal Control over Financial Reporting

In connection with the evaluation required by Exchange Act Rule 13a-15(d), our management, including our Chief Executive Officer and our Chief Financial Officer, concluded that no changes in our internal control over financial reporting occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and our Chief Financial Officer, do not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

See note 12 to the unaudited condensed consolidated financial statements.

ITEM 1A. RISK FACTORS

In evaluating us and our common stock, we urge you to carefully consider the risks and other information in this Quarterly Report on Form 10-Q, as well as the risk factors disclosed in Item 1A. to Part I of our Annual Report on Form 10-K for the fiscal year ended June 30, 2014. Except as set forth below, there have been no material changes from the risk factors as previously disclosed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2014. Any of the risks discussed in this Quarterly Report on Form 10-Q or any of the risks disclosed in Item 1A. to Part I of our Annual Report on Form 10-K for the fiscal year ended June 30, 2014, as well as additional risks and uncertainties not currently known to us or that we currently deem immaterial, could materially and adversely affect our results of operations or financial condition.

Risks Related to Our Proposed Acquisition by Becton, Dickinson and Company

On October 5, 2014, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Becton, Dickinson and Company, a New Jersey corporation (“BD”), and Griffin Sub, Inc., a Delaware corporation and a wholly owned subsidiary of BD (“Merger Corp”), providing for, among other things, that, upon the terms and subject to the conditions set forth therein, Merger Corp will merge with and into our company, with our company surviving as a wholly-owned subsidiary of BD (the “Merger”). In connection with the proposed merger, we are subject to certain risks including, but not limited to, those set forth below.

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For additional information related to the Merger Agreement, please refer to the Current Report on Form 8-K filed with the SEC on October 6, 2014 (the “October 6th Form 8-K”). The foregoing description of the Merger Agreement is qualified in its entirety by reference to the full text of the Merger Agreement attached as Exhibit 2.1 to the October 6th Form 8-K.

The announcement and pendency of the Merger could adversely affect our business, results of operations and financial condition.

The announcement and pendency of the Merger of our company with BD could cause disruptions in and create uncertainty surrounding our business, including affecting our relationships with our existing and future customers, suppliers and employees, which could have an adverse effect on our business, results of operations and financial condition, regardless of whether the proposed merger is completed. In particular, we could potentially lose important personnel as a result of the departure of employees who decide to pursue other opportunities in light of the Merger. We could also potentially lose customers or suppliers, and new customer or supplier contracts could be delayed or decreased. In addition, we have diverted, and will continue to divert, significant management resources towards the completion of the transaction, which could adversely affect our business and results of operations.

We are subject to putative class action lawsuits challenging the Merger.  The lawsuits seek, among other things, to enjoin the consummation of the Merger, rescission of the Merger if it is consummated, and an award of monetary damages, costs and fees.  The costs, delay and management resources associated with litigation related to the Merger could adversely affect our business, results of operations and financial condition.

We are also subject to restrictions on the conduct of our business prior to the consummation of the Merger as provided in the Merger Agreement, including, among other things, certain restrictions on our ability to acquire other businesses, sell, transfer or license our assets, amend our organizational documents, and incur indebtedness. These restrictions could result in our inability to respond effectively to competitive pressures, industry developments and future opportunities and may otherwise harm our business, results of operations and financial condition.

Failure to complete the proposed merger could adversely affect our business and the market price of our common stock.

There is no assurance that the closing of the Merger will occur. Consummation of the Merger is subject to various conditions, including, among other things, the approval of the Merger Agreement and the Merger by the holders of a majority of our outstanding shares of common stock, and certain other customary conditions, including, among other things, the absence of laws or judgments prohibiting or restraining the merger and the receipt of certain regulatory approvals. We cannot predict with certainty whether and when any of these conditions will be satisfied. We are subject to putative class action lawsuits challenging the Merger, which seek, among other things, to enjoin the consummation of the Merger. In addition, the Merger Agreement may be terminated under certain specified circumstances, including, but not limited to, a change in the recommendation of our Board of Directors or a termination of the Merger Agreement by our company to enter into an agreement for a “superior proposal”. If the Merger Agreement is terminated, we may be required to pay BD an amount equal to fifty percent of BD’s out-of-pocket expenses incurred in connection with the Merger Agreement and the Merger and in certain other circumstances, we may be required to pay BD a termination fee of $367 million. If the Merger is not consummated, our stock price will likely decline as our stock has recently traded based on the proposed per share price for the Merger. We will have incurred significant costs, including, among other things, the diversion of management resources, for which we will have received little or no benefit if the closing of the Merger does not occur. A failed transaction may result in negative publicity and a negative impression of us in the investment community. The occurrence of any of these events individually or in combination could have a material adverse effect on our results of operations and the market price of our common stock.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table contains information about our company’s purchases of equity securities during the quarter ended September 30, 2014:

Issuer Purchases of Equity Securities
Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Publicly Announced Program1,2
July 1 - 31, 2014	1,971,250	$	44.74	1,971,250	$	85
August 1 - 31, 2014	343,904	43.39		343,904	820
September 1 - 30, 2014	—	—		—	820
Total	2,315,154	44.54		2,315,154	$	820

________________

¹ During the quarter ended September 30, 2014, we repurchased a total of 2.3 million shares under our share repurchase programs for an aggregate of $103 million (excluding commissions and fees). From October 1, 2014 through the date of this filing, we did not repurchase additional shares. Includes the new share repurchase program for the repurchase of up to $750 million of our common stock which was announced in August 2014.

² Dollars in millions.

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ITEM 6. EXHIBITS

Exhibit Number	Description of Exhibits
2.1	Agreement and Plan of Merger, dated as of October 5, 2014, among CareFusion Corporation, Becton, Dickinson and Company and Griffin Sub, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on October 6, 2014, File No. 1-34273).
10.1	Form of Nonqualified Stock Option Agreement, as amended effective August 2014, under the CareFusion Corporation 2009 Long-Term Incentive Plan.*
10.2	Form of Performance Stock Units Agreement, as amended effective August 2014, under the CareFusion Corporation 2009 Long-Term Incentive Plan.*
10.3	Form of Restricted Stock Units Agreement (Officers), as amended effective August 2014, under the CareFusion Corporation 2009 Long-Term Incentive Plan.*
10.4	Form of Restricted Stock Units Agreement (Multi-year vest), as amended effective August 2014, under the CareFusion Corporation 2009 Long-Term Incentive Plan.*
10.5	Form of Restricted Stock Units Agreement (Directors), as amended effective October 2014, under the CareFusion Corporation 2009 Long-Term Incentive Plan.*
10.6	CareFusion Corporation Executive Change in Control Severance Plan, as amended and restated effective October 5, 2014.*
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1	Certifications pursuant to 18 U.S.C. Section 1350.*
101.INS	XBRL Instance Document*
101.SCH	XBRL Taxonomy Extension Schema Document*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document*
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document*
101.LAB	XBRL Taxonomy Extension Label Linkbase Document*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document*

_________________

* Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CAREFUSION CORPORATION
Date: November 7, 2014	By:	/s/ James F. Hinrichs
		James F. Hinrichs,
		Chief Financial Officer
		(Principal financial officer and duly authorized signatory)

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EX-10.1

Exhibit 10.1

CAREFUSION CORPORATION

NONQUALIFIED STOCK OPTION AGREEMENT

On _________ (the “Grant Date”), CareFusion Corporation, a Delaware corporation (the “Company”), has awarded to __________ (“Awardee”), an option (the “Option”) to purchase ________ shares of common stock, par value $0.01 per share, of the Company (the “Shares”) for a price of _______ per share. The Option has been granted under the CareFusion Corporation 2009 Long-Term Incentive Plan (the “Plan”), and will include and be subject to all provisions of the Plan, which are incorporated herein by reference, and will be subject to the provisions of this Nonqualified Stock Option Agreement (this “Agreement”). Capitalized terms used in this Agreement which are not specifically defined will have the meanings ascribed to such terms in the Plan. This Option shall vest and become exercisable in three installments, which shall be as nearly equal as possible, on the first three anniversaries of the Grant Date (each a “Vesting Date” with respect to the portion of the Option scheduled to vest on such date), subject in each case to the provisions of this Agreement, including those relating to the Awardee’s continued employment with the Company and its Affiliates (collectively, the “CareFusion Group”). This Option shall expire on _________ (the “Grant Expiration Date”).

1.Method of Exercise and Payment of Price.

(a)Method of Exercise. At any time when all or a portion of the Option is exercisable under the Plan and this Agreement, some or all of the exercisable portion of the Option may be exercised from time to time by written notice to the Company, or such other method of exercise as may be specified by the Company, including without limitation, exercise by electronic means on the web site of the Company’s third-party equity plan administrator, which will:

(i)state the number of whole Shares with respect to which the Option is being exercised; and

(ii) if the Option is being exercised by anyone other than Awardee, if not already provided, be accompanied by proof satisfactory to counsel for the Company of the right of such person or persons to exercise the Option under the Plan and all Applicable Laws and regulations.

(b)Payment of Price. The full exercise price for the portion of the Option being exercised shall be paid to the Company as provided below:

(i)in cash;

(ii)by check or wire transfer (denominated in U.S. Dollars);

(iii)subject to any conditions or limitations established by the Administrator, other Shares which (A) in the case of Shares acquired from the Company (whether upon the exercise of an Option or otherwise), have been owned by the Participant for more than six months on the date of surrender (unless this condition is waived by the Administrator), and (B) have a Fair Market Value on the date of surrender equal to or greater

than the aggregate exercise price of the Shares as to which said Option shall be exercised (it being agreed that the excess of the Fair Market Value over the aggregate exercise price shall be refunded to the Awardee, with any fractional Share being repaid in cash);

(iv)subject to any conditions or limitations established by the Administrator, the Company’s withholding Shares otherwise issuable upon exercise of an Option;

(v) consideration received by the Company under a broker-assisted sale and remittance program acceptable to the Administrator; or

(vi) any combination of the foregoing methods of payment.

2.Transferability. The Option shall be transferable (I) at Awardee’s death, by Awardee by will or pursuant to the laws of descent and distribution, and (II) by Awardee during Awardee’s lifetime, without payment of consideration, to (a) the spouse, former spouse, parents, stepparents, grandparents, parents-in-law, siblings, siblings-in-law, children, stepchildren, children-in-law, grandchildren, nieces or nephews of Awardee, or any other persons sharing Awardee’s household (other than tenants or employees) (collectively, “Family Members”), (b) a trust or trusts for the primary benefit of Awardee or such Family Members, (c) a foundation in which Awardee or such Family Members control the management of assets, or (d) a partnership in which Awardee or such Family Members are the majority or controlling partners; provided, however, that subsequent transfers of the transferred Option shall be prohibited, except (X) if the transferee is an individual, at the transferee’s death by the transferee by will or pursuant to the laws of descent and distribution, and (Y) without payment of consideration to the individuals or entities listed in subparagraphs II(a), (b) or (c), above, with respect to the original Awardee. The Administrator may, in its discretion, permit transfers to other persons and entities as permitted by the Plan. Neither a transfer under a domestic relations order in settlement of marital property rights nor a transfer to an entity in which more than 50% of the voting interests are owned by Awardee or Family Members in exchange for an interest in that entity shall be considered to be a transfer for consideration. Within 10 days of any transfer, Awardee shall notify the Compensation and Benefits department of the Company in writing of the transfer. Following transfer, the Option shall continue to be subject to the same terms and conditions as were applicable immediately prior to transfer and, except as otherwise provided in the Plan or this Agreement, references to the original Awardee shall be deemed to refer to the transferee. The events of a Termination of Employment of Awardee provided in Paragraph 3 hereof shall continue to be applied with respect to the original Awardee, following which the Option shall be exercisable by the transferee only to the extent, and for the periods, specified in Paragraph 3. The Company shall have no obligation to notify any transferee of Awardee’s Termination of Employment with the CareFusion Group for any reason. The conduct prohibited of Awardee in Paragraphs 5 and 6 hereof shall continue to be prohibited of Awardee following transfer to the same extent as immediately prior to transfer and the Option (or its economic value, as applicable) shall be subject to forfeiture by the transferee and recoupment from Awardee to the same extent as would have been the case of Awardee had the Option not been transferred. Awardee shall remain subject to the recoupment provisions of Paragraphs 5 and 6 of this Agreement and tax withholding provisions of Section 29 of the Plan following transfer of the Option.

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3.Termination of Employment; Retirement.

(a)Termination of Employment by Reason of Death or Disability. If a Termination of Employment of Awardee occurs by reason of death or Disability prior to the vesting in full of the Option, but at least six (6) months from the Grant Date, then any unvested portion of the Option shall vest upon and become exercisable in full from and after such death or Disability. The Option may thereafter be exercised by the Awardee, any transferee of Awardee, if applicable, or by the legal representative of the estate or by the legatee of Awardee under the will of Awardee from the date of such death or Disability until the Grant Expiration Date.

(b)Retirement. If Awardee remains in the continuous employ of the Company or its Affiliates for at least six (6) months after the Grant Date and at such time is or thereafter becomes Retirement Eligible, then any unvested portion of the Option shall vest. Subject to Paragraph 3(c) below, if the Option vests in accordance with the preceding sentence, it shall become exercisable by Awardee (or any transferee, if applicable) on the applicable Vesting Date(s) in the portions set forth on the vesting schedule provided in the preamble to this Agreement, and once a portion of the Option becomes exercisable, it shall remain exercisable until the Grant Expiration Date. If Awardee dies after becoming Retirement Eligible, but before the Grant Expiration Date, the Option may be exercised in full by any transferee of the Option, if applicable, or by the legal representative of the estate or by the legatee of Awardee under the will of Awardee from and after such death until the Grant Expiration Date. For purposes of this Agreement and this Award under the Plan, “Retirement Eligible” shall mean Awardee’s (i) attaining age fifty-five (55), and (i) having at least ten (10) years of continuous service with the Company or Cardinal Health, Inc. and their Affiliates, including service with an Affiliate of the Company or Cardinal Health, Inc. prior to the time that such Affiliate became an Affiliate of the Company or Cardinal Health, Inc. For purposes of the age and/or service requirement, the Administrator may, in its discretion, credit a Participant with additional age and/or years of service.

(c)Termination in Connection with a Change of Control. If within two (2) years after a Change of Control, Awardee experiences a Termination of Employment (i) by the Company for any reason other than because of Awardee’s death, Disability or Termination for Cause or (ii) by Awardee for Good Reason (as defined below), then any unvested portion of the Option shall vest upon and become exercisable in full from and after such date of Termination of Employment and the Option shall remain exercisable until the earlier of one (1) year following the date of such Termination of Employment or the Grant Expiration Date; provided that, if Awardee is Retirement Eligible on the date of such Termination of Employment, then any unexercisable portion of the Option shall become exercisable in full from after such date of Termination of Employment and shall remain exercisable until the Grant Expiration Date.

For purposes of this Paragraph 3(c), “Good Reason” means one or more of the following conditions (without the consent of Awardee): (i) a material reduction of Awardee’s base compensation (including Base Salary or Target Bonus); (ii) a material diminution in Awardee’s authority, duties, or responsibilities; and (iii) a material change in the geographic location at which Awardee must perform services, where a change of at least 35 miles or to another country will be deemed material. Awardee must provide notice to the Company of

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the existence of one or more of the above conditions within 90 days after the initial existence of the condition(s), upon the notice of which the Company shall have 30 days to remedy the condition(s). If the Company fails to so remedy the condition(s), the 31 day following the Company’s receipt of Awardee’s notice shall be deemed to be the date of Termination of Employment of Awardee for Good Reason hereunder.

(d) Other Termination of Employment. If a Termination of Employment of Awardee occurs by any reason other than as set forth in Paragraphs (a), (b) and (c) hereof, any unexercised portion of the Option which has not vested on such date of Termination of Employment will automatically be forfeited. Awardee (or any transferee, if applicable) will have 90 days from the date of Termination of Employment or until the Grant Expiration Date, whichever period is shorter, to exercise any portion of the Option that is vested and exercisable on the date of Termination of Employment; provided, however, that if the Termination of Employment was a Termination for Cause, as determined by the Administrator, the Option shall be immediately canceled by the Administrator (whether then held by Awardee or any transferee).

4.Restrictions on Exercise. The Option is subject to all restrictions in this Agreement and/or in the Plan. As a condition of any exercise of the Option, the Company may require Awardee or his or her transferee or successor to make any representation and warranty to comply with any applicable law or regulation or to confirm any factual matters (including Awardee’s compliance with the terms of Paragraphs 5 and 6 of this Agreement or any employment or severance agreement between the CareFusion Group and Awardee) reasonably requested by the Company. The Option shall not be exercisable if such exercise would involve a violation of any Applicable Law.

5.Triggering Conduct/Competitor Triggering Conduct. As used in this Agreement, “Triggering Conduct” shall include the following: disclosing or using in any capacity other than as necessary in the performance of duties assigned by the CareFusion Group any confidential information, trade secrets or other business sensitive information or material concerning the CareFusion Group; violation of Company policies, including but not limited to conduct which would constitute a breach of any certificate of compliance or similar attestation/certification signed by Awardee; directly or indirectly employing, contacting concerning employment, or participating in any way in the recruitment for employment of (whether as an employee, officer, director, agent, consultant or independent contractor), any person who was or is an employee, representative, officer or director of the CareFusion Group at any time within the 12 months prior to Awardee’s Termination of Employment; any action by Awardee and/or his or her representatives that either does or could reasonably be expected to undermine, diminish or otherwise damage the relationship between the CareFusion Group and any of its customers, potential customers, vendors and/or suppliers that were known to Awardee; and breaching any provision of any employment or severance agreement with a member of the CareFusion Group. As used in this Agreement, “Competitor Triggering Conduct” shall include, either during Awardee’s employment or within one year following Awardee’s Termination of Employment, accepting employment with, or serving as a consultant or advisor or in any other capacity to, an entity that is in competition with the business conducted by any member of the CareFusion Group prior to a Change of Control (a “Competitor”), including, but not limited to, employment or another

4

business relationship with any Competitor if Awardee has been introduced to trade secrets, confidential information or business sensitive information during Awardee’s employment with the CareFusion Group and such information would aid the Competitor because the threat of disclosure of such information is so great that, for purposes of this Agreement, it must be assumed that such disclosure would occur.

6.Special Forfeiture/Repayment Rules. For so long as Awardee continues as an employee with the CareFusion Group and for three years following Termination of Employment regardless of the reason, Awardee agrees not to engage in Triggering Conduct. If Awardee engages in Triggering Conduct during the time period set forth in the preceding sentence or in Competitor Triggering Conduct during the time period referenced in the definition of “Competitor Triggering Conduct” set forth in Paragraph 5 above, then:

(a)the Option (or any part thereof that has not been exercised) shall immediately and automatically terminate, be forfeited, and shall cease to be exercisable at any time; and

(b)Awardee shall, within 30 days following written notice from the Company, pay the to Company an amount equal to (x) the gross option gain realized or obtained by Awardee or any transferee resulting from the exercise of such Option, measured at the date of exercise (i.e., the difference between the market value of the Shares underlying the Option on the exercise date and the exercise price paid for such Shares underlying the Option), with respect to any portion of the Option that has already been exercised at any time within three years prior to the Triggering Conduct (the “Look-Back Period”), (y) minus $1.00. If Awardee engages only in Competitor Triggering Conduct, then the Look-Back Period shall be shortened to exclude any period more than one year prior to Awardee’s Termination of Employment, but including any period between the time of Termination of Employment and engagement in Competitor Triggering Conduct. Awardee may be released from Awardee’s obligations under this Paragraph 6 if and only if the Administrator (or its duly appointed designee) authorizes, in writing and in its sole discretion, such release. Nothing in this Paragraph 6 constitutes a so-called “noncompete” covenant. This Paragraph 6 does, however, prohibit certain conduct while Awardee is associated with the CareFusion Group and thereafter and does provide for the forfeiture or repayment of the benefits granted by this Agreement under certain circumstances, including, but not limited to, Awardee’s acceptance of employment with a Competitor. Awardee agrees to provide the Company with at least 10 days written notice prior to directly or indirectly accepting employment with or serving as a consultant or advisor or in any other capacity to a Competitor, and further agrees to inform any such new employer, before accepting employment, of the terms of this Paragraph 6 and Awardee’s continuing obligations contained herein. No provisions of this Agreement shall diminish, negate or otherwise impact any separate noncompete or other Agreement to which Awardee may be a party, including, but not limited to, any certificate of compliance or similar attestation/certification signed by Awardee; provided, however, that to the extent that any provisions contained in any other Agreement are inconsistent in any manner with the restrictions and covenants of Awardee contained in this Agreement, the provisions of this Agreement shall take precedence and such other inconsistent provisions shall be null and void. Awardee acknowledges and agrees that the restrictions contained in this Agreement are being made for the benefit of the Company in consideration of Awardee’s

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receipt of the Option, in consideration of employment, in consideration of exposing Awardee to the Company’s business operations and confidential information, and for other good and valuable consideration, the adequacy of which consideration is hereby expressly confirmed. Awardee further acknowledges that the receipt of the Option and execution of this Agreement are voluntary actions on the part of Awardee and that the Company is unwilling to provide the Option to Awardee without including the restrictions and covenants of Awardee contained in this Agreement. Further, the parties agree and acknowledge that the provisions contained in Paragraphs 5 and 6 are ancillary to, or part of, an otherwise enforceable agreement at the time the agreement is made.

7.Right of Set-Off. By accepting this Option, Awardee consents to a deduction from, and set-off against, any amounts owed to Awardee that are not treated as “non-qualified deferred compensation” under Section 409A of the Code by any member of the CareFusion Group from time to time (including, but not limited to, amounts owed to Awardee as wages, severance payments or other fringe benefits) to the extent of the amounts owed to the CareFusion Group by Awardee under this Agreement.

8.Withholding Tax.

(a)Generally. Awardee is liable and responsible for all taxes owed in connection with the exercise of the Option, regardless of any action the Company takes with respect to any tax withholding obligations that arise in connection with the Option. The Company does not make any representation or undertaking regarding the tax treatment or the treatment of any tax withholding in connection with the exercise of the Option. The Company does not commit and is under no obligation to structure the Option or the exercise of the Option to reduce or eliminate Awardee’s tax liability.

(b)Payment of Withholding Taxes. Concurrently with the payment of the exercise price pursuant to Paragraph 1 hereof, Awardee is required to arrange for the satisfaction of the minimum amount of any domestic or foreign tax withholding obligation, whether national, federal, state or local, including any employment tax obligation (the “Tax Withholding Obligation”) in a manner acceptable to the Company, including withholding such amounts in cash from the Awardee's wages or other payments due to the Awardee at any time, or, in lieu thereof, to retain, or sell without notice, a number of Shares sufficient to cover the Tax Withholding Obligation. The value of any Shares retained for such purposes shall be based on the Fair Market Value, as the term is defined in the Plan, of the Shares on the date of exercise of the Option. To the extent that the Company or its Affiliate withholds any amounts in Shares to cover the Tax Withholding Obligation, it will do so at the minimum statutory rate. Should the Company or the Affiliate withhold any amounts in cash or retains any Shares in excess of Awardee’s actual Tax Withholding Obligation, the Company and/or Awardee’s employer will refund the excess amount to the Awardee, with any fractional Share being repaid in cash, within a reasonable period and without any interest. The Awardee authorizes the Company or the Affiliate, or their agents (including, without limitations, any broker or bank) to withhold cash or Shares as appropriate. Awardee agrees to pay the Company and/or the Affiliate employing Awardee any amount of the Tax Withholding Obligation that is not satisfied by the means described herein.

If any of the foregoing methods of collection are not allowed under Applicable Law or if

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Awardee fails to comply with his or her obligations in connection with the Tax Withholding Obligation as described in this section, the Company may refuse to honor the exercise and refuse to deliver the Shares.

Awardee is liable and responsible for all taxes and social security owed in connection with the Option, regardless of any action the Company takes with respect to any Tax Withholding Obligations that arise in connection with the Option. The Company does not make any representation or undertaking regarding the tax and social security treatment or the treatment of any withholding in connection with the exercise of the Option. The Company does not commit and is under no obligation to structure the Option or the exercise of the Option to reduce or eliminate Awardee's tax liability.

9.Governing Law/Venue for Dispute Resolution/Costs and Legal Fees. This Agreement shall be governed by the laws of the State of Delaware, without regard to principles of conflicts of law, except to the extent superceded by the laws of the United States of America. The parties agree and acknowledge that the laws of the State of Delaware bear a substantial relationship to the parties and/or this Agreement and that the Option and benefits granted herein would not be granted without the governance of this Agreement by the laws of the State of Delaware. In addition, all legal actions or proceedings relating to this Agreement shall be brought exclusively in state or federal courts located in the State of Delaware and the parties executing this Agreement hereby consent to the personal jurisdiction of such courts. Awardee acknowledges that the covenants contained in Paragraphs 5 and 6 of this Agreement are reasonable in nature, are fundamental for the protection of the Company’s legitimate business and proprietary interests, and do not adversely affect Awardee’s ability to earn a living in any capacity that does not violate such covenants. The parties further agree that in the event of any violation by Awardee of any such covenants, the Company will suffer immediate and irreparable injury for which there is no adequate remedy at law. In the event of any violation or attempted violations of the restrictions and covenants of Awardee contained in this Agreement, the CareFusion Group shall be entitled to specific performance and injunctive relief or other equitable relief, including the issuance ex parte of a temporary restraining order, without any showing of irreparable harm or damage, such irreparable harm being acknowledged and admitted by Awardee, and Awardee hereby waives any requirement for the securing or posting of any bond in connection with such remedy, without prejudice to any other rights and remedies afforded the CareFusion Group hereunder or by law. In the event that it becomes necessary for the CareFusion Group to institute legal proceedings under this Agreement, Awardee shall be responsible to the Company for all costs and reasonable legal fees incurred by the Company with regard to such proceedings. Any provision of this Agreement which is determined by a court of competent jurisdiction to be invalid or unenforceable should be construed or limited in a manner that is valid and enforceable and that comes closest to the business objectives intended by such provision, without invalidating or rendering unenforceable the remaining provisions of this Agreement.

10.Action by the Administrator. The parties agree that the interpretation of this Agreement shall rest exclusively and completely within the sole discretion of the Administrator. The parties agree to be bound by the decisions of the Administrator with regard to the interpretation of this Agreement and with regard to any and all matters set forth

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in this Agreement. The Administrator may delegate its functions under this Agreement to an officer of the CareFusion Group designated by the Administrator (hereinafter the “designee”). In fulfilling its responsibilities hereunder, the Administrator or its designee may rely upon documents, written statements of the parties or such other material as the Administrator or its designee deems appropriate. The parties agree that there is no right to be heard or to appear before the Administrator or its designee and that any decision of the Administrator or its designee relating to this Agreement, including without limitation whether particular conduct constitutes Triggering Conduct or Competitor Triggering Conduct, shall be final and binding unless such decision is arbitrary and capricious.

11.Prompt Acceptance of Agreement. The Option grant evidenced by this Agreement shall, at the discretion of the Administrator, be forfeited if this Agreement is not manually executed and returned to the Company, or electronically executed by Awardee by indicating Awardee’s acceptance of this Agreement in accordance with the acceptance procedures set forth on the Company’s third-party equity plan administrator’s web site, within 90 days of the Grant Date.

12.Electronic Delivery and Consent to Electronic Participation. The Company may, in its sole discretion, decide to deliver any documents related to the Option grant under and participation in the Plan or future options that may be granted under the Plan by electronic means. Awardee hereby consents to receive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company, including the acceptance of option grants and the execution of option Agreements through electronic signature.

13.Notices. All notices, requests, consents and other communications required or provided under this Agreement to be delivered by Awardee to the Company will be in writing and will be deemed sufficient if delivered by hand, nationally recognized overnight courier, or certified or registered mail, return receipt requested, postage prepaid, and will be effective upon delivery to the Company at the address set forth below:

CareFusion Corporation

3750 Torrey View Court

San Diego, CA 92130

Attention: General Counsel

All notices, requests, consents and other communications required or provided under this Agreement to be delivered by the Company to Awardee may be delivered by e-mail or in writing and will be deemed sufficient if delivered by e-mail, hand, facsimile, nationally recognized overnight courier, or certified or registered mail, return receipt requested, postage prepaid, and will be effective upon delivery to the Awardee.

14.Employment Agreement, Offer Letter or Other Arrangement. To the extent a written employment Agreement, offer letter or other arrangement (“Employment Arrangement”) that was approved by the Human Resources and Compensation Committee or the Board of Directors or that was approved in writing by an officer of the Company pursuant

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to delegated authority of the Human Resources and Compensation Committee provides for greater benefits to Awardee with respect to (i) vesting of the Option on Termination of Employment by reason of specified events or (ii) exercisability of the Option following Termination of Employment, than provided in this Agreement or in the Plan, then the terms of such Employment Arrangement with respect to vesting of the Option on Termination of Employment by reason of such specified events or exercisability of the Option following Termination of Employment shall supersede the terms hereof to the extent permitted by the terms of the Plan.

CAREFUSION CORPORATION
By:	Kieran T. Gallahue
Its:	Chairman and Chief Executive Officer

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ACCEPTANCE OF AGREEMENT

Awardee hereby: (a) acknowledges receiving a copy of the Plan, which has either been previously delivered or is provided with this Agreement, and represents that he or she is familiar with and understands all provisions of the Plan and this Agreement; (b) voluntarily and knowingly accepts this Agreement and the Option granted to him or her under this Agreement subject to all provisions of the Plan and this Agreement, including the provisions in the Agreement regarding “Triggering Conduct/Competitor Triggering Conduct” and “Special Forfeiture/Repayment Rules” set forth in Paragraphs 5 and 6 above; (c) acknowledges previously accepting, and voluntarily and knowingly accepts, the terms of the equity awards of the Company and/or Cardinal Health, Inc. that Awardee received in connection with the spin-off of the Company from Cardinal Health, Inc., subject to all the provisions of the applicable equity incentive plan(s) under which the award(s) was granted; and (d) represents that he or she understands that the acceptance of this Agreement through an on-line or electronic system, if applicable, carries the same legal significance as if he or she manually signed the Agreement. Awardee further acknowledges receiving a copy of the Company’s most recent annual report to stockholders and other communications routinely distributed to the Company’s stockholders and a copy of the Plan Prospectus dated August 31, 2009 pertaining to the Plan.

Awardee’s Signature

Date

EX-10.2

Exhibit 10.2

CAREFUSION CORPORATION

PERFORMANCE STOCK UNITS AGREEMENT

On ___________ (the “Grant Date”), CareFusion Corporation, a Delaware corporation (the “Company”), has awarded to _________________ (“Awardee”) a targeted number of _________ (the “Target Number”) Performance Stock Units (the “Performance Stock Units” or “Award”) to be calculated and determined as discussed below. Each Performance Stock Unit will represent an unfunded and unsecured promise of the Company to deliver shares of common stock, par value $0.01 per share, of the Company (the “Shares”) to Awardee as set forth herein. Each Performance Stock Unit will be subject to forfeiture until the date such Performance Stock Unit vests pursuant to Paragraph 1 of this Agreement, or as otherwise provided herein. The Performance Stock Units have been granted pursuant to the CareFusion Corporation 2009 Long-Term Incentive Plan (the “Plan”), and shall be subject to all provisions of the Plan, which are incorporated herein by reference, and shall be subject to the provisions of this Agreement. Capitalized terms used in this Agreement that are not specifically defined will have the meanings ascribed to such terms in the Plan.

1.Vesting.

(a)The Performance Stock Units will vest if and to the extent that (i) the specific performance measure set forth in Appendix A of this Agreement (the “Performance Measure”) equals or exceeds the designated performance target level or levels specified in Appendix A of this Agreement(the “Performance Target”) for the performance period August 15, 2014 through June 30, 2017 (the “Performance Period”) and (ii) the continuous service requirements set forth in Paragraph 3 are satisfied. Any determination that the Performance Target is achieved and that any Performance Stock Units vest with respect to the Performance Period shall be made by written certification of the Human Resources and Compensation Committee of the Board of Directors of the Company (the “Committee”) not later than the date that is 2½ months after the end of the Performance Period. If the Performance Measure fails to equal or exceed the Performance Target for the Performance Period, then all outstanding Performance Stock Units shall be forfeited by Awardee.

(b)Notwithstanding the foregoing, upon a Change of Control the Performance Stock Units will immediately vest with respect to a number of Shares equal to the greater of (i) the Target Number of Performance Stock Units or (ii) the total number of Shares issuable based on the achievement of the Performance Target calculated as set forth in Appendix A of this Agreement but determined by treating the date of the date of the Change of Control as the last day of the Performance Period, provided that Awardee remains in the continuous employ of the Company or its Affiliates until immediately prior to the date of the Change of Control. For purposes of this Agreement, the term “Change of Control” shall mean a “Change of Control” as defined in the Plan that is also a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company for purposes of Section 409A(2)(A)(v) of the Code.

2.Transferability. The Performance Stock Units shall not be transferable.

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3.Continuous Service Requirement and Termination of Employment.

(a)General. Except as set forth in Paragraphs 6(b), (c) and (d) below, in order to receive a payment pursuant to Paragraph 6 hereof with respect to Performance Stock Units that vest based on the achievement of the Performance Target in accordance with Paragraph 1 hereof, Awardee must remain in the continuous employ of the Company or its Affiliates through the third anniversary of the Grant Date, and if a Termination of Employment of Awardee occurs other than by reason of Death or Disability (as set forth in Paragraph 3(b) hereof) or Retirement (as set forth in Paragraph 3(c) hereof) prior to such date, then all outstanding Performance Stock Units shall be forfeited by Awardee.

(b)Termination of Employment by Reason of Death or Disability. If, at least six (6) months following the Grant Date, a Termination of Employment of Awardee occurs by reason of death or by the Company on account of Disability, then the Performance Stock Units shall not be forfeited as a result of such Termination of Employment. If such a Termination of Employment occurs prior to the end of the Performance Period, then the Performance Stock Units shall immediately vest on the date of such Termination of Employment, with payment in Shares to be made as to 100% of the Target Number multiplied by a fraction, the numerator of which is the number of complete weeks that have elapsed from the beginning of the Performance Period until the date on which the Termination of Employment occurs and the denominator of which is 150. If such a Termination of Employment occurs after the end of the Performance Period, then the Performance Stock Units shall immediately vest on the date of such Termination of Employment, with payment in Shares to be made based on the achievement of the Performance Target in accordance with Paragraph 1 hereof.

(c)Termination of Employment by Reason of Retirement. If, at least six (6) months following the Grant Date, a Termination of Employment of Awardee occurs by reason of Retirement, then the Performance Stock Units shall not be forfeited as a result of such Termination of Employment, and Awardee shall vest in such Performance Stock Units as provided in Paragraph 1 hereof without regard to such Termination of Employment and subject to the provisions of this Agreement. For purposes of this Agreement and this Award under the Plan, “Retirement” shall mean Awardee’s (i) attaining age fifty-five (55) and (ii) having at least ten (10) years of continuous service with the Company or Cardinal Health, Inc. and their Affiliates, including service with an Affiliate of the Company or Cardinal Health, Inc. prior to the time that such Affiliate became an Affiliate of the Company or Cardinal Health, Inc. For purposes of the age and/or service requirement, the Administrator may, in its discretion, credit a Participant with additional age and/or years of service.

4.Triggering Conduct/Competitor Triggering Conduct. As used in this Agreement, “Triggering Conduct” shall include the following: disclosing or using in any capacity other than as necessary in the performance of duties assigned by the Company and its Affiliates (the “CareFusion Group”) any confidential information, trade secrets or other business sensitive information or material concerning the CareFusion Group; violation of Company policies, including but not limited to conduct which would constitute a breach of any certificate of compliance or similar attestation/ certification signed by Awardee; directly or indirectly employing, contacting concerning employment, or participating in any way in the recruitment for employment of (whether as an employee, officer, director, agent,

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consultant or independent contractor), any person who was or is an employee, representative, officer or director of the CareFusion Group at any time within the 12 months prior to Awardee’s Termination of Employment; any action by Awardee and/or his or her representatives that either does or could reasonably be expected to undermine, diminish or otherwise damage the relationship between the CareFusion Group and any of its customers, potential customers, vendors and/or suppliers that were known to Awardee; and breaching any provision of any employment or severance agreement with a member of the CareFusion Group. As used in this Agreement, “Competitor Triggering Conduct” shall include, either during Awardee’s employment or within one year following Awardee’s Termination of Employment, accepting employment with, or serving as a consultant or advisor or in any other capacity to, an entity that is in competition with the business conducted by any member of the CareFusion Group prior to a Change of Control (a “Competitor”), including, but not limited to, employment or another business relationship with any Competitor if Awardee has been introduced to trade secrets, confidential information or business sensitive information during Awardee’s employment with the CareFusion Group and such information would aid the Competitor because the threat of disclosure of such information is so great that, for purposes of this Agreement, it must be assumed that such disclosure would occur.

5.Special Forfeiture/Repayment Rules. For so long as Awardee continues as an Employee with the CareFusion Group and for three years following Termination of Employment regardless of the reason, Awardee agrees not to engage in Triggering Conduct. If Awardee engages in Triggering Conduct during the time period set forth in the preceding sentence or in Competitor Triggering Conduct during the time period referenced in the definition of “Competitor Triggering Conduct” set forth in Paragraph 4 above, then:

(a)any Performance Stock Units that have not yet vested or that vested within the Look-Back Period (as defined below) with respect to such Triggering Conduct or Competitor Triggering Conduct and have not yet been settled by a payment of Shares pursuant to Paragraph 6 hereof shall immediately and automatically terminate, be forfeited, and cease to exist; and

(b) Awardee shall, within 30 days following written notice from the Company, pay to the Company an amount equal to (x) the aggregate gross gain realized or obtained by Awardee resulting from the settlement of all Performance Stock Units pursuant to Paragraph 6 hereof (measured as of the settlement date (i.e., the market value of the Performance Stock Units on such settlement date)) that have already been settled and that had vested at any time within three years prior to the Triggering Conduct (the “Look-Back Period”), minus (y) $1.00. If Awardee engages only in Competitor Triggering Conduct, then the Look-Back Period shall be shortened to exclude any period more than one year prior to Awardee’s Termination of Employment, but including any period between the time of Termination of Employment and engagement in Competitor Triggering Conduct. Awardee may be released from Awardee’s obligations under this Paragraph 5 if and only if the Administrator (or its duly appointed designee) authorizes, in writing and in its sole discretion, such release. Nothing in this Paragraph 5 constitutes a so-called “noncompete” covenant. This Paragraph 5 does, however, prohibit certain conduct while Awardee is associated with the CareFusion Group and thereafter and does provide for the forfeiture or repayment of the benefits granted by this Agreement under certain circumstances, including, but not limited to,

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Awardee’s acceptance of employment with a Competitor. Awardee agrees to provide the Company with at least 10 days written notice prior to directly or indirectly accepting employment with, or serving as a consultant or advisor or in any other capacity to, a Competitor, and further agrees to inform any such new employer, before accepting employment, of the terms of this Paragraph 5 and Awardee’s continuing obligations contained herein. No provisions of this Agreement shall diminish, negate or otherwise impact any separate noncompete or other agreement to which Awardee may be a party, including, but not limited to, any certificate of compliance or similar attestation/certification signed by Awardee; provided, however, that to the extent that any provisions contained in any other agreement are inconsistent in any manner with the restrictions and covenants of Awardee contained in this Agreement, the provisions of this Agreement shall take precedence and such other inconsistent provisions shall be null and void. Awardee acknowledges and agrees that the restrictions contained in this Agreement are being made for the benefit of the Company in consideration of Awardee’s receipt of the Performance Stock Units, in consideration of employment, in consideration of exposing Awardee to the Company’s business operations and confidential information, and for other good and valuable consideration, the adequacy of which consideration is hereby expressly confirmed. Awardee further acknowledges that the receipt of the Performance Stock Units and execution of this Agreement are voluntary actions on the part of Awardee and that the Company is unwilling to provide the Performance Stock Units to Awardee without including the restrictions and covenants of Awardee contained in this Agreement. Further, the parties agree and acknowledge that the provisions contained in Paragraphs 4 and 5 are ancillary to, or part of, an otherwise enforceable agreement at the time the agreement is made.

6.Payment of Vested Performance Stock Units. (a) Subject to the provisions of Paragraphs 4 and 5 of this Agreement and Paragraphs 6(b), (c) and (d), the Company shall pay to Awardee (without any payment on behalf of Awardee other than as described in Paragraph 10) the Shares represented by any Performance Stock Unit to the extent it vested as provided in Paragraph 1 of this Agreement on the fourth anniversary of the Grant Date (the “Payment Date”). Notwithstanding the vesting of any Performance Stock Units as provided in Paragraph 1 of this Agreement, until the Payment Date (and the payment of Shares represented by any Performance Stock Units), the Performance Stock Units and the Shares represented thereby may not be transferred, sold, pledged or hypothecated, nor shall such Shares be treated as outstanding and entitled to vote.

(b)Death. Notwithstanding anything herein to the contrary, if any Performance Stock Units vest as a result of Awardee’s Termination of Employment due to death as provided in Paragraph 3(b) of the Agreement, the number of Shares corresponding with the vesting of such Performance Stock Units as provided in Paragraph 3(b) shall be paid within 60 days after the date of death.

(c)Disability. Notwithstanding anything herein to the contrary, if any Performance Stock Units vest as a result of the occurrence of a Termination of Employment by the Company on account of Disability as provided in Paragraph 3(b) of this Agreement, Awardee shall be entitled to receive the number of Shares corresponding with the vesting of such Performance Stock Units as provided in Paragraph 3(b) on or within 60 days after the date of Termination of Employment; provided, however, that where Section 409A of the

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Code applies to such distribution and Awardee is a “specified employee” (determined in accordance with Section 409A of the Code), Awardee shall be entitled to receive the corresponding Shares from the Company on the date that is the first day of the seventh month after Awardee’s “separation from service” with the Company (determined in accordance with Section 409A of the Code.

(d)Change of Control. Notwithstanding anything herein to the contrary, if any Performance Stock Units vest as a result of the occurrence of a Change of Control in accordance with the provisions of Paragraph 1(b) hereof, Awardee shall be paid the number of Shares corresponding with the vesting of such Performance Stock Units as provided in Paragraph 1(b) on the date of such vesting.

(e)Deferral. Elections to defer receipt of the Shares beyond the date for payment provided herein may be permitted in the discretion of the Administrator pursuant to procedures established by the Administrator in compliance with the requirements of Section 409A of the Code.

7.Dividend Equivalents. Awardee shall not be entitled to receive any cash dividends on the Performance Stock Units. However, cash payments on each cash dividend payment date with respect to Shares subject to Performance Stock Units that have vested as provided in Paragraph 1 of this Agreement with a record date prior to the Payment Date shall be accrued until the Payment Date and paid thereon on the Payment Date.

8.Right of Set-Off. By accepting these Performance Stock Units, Awardee consents to a deduction from, and set-off against, any amounts owed to Awardee that are not treated as “non-qualified deferred compensation” under Section 409A of the Code by any member of the CareFusion Group from time to time (including, but not limited to, amounts owed to Awardee as wages, severance payments or other fringe benefits) to the extent of the amounts owed to the CareFusion Group by Awardee under this Agreement.

9.No Stockholder Rights. Awardee shall have no rights of a stockholder with respect to the Performance Stock Units, including, without limitation, any right to vote the Shares represented by the Performance Stock Units.

10.Withholding Tax.

(a)Generally. Awardee is liable and responsible for all taxes owed in connection with the Performance Stock Units (including taxes owed with respect to any cash payments described in Paragraph 7 hereof), regardless of any action the Company takes with respect to any tax withholding obligations that arise in connection with the Performance Stock Units. The Company does not make any representation or undertaking regarding the tax treatment or the treatment of any tax withholding in connection with the grant or vesting of the Performance Stock Units or the subsequent sale of Shares issuable upon settlement of the Performance Stock Units. The Company does not commit and is under no obligation to structure the Performance Stock Units to reduce or eliminate Awardee’s tax liability.

(b)Payment of Withholding Taxes. Prior to any event in connection with the Performance Stock Units (e.g., vesting or settlement) that the Company determines may result in any domestic or foreign tax withholding obligation, whether national, federal, state

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or local, including any employment tax obligation (the “Tax Withholding Obligation”), Awardee is required to arrange for the satisfaction of the minimum amount of such Tax Withholding Obligation in a manner acceptable to the Company. Unless Awardee elects to satisfy the Tax Withholding Obligation by an alternative means that is then permitted by the Company, Awardee’s acceptance of this Agreement constitutes Awardee’s instruction and authorization to the Company to retain on Awardee’s behalf the number of Shares from those Shares issuable to Awardee under this Award, to reduce the number of unpaid Performance Stock Units or to sell or arrange for the sale of the number of Shares as the Company determines to be sufficient to satisfy the Tax Withholding Obligation as owed when any such obligation comes due. The value of any Shares retained or the number of Performance Stock Units reduced for such purposes shall be based on the Fair Market Value, as the term is defined in the Plan, of the Shares on the date of vesting of the Performance Stock Units. To the extent that the Company retains any Shares or reduces the number of Performance Stock Units to cover the Tax Withholding Obligation, it will do so at the minimum statutory rate, but in no event shall such amount exceed the minimum required by applicable law and regulations. The Company shall have the right to deduct from all cash payments paid pursuant to Paragraph 7 hereof the amount of any taxes which the Company is required to withhold with respect to such payments.

11.Governing Law/Venue for Dispute Resolution/Costs and Legal Fees. This Agreement shall be governed by the laws of the State of Delaware, without regard to principles of conflicts of law, except to the extent superseded by the laws of the United States of America. The parties agree and acknowledge that the laws of the State of Delaware bear a substantial relationship to the parties and/or this Agreement and that the Performance Stock Units and benefits granted herein would not be granted without the governance of this Agreement by the laws of the State of Delaware. In addition, all legal actions or proceedings relating to this Agreement shall be brought exclusively in state or federal courts located in the State of Delaware and the parties executing this Agreement hereby consent to the personal jurisdiction of such courts. Awardee acknowledges that the covenants contained in Paragraphs 4 and 5 of this Agreement are reasonable in nature, are fundamental for the protection of the Company’s legitimate business and proprietary interests, and do not adversely affect Awardee’s ability to earn a living in any capacity that does not violate such covenants. The parties further agree that in the event of any violation by Awardee of any such covenants, the Company will suffer immediate and irreparable injury for which there is no adequate remedy at law. In the event of any violation or attempted violations of the restrictions and covenants of Awardee contained in this Agreement, the CareFusion Group shall be entitled to specific performance and injunctive relief or other equitable relief, including the issuance ex parte of a temporary restraining order, without any showing of irreparable harm or damage, such irreparable harm being acknowledged and admitted by Awardee, and Awardee hereby waives any requirement for the securing or posting of any bond in connection with such remedy, without prejudice to any other rights and remedies afforded the CareFusion Group hereunder or by law. In the event that it becomes necessary for the CareFusion Group to institute legal proceedings under this Agreement, Awardee shall be responsible to the Company for all costs and reasonable legal fees incurred by the Company with regard to such proceedings. Any provision of this Agreement which is determined by a court of competent jurisdiction to be invalid or unenforceable should be construed or limited in a manner that is valid and enforceable and

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that comes closest to the business objectives intended by such provision, without invalidating or rendering unenforceable the remaining provisions of this Agreement.

12.Action by the Administrator. The parties agree that the interpretation of this Agreement shall rest exclusively and completely within the sole discretion of the Administrator. The parties agree to be bound by the decisions of the Administrator with regard to the interpretation of this Agreement and with regard to any and all matters set forth in this Agreement. The Administrator may delegate its functions under this Agreement to an officer of the CareFusion Group designated by the Administrator (hereinafter the “designee”). In fulfilling its responsibilities hereunder, the Administrator or its designee may rely upon documents, written statements of the parties or such other material as the Administrator or its designee deems appropriate. The parties agree that there is no right to be heard or to appear before the Administrator or its designee and that any decision of the Administrator or its designee relating to this Agreement, including, without limitation, whether particular conduct constitutes Triggering Conduct or Competitor Triggering Conduct, shall be final and binding unless such decision is arbitrary and capricious.

13.Prompt Acceptance of Agreement. The Performance Stock Unit grant evidenced by this Agreement shall, at the discretion of the Administrator, be forfeited if this Agreement is not manually executed and returned to the Company, or electronically executed by Awardee by indicating Awardee’s acceptance of this Agreement in accordance with the acceptance procedures set forth on the Company’s third-party equity plan administrator’s web site, within 90 days of the Grant Date.

14.Electronic Delivery and Consent to Electronic Participation. The Company may, in its sole discretion, decide to deliver any documents related to the Performance Stock Unit grant under and participation in the Plan or future Performance Stock Units that may be granted under the Plan by electronic means. Awardee hereby consents to receive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company, including the acceptance of Performance Stock Unit grants and the execution of Performance Stock Unit agreements through electronic signature.

15.Notices. All notices, requests, consents and other communications required or provided under this Agreement to be delivered by Awardee to the Company will be in writing and will be deemed sufficient if delivered by hand, nationally recognized overnight courier, or certified or registered mail, return receipt requested, postage prepaid, and will be effective upon delivery to the Company at the address set forth below:

CareFusion Corporation

3750 Torrey View Court

San Diego, CA 92130

Attention: General Counsel

All notices, requests, consents and other communications required or provided under this Agreement to be delivered by the Company to Awardee may be delivered by e-mail or in writing and will be deemed sufficient if delivered by e-mail, hand, facsimile, nationally

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recognized overnight courier, or certified or registered mail, return receipt requested, postage prepaid, and will be effective upon delivery to Awardee.

16.Employment Agreement, Offer Letter or Other Arrangement. To the extent a written employment agreement, offer letter or other arrangement (“Employment Arrangement”) that was approved by the Human Resources and Compensation Committee or the Board of Directors or that was approved in writing by an officer of the Company pursuant to delegated authority of the Human Resources and Compensation Committee provides for greater benefits to Awardee with respect to vesting of the Award on Termination of Employment than provided in this agreement or in the Plan, then the terms of such Employment Arrangement with respect to vesting of the Award on Termination of Employment by reason of such specified events shall supersede the terms hereof to the extent permitted by the terms of the Plan.

CAREFUSION CORPORATION
By:	Kieran T. Gallahue
Its:	Chairman and Chief Executive Officer

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ACCEPTANCE OF AGREEMENT

Awardee hereby: (a) acknowledges receiving a copy of the Plan, which has either been previously delivered or is provided with this agreement, and represents that he or she is familiar with and understands all provisions of the Plan and this agreement; (b) voluntarily and knowingly accepts this Agreement and the Performance Stock Units granted to him or her under this Agreement subject to all provisions of the Plan and this Agreement, including the provisions in the Agreement regarding “Triggering Conduct/Competitor Triggering Conduct” and “Special Forfeiture/Repayment Rules” set forth in Paragraphs 4 and 5 above; (c) acknowledges previously accepting, and voluntarily and knowingly accepts, the terms of the equity awards of the Company and/or Cardinal Health, Inc. that Awardee received in connection with the spin-off of the Company from Cardinal Health, Inc., subject to all the provisions of the applicable equity incentive plan(s) under which the award(s) was granted; and (d) represents that he or she understands that the acceptance of this Agreement through an on-line or electronic system, if applicable, carries the same legal significance as if he or she manually signed the Agreement. Awardee further acknowledges receiving a copy of the Company’s most recent annual report to stockholders and other communications routinely distributed to the Company’s stockholders and a copy of the Plan Prospectus dated August 31, 2009 pertaining to the Plan.

Awardee’s Signature

Date

APPENDIX A

Awardee: Target Number:

EX-10.3

Exhibit 10.3

CAREFUSION CORPORATION

RESTRICTED STOCK UNITS AGREEMENT (OFFICERS)

On _____________ (the “Grant Date”), CareFusion Corporation, a Delaware corporation (the “Company”), has awarded to ________________ (“Awardee”) ________ Restricted Stock Units (the “Restricted Stock Units” or “Award”), representing an unfunded unsecured promise of the Company to deliver shares of common stock, par value $0.01 per share, of the Company (the “Shares”) to Awardee as set forth herein. The Restricted Stock Units have been granted pursuant to the CareFusion Corporation 2009 Long-Term Incentive Plan (the “Plan”), and shall be subject to all provisions of the Plan, which are incorporated herein by reference, and shall be subject to the provisions of this Restricted Stock Units Agreement (this “Agreement”). Capitalized terms used in this Agreement which are not specifically defined will have the meanings ascribed to such terms in the Plan.

1.Vesting.

(a)The Restricted Stock Units shall vest if and to the extent that (i) the specific performance measure set forth in Appendix A of this Agreement (the “Performance Measure”) equals or exceeds the designated performance target level or levels specified in Appendix A of this Agreement (the “Performance Target”) for the one-fiscal year period ending June 30, _________ (the “Performance Period”) and (ii) the continuous service requirements set forth in Paragraph 3 are satisfied. Any determination that the Performance Target is achieved and that any Restricted Stock Units vest with respect to the Performance Period shall be made by written certification of the Human Resources and Compensation Committee of the Board of Directors of the Company (the “Committee”) not later than the date that is 2½ months after the end of the Performance Period (the “Certification Date”). If the Performance Measure fails to equal or exceed the Performance Target for the Performance Period, then all outstanding Restricted Stock Units shall be forfeited by Awardee.

(b)Notwithstanding the foregoing, if within two (2) years after a Change of Control, Awardee experiences a Termination of Employment (i) by the Company for any reason other than because of Awardee’s death, Disability or Termination for Cause or (ii) by Awardee for Good Reason (as defined below), then all outstanding Restricted Stock Units shall vest in full as of the Awardee’s Termination of Employment.

For purposes of this Paragraph 1(b), “Good Reason” means one or more of the following conditions (without the consent of Awardee): (i) a material reduction of Awardee’s base compensation (including Base Salary or Target Bonus); (ii) a material diminution in Awardee’s authority, duties, or responsibilities; and (iii) a material change in the geographic location at which Awardee must perform services, where a change of at least 35 miles or to another country will be deemed material. Awardee must provide notice to the Company of the existence of one or more of the above conditions within 90 days after the initial existence of the condition(s), upon the notice of which the Company shall have 30 days to remedy the condition(s). If the Company fails to so remedy the condition(s), the 31st day following the Company’s receipt of Awardee’s notice shall be deemed to be the date of Termination of Employment of Awardee for Good Reason hereunder.

2.Transferability. The Restricted Stock Units shall not be transferable.

3.Continuous Service Requirement and Termination of Employment; Retirement.

(a)General. Except as set forth in Paragraphs 6(b), (c), (d) and (e) below, in order to receive a payment pursuant to Paragraph 6 hereof with respect to Restricted Stock Units that vest based on the achievement of the Performance Target in accordance with Paragraph 1(a)(i) hereof, Awardee must remain in the continuous employ of the Company or its Affiliates through the dates specified in Paragraph 6 on which any Shares are paid, and if a Termination of Employment of Awardee occurs (other than in connection with a Change of Control in accordance with Paragraph 1(b) hereof) prior to the date Shares are paid under Paragraph 6, then all outstanding Restricted Stock Units which have not been paid shall be forfeited by Awardee.

(b)Termination of Employment by Reason of Death or Disability. If a Termination of Employment of Awardee occurs by reason of death or by the Company on account of Disability prior to any portion of the Restricted Stock Units vesting as provided in Paragraph 1 hereof, but at least six (6) months from the Grant Date, then any unvested Restricted Stock Units shall immediately vest in full on the date of such Termination of Employment and shall not be forfeited.

(c)Retirement. If Awardee remains in the continuous employ of the Company or its Affiliates for at least six (6) months after the Grant Date and at such time is or thereafter becomes Retirement Eligible, then in the event the Performance Measure equals or exceeds the designated Performance Target for the Performance Period, the Awardee shall receive payment of the Restricted Stock Units pursuant to Paragraph 6 without regard to the continuous service requirements of Paragraph 3(a). For purposes of this Agreement and this Award under the Plan, “Retirement Eligible” shall mean Awardee’s (i) attaining age fifty-five (55) and (ii) having at least ten (10) years of continuous service with the Company or Cardinal Health, Inc. and their Affiliates, including service with an Affiliate of the Company or Cardinal Health, Inc. prior to the time that such Affiliate became an Affiliate of the Company or Cardinal Health, Inc. For purposes of the age and/or service requirement, the Administrator may, in its discretion, credit a Participant with additional age and/or years of service.

4.Triggering Conduct/Competitor Triggering Conduct. As used in this Agreement, “Triggering Conduct” shall include the following: disclosing or using in any capacity other than as necessary in the performance of duties assigned by the CareFusion Group any confidential information, trade secrets or other business sensitive information or material concerning the CareFusion Group; violation of Company policies, including but not limited to conduct which would constitute a breach of any certificate of compliance or similar attestation/ certification signed by Awardee; directly or indirectly employing, contacting concerning employment, or participating in any way in the recruitment for employment of (whether as an employee, officer, director, agent, consultant or independent contractor), any person who was or is an employee, representative, officer or director of the CareFusion Group at any time within the 12 months prior to Awardee’s Termination of Employment; any action by Awardee and/or his or her representatives that either does or could reasonably be expected to undermine, diminish or otherwise damage the relationship between the CareFusion Group and any of its customers, potential customers, vendors and/or suppliers that were known to Awardee; and breaching any

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provision of any employment or severance agreement with a member of the CareFusion Group. As used in this Agreement, “Competitor Triggering Conduct” shall include, either during Awardee’s employment or within one year following Awardee’s Termination of Employment, accepting employment with, or serving as a consultant or advisor or in any other capacity to, an entity that is in competition with the business conducted by any member of the CareFusion Group prior to a Change of Control (a “Competitor”), including, but not limited to, employment or another business relationship with any Competitor if Awardee has been introduced to trade secrets, confidential information or business sensitive information during Awardee’s employment with the CareFusion Group and such information would aid the Competitor because the threat of disclosure of such information is so great that, for purposes of this Agreement, it must be assumed that such disclosure would occur.

5.Special Forfeiture/Repayment Rules. For so long as Awardee continues as an Employee with the CareFusion Group and for three years following Termination of Employment regardless of the reason, Awardee agrees not to engage in Triggering Conduct. If Awardee engages in Triggering Conduct during the time period set forth in the preceding sentence or in Competitor Triggering Conduct during the time period referenced in the definition of “Competitor Triggering Conduct” set forth in Paragraph 4 above, then:

(a)any Restricted Stock Units that have not yet vested or that vested within the Look-Back Period (as defined below) with respect to such Triggering Conduct or Competitor Triggering Conduct and have not yet been settled by a payment of Shares pursuant to Paragraph 6 hereof shall immediately and automatically terminate, be forfeited, and cease to exist; and

(b)Awardee shall, within 30 days following written notice from the Company, pay to the Company an amount equal to (x) the aggregate gross gain realized or obtained by Awardee resulting from the settlement of all Restricted Stock Units pursuant to Paragraph 6 hereof (measured as of the settlement date (i.e., the market value of the Restricted Stock Units on such settlement date)) that have already been settled and that had vested at any time within three years prior to the Triggering Conduct (the “Look-Back Period”), minus (y) $1.00. If Awardee engages only in Competitor Triggering Conduct, then the Look-Back Period shall be shortened to exclude any period more than one year prior to Awardee’s Termination of Employment, but including any period between the time of Termination of Employment and engagement in Competitor Triggering Conduct. Awardee may be released from Awardee’s obligations under this Paragraph 5 if and only if the Administrator (or its duly appointed designee) authorizes, in writing and in its sole discretion, such release. Nothing in this Paragraph 5 constitutes a so-called “noncompete” covenant. This Paragraph 5 does, however, prohibit certain conduct while Awardee is associated with the CareFusion Group and thereafter and does provide for the forfeiture or repayment of the benefits granted by this Agreement under certain circumstances, including, but not limited to, Awardee’s acceptance of employment with a Competitor. Awardee agrees to provide the Company with at least 10 days written notice prior to directly or indirectly accepting employment with, or serving as a consultant or advisor or in any other capacity to, a Competitor, and further agrees to inform any such new employer, before accepting employment, of the terms of this Paragraph 5 and Awardee’s continuing obligations contained herein. No provisions of this Agreement shall diminish, negate or otherwise impact any separate noncompete or other agreement to which Awardee may be a party, including, but

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not limited to, any certificate of compliance or similar attestation/certification signed by Awardee; provided, however, that to the extent that any provisions contained in any other agreement are inconsistent in any manner with the restrictions and covenants of Awardee contained in this Agreement, the provisions of this Agreement shall take precedence and such other inconsistent provisions shall be null and void. Awardee acknowledges and agrees that the restrictions contained in this Agreement are being made for the benefit of the Company in consideration of Awardee’s receipt of the Restricted Stock Units, in consideration of employment, in consideration of exposing Awardee to the Company’s business operations and confidential information, and for other good and valuable consideration, the adequacy of which consideration is hereby expressly confirmed. Awardee further acknowledges that the receipt of the Restricted Stock Units and execution of this Agreement are voluntary actions on the part of Awardee and that the Company is unwilling to provide the Restricted Stock Units to Awardee without including the restrictions and covenants of Awardee contained in this Agreement. Further, the parties agree and acknowledge that the provisions contained in Paragraphs 4 and 5 are ancillary to, or part of, an otherwise enforceable agreement at the time the agreement is made.

6.Payment of Vested Restricted Stock Units.

(a)To the extent the Restricted Stock Units vest in accordance with Paragraph 1 hereof, subject to the provisions of Paragraphs 4 and 5 of this Agreement and Paragraphs (b), (c), (d) and (e) below, and unless Awardee makes an effective election to defer receipt of the Shares represented by the Restricted Stock Units, the Restricted Stock Units shall be paid by the Company to the Awardee in Shares (without any payment on behalf of Awardee other than as described in Paragraph 10) in three installments, which shall be as nearly equal as possible, as follows: (i) the first installment shall be paid on the later of the Certification Date and the first anniversary of the Grant Date; (ii) the second installment shall be paid on the second anniversary of the Grant Date; and (iii) the third installment shall be paid on the third anniversary of the Grant Date, subject in each case to the provisions of this Agreement, including those relating to the Awardee’s continued employment with the Company or its Affiliates. Elections to defer receipt of the Shares beyond the date for payment provided herein may be permitted in the discretion of the Administrator pursuant to procedures established by the Administrator in compliance with the requirements of Section 409A of the Code.

(b)Retirement. Notwithstanding anything herein to the contrary, in the event Awardee is or becomes Retirement Eligible, and as a result of the vesting of the Restricted Stock Units becomes subject to a Tax Withholding Obligation (as defined in Paragraph 10(b)), then Awardee shall be required to arrange for the satisfaction of the minimum amount of any related Tax Withholding Obligation in a manner acceptable to the Company. To satisfy any related Tax Withholding Obligation, Awardee shall, in accordance with and subject to Paragraph 10(b), be entitled to (i) receive, to the extent permitted by Treasury Regulation Section 1.409A-3(j)(4)(vi), a number of corresponding Shares with an aggregate market value equal to the amount necessary to satisfy such obligation, and the Company is authorized to retain on Awardee’s behalf or sell or arrange for the sale of the number of Shares that the Company determines to be sufficient to satisfy such obligation or (ii) reduce the number of unpaid Restricted Stock Units by the number of Shares as the Company determines to be sufficient to satisfy such obligation. Awardee shall be entitled to receive the Shares corresponding to the remaining Restricted Stock Units on the

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applicable date specified in Paragraph 6(a); provided, however, that if an Awardee who is Retirement Eligible experiences a Termination of Employment due to death, Disability or in connection with a Change in Control, payment of Shares for such Restricted Stock Units will instead be made in accordance with the provisions of Paragraphs (c), (d) and (e) below, as applicable.

(c)Death. Notwithstanding anything herein to the contrary, if an Awardee experiences a Termination of Employment due to death, then all vested Restricted Stock Units (including Restricted Stock Units that vest in accordance with Paragraph 3(b) of this Agreement) that have not been paid shall be paid by the Company in Shares (without any payment on behalf of Awardee other than as described in Paragraph 10) within 60 days after the date of death.

(d)Disability. Notwithstanding anything herein to the contrary, if an Awardee experiences a Termination of Employment by the Company on account of Disability, then all vested Restricted Stock Units (including Restricted Stock Units that vest in accordance with Paragraph 3(b) of this Agreement) that have not been paid shall be paid by the Company in Shares (without any payment on behalf of Awardee other than as described in Paragraph 10) within 60 days after the date of Termination of Employment; provided, however, that where Section 409A of the Code applies to such distribution and Awardee is a “specified employee” (determined in accordance with Section 409A of the Code), Awardee shall be entitled to receive the corresponding Shares from the Company on the date that is the first day of the seventh month after Awardee’s “separation from service” with the Company (determined in accordance with Section 409A of the Code.

(e)Change of Control. Notwithstanding anything herein to the contrary, in the event that such Restricted Stock Units vest as a result of the occurrence of a Termination of Employment in connection with a Change of Control in accordance with the provisions of Paragraph 1(b), all vested Restricted Stock Units that have not been paid shall be paid by the Company in Shares (without any payment on behalf of Awardee other than as described in Paragraph 10) on the date of such vesting; provided, however, that where Section 409A of the Code applies to such distribution and Awardee is a “specified employee” (determined in accordance with Section 409A of the Code), Awardee shall be entitled to receive the corresponding Shares from the Company on the date that is the first day of the seventh month after Awardee’s “separation from service” with the Company (determined in accordance with Section 409A of the Code.

7.Dividend Equivalents. Awardee shall not be entitled to receive any cash dividends on the Restricted Stock Units. However, to the extent the Company determines to pay a cash dividend to holders of the Common Stock, an Awardee shall, with respect to each Restricted Stock Unit, be entitled to receive a cash payment from the Company on each cash dividend payment date with respect to the Shares with a record date between the Grant Date and the settlement of such unit pursuant to Paragraph 6 hereof, such cash payment to be in an amount equal to the dividend that would have been paid on the Common Stock represented by such unit. Cash payments on each cash dividend payment date with respect to the Shares with a record date prior to the payment date described in Paragraph 6 shall be accrued until the payment date described in Paragraph 6 and paid thereon (subject to the same vesting requirements as the underlying Restricted Stock Units award). Elections to defer receipt of the cash payments in lieu of cash dividends beyond the date of settlement provided herein may be permitted in the

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discretion of the Committee pursuant to procedures established by the Company in compliance with the requirements of Section 409A of the Code.

8.Right of Set-Off. By accepting these Restricted Stock Units, Awardee consents to a deduction from, and set-off against, any amounts owed to Awardee that are not treated as “non-qualified deferred compensation” under Section 409A of the Code by any member of the CareFusion Group from time to time (including, but not limited to, amounts owed to Awardee as wages, severance payments or other fringe benefits) to the extent of the amounts owed to the CareFusion Group by Awardee under this Agreement.

9.No Stockholder Rights. Awardee shall have no rights of a stockholder with respect to the Restricted Stock Units, including, without limitation, any right to vote the Shares represented by the Restricted Stock Units.

10.Withholding Tax.

(a)Generally. Awardee is liable and responsible for all taxes owed in connection with the Restricted Stock Units (including taxes owed with respect to any cash payments described in Paragraph 7 hereof), regardless of any action the Company takes with respect to any tax withholding obligations that arise in connection with the Restricted Stock Units. The Company does not make any representation or undertaking regarding the tax treatment or the treatment of any tax withholding in connection with the grant or vesting of the Restricted Stock Units or the subsequent sale of Shares issuable upon settlement of the Restricted Stock Units. The Company does not commit and is under no obligation to structure the Restricted Stock Units to reduce or eliminate Awardee’s tax liability.

(b)Payment of Withholding Taxes. Prior to any event in connection with the Restricted Stock Units (e.g., vesting or settlement) that the Company determines may result in any domestic or foreign tax withholding obligation, whether national, federal, state or local, including any employment tax obligation (the “Tax Withholding Obligation”), Awardee is required to arrange for the satisfaction of the minimum amount of such Tax Withholding Obligation in a manner acceptable to the Company. Unless Awardee elects to satisfy the Tax Withholding Obligation by an alternative means that is then permitted by the Company, Awardee’s acceptance of this Agreement constitutes Awardee’s instruction and authorization to the Company to retain on Awardee’s behalf the number of Shares from those Shares issuable to Awardee under this Award, to reduce the number of unpaid Restricted Stock Units or to sell or arrange for the sale of the number of Shares as the Company determines to be sufficient to satisfy the Tax Withholding Obligation as owed when any such obligation comes due. The value of any Shares retained or the number of Restricted Stock Units reduced for such purposes shall be based on the Fair Market Value, as the term is defined in the Plan, of the Shares on the date of vesting of the Restricted Stock Units. To the extent that the Company retains any Shares or reduces the number of Restricted Stock Units to cover the Tax Withholding Obligation, it will do so at the minimum statutory rate, but in no event shall such amount exceed the minimum required by applicable law and regulations. The Company shall have the right to deduct from all cash payments paid pursuant to Paragraph 7 hereof the amount of any taxes which the Company is required to withhold with respect to such payments.

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11.Governing Law/Venue for Dispute Resolution/Costs and Legal Fees. This Agreement shall be governed by the laws of the State of Delaware, without regard to principles of conflicts of law, except to the extent superseded by the laws of the United States of America. The parties agree and acknowledge that the laws of the State of Delaware bear a substantial relationship to the parties and/or this Agreement and that the Restricted Stock Units and benefits granted herein would not be granted without the governance of this Agreement by the laws of the State of Delaware. In addition, all legal actions or proceedings relating to this Agreement shall be brought exclusively in state or federal courts located in the State of Delaware and the parties executing this Agreement hereby consent to the personal jurisdiction of such courts. Awardee acknowledges that the covenants contained in Paragraphs 4 and 5 of this Agreement are reasonable in nature, are fundamental for the protection of the Company’s legitimate business and proprietary interests, and do not adversely affect Awardee’s ability to earn a living in any capacity that does not violate such covenants. The parties further agree that in the event of any violation by Awardee of any such covenants, the Company will suffer immediate and irreparable injury for which there is no adequate remedy at law. In the event of any violation or attempted violations of the restrictions and covenants of Awardee contained in this Agreement, the CareFusion Group shall be entitled to specific performance and injunctive relief or other equitable relief, including the issuance ex parte of a temporary restraining order, without any showing of irreparable harm or damage, such irreparable harm being acknowledged and admitted by Awardee, and Awardee hereby waives any requirement for the securing or posting of any bond in connection with such remedy, without prejudice to any other rights and remedies afforded the CareFusion Group hereunder or by law. In the event that it becomes necessary for the CareFusion Group to institute legal proceedings under this Agreement, Awardee shall be responsible to the Company for all costs and reasonable legal fees incurred by the Company with regard to such proceedings. Any provision of this Agreement which is determined by a court of competent jurisdiction to be invalid or unenforceable should be construed or limited in a manner that is valid and enforceable and that comes closest to the business objectives intended by such provision, without invalidating or rendering unenforceable the remaining provisions of this Agreement.

12.Action by the Administrator. The parties agree that the interpretation of this Agreement shall rest exclusively and completely within the sole discretion of the Administrator. The parties agree to be bound by the decisions of the Administrator with regard to the interpretation of this Agreement and with regard to any and all matters set forth in this Agreement. The Administrator may delegate its functions under this Agreement to an officer of the CareFusion Group designated by the Administrator (hereinafter the “designee”). In fulfilling its responsibilities hereunder, the Administrator or its designee may rely upon documents, written statements of the parties or such other material as the Administrator or its designee deems appropriate. The parties agree that there is no right to be heard or to appear before the Administrator or its designee and that any decision of the Administrator or its designee relating to this Agreement, including, without limitation, whether particular conduct constitutes Triggering Conduct or Competitor Triggering Conduct, shall be final and binding unless such decision is arbitrary and capricious.

13.Prompt Acceptance of Agreement. The Restricted Stock Unit grant evidenced by this Agreement shall, at the discretion of the Administrator, be forfeited if this Agreement is not manually executed and returned to the Company, or electronically executed by Awardee by

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indicating Awardee’s acceptance of this Agreement in accordance with the acceptance procedures set forth on the Company’s third-party equity plan administrator’s web site, within 90 days of the Grant Date.

14.Electronic Delivery and Consent to Electronic Participation. The Company may, in its sole discretion, decide to deliver any documents related to the Restricted Stock Unit grant under and participation in the Plan or future Restricted Stock Units that may be granted under the Plan by electronic means. Awardee hereby consents to receive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company, including the acceptance of Restricted Stock Unit grants and the execution of Restricted Stock Unit agreements through electronic signature.

15.Notices. All notices, requests, consents and other communications required or provided under this Agreement to be delivered by Awardee to the Company will be in writing and will be deemed sufficient if delivered by hand, nationally recognized overnight courier, or certified or registered mail, return receipt requested, postage prepaid, and will be effective upon delivery to the Company at the address set forth below:

CareFusion Corporation

3750 Torrey View Court

San Diego, CA 92130

Attention: General Counsel

All notices, requests, consents and other communications required or provided under this Agreement to be delivered by the Company to Awardee may be delivered by e-mail or in writing and will be deemed sufficient if delivered by e-mail, hand, facsimile, nationally recognized overnight courier, or certified or registered mail, return receipt requested, postage prepaid, and will be effective upon delivery to Awardee.

16.Employment Agreement, Offer Letter or Other Arrangement. To the extent a written employment agreement, offer letter or other arrangement (“Employment Arrangement”) that was approved by the Committee or the Board of Directors or that was approved in writing by an officer of the Company pursuant to delegated authority of the Committee provides for greater benefits to Awardee with respect to vesting of the Award on Termination of Employment than provided in this agreement or in the Plan, then the terms of such Employment Arrangement with respect to vesting of the Award on Termination of Employment by reason of such specified events shall supersede the terms hereof to the extent permitted by the terms of the Plan.

CAREFUSION CORPORATION
By:	Kieran T. Gallahue
Its:	Chairman and Chief Executive Officer

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ACCEPTANCE OF AGREEMENT

Awardee hereby: (a) acknowledges receiving a copy of the Plan, which has either been previously delivered or is provided with this agreement, and represents that he or she is familiar with and understands all provisions of the Plan and this agreement; (b) voluntarily and knowingly accepts this Agreement and the Restricted Stock Units granted to him or her under this Agreement subject to all provisions of the Plan and this Agreement, including the provisions in the Agreement regarding “Triggering Conduct/Competitor Triggering Conduct” and “Special Forfeiture/Repayment Rules” set forth in Paragraphs 4 and 5 above; (c) acknowledges previously accepting, and voluntarily and knowingly accepts, the terms of the equity awards of the Company and/or Cardinal Health, Inc. that Awardee received in connection with the spin-off of the Company from Cardinal Health, Inc., subject to all the provisions of the applicable equity incentive plan(s) under which the award(s) was granted; and (d) represents that he or she understands that the acceptance of this Agreement through an on-line or electronic system, if applicable, carries the same legal significance as if he or she manually signed the Agreement. Awardee further acknowledges receiving a copy of the Company’s most recent annual report to stockholders and other communications routinely distributed to the Company’s stockholders and a copy of the Plan Prospectus dated August 31, 2009 pertaining to the Plan.

Awardee’s Signature

Date

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APPENDIX A

Awardee:	Restricted Stock Units:
Performance Measure and Performance Target:	Date of Grant:

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EX-10.4

Exhibit 10.4

CAREFUSION CORPORATION

RESTRICTED STOCK UNITS AGREEMENT

On _____________ (the “Grant Date”), CareFusion Corporation, a Delaware corporation (the “Company”), has awarded to ________________ (“Awardee”) ________ Restricted Stock Units (the “Restricted Stock Units” or “Award”), representing an unfunded unsecured promise of the Company to deliver shares of common stock, par value $0.01 per share, of the Company (the “Shares”) to Awardee as set forth herein. The Restricted Stock Units have been granted pursuant to the CareFusion Corporation 2009 Long-Term Incentive Plan (the “Plan”), and shall be subject to all provisions of the Plan, which are incorporated herein by reference, and shall be subject to the provisions of this Restricted Stock Units Agreement (this “Agreement”). Capitalized terms used in this Agreement which are not specifically defined will have the meanings ascribed to such terms in the Plan.

1.Vesting. The Restricted Stock Units shall vest in three installments, which shall be as nearly equal as possible, on the first three anniversaries of the Grant Date (each a “Vesting Date” with respect to the portion of the Restricted Stock Units scheduled to vest on such date), subject in each case to the provisions of this Agreement, including those relating to the Awardee’s continued employment with the Company and its Affiliates (collectively, the “CareFusion Group”).

2.Transferability. The Restricted Stock Units shall not be transferable.

3.Continuous Service Requirement and Termination of Employment; Retirement.

(a)General. Except as set forth below, if a Termination of Employment of Awardee occurs prior to the vesting in full of the Restricted Stock Units, any unvested portion of such Restricted Stock Units shall be forfeited by Awardee.

(b)Termination of Employment by Reason of Death or Disability. If a Termination of Employment of Awardee occurs by reason of death or by the Company on account of Disability prior to any portion of the Restricted Stock Units vesting as provided in Paragraph 1 hereof, but at least six (6) months from the Grant Date, then any unvested Restricted Stock Units shall immediately vest in full on the date of such Termination of Employment and shall not be forfeited.

(c)Retirement. If Awardee remains in the continuous employ of the Company or its Affiliates for at least six (6) months after the Grant Date and at such time is or thereafter becomes Retirement Eligible, then any unvested Restricted Stock Units shall immediately vest in full, and Awardee shall receive the Shares in accordance with the provisions of Paragraph 6. For purposes of this Agreement and this Award under the Plan, “Retirement Eligible” shall mean Awardee’s (i) attaining age fifty-five (55) and (ii) having at least ten (10) years of continuous service with the with the Company or Cardinal Health, Inc. and their Affiliates, including service with an Affiliate of the Company or Cardinal Health, Inc. prior to the time that such Affiliate became an Affiliate of the Company or Cardinal Health, Inc. For purposes of the age and/or service requirement, the Administrator may, in its discretion, credit a Participant with additional age and/or years of service.

(d)Termination in Connection with a Change of Control. If within two (2) years after a Change of Control, Awardee experiences a Termination of Employment (i) by the Company for any reason other than because of Awardee’s death, Disability or Termination for Cause or (ii) by Awardee for Good Reason (as defined below), then any unvested portion of such Restricted Stock Units shall immediately vest in full on such date of Termination of Employment.

For purposes of this Paragraph 3(d), “Good Reason” means one or more of the following conditions (without the consent of Awardee): (i) a material reduction of Awardee’s base compensation (including Base Salary or Target Bonus); (ii) a material diminution in Awardee’s authority, duties, or responsibilities; and (iii) a material change in the geographic location at which Awardee must perform services, where a change of at least 35 miles or to another country will be deemed material. Awardee must provide notice to the Company of the existence of one or more of the above conditions within 90 days after the initial existence of the condition(s), upon the notice of which the Company shall have 30 days to remedy the condition(s). If the Company fails to so remedy the condition(s), the 31st day following the Company’s receipt of Awardee’s notice shall be deemed to be the date of Termination of Employment of Awardee for Good Reason hereunder.

4.Triggering Conduct/Competitor Triggering Conduct. As used in this Agreement, “Triggering Conduct” shall include the following: disclosing or using in any capacity other than as necessary in the performance of duties assigned by the CareFusion Group any confidential information, trade secrets or other business sensitive information or material concerning the CareFusion Group; violation of Company policies, including but not limited to conduct which would constitute a breach of any certificate of compliance or similar attestation/ certification signed by Awardee; directly or indirectly employing, contacting concerning employment, or participating in any way in the recruitment for employment of (whether as an employee, officer, director, agent, consultant or independent contractor), any person who was or is an employee, representative, officer or director of the CareFusion Group at any time within the 12 months prior to Awardee’s Termination of Employment; any action by Awardee and/or his or her representatives that either does or could reasonably be expected to undermine, diminish or otherwise damage the relationship between the CareFusion Group and any of its customers, potential customers, vendors and/or suppliers that were known to Awardee; and breaching any provision of any employment or severance agreement with a member of the CareFusion Group. As used in this Agreement, “Competitor Triggering Conduct” shall include, either during Awardee’s employment or within one year following Awardee’s Termination of Employment, accepting employment with, or serving as a consultant or advisor or in any other capacity to, an entity that is in competition with the business conducted by any member of the CareFusion Group prior to a Change of Control (a “Competitor”), including, but not limited to, employment or another business relationship with any Competitor if Awardee has been introduced to trade secrets, confidential information or business sensitive information during Awardee’s employment with the CareFusion Group and such information would aid the Competitor because the threat of disclosure of such information is so great that, for purposes of this Agreement, it must be assumed that such disclosure would occur.

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5.Special Forfeiture/Repayment Rules. For so long as Awardee continues as an Employee with the CareFusion Group and for three years following Termination of Employment regardless of the reason, Awardee agrees not to engage in Triggering Conduct. If Awardee engages in Triggering Conduct during the time period set forth in the preceding sentence or in Competitor Triggering Conduct during the time period referenced in the definition of “Competitor Triggering Conduct” set forth in Paragraph 4 above, then:

(a)any Restricted Stock Units that have not yet vested or that vested within the Look-Back Period (as defined below) with respect to such Triggering Conduct or Competitor Triggering Conduct and have not yet been settled by a payment pursuant to Paragraph 6 hereof shall immediately and automatically terminate, be forfeited, and cease to exist; and

(b)Awardee shall, within 30 days following written notice from the Company, pay to the Company an amount equal to (x) the aggregate gross gain realized or obtained by Awardee resulting from the settlement of all Restricted Stock Units pursuant to Paragraph 6 hereof (measured as of the settlement date (i.e., the market value of the Restricted Stock Units on such settlement date)) that have already been settled and that had vested at any time within three years prior to the Triggering Conduct (the “Look-Back Period”), minus (y) $1.00. If Awardee engages only in Competitor Triggering Conduct, then the Look-Back Period shall be shortened to exclude any period more than one year prior to Awardee’s Termination of Employment, but including any period between the time of Termination of Employment and engagement in Competitor Triggering Conduct. Awardee may be released from Awardee’s obligations under this Paragraph 5 if and only if the Administrator (or its duly appointed designee) authorizes, in writing and in its sole discretion, such release. Nothing in this Paragraph 5 constitutes a so-called “noncompete” covenant. This Paragraph 5 does, however, prohibit certain conduct while Awardee is associated with the CareFusion Group and thereafter and does provide for the forfeiture or repayment of the benefits granted by this Agreement under certain circumstances, including, but not limited to, Awardee’s acceptance of employment with a Competitor. Awardee agrees to provide the Company with at least 10 days written notice prior to directly or indirectly accepting employment with, or serving as a consultant or advisor or in any other capacity to, a Competitor, and further agrees to inform any such new employer, before accepting employment, of the terms of this Paragraph 5 and Awardee’s continuing obligations contained herein. No provisions of this Agreement shall diminish, negate or otherwise impact any separate noncompete or other agreement to which Awardee may be a party, including, but not limited to, any certificate of compliance or similar attestation/certification signed by Awardee; provided, however, that to the extent that any provisions contained in any other agreement are inconsistent in any manner with the restrictions and covenants of Awardee contained in this Agreement, the provisions of this Agreement shall take precedence and such other inconsistent provisions shall be null and void. Awardee acknowledges and agrees that the restrictions contained in this Agreement are being made for the benefit of the Company in consideration of Awardee’s receipt of the Restricted Stock Units, in consideration of employment, in consideration of exposing Awardee to the Company’s business operations and confidential information, and for other good and valuable consideration, the adequacy of which consideration is hereby expressly confirmed. Awardee further acknowledges that the receipt of the Restricted Stock Units and execution of this Agreement are voluntary actions

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on the part of Awardee and that the Company is unwilling to provide the Restricted Stock Units to Awardee without including the restrictions and covenants of Awardee contained in this Agreement. Further, the parties agree and acknowledge that the provisions contained in Paragraphs 4 and 5 are ancillary to, or part of, an otherwise enforceable agreement at the time the agreement is made.

6.Payment of Vested Restricted Stock Units.

(a) Subject to the provisions of Paragraphs 4 and 5 of this Agreement and Paragraphs (b), (c), (d) and (e) below, and unless Awardee makes an effective election to defer receipt of the Shares represented by the Restricted Stock Units, on the date of vesting of any Restricted Stock Unit, Awardee shall be entitled to receive from the Company (without any payment on behalf of Awardee other than as described in Paragraph 10) the Shares represented by such Restricted Stock Unit. Elections to defer receipt of the Shares beyond the date of settlement provided herein may be permitted in the discretion of the Administrator pursuant to procedures established by the Administrator in compliance with the requirements of Section 409A of the Code.

(b) Retirement. Notwithstanding anything herein to the contrary, in the event Awardee is or becomes Retirement Eligible, and as a result of the vesting of the Restricted Stock Units becomes subject to a Tax Withholding Obligation (as defined in Paragraph 10(b)), Awardee shall be required to arrange for the satisfaction of the minimum amount of any related Tax Withholding Obligation in a manner acceptable to the Company. To satisfy any related Tax Withholding Obligation, Awardee shall, in accordance with and subject to Paragraph 10(b), be entitled to (i) receive, to the extent permitted by Treasury Regulation Section 1.409A-3(j)(4)(vi), a number of corresponding Shares with an aggregate market value equal to the amount necessary to satisfy such obligation, and the Company is authorized to retain on Awardee’s behalf or sell or arrange for the sale of the number of Shares that the Company determines to be sufficient to satisfy such obligation or (ii) reduce the number of unpaid Restricted Stock Units by the number of Shares as the Company determines to be sufficient to satisfy such obligation. Awardee shall be entitled to receive the Shares corresponding to the remaining Restricted Stock Units on the applicable Vesting Date(s) in the portions set forth on the vesting schedule provided in Paragraph 1; provided, however, that if an Awardee who is Retirement Eligible experiences a Termination of Employment due to death, Disability or in connection with a Change in Control, payment of Shares for such Restricted Stock Units will instead be made in accordance with the provisions of Paragraphs (c), (d) and (e) below, as applicable.

(c) Death. Notwithstanding anything herein to the contrary, if an Awardee experiences a Termination of Employment due to death, then all vested Restricted Stock Units (including Restricted Stock Units that vest in accordance with Paragraph 3(b) of this Agreement) that have not been paid shall be paid by the Company in Shares (without any payment on behalf of Awardee other than as described in Paragraph 10) within 60 days after the date of death.

(d) Disability. Notwithstanding anything herein to the contrary, if an Awardee experiences a Termination of Employment by the Company on account of Disability, then all vested Restricted Stock Units (including Restricted Stock Units that vest

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in accordance with Paragraph 3(b) of this Agreement) that have not been paid shall be paid by the Company in Shares (without any payment on behalf of Awardee other than as described in Paragraph 10) within 60 days after the date of Termination of Employment; provided, however, that where Section 409A of the Code applies to such distribution and Awardee is a “specified employee” (determined in accordance with Section 409A of the Code), Awardee shall be entitled to receive the corresponding Shares from the Company on the date that is the first day of the seventh month after Awardee’s “separation from service” with the Company (determined in accordance with Section 409A of the Code).

(e) Change of Control. Notwithstanding anything herein to the contrary, in the event that such Restricted Stock Units vest prior to the Vesting Date(s) set forth in Paragraph 1 as a result of a Termination of Employment in connection with a Change of Control in accordance with the provisions of Paragraph 3(d), all vested Restricted Stock Units (including Restricted Stock Units that vest in accordance with Paragraph 3(b) of this Agreement) that have not been paid shall be paid by the Company in Shares (without any payment on behalf of Awardee other than as described in Paragraph 10) on the date of such vesting.

7.Dividend Equivalents. Awardee shall not be entitled to receive any cash dividends on the Restricted Stock Units. However, to the extent the Company determines to pay a cash dividend to holders of the Common Stock, an Awardee shall, with respect to each Restricted Stock Unit, be entitled to receive a cash payment from the Company on each cash dividend payment date with respect to the Shares with a record date between the Grant Date and the settlement of such unit pursuant to Paragraph 6 hereof, such cash payment to be in an amount equal to the dividend that would have been paid on the Common Stock represented by such unit. Cash payments on each cash dividend payment date with respect to the Shares with a record date prior to a Vesting Date shall be accrued until the Vesting Date and paid thereon (subject to the same vesting requirements as the underlying Restricted Stock Units award). Elections to defer receipt of the cash payments in lieu of cash dividends beyond the date of settlement provided herein may be permitted in the discretion of the Committee pursuant to procedures established by the Company in compliance with the requirements of Section 409A of the Code.

8.Right of Set-Off. By accepting these Restricted Stock Units, Awardee consents to a deduction from, and set-off against, any amounts owed to Awardee that are not treated as “non-qualified deferred compensation” under Section 409A of the Code by any member of the CareFusion Group from time to time (including, but not limited to, amounts owed to Awardee as wages, severance payments or other fringe benefits) to the extent of the amounts owed to the CareFusion Group by Awardee under this Agreement.

9.No Stockholder Rights. Awardee shall have no rights of a stockholder with respect to the Restricted Stock Units, including, without limitation, any right to vote the Shares represented by the Restricted Stock Units.

10.Withholding Tax.

(a)Generally. Awardee is liable and responsible for all taxes owed in connection with the Restricted Stock Units (including taxes owed with respect to any cash

5

payments described in Paragraph 7 hereof), regardless of any action the Company takes with respect to any tax withholding obligations that arise in connection with the Restricted Stock Units. The Company does not make any representation or undertaking regarding the tax treatment or the treatment of any tax withholding in connection with the grant or vesting of the Restricted Stock Units or the subsequent sale of Shares issuable upon settlement of the Restricted Stock Units. The Company does not commit and is under no obligation to structure the Restricted Stock Units to reduce or eliminate Awardee’s tax liability.

(b)Payment of Withholding Taxes. Prior to any event in connection with the Restricted Stock Units (e.g., vesting or settlement) that the Company determines may result in any domestic or foreign tax withholding obligation, whether national, federal, state or local, including any employment tax obligation (the “Tax Withholding Obligation”), Awardee is required to arrange for the satisfaction of the minimum amount of such Tax Withholding Obligation in a manner acceptable to the Company. Unless Awardee elects to satisfy the Tax Withholding Obligation by an alternative means that is then permitted by the Company, Awardee’s acceptance of this Agreement constitutes Awardee’s instruction and authorization to the Company to retain on Awardee’s behalf the number of Shares from those Shares issuable to Awardee under this Award, to reduce the number of unpaid Restricted Stock Units or to sell or arrange for the sale of the number of Shares as the Company determines to be sufficient to satisfy the Tax Withholding Obligation as owed when any such obligation comes due. The value of any Shares retained or the number of Restricted Stock Units reduced for such purposes shall be based on the Fair Market Value, as the term is defined in the Plan, of the Shares on the date of vesting of the Restricted Stock Units. To the extent that the Company retains any Shares or reduces the number of Restricted Stock Units to cover the Tax Withholding Obligation, it will do so at the minimum statutory rate, but in no event shall such amount exceed the minimum required by applicable law and regulations. The Company shall have the right to deduct from all cash payments paid pursuant to Paragraph 7 hereof the amount of any taxes which the Company is required to withhold with respect to such payments.

11.Governing Law/Venue for Dispute Resolution/Costs and Legal Fees. This Agreement shall be governed by the laws of the State of Delaware, without regard to principles of conflicts of law, except to the extent superceded by the laws of the United States of America. The parties agree and acknowledge that the laws of the State of Delaware bear a substantial relationship to the parties and/or this Agreement and that the Restricted Stock Units and benefits granted herein would not be granted without the governance of this Agreement by the laws of the State of Delaware. In addition, all legal actions or proceedings relating to this Agreement shall be brought exclusively in state or federal courts located in the State of Delaware and the parties executing this Agreement hereby consent to the personal jurisdiction of such courts. Awardee acknowledges that the covenants contained in Paragraphs 4 and 5 of this Agreement are reasonable in nature, are fundamental for the protection of the Company’s legitimate business and proprietary interests, and do not adversely affect Awardee’s ability to earn a living in any capacity that does not violate such covenants. The parties further agree that in the event of any violation by Awardee of any such covenants, the Company will suffer immediate and irreparable injury for which there is no adequate remedy at law. In the event of any violation or attempted violations of the restrictions and covenants of Awardee

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contained in this Agreement, the CareFusion Group shall be entitled to specific performance and injunctive relief or other equitable relief, including the issuance ex parte of a temporary restraining order, without any showing of irreparable harm or damage, such irreparable harm being acknowledged and admitted by Awardee, and Awardee hereby waives any requirement for the securing or posting of any bond in connection with such remedy, without prejudice to any other rights and remedies afforded the CareFusion Group hereunder or by law. In the event that it becomes necessary for the CareFusion Group to institute legal proceedings under this Agreement, Awardee shall be responsible to the Company for all costs and reasonable legal fees incurred by the Company with regard to such proceedings. Any provision of this Agreement which is determined by a court of competent jurisdiction to be invalid or unenforceable should be construed or limited in a manner that is valid and enforceable and that comes closest to the business objectives intended by such provision, without invalidating or rendering unenforceable the remaining provisions of this Agreement.

12.Action by the Administrator. The parties agree that the interpretation of this Agreement shall rest exclusively and completely within the sole discretion of the Administrator. The parties agree to be bound by the decisions of the Administrator with regard to the interpretation of this Agreement and with regard to any and all matters set forth in this Agreement. The Administrator may delegate its functions under this Agreement to an officer of the CareFusion Group designated by the Administrator (hereinafter the “designee”). In fulfilling its responsibilities hereunder, the Administrator or its designee may rely upon documents, written statements of the parties or such other material as the Administrator or its designee deems appropriate. The parties agree that there is no right to be heard or to appear before the Administrator or its designee and that any decision of the Administrator or its designee relating to this Agreement, including, without limitation, whether particular conduct constitutes Triggering Conduct or Competitor Triggering Conduct, shall be final and binding unless such decision is arbitrary and capricious.

13.Prompt Acceptance of Agreement. The Restricted Stock Unit grant evidenced by this Agreement shall, at the discretion of the Administrator, be forfeited if this Agreement is not manually executed and returned to the Company, or electronically executed by Awardee by indicating Awardee’s acceptance of this Agreement in accordance with the acceptance procedures set forth on the Company’s third-party equity plan administrator’s web site, within 90 days of the Grant Date.

14.Electronic Delivery and Consent to Electronic Participation. The Company may, in its sole discretion, decide to deliver any documents related to the Restricted Stock Unit grant under and participation in the Plan or future Restricted Stock Units that may be granted under the Plan by electronic means. Awardee hereby consents to receive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company, including the acceptance of Restricted Stock Unit grants and the execution of Restricted Stock Unit agreements through electronic signature.

15.Notices. All notices, requests, consents and other communications required or provided under this Agreement to be delivered by Awardee to the Company will be in writing and will be deemed sufficient if delivered by hand, nationally recognized overnight courier, or certified or registered mail, return receipt requested, postage prepaid, and will be

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effective upon delivery to the Company at the address set forth below:

CareFusion Corporation

3750 Torrey View Court

San Diego, CA 92130

Attention: General Counsel

All notices, requests, consents and other communications required or provided under this Agreement to be delivered by the Company to Awardee may be delivered by e-mail or in writing and will be deemed sufficient if delivered by e-mail, hand, facsimile, nationally recognized overnight courier, or certified or registered mail, return receipt requested, postage prepaid, and will be effective upon delivery to the Awardee.

16.Employment Agreement, Offer Letter or Other Arrangement. To the extent a written employment agreement, offer letter or other arrangement (“Employment Arrangement”) that was approved by the Human Resources and Compensation Committee or the Board of Directors or that was approved in writing by an officer of the Company pursuant to delegated authority of the Human Resources and Compensation Committee provides for greater benefits to Awardee with respect to vesting of the Award on Termination of Employment than provided in this agreement or in the Plan, then the terms of such Employment Arrangement with respect to vesting of the Award on Termination of Employment by reason of such specified events shall supersede the terms hereof to the extent permitted by the terms of the Plan.

CAREFUSION CORPORATION
By:	Kieran T. Gallahue
Its:	Chairman and Chief Executive Officer

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ACCEPTANCE OF AGREEMENT

Awardee hereby: (a) acknowledges receiving a copy of the Plan, which has either been previously delivered or is provided with this agreement, and represents that he or she is familiar with and understands all provisions of the Plan and this agreement; (b) voluntarily and knowingly accepts this Agreement and the Restricted Stock Units granted to him or her under this Agreement subject to all provisions of the Plan and this Agreement, including the provisions in the Agreement regarding “Triggering Conduct/Competitor Triggering Conduct” and “Special Forfeiture/Repayment Rules” set forth in Paragraphs 4 and 5 above; (c) acknowledges previously accepting, and voluntarily and knowingly accepts, the terms of the equity awards of the Company and/or Cardinal Health, Inc. that Awardee received in connection with the spin-off of the Company from Cardinal Health, Inc., subject to all the provisions of the applicable equity incentive plan(s) under which the award(s) was granted; and (d) represents that he or she understands that the acceptance of this Agreement through an on-line or electronic system, if applicable, carries the same legal significance as if he or she manually signed the Agreement. Awardee further acknowledges receiving a copy of the Company’s most recent annual report to stockholders and other communications routinely distributed to the Company’s stockholders and a copy of the Plan Prospectus dated August 31, 2009 pertaining to the Plan.

Awardee’s Signature

Date

EX-10.5

Exhibit 10.5

CAREFUSION CORPORATION

RESTRICTED STOCK UNITS AGREEMENT FOR DIRECTORS

On [date of grant] (the “Grant Date”), CareFusion Corporation, a Delaware corporation (the “Company”), has awarded to [Director name] (“Awardee”), [# of Shares] Restricted Stock Units (the “Restricted Stock Units” or “Award”) and each such Restricted Stock Unit represents an unfunded, unsecured promise of the Company to deliver one share of common stock, par value $0.01 per share, of the Company (a “Share”) to Awardee as set forth herein. The Restricted Stock Units have been granted pursuant to the CareFusion Corporation 2009 Long-Term Incentive Plan (the “Plan”), and shall be subject to all provisions of the Plan, which are incorporated herein by reference, and shall be subject to the following provisions of this Restricted Stock Units Agreement (this “Agreement”). Capitalized terms used in this Agreement which are not specifically defined herein will have the meanings ascribed to such terms in the Plan.

1. Vesting. The Restricted Stock Units shall vest on the first anniversary of the Grant Date (the “Vesting Date”), subject to the provisions of this Agreement, including those relating to the Awardee’s continued service on the Company’s Board of Directors (the “Board”). Notwithstanding the foregoing, in the event that a Change of Control which constitutes a change in control event as defined under Section 409A(a)(2)(A)(v) of the Code occurs prior to the Vesting Date, the Restricted Stock Units shall vest in full.

2. Transferability. The Restricted Stock Units shall not be transferable.

3. Termination of Service on the Board. If the Awardee ceases to be a member of the Board for any reason other than Awardee’s death prior to the vesting in full of the Restricted Stock Units, any unvested portion of such Restricted Stock Units shall be forfeited by Awardee. If the Awardee ceases to be a member of the Board by reason of Awardee’s death, any unvested portion of such Restricted Stock Units shall vest in full and not be forfeited.

4. Triggering Conduct/Competitor Triggering Conduct. As used in this Agreement, “Triggering Conduct” shall include disclosing or using in any capacity other than as necessary in the performance of duties as a Director of the Company any confidential information, trade secrets or other business sensitive information or material concerning the Company or its subsidiaries (collectively, the “CareFusion Group”); violation of Company policies, including but not limited to conduct which would constitute a breach of any certificate of compliance or similar attestation/certification signed by Awardee; directly or indirectly employing, contacting concerning employment, or participating in any way in the recruitment for employment of (whether as an employee, officer, director, agent, consultant or independent contractor), any person who was or is an employee, representative, officer, or director of any entity in the CareFusion Group at any time within the twelve (12) months prior to the termination of service on the Board; any action by Awardee and/or Awardee’s representatives that either does or could reasonably be expected to undermine, diminish or otherwise damage the relationship between the CareFusion Group and any of its customers, potential customers, vendors and/or suppliers that were known to Awardee; and breaching any provision of any benefit or severance agreement with a member of the CareFusion Group. As used in this Agreement, “Competitor Triggering Conduct” shall include, either during Awardee’s service as a Director or within one year following Awardee’s termination of service on the Board, accepting employment with or serving as a consultant, advisor, or any other capacity to an entity that is in competition with the business conducted by any member of the CareFusion Group (a “Competitor”) including, but not limited to, employment or another business relationship with any Competitor if Awardee has been introduced to trade secrets, confidential information or business sensitive information during Awardee’s service as a Director of the Company and such information would aid the Competitor because the threat of disclosure of such information is so great that, for purposes of this Agreement, it must be assumed that such disclosure would occur. For purposes of this Agreement, the nature and extent of Awardee’s activities, if any, disclosed to and reviewed by the Governance and Compliance Committee of the Board (the “Governance Committee”) prior to the date of Awardee’s termination of service on the Board shall not, unless specified to the contrary by the Governance Committee in a written notice given to Awardee, be deemed to be Competitor Triggering Conduct. The Committee shall resolve in good faith any disputes concerning whether particular conduct constitutes Triggering Conduct or Competitor Triggering Conduct, and any such determination by the Committee shall be conclusive and binding on all interested persons.

5. Special Forfeiture/Repayment Rules. For so long as Awardee continues as a Director of the Company and for three years following Awardee’s termination of service on the Board regardless of the reason, Awardee agrees not to engage in Triggering Conduct. If Awardee engages in Triggering Conduct during the time period set forth in the preceding sentence or in Competitor Triggering Conduct during the time period referenced in the definition of Competitor Triggering Conduct set forth in Paragraph 5 above, then:

(a) any Restricted Stock Units that have not yet vested or that vested within the Look-Back Period (as defined below) with respect to such Triggering Conduct or Competitor Triggering Conduct and have not yet been settled by a payment pursuant to Paragraph 6 hereof shall immediately and automatically terminate, be forfeited, and cease to exist; and

(b) Awardee shall, within 30 days following written notice from the Company, pay to the Company an amount equal to (x) the aggregate gross gain realized or obtained by the Awardee resulting from the settlement of all Restricted Stock Units pursuant to Paragraph 6 hereof (measured as of the settlement date (i.e., the market value of the Restricted Stock Units on such settlement date)) that have already been settled and that had vested at any time within three years prior to the Triggering Conduct (the “Look-Back Period”), minus (y) $1.00. If Awardee engages only in Competitor Triggering Conduct, then the Look-Back Period shall be shortened to exclude any period more than one year prior to Awardee’s termination of service on the Board, but including any period between the time of Awardee’s termination of service on the Board and the time Awardee engaged in Competitor Triggering Conduct. Awardee may be released from Awardee’s obligations under this Paragraph 5 only if the Committee (or its duly appointed designee) authorizes, in writing and in its sole discretion, such release. Nothing in this Paragraph 5 constitutes a so-called “noncompete” covenant. However, this Paragraph 5 does prohibit certain conduct while Awardee is associated with the CareFusion Group and thereafter and does provide for the forfeiture or repayment of the benefits granted by this Agreement under certain circumstances, including but not limited to the Awardee’s acceptance of employment with a Competitor. Awardee agrees to provide the Company with at least ten (10) days written notice prior to directly or indirectly accepting employment with or serving as a consultant, advisor, or in any other capacity to a Competitor, and further agrees to inform any such new employer, before accepting employment, of the terms of this Paragraph 5 and of the Awardee’s continuing obligations contained herein. No provision of this Agreement shall diminish, negate, or otherwise impact any separate noncompete or other agreement to which Awardee may be a party, including but not limited to any certificate of compliance or similar attestation/ certification signed by Awardee; provided, however, that to the extent that any provisions contained in any other agreement are inconsistent in any manner with the restrictions and covenants of Awardee contained in this Agreement, the provisions of this Agreement shall take precedence and such other inconsistent provisions shall be null and void. Awardee acknowledges and agrees that the restrictions contained in this Paragraph 5 are being made for the benefit of the Company in consideration of Awardee’s receipt of the Restricted Stock Units, in consideration of exposing Awardee to the Company’s business operations and confidential information, and for other good and valuable consideration, the adequacy of which consideration is hereby expressly confirmed. Awardee further acknowledges that the receipt of the Restricted Stock Units and execution of this Agreement are voluntary actions on the part of Awardee, and that the Company is unwilling to provide the Restricted Stock Units to Awardee without including the restrictions and covenants of Awardee contained in this Agreement. Further, the parties agree and acknowledge that the provisions contained in this Paragraph 5 are ancillary to or part of an otherwise enforceable agreement at the time the agreement is made.

6. Payment. (a) Subject to the provisions of Paragraphs 4 and 5 of this Agreement and Paragraphs (b) and (c) below, and unless Awardee makes an effective election to defer receipt of the Shares represented by the Restricted Stock Units, as soon as practicable, and in no event later than thirty days, following the date of vesting of the Restricted Stock Units, Awardee shall be entitled to receive from the Company the Shares represented by the Restricted Stock Units. Elections to defer receipt of the Shares beyond the date of settlement provided herein may be permitted in the discretion of the Committee pursuant to procedures established by the Company in compliance with the requirements of Section 409A of the Code.

(b) Death. Notwithstanding anything herein to the contrary, in the event that the Restricted Stock Units vest prior to the Vesting Date as a result of the death of Awardee, then Awardee’s estate shall be entitled to receive the corresponding Shares from the Company as soon as practicable, and in no event later than thirty days, following the date of such vesting.

(c) Change of Control. Notwithstanding anything herein to the contrary, in the event that the Restricted Stock Units vest prior to the Vesting Date as a result of a Change of Control, then Awardee shall be entitled to receive the corresponding Shares from the Company as soon as practicable, and in no event later than thirty days, following the date of such vesting.

7. Dividend Equivalents. Awardee shall not be entitled to receive any cash dividends on the Restricted Stock Units. However, to the extent the Company determines to pay a cash dividend with respect to Shares (a “Dividend”) between the Grant Date and the settlement of the Restricted Stock Units pursuant to Paragraph 6 hereof, an Awardee shall, with respect to each Restricted Stock Unit, be entitled to receive a cash payment from the Company (a “Dividend Equivalent Payment”) in an

2

amount equal to the per Share amount of the Dividend. For Dividends with a record date prior to the Vesting Date, the applicable Dividend Equivalents Payments shall be subject to the same vesting requirements as, and paid at the time of settlement of, the underlying Restricted Stock Units. For Dividends with a record date after the Vesting Date, the applicable Dividend Equivalent Payments shall be paid on the Dividend payment date. Elections to defer receipt of Dividend Equivalent Payments beyond the date of payment provided herein may be permitted in the discretion of the Committee pursuant to procedures established by the Company in compliance with the requirements of Section 409A of the Code.

8. Right of Set-Off. By accepting these Restricted Stock Units, Awardee consents to a deduction from, and set-off against, any amounts owed to Awardee that are not treated as “non-qualified deferred compensation” under Section 409A of the Code by any member of the CareFusion Group from time to time (including, but not limited to, amounts owed to Awardee as Director annual retainer fees, meeting fees or other fringe benefits) to the extent of the amounts owed to the CareFusion Group by Awardee under this Agreement.

9. No Stockholder Rights. Awardee shall have no rights of a stockholder with respect to the Restricted Stock Units, including, without limitation, any right to vote the Shares represented by the Restricted Stock Units.

10. Governing Law/Venue for Dispute Resolution/Costs and Legal Fees. This Agreement shall be governed by the laws of the State of Delaware, without regard to principles of conflicts of law, except to the extent superseded by the laws of the United States of America. The parties agree and acknowledge that the laws of the State of Delaware bear a substantial relationship to the parties and/or this Agreement and that the Restricted Stock Units and benefits granted herein would not be granted without the governance of the Agreement by the laws of the State of Delaware. In addition, all legal actions or proceedings relating to this Agreement shall be brought exclusively in state or federal courts located in the State of Delaware, and the parties executing this Agreement hereby consent to the personal jurisdiction of such courts. Awardee acknowledges that the covenants contained in Paragraphs 4 and 5 of this Agreement are reasonable in nature, are fundamental for the protection of the Company’s legitimate business and proprietary interests, and do not adversely affect the Awardee’s ability to earn a living in any capacity that does not violate such covenants. The parties further agree that, in the event of any violation by Awardee of any such covenants, the Company will suffer immediate and irreparable injury for which there is no adequate remedy at law. In the event of any violation or attempted violations of the restrictions and covenants of Awardee contained in this Agreement, the Company shall be entitled to specific performance and injunctive relief or other equitable relief, including the issuance ex parte of a temporary restraining order, without any showing of irreparable harm or damage, such irreparable harm being acknowledged and admitted by Awardee, and Awardee hereby waives any requirement for the securing or posting of any bond in connection with such remedy, without prejudice to the rights and remedies afforded the Company hereunder or by law. In the event that it becomes necessary for the Company to institute legal proceedings under this Agreement, Awardee shall be responsible to the Company for all costs and reasonable legal fees incurred by the Company with regard to such proceedings. Any provision of this Agreement which is determined by a court of competent jurisdiction to be invalid or unenforceable should be construed or limited in a manner that is valid and enforceable and that comes closest to the business objectives intended by such provision, without invalidating or rendering unenforceable the remaining provisions of this Agreement.

11. Action by the Committee. The parties agree that the interpretation of this Agreement shall rest exclusively and completely within the sole discretion of the Committee. The parties agree to be bound by the decisions of the Committee with regard to the interpretation of this Agreement and with regard to any and all matters set forth in this Agreement. To the extent permitted by applicable law, including the Delaware General Corporation Law, the Committee may delegate its functions under this Agreement to an officer of the Company designated by the Committee (hereinafter the “designee”). In fulfilling its responsibilities hereunder, the Committee or its designee may rely upon documents, written statements of the parties, or such other material as the Committee or its designee deems appropriate. The parties agree that there is no right to be heard or to appear before the Committee or its designee and that any decision of the Committee or its designee relating to this Agreement, including without limitation whether particular conduct constitutes Triggering Conduct or Competitor Triggering Conduct, shall be final and binding.

12. Electronic Delivery and Consent to Electronic Participation. The Company may, in its sole discretion, decide to deliver any documents related to the Restricted Stock Units, participation in the Plan or future restricted stock units that may be granted under the Plan by electronic means. Awardee hereby consents to receive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company, including the acceptance of Restricted Stock Unit grants and the execution of Restricted Stock Unit agreements through electronic signature.

13. Notices. All notices, requests, consents and other communications required or provided under this Agreement to be delivered by Awardee to the Company shall be in writing and shall be deemed sufficient if delivered by hand, nationally

3

recognized overnight courier, or certified or registered mail, return receipt requested, postage prepaid, and shall be effective upon delivery to the Company at the address set forth below:

CareFusion Corporation

3750 Torrey View Court

San Diego, CA 92130

Attention: General Counsel

All notices, requests, consents and other communications required or provided under this Agreement to be delivered by the Company to Awardee may be delivered by e-mail or in writing and shall be deemed sufficient if delivered by e-mail, hand, facsimile, nationally recognized overnight courier, or certified or registered mail, return receipt requested, postage prepaid, and shall be effective upon delivery to the Awardee.

CAREFUSION CORPORATION
By:	Kieran T. Gallahue
Its:	Chairman and Chief Executive Officer

4

ACCEPTANCE OF AGREEMENT

Awardee hereby: (a) acknowledges receiving a copy of the Plan, which has either been previously delivered or is provided with this agreement, and represents that he or she is familiar with and understands all provisions of the Plan and this agreement; (b) voluntarily and knowingly accepts this Agreement and the Restricted Stock Units granted to him or her under this Agreement subject to all provisions of the Plan and this Agreement, including the provisions in the Agreement regarding “Triggering Conduct/Competitor Triggering Conduct” and “Special Forfeiture/Repayment Rules” set forth in Paragraphs 4 and 5 above; and (c) represents that he or she understands that the acceptance of this Agreement through an on-line or electronic system, if applicable, carries the same legal significance as if he or she manually signed the Agreement. Awardee further acknowledges receiving a copy of the Company’s most recent annual report to stockholders and other communications routinely distributed to the Company’s stockholders and a copy of the Plan Prospectus dated August 31, 2009 pertaining to the Plan.

Awardee’s Signature

Date

EX-10.6

Exhibit 10.6

CAREFUSION CORPORATION

Executive Change in Control Severance Plan

(As amended and restated effective October 5, 2014)

1. Purpose of the Plan

The purpose of the Plan is to assure the Company and its Affiliates of the continued dedication, loyalty, and service of, and the availability of objective advice and counsel from, key executives of the Company in the event of a Change in Control. The Plan is intended to be a “top-hat” plan (i.e., an unfunded deferred compensation plan maintained for a select group of management or highly-compensated employees) under ERISA sections 201(2), 301(a)(3), and 401(a)(1).

2. Definitions

As used herein, the following definitions shall apply:

(a) “Affiliate” means any entity, whether now or hereafter existing, which controls, is controlled by, or is under common control with, the Company (including, but not limited to, joint ventures, limited liability companies and partnerships), as determined by the Board.

(b) “Base Salary” means a Participant’s annual rate of base salary in effect as of the date of termination of employment, determined without regard to any reduction thereof that constitutes Good Reason under the Plan.

(c) “Board” means the Board of Directors of the Company.

(d) “Cause” means:

(i) the willful and continued failure of the Participant to perform substantially the Participant’s material duties with the Company (other than any such failure resulting from incapacity due to physical or mental illness), as determined by the Board no earlier than 30 days after a written demand for substantial performance is delivered to the Participant, which specifically identifies the manner in which the Company believes that the Participant has willfully and continuously failed to perform substantially the Participant’s duties with the Company;

(ii) the willful engaging by the Participant in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Company or its affiliates;

(iii) conviction of a felony; or

(iv) a material breach of the restrictive covenants in the Plan subject to the cure provisions of Section 6(b).

For purposes of this definition, no act or failure to act on the part of the Participant shall be considered “willful” unless it is done, or omitted to be done, by the Participant in bad faith or without reasonable belief that the Participant’s act or omission was in the best interests of the Company.

(e) “Change in Control” means any of the following:

(i) the acquisition by any individual, entity or group (within the meaning of section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended) of fifty percent (50%) or more of either (x) the then outstanding Common Stock of the Company (the “Outstanding Company Common Stock”), or (y) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of Directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this Section 2(e)(i), the following acquisitions shall not constitute a Change in Control: (A) any acquisition directly from the Company or any corporation controlled by the Company; (B) any acquisition by the Company or any corporation controlled by the Company; (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; or (D) any acquisition by any corporation that is a Non‑Control Acquisition (as defined in Section 2(e)(iii)); or

(ii) individuals who, as of the effective date of the Plan, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a Director subsequent to the effective date whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the Directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

(iii) consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company or the acquisition by the Company of assets or shares of another corporation (a “Business Combination”), unless, such Business Combination is a Non-Control Acquisition. A “Non-Control Acquisition” shall mean a Business Combination where: (x) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially

2

own, directly or indirectly, more than fifty percent (50%) of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be; (y) no Person (excluding any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, fifty percent (50%) or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination (including any ownership that existed in the Company or the company being acquired, if any); and (z) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

(iv) approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.

The Board shall determine whether one or more transactions or a series of transactions should be treated as a single transaction for purposes of determining whether a Change in Control has occurred.

(f) “Change in Control Date” means the date on which a Change in Control becomes effective.

(g) “Code” means the Internal Revenue Code of 1986, as amended, and the regulations and Treasury guidance promulgated under the Code.

(h) “Company” means CareFusion Corporation, a Delaware corporation, or, except as utilized in the definition of Change in Control, its successor.

(i) “Director” means a member of the Board.

(j) “Disability,” unless the Board specifies otherwise, has the meaning specified in the Company’s long-term disability plan applicable to the Participant at the time of Disability.

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(k) “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations and guidance promulgated under it.

(l) “Good Reason” means

(i) a material reduction of the Participant’s base compensation (including Base Salary or Target Bonus);

(ii) a material diminution in the Participant’s authority, duties, or responsibilities (for avoidance of doubt, and without limiting the generality of the foregoing, a material diminution in the Participant’s authority, duties, or responsibilities shall have occurred if (A) the Participant performed a policy making function for the Company immediately prior to the Change in Control and following the Change in Control no longer performs a policy making function for the Company (or, if the Company is not the ultimate parent corporation following the Change in Control, the ultimate parent of the Company); or (B) the Participant reported directly to the Company’s Chief Executive Officer (in that person’s capacity as Chief Executive Officer) immediately prior to the Change in Control and following the Change in Control no longer reports directly to the Chief Executive Officer of the Company (in that person’s capacity as Chief Executive Officer), or if the Company is not the ultimate parent corporation following the Change in Control, the Chief Executive Officer or the ultimate parent of the Company); or

(iii) Participant is required to relocate from his or her principal workplace immediately prior to the Change in Control (except for workplace relocations within the country in which the Participant is employed that would not increase his or her one-way commute by more than 35 miles from his or her principal residence).

The Participant must provide notice to the Company of the existence of one of the “Good Reason” conditions (which, in the case of a Participant who reported directly to the Chief Executive Officer, in that person’s capacity as Chief Executive Officer, immediately prior to the Change in Control, shall be conclusively deemed to exist if so determined by such Participant in good faith), within 90 days after the initial existence of the “Good Reason” condition, upon the notice of which the Company shall have 30 days to remedy the condition and not be required to pay any amount of severance. In all cases, for the Participant to receive any severance benefit, the Participant’s termination must occur no later than one year following the initial existence of one or more of the “Good Reason” conditions arising without the consent of the Participant.

(m) “Management Incentive Plan” means the Company’s Management Incentive Plan dated as of July 1, 2010, as amended, or any successor plan thereto that provides for cash bonuses to employees of the Company.

(n) “Non-Compete Restricted Period” means the period beginning on the date on which an eligible executive becomes a Participant under Section 4(b) and ending

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on (i) with respect to any Tier I Executive and any Tier II Executive with a position of Chief Financial Officer, president or executive vice president, the last day of the 24-month period after the date of termination of employment, (ii) with respect to any Tier II Executive with a position of senior vice president, the last day of the 18-month period after the date of termination of employment and (iii) with respect to any Tier II Executive with a position of vice president, the last day of the 12-month period after the date of termination of employment.

(o) “Participant” means an individual designated by the Board (or an authorized officer of the Company) as eligible to participate in the Plan pursuant to Section 4(a) who executes and returns to the Company a Participation Agreement in accordance with Section 4(b) of the Plan.

(p) “Participation Agreement” means the agreement between the Participant and the Company pursuant to Section 4(b).

(q) “Plan” means this Executive Change in Control Severance Plan, as amended and restated effective October 5, 2014.

(r) “Prorated Long-term Incentive Award Value” means the highest grant date dollar value (determined based on the methodology used by the Company as of the grant date as reflected in the Company’s records) of any annual long-term incentive award (cash and/or equity-based incentive) granted to the Participant in the Company’s fiscal year in which the Change in Control occurs and the two preceding fiscal years of the Company, multiplied by a fraction, the numerator of which is the number of whole and partial months (rounded up) from the beginning of the Company’s fiscal year until the date of termination of employment (provided, however, that such numerator shall not exceed six), and the denominator of which is 12.

(s) “Prorated Target Bonus” means the Target Bonus multiplied by a fraction, the numerator of which is the number of whole and partial months (rounded up) from the date of termination of employment until the end of the fiscal year of the Company, and the denominator of which is 12.

(t) “Restricted Period” means the period beginning on the date on which an eligible executive becomes a Participant under Section 4(b) and ending on the last day of the 24-month period after the date of termination of employment.

(u) “Severance Plan” means the Company’s Severance Plan dated as of July 1, 2012, as amended, or any successor plan thereto that provides for cash severance to employees of the Company in the event of termination of employment as a result of position elimination or Company restructuring activities.

(v) “Target Bonus” means the Participant’s target cash bonus under the Company’s Management Incentive Plan for the fiscal year of the Company in which the termination of employment occurs, determined without regard to any reduction thereof that constitutes Good Reason under the Plan.

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(w) “Tier I Executive” means the Chief Executive Officer of the Company.

(x) “Tier II Executive” means the Chief Financial Officer, any president, executive vice president and senior vice president of the Company, and certain vice presidents of the Company specifically designated as Tier II Executives in accordance with the Plan, as further described in Section 4(a).

3. Administration

(a)The Company shall act as the plan administrator and the “named fiduciary” of the Plan for purposes of ERISA. Prior to a Change in Control, the Board has sole and absolute discretion and authority to administer the Plan on behalf of the Company, including the discretionary power and authority to:

(i) adopt such rules as it deems advisable in connection with the administration of the Plan, and to construe, interpret, apply and enforce the Plan and any such rules and to remedy ambiguities, errors or omissions in the Plan;

(ii) determine eligibility pursuant to Section 4(a), the terms and conditions of individual Participation Agreements pursuant to Section 4(a), and any other terms of the Plan applicable to Participants, including, but not limited to, the applicable period of restriction for purposes of the covenants under Section 6(b), the amount and method of payment, and a Participant’s continued entitlement to benefits under the Plan; the Board’s determinations will be conclusive and binding on all parties affected by its determinations;

(iii) act under the Plan on a case-by-case basis; the Board’s decisions under the Plan need not be uniform with respect to similarly situated participants; and

(iv) delegate its authority under the Plan with respect to Tier II Executives to any committee of the Board, and with respect to Tier II Executives who are not subject to Section 16 of the Securities Exchange Act of 1934 to any officer of the Company.

(b)If any person with administrative authority becomes eligible or makes a claim for Plan benefits, he or she will have no authority with respect to any matter specifically affecting his or her individual interest under the Plan and the Company will designate another person to exercise such authority.

(c)Notwithstanding anything in the Plan to the contrary, after a Change in Control, neither the Board nor any other person shall have discretionary authority in the administration of the Plan, and any court or tribunal that adjudicates any dispute, controversy, or claim in connection with benefits under Section 5 will apply a de novo standard of review to any determinations made by the Board or the Company. Such de novo standard shall apply notwithstanding the grant of full discretion hereunder to the Board or any person or characterization of any decision by the Board or by such person as final, binding or conclusive on any party.

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4. Eligibility and Participation

(a)Eligibility. The Board, in its sole discretion, may from time to time designate key executives of the Company who are eligible to participate in the Plan. Without further action of the Board, the Chief Executive Officer of the Company shall be designated as a Tier I Executive. Without further action of the Board, the Chief Financial Officer and each president, each executive vice president and each senior vice president of the Company shall be designated as a Tier II Executive. In addition, a vice president may be designated as a Tier II Executive hereunder if the Board, in its sole discretion, specifically approves such designation.

(b)Participation; Execution of Participation Agreement. Each eligible executive designated pursuant to Section 4(a) shall become a Participant in the Plan only upon execution of a Participation Agreement in the form, or substantially the form, attached hereto as Appendix A, subject to additional terms as the Board may specify. Each executed Participation Agreement shall constitute the Participant’s agreement to the terms and conditions of participation in the Plan.

5. Severance Benefits

(a)Entitlement to Severance Benefits. In the event a Participant’s employment with the Company is terminated within 24 months after the Change in Control Date either (i) by the Company for reasons other than Cause, death, or Disability, or (ii) by the Participant for Good Reason, the Company shall make payments and provide benefits to the Participant as specified under Sections 5(b) through 5(e), subject to the Participant’s satisfaction of the requirements of Section 6(a) (regarding waiver and release of claims) and Section 6(b) (regarding restrictive covenants). To the extent the amount of payments and benefits due under Sections 5(b) through 5(e) is based on a Participant’s status as a Tier I or Tier II Executive, that status shall be determined on the date immediately before the Change in Control Date. In addition, if a Participant’s employment with the Company had terminated, or the Participant’s status as a Tier I or Tier II Executive had been diminished, in either event before a Change in Control that is a “change in control event” under Treasury regulation section 1.409A-3(i)(5), and if it is reasonably demonstrated by the Participant to the Board that his or her termination of employment, or diminishment in status, either was at the request of a third party that had taken steps reasonably calculated to effect the Change in Control or otherwise arose in connection with or in anticipation of the Change in Control, then, for purposes of determining entitlement to severance benefits under the Plan, the Participant’s employment is deemed to have terminated on the Change in Control Date, or the Participant’s status is determined on the date immediately before such diminishment in connection with the Change in Control.

(b)Cash Payment. The Company shall pay to the Participant in cash the following applicable amount:

(i) Tier I Executive: an amount equal to the sum of (1) two times the sum of Base Salary plus Target Bonus and (2) the Prorated Target Bonus.

(ii) Tier II Executives: for Tier II Executives with a position of Chief Financial Officer, president or executive vice president, an amount equal to the sum of (1) two times the sum of Base Salary plus Target Bonus and (2) the

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Prorated Target Bonus; for Tier II Executives with a position of senior vice president, an amount equal to the sum of (1) one and a half times the sum of Base Salary plus Target Bonus and (2) the Prorated Target Bonus, and (3) subject to Section 9(c), the Prorated Long-term Incentive Award Value; and for Tier II Executives with a position of vice president, an amount equal to the sum of (1) one times the sum of Base Salary plus Target Bonus and (2) the Prorated Target Bonus, and (3) subject to Section 9(c), the Prorated Long-term Incentive Award Value.

(iii) Notwithstanding the provisions of Sections 5(b)(i) and 5(b)(ii), to the extent a Participant becomes entitled to severance benefits under the Plan in accordance with Section 5(a), and the cash amount payable to the Participant under Section 5(b)(i) or 5(b)(ii), as applicable, is less than the amount that would be payable to the Participant as cash severance under the Severance Plan, the Participant shall be entitled to receive a cash amount payable under the Plan equal to the higher cash severance amount calculated in accordance with the terms of the Severance Plan.

(iv) Any cash payment due under this Section 5(b) shall be made in a lump sum if either (I) the Change in Control is a “change in control event” under Treasury regulation section 1.409A-3(i)(5) or (II) the Participant participates in no other “separation pay plan” under Treasury regulation section 1.409A-1(b)(9); otherwise, the cash payment shall be made consistent with the time and form of payment specified under such other separation pay plan. A lump-sum cash payment due under this Section 5(b) shall be made no later three business days following the expiration of any period during which a Participant may revoke the waiver and release of claims executed pursuant to Section 6(a), so long as that waiver and release becomes effective no later than 60 days after the Participant’s termination of employment (or the Change in Control Date, for a Participant whose termination of employment is deemed to occur on the Change in Control Date). Notwithstanding the foregoing, if the period during which a Participant has discretion to execute or revoke the waiver and release of claims straddles two taxable years of the Participant, then the Company shall make the payment in the second of such taxable years, regardless of which taxable year the Participant actually delivers the executed waiver and release to the Company.

(c) Health Benefit Continuation. The Company shall pay the premium for COBRA coverage, if elected by the Participant and his eligible dependents, upon loss of coverage under the Company’s group health plan for active employees of the Company due to termination of employment, until the earlier of (i) the date that the Participant becomes eligible for coverage under another group health plan, or (ii) the end of the 18-month maximum COBRA coverage period. For Participants who do not become eligible for coverage under another group health plan by the end of the 18-month maximum COBRA coverage period, the Company shall continue to provide coverage under its group health plan for active employees until the earlier

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of (x) the date that the Participant becomes eligible for coverage under another group health plan, or (y) for Tier I Executives, the end of an additional 18-month period or, for Tier II Executives, the end of an additional six-month period. The Company includes as gross taxable income to the Participant the amount of the COBRA premium during the period of COBRA coverage and the fair market value of the continued coverage beyond the end of the COBRA period, if applicable.

(d) Outplacement Assistance. The Company shall pay the cost of providing outplacement services (i) for six months for each Tier II Executive that is a vice president and (ii) for twelve months for all other Tier II and Tier I Participants, so long as (x) the Participant commences utilization of the services within six months following the date of termination of employment; and (y) the services are provided by a recognized outplacement provider. Payment shall be made by the Company directly to the service provider promptly following the provision of the outplacement services and the presentation to the Company of documentation of the provision of the services, and in all events by no later than the first anniversary of the date of termination of employment.

(e) Code Section 280G Cutback. If the severance benefits provided by this Plan or other benefits otherwise payable to the Participant (i) constitute “parachute payments” within the meaning of Code section 280G, and (ii) but for this Section 5(d), would be subject to the excise tax imposed by Code section 4999 (“Excise Tax”), then such severance benefits or other benefits shall be payable either in full or in such lesser amount which would result in no portion of such severance benefits or other benefits being subject to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state and local income and employment taxes and the Excise Tax, results in the receipt by the Participant, on an after-tax basis, of the greatest amount of such severance benefits and other benefits under this Plan or otherwise, notwithstanding that all or some portion of such severance benefits or other benefits may be taxable under Code section 4999. Any reduction in the severance benefits and other benefits required by this Section 5(d) shall be made in the following order: (A) reduction of non-cash benefits paid or provided to the Participant under this Plan, (B) reduction of cash payments under this Plan beginning with payments that are to be paid the farthest in time; (C) reduction of accelerated vesting of equity awards other than stock options; and (D) reduction of accelerated vesting of stock options. The calculations in this Section 5(d) will be performed by the professional firm engaged by the Company for general tax purposes as of the day prior to the Change in Control. If the tax firm so engaged by the Company is serving as accountant or auditor for the acquiring company, the Company shall, prior to the Change in Control, appoint a nationally recognized tax firm to make the determinations required by this Section 5(d). The Company shall bear all expenses with respect to the determinations by such firm required to be made by this Section 5(d). The Company and the Participant shall furnish such tax firm such information and documents as the tax firm may reasonably request in order to make its required determination. The Company will request that the tax firm provide, both to the Company and to the Participant, its calculations, together with detailed supporting documentation,

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within five (5) business days following (x) the receipt, after the date of the Change in Control, of a request from the Participant for such calculations or (y) the receipt of notice that there has been a payment pursuant to this Plan. Any good faith determinations of the tax firm made hereunder shall be final, binding and conclusive upon the Company and the Participant. However, the Company shall have the final authority to make any good faith determination(s) associated with the assumptions used by the tax firm in providing its calculations, and such good faith determination made by the Company prior to the Change in Control shall be binding on the Company and the Participant. As a result of the uncertainty in the application of Code section 280G or 4999 at the time of the initial determination by the professional tax firm described in this Section 5(d), it is possible that the Internal Revenue Service (the “IRS”) or other tax authority will claim that an Excise Tax greater than that amount, if any, determined by such professional firm for the purposes of Section 5(d) is due (the “Additional Excise Tax”). The Participant shall notify the Company in writing of any claim by the IRS or other tax authority that, if successful, would require payment of Additional Excise Tax. The Participant and the Company shall each reasonably cooperate with the other in connection with any administrative or judicial proceedings concerning the existence or amount of liability for Excise Tax with respect to payments made or due to the Participant. The Company shall pay all reasonable fees, expenses and penalties of the Participant relating to such claim by the IRS or other tax authority. In the event it is finally determined that a further reduction would have been required under this Section 5(d) to place the Participant in a better after-tax position, the Participant shall repay the Company such amount within 30 days thereof in order to effect such result.

6. Terms and Conditions of Participation

(a)Waiver and Release of Claims. As a condition to receiving severance benefits under Section 5 of the Plan, each Participant shall be required to sign and deliver to the Company, and may not revoke or violate the terms of, a general release of all claims, substantially in the form attached as Appendix B, as revised from time to time prior to a Change in Control to comply with applicable law or to reflect changes made to the Company’s standard form of general release of all claims for all employees. In no case will payments be made or begin before the end of any rescission period required by applicable law or regulation in connection with any release or waiver that the Participant is asked to sign.

(b)Restrictive Covenants. By executing the Participation Agreement, the Participant agrees to abide by the following restrictive covenants as consideration for the severance benefits provided under Section 5, and acknowledges that the provisions and covenants contained in this Section 6(b) are ancillary and material to the terms of the Plan and that the limitations contained herein are reasonable in geographic and temporal scope and do not impose a greater restriction or restraint than is necessary to protect the goodwill and other legitimate business interests of the Company. The Participant also acknowledges and agrees that the provisions of this Section 6(b) do not adversely affect the Participant’s ability to earn a living in any capacity that does not violate the covenants contained herein. The Participant also acknowledges that before Participant shall be determined to have breached any provision or covenant contained in this Section 6(b), the

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Participant shall have been given notice of any such alleged breach and been given 45 days after receipt of such notice of such breach to cure or remedy any such breach that is reasonably susceptible of cure or remedy.

(i) Confidential Information. The Participant shall hold in a fiduciary capacity for the benefit of the Company and all of its subsidiaries, partnerships, joint ventures, limited liability companies, and other affiliates (collectively, the “CareFusion Group”), all secret or confidential information, knowledge or data relating to the CareFusion Group and its businesses (including, without limitation, any proprietary and not publicly available information concerning any processes, methods, trade secrets, intellectual property, research secret data, costs, names of users or purchasers of their respective products or services, business methods, operating or manufacturing procedures, or programs or methods of promotion and sale) that the Participant has obtained or obtains during the Participant’s employment by the CareFusion Group and that is not public knowledge (other than as a result of the Participant’s violation of this Section 6(b)(i)) (“Confidential Information”). The Participant shall not communicate, divulge or disseminate Confidential Information at any time during or after the Participant’s employment and/or service as a consultant with the CareFusion Group, except with prior written consent of a corporate officer of Company, or as otherwise required by law or legal process. All records, files, memoranda, reports, customer lists, drawings, plans, documents and the like that the Participant uses, prepares or comes into contact with during the course of the Participant’s employment shall remain the sole property of the Company and/or the CareFusion Group, as applicable, and shall be turned over to the applicable CareFusion Group company upon termination of the Participant’s employment.

(ii) Non-Recruitment of CareFusion Group Employees, Etc. During the Participant’s employment with the CareFusion Group and for the Restricted Period, the Participant shall not (1) solicit, participate in, or promote the solicitation of any person who was employed by the CareFusion Group at any time during the six-month period prior to the Participant’s termination of employment to leave the employ of CareFusion Group; or (2) on behalf of the Participant or any other person, hire, employ, or engage any such person. The Participant further agrees that, during the Participant’s employment with the CareFusion Group and for the Restricted Period, if an employee of the CareFusion Group contacts the Participant about prospective employment, the Participant will inform that employee that the Participant cannot discuss the matter further without informing the CareFusion Group.

(iii) Non-Solicitation of Business. The Participant acknowledges and agrees that Company’s customers and any information regarding Company’s customers is confidential and constitutes trade secrets. In recognition of the confidential and trade secret nature of information regarding Company’s

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customers, the Participant agrees that during the Restricted Period, the Participant shall not (either directly or indirectly or as an officer, agent, employee, partner or director of any other company, partnership or entity) solicit on behalf of any competitor of the CareFusion Group the business of (1) any customer of the CareFusion Group at the time of the Participant’s employment or date of termination of employment, or (2) any potential customer of the CareFusion Group which the Participant knew to be an identified, prospective purchaser of services or products of the CareFusion Group.

(iv) Employment by Competitor. During the Non-Compete Restricted Period, the Participant shall not invest in (other than in a publicly traded company with a maximum investment of no more than 1% of outstanding shares), counsel, advise, or be otherwise engaged or employed by, any entity or enterprise that competes with the CareFusion Group, by developing, manufacturing or selling any product or service of a type, respectively, developed, manufactured or sold by the CareFusion Group.

(v) No Disparagement.

(1) The Participant and the Company shall at all times refrain from taking actions or making statements, written or oral, that denigrate, disparage or defame the goodwill or reputation of the Participant or the CareFusion Group, as the case may be, or any of its trustees, officers, security holders, partners, agents or former or current employees and directors. The Participant further agrees not to make any negative statement to third parties relating to the Participant’s employment or any aspect of the businesses of CareFusion Group and not to make any statements to third parties about the circumstances of the termination of the Participant’s employment, or about the CareFusion Group or its trustees, directors, officer, security holders, partners, agents or former or current employees and directors, except as may be required by a court or government body.

(2) The Participant further agrees that, following termination of employment for any reason, the Participant shall assist and cooperate with the Company with regard to any matter or project in which the Participant was involved during the Participant’s employment with the Company, including but not limited to any litigation that may be pending or arise after such termination of employment. Further, the Participant agrees to notify the Company at the earliest reasonable opportunity of any contact that is made by any third parties concerning any such matter or project. The Company shall not unreasonably request such cooperation of the Participant and shall cooperate with the Participant in scheduling any assistance by the Participant taking into account the

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Participant’s business and personal affairs and shall compensate the Participant for any lost wages and/or expenses associated with such cooperation and assistance.

(vi) Inventions. All plans, discoveries and improvements, whether patentable or unpatentable, made or devised by the Participant, whether alone or jointly with others, from the date of the Participant’s initial employment by the Company and continuing until the end of any period during which the Participant is employed by the CareFusion Group, relating or pertaining in any way to the Participant’s employment with or the business of the CareFusion Group (each, an “Invention”), shall be promptly disclosed in writing to the Secretary of the Board and are hereby transferred to and shall redound to the benefit of the Company and shall become and remain its sole and exclusive property. The Participant agrees to execute any assignment to the Company or its nominee, of the Participant’s entire right, title and interest in and to any Invention and to execute any other instruments and documents requisite or desirable in applying for and obtaining patents, trademarks or copyrights, at the expense of the Company, with respect thereto in the United States and in all foreign countries, that may be required by the Company. The Participant further agrees to cooperate, while employed and thereafter, to the extent and in the manner required by the Company, in the prosecution or defense of any patent or copyright claims or any litigation, or other proceeding involving any trade secrets, processes, discoveries or improvements covered by this covenant, but all necessary expenses thereof shall be paid by the Company. This Section 6(b)(vi) does not apply to an Invention which qualifies fully as a nonassignable invention under the provisions of section 2870 of the California Labor Code. The Participant acknowledges that a condition for an Invention to qualify fully as a nonassignable invention under the provisions of section 2870 of the California Labor Code is that the Invention must be protected under patent laws. The Participant has reviewed the notification in Appendix C (“Limited Exclusion Notification”) and agrees that his or her signature acknowledges receipt of the notification. However, the Participant agrees to disclose promptly in writing to Company all innovations (including Inventions) conceived, reduced to practice, created, derived, developed, or made by the Participant during the term of employment and for three months thereafter, whether or not the Participant believes such innovations are subject to this Section 6(b)(vi), to permit a determination by Company as to whether or not the innovations should be the property of Company. Any such information will be received in confidence by Company.

(vii) Acknowledgement and Enforcement. The Participant acknowledges and agrees that: (1) the purpose of the foregoing covenants is to protect the goodwill, trade secrets and other Confidential Information of the Company; (2) because of the nature of the business in which the CareFusion Group is engaged and because of the nature of the Confidential Information to which the Participant has access, the Company would suffer irreparable harm and

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it would be impractical and excessively difficult to determine the actual damages of the CareFusion Group in the event the Participant breached any of the covenants of this Section 6(b); and (3) remedies at law (such as monetary damages) for any breach of the Participant’s obligations under this Section 6(b) would be inadequate. The Participant therefore agrees and consents that (X) if the Participant commits any breach of a covenant under this Section 6(b) during the applicable period of restriction specified therein, all unpaid severance benefits will be immediately forfeited, and (Y) if the Participant commits any breach of a covenant under this Section 6(b) or threatens to commit any such breach at any time, the Company shall have the right (in addition to, and not in lieu of, any other right or that may be available to it) to temporary and permanent injunctive relief from a court of competent jurisdiction, without posting any bond or other security and without the necessity of proof of actual damage.

(viii) Similar Covenants in Other Agreements Unaffected. The Participant may be or become subject to covenants contained in other agreements (including but limited to stock option and restricted stock unit agreements) which are similar to those contained in this Section 6(b). Further, a breach of the covenants contained in this Section 6(b) may have implications under the terms of such other agreements, including but not limited to a forfeiture of equity awards and long-term cash compensation. The Participant acknowledges the foregoing and understands that the covenants contained in this Section 6(b) are in addition to, and not in substitution of, the similar covenants contained in any such other agreements. The Company agrees that any forfeiture or repayment obligation under any such agreement shall be subject to arbitration as specified under Section 8(i).

(c)At-Will Employment. Each Participant is and shall continue to be employed by the Company on an “at will” basis. A Participant shall have no further rights under the Plan if he or she terminates employment with the Company for any reason prior to a Change in Control Date (other than as set forth in Section 5(a)), or if he or she terminates voluntarily without Good Reason or is terminated with Cause following a Change in Control.

(d)Nonduplication; No Impact on Benefits. Payments to a Participant under the Plan shall be in lieu of any severance or similar payments that otherwise might be payable under any plan, program, policy or agreement sponsored by the Company that provides severance benefits to employees upon termination of employment, except that the payment or acceleration of equity or equity-based awards shall be in addition to, rather than in lieu of, any payment or benefits due under the Plan. Except as may otherwise be specifically stated under any employee benefit plan, policy, or program, no amount payable under the Plan shall be treated as compensation for purposes of calculating a Participant’s right under any such plan, policy, or program.

7. Benefit Claims

A Participant who has not been awarded benefits under the terms of the Plan may file a written claim for benefits with the Company.

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(a)Such claim shall be decided within 90 days by the Board unless special circumstances require an extension of up to 90 additional days. If the Board determines that an extension is necessary, it shall provide the claimant with written notice of the need for an extension prior to the termination of the initial 90-day period, indicating the special circumstances requiring an extension and the date by which the Board expects to render its decision. Written notice of the Board’s decision on the claim shall be furnished promptly to the claimant. If the claim is denied in whole or in part, such written notice shall (i) set forth, in a manner calculated to be understood by the claimant, the specific reason or reasons for the adverse determination; (ii) reference the specific plan provisions on which the determination is based; (iii) describe any additional material or information necessary for the claimant to perfect the claim and explain why such material or information is necessary; and (iv) describe the plan’s review procedures and the time limits applicable to such procedures, including a claimant’s right to bring a civil action under ERISA section 502(a) following an adverse benefit determination on review;

(b)Within 60 days following receipt of an adverse benefit determination, a claimant may file a request for review of the initial claim in writing with the Board. A claimant shall be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records or other information in the Board’s possession relevant to the claimant’s claim for benefits. The claimant may also submit comments, documents, records and other information relating to the claim, which shall be taken into account by the Board in reviewing its denial of the Participant’s claim, without regard to whether such information was submitted or considered in the initial benefit determination.

(c)Notice of the Board’s decision on review shall be furnished to the claimant within 60 days following the receipt of the request for review, unless special circumstances require an extension of up to 60 additional days, in which case written notice of the extension shall be furnished to the claimant prior to the end of the initial 60-day period, indicating the special circumstances requiring an extension and the date by which the Board expects to render its decision on review. If the Board makes an adverse benefit determination upon review, the adverse benefit determination will set forth, in a manner calculated to be understood by the claimant, (i) the specific reason or reasons for the adverse determination; (ii) reference to the specific plan provisions on which the determination was based; (iii) a statement of the claimant’s entitlement to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claimant’s claim for benefits; and (iv) a description of the claimant’s right to bring a civil action under ERISA section 502(a).

8. General

(a)Amendment and Termination of the Plan. The Board may terminate or amend the Plan in any respect and at any time; provided, however, that (i) no termination or amendment of the Plan shall be effective with respect to a Change in Control that occurs less than six months following the date of such termination or amendment and (ii) the Plan may not be terminated or amended after the Change in Control Date in any manner that would adversely affect the rights of a Participant without his or her prior written consent. Notwithstanding anything herein to the contrary, the Plan may be amended by the Board at any time, including retroactively if required, in order to conform the Plan to the provisions of Code section 409A and the Treasury regulations or

15

other authoritative guidance issued thereunder and to conform the Plan to the requirements of any other applicable law.

(b)Integration with Other Benefit Programs. Benefits payable under the Plan, whether paid in a lump sum or in periodic payments, will not increase or decrease the benefits otherwise available to a Participant under any Company-sponsored retirement plan, welfare plan or any other employee benefit plan or program, unless otherwise expressly provided for in any particular plan or program.

(c)Funding. Benefits payable under the Plan will be paid only from the general assets of the Company or a successor. The Plan does not create any right to or interest in any specific assets of the Company.

(d)No Mitigation. The Participant shall not be obligated to seek other employment in mitigation of the amounts payable under any provision of the Plan, and the obtaining of such other employment shall not effect any reduction of the Company’s obligations to pay the lump-sum cash payment provided under Section 5(b).

(e)Withholding. The Company may withhold from any payments made under the Plan all federal, state, local or other taxes required pursuant to any law or governmental regulation or ruling.

(f)Successors. All rights under the Plan are personal to the Participant and without the prior written consent of the Company shall not be assignable by the Participant other than by will or the laws of descent and distribution. The Plan shall inure to the benefit of and be enforceable by the Participant’s legal representative. The Plan shall inure to the benefit of and be binding upon the Company and its successors and assigns. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform the obligations set forth in the Plan in the same manner and to the same extent as the Company would be required to do so.

(g)Governing Law. The Plan and all determinations made and actions taken pursuant hereto shall be governed by the substantive laws, but not the choice of law rules, of the State of Delaware, or by U.S. federal law.

(h)Severability. In the event that any provision of the Plan is declared to be illegal, invalid or otherwise unenforceable by a court of competent jurisdiction, such provision shall be reformed, if possible, to the extent necessary to render it legal, valid and enforceable, or otherwise deleted, and the remainder of the terms of the Plan shall not be affected except to the extent necessary to reform or delete such illegal, invalid or unenforceable provision.

(i)Arbitration. The Company and the Participant agree to attempt to resolve any dispute between them quickly and fairly. Any dispute related to the Plan which remains unresolved shall be resolved exclusively by final and binding arbitration conducted within 50 miles of San Diego, California, pursuant to the then-current rules of the American Arbitration Association with respect to employment disputes. The Company shall bear any and all costs of the arbitration

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process plus, if a Participant substantially prevails on all issues raised, any reasonable attorneys’ fees incurred by the Participant with regard to such arbitration.

(j)Notices. Notices and all other communications provided for herein shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by United States certified mail, return receipt requested, or by overnight courier, postage prepaid, to the Company at its corporate headquarters address, to the attention of the Secretary of the Company, or to the Participant at the home address most recently communicated by the Participant to the Company in writing.

(k)409A Compliance.

i. The Plan is intended to comply with, or otherwise be exempt from, Code section 409A and any regulations and Treasury guidance promulgated thereunder.

ii. The preceding provisions, however, shall not be construed as a guarantee by the Company of any particular tax effect to a Participant under the Plan. The Company shall not be liable to a Participant for any payment made under the Plan, at the direction or with the consent of the Participant, which is determined to result in an additional tax, penalty, or interest under Code section 409A, nor for reporting in good faith any payment made under the Plan as an amount includible in gross income under Code section 409A.

iii. With respect to any reimbursement of expenses or any provision of in-kind benefits to a Participant specified under the Plan, such reimbursement of expenses or provision of in-kind benefits shall be subject to the following conditions: (1) the expenses eligible for reimbursement or the amount of in-kind benefits provided in one taxable year shall not affect the expenses eligible for reimbursement or the amount of in-kind benefits provided in any other taxable year, except for any medical reimbursement arrangement providing for the reimbursement of expenses referred to in Code section 105(b); (2) the reimbursement of an eligible expense shall be made no later than the end of the year after the year in which such expense was incurred; and (3) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit.

iv. A termination of employment shall not be deemed to have occurred for purposes of any provision of this Plan providing for the payment of “deferred compensation” (as defined under Treasury Regulation Section 1.409A-1(b)(1), after giving effect to the exemptions in Treasury Regulation Sections 1.409A-1(b)(3) through (b)(12)) (“Deferred Compensation”) upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Code section 409A, and for purposes of any such provision of this Plan, references to a ‘termination,’ ‘termination of employment’ or like term shall mean ‘separation from service.’ If a payment obligation under the

17

Plan arises on account of a Participant’s termination of employment while a “specified employee” (as defined under Code section 409A and the regulations thereunder and determined in good faith by the Board), any payment of Deferred Compensation shall accrue with interest and shall be paid within 15 days after the end of the six-month period beginning on the date of such termination of employment or, if earlier, within 15 days after appointment of the personal representative or executor of the Participant’s estate following his death (“Delayed Payment Date”). For purposes of the preceding sentence, interest shall accrue at the six-month Libor rate. With respect to a Participant who experiences a termination of employment during the six-month period following a Change in Control, all such amounts payable to such Participant on the Delayed Payment Date (the “Deferred Payment Amounts”) will be deposited on or before the date on which such Participant’s termination of employment occurs in an irrevocable grantor trust that shall be established by the Company prior to the Change in Control (the “Rabbi Trust”), along with irrevocable instructions to the trustee to pay such Delayed Payment Amounts to the Participant (or his or her designated beneficiary in the event of the Participant’s death) on the Delayed Payment Date. The Rabbi Trust shall have an institutional trustee selected by the Company prior to the Change in Control. The Company shall be responsible for payment of all costs, expenses and fees, including legal and trustee fees, of establishing and maintaining the Rabbi Trust.

9. Effect of Amendment and Restatement

(a)New Participation Agreements. Each individual (each, a “Current Participant”) who was designated by the Board (or an authorized officer of the Company) as eligible to participate in the Executive Change in Control Severance Plan, as amended and restated effective July 1, 2012 (the “2012 Plan”) shall be deemed designated by the Board to participate in this Plan pursuant to Section 4(a) and shall have the opportunity (but shall not be required) to execute and return to the Company a Participation Agreement in accordance with Section 4(b) of the Plan (a “New Participation Agreement”) on or prior to November 30, 2014.

(b)Change in Control on or prior to April 5, 2015. In connection with a Change in Control that occurs on or prior to April 5, 2015, the rights of each Current Participant (i) who has executed and returned to the Company a New Participation Agreement on or prior to November 30, 2014 (or, if earlier, the date of the Change in Control) shall be governed by this Plan and (ii) who has not executed and returned to the Company a New Participation Agreement on or prior to November 30, 2014 (or, if earlier, the date of the Change in Control) shall be governed by the 2012 Plan.

(c)Change in Control after April 5, 2015. In connection with a Change in Control that occurs after April 5, 2015, the rights of all Current Participants shall be governed by this Plan, regardless of whether such Current Participants executed and returned to the Company a New Participation Agreement; provided, that, a Current Participant who is a Tier II Executive with a position of senior vice president or vice president shall only be eligible to receive the Prorated

18

Long-term Incentive Award Value pursuant to Section 5(b)(ii) of this Plan if such Current Participant executed and returned to the Company a New Participation Agreement on or prior to November 30, 2014.

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APPENDIX A

3750 Torrey View Court

San Diego, CA 92130

858.617.2000

858.617.2900 (fax)

carefusion.com

[Date]

[Name]

[Title]

[Street Address]

[City, State, Zip Code]

RE: Participation in Executive Change in Control Severance Plan

Dear [Name]:

CareFusion Corporation (the “Company”) maintains the Executive Change in Control Severance Plan, as amended and restated effective as of October 5, 2014 (the “Plan”), a copy of which is attached. The purpose of the Plan is to assure the Company of the continued dedication, loyalty, and service of, and the availability of objective advice and counsel from, key executives of the Company in the event of a Change in Control. I am pleased to inform you that, based on your current role with the Company, the Board of Directors (the “Board”) has designated you as an eligible participant in the Plan.

Based on your current role as the Company’s [insert current title], and pursuant to Section 4(a) of the Plan, the Board has determined that you are eligible to participate in the Plan as a Tier [__] Executive. Subject to and as further described in the Plan, in the event your employment is terminated within 24 months after the Change in Control Date either (i) by the Company for reasons other than Cause, death, or Disability, or (ii) by you for Good Reason (as such capitalized terms are defined in the Plan), you will be entitled to a cash severance payment under Section 5(b) of the Plan in an amount equal to [insert amount or formula]. In addition, you will be entitled to certain severance benefits, including health insurance coverage and outplacement assistance as set forth in the Plan. You will become a participant in the Plan and be eligible to receive the severance payment and severance benefit described herein, subject to the terms of the Plan, only upon executing and returning to the Company this letter agreement, which serves as the Participation Agreement required under Section 4(b) of the Plan.

If you previously signed a Participation Agreement similar to this one confirming your participation in the Plan, this Participation Agreement supersedes that prior Participation Agreement. By executing this Participation Agreement, you are consenting and agreeing to the amendments to the Plan that have been incorporated into the Plan document, notwithstanding Section 8(a) of the Plan, and

you acknowledge and agree that the payments, benefits and rights provided under the amended Plan are adequate consideration for your consent and agreement.

As a condition to participating in the Plan and your eligibility to receive the severance payment and severance benefit described herein, you hereby agree that the definition of “Good Reason” set forth in any and all agreements evidencing any award granted to you under the CareFusion Corporation 2009 Long-Term Incentive Plan (the “2009 LTIP”) is hereby amended to read as set forth in Section 2(n) of the Plan. You understand and hereby agree that by executing this Participation Agreement, you are amending the definition of “Good Reason” set forth in the award agreements with respect to any and all awards granted to you under the 2009 LTIP (the “Award Agreements”) by replacing that definition with the definition of Good Reason set forth in Section 2(n) of the Plan.

Please note that your participation in the Plan and your eligibility to receive the severance payment and severance benefit described herein are subject to and conditioned upon your continued service to the Company in the role of [insert current title]. In the event your role with the Company changes prior to the Change in Control Date (other than as contemplated by Section 5(a) of the Plan), this Participation Agreement will automatically terminate without further action by either party hereto. Thereafter, any future participation by you in the Plan will be subject to review and approval by the Board and subject to any terms and conditions then in effect, including execution by you of a new Participation Agreement, if applicable.

This Participation Agreement sets forth certain information regarding the severance payment and severance benefit to be provided to you in accordance with Section 5 of the Plan. As used in this Participation Agreement, each capitalized term, if not defined herein, has the meaning ascribed to it under the Plan. You hereby acknowledge and agree that the foregoing payment and benefits will only be provided to you if you sign and do not revoke or violate the terms of a waiver and release of claims, pursuant to Section 6(a) of the Plan, and that the terms of this letter agreement that entitle you to any severance payment and severance benefit are subject to all of the terms of the Plan.

Please review the entire Plan carefully, including, but not limited to, the “Terms and Conditions of Participation” set forth in Section 6 of the Plan, which includes restrictive covenants. In order to become a Participant in the Plan you must acknowledge and agree to all of the terms and conditions of the Plan by executing this Participation Agreement and returning it to ___________.

Sincerely,

[Name]

[Title]

Enclosures

cc: [Name]

I have read the foregoing Participation Agreement and the Plan, understand their terms and conditions, and hereby agree to be bound thereby:

PARTICIPANT

By: [Executive]

Date:

2

APPENDIX B

RELEASE AGREEMENT

This RELEASE AGREEMENT by and between CareFusion Corporation (the “Company”) and ____________________ (the “Executive”) is dated as of the ____day of _______________, _____ (the “Release”).

Release

In consideration for the payments and benefits specified in the CareFusion Corporation Executive Change in Control Severance Plan, as amended from time to time (the “Plan”), as set forth in Section 1 of Exhibit A to this Release, Executive hereby releases the Company and any of its predecessors, successors or assigns to all or any part of its businesses (“CareFusion”) by execution of this Release from any and all claims and causes of action related in any way to the transactions or occurrences between them to date, to the fullest extent permitted by law, including, but not limited to, Executive’s employment with CareFusion, the termination of Executive’s employment, and all other losses, liabilities, claims, charges, demands and causes of action, whether known or unknown, as of the date of Executive’s execution of this Release, other than those that arise under the Plan. Executive agrees that this Release applies to all officers, directors, employees and other representatives of CareFusion and its affiliates and any of its predecessors, successors or assigns to all or any part of its businesses including the Company, both individually and in their respective capacities (collectively with CareFusion, the “Releasees”). This Release is intended to have the broadest possible application permitted by law and includes, but is not limited to, claims under any employment agreement between Executive and Company (the “Employment Agreement”), and any tort, contract, common law, constitutional or other statutory claims, including, but not limited to, alleged violations of CareFusion’s policies or practices; Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, other federal and state fair employment practices or discrimination laws; laws pertaining to breach of employment contract or wrongful termination; age discrimination claims under the Age Discrimination and Employment Act, 29 U.S.C. Section 621 et seq., the Uniformed Services Employment and Reemployment Rights Act, 38 U.S.C. Section 4301 et seq.; the Worker Adjustment and Retraining Notification Act, 29 U.S.C. Section 2101 et seq. and any applicable state laws of similar intent (including claims relating to notice or payment in lieu of notice).

In addition, Executive agrees that Executive will not initiate, bring, or prosecute any suit, action or grievance against any of the Releasees for any released claim in any federal, state, county or municipal court, or any arbitral forum, except as specifically stated below. Executive further agree that if Executive does so, Executive will be liable for the payment of all damages and costs, including attorneys’ fees, incurred by any of the Releasees in connection with Executive’s suit, action, or grievance. Executive also waives any right to any relief sought in connection with such claims, including any right to damages, attorneys’ fees, costs, and all other legal or equitable relief.

This Release and agreement not to sue does not prohibit Executive from pursuing a lawsuit, claim, or charge to challenge the validity or enforceability of this Release under the Age Discrimination in Employment Act (“ADEA”) or the Older Workers Benefit Protection Act (“OWBPA”), nor does it render Executive liable for damages or costs, including attorneys’ fees, incurred by the Releasees in connection with a lawsuit, claim, or charge to challenge the validity or enforceability of this Release under the ADEA or the OWBPA. This Release and agreement not to

sue also does not prohibit Executive from filing charges with government agencies or participating in any investigation resulting from such charges. However, under this Release, Executive agrees not to accept any monetary or personal relief or remedy, including but not limited to back pay, front pay, or reinstatement, or damages of any nature that may be awarded to Executive in connection with such charges. In addition, this general release is not intended to bar any claims that may not be waived by law, such as claims for workers’ compensation benefits, unemployment benefits or statutory indemnity, if applicable.

Notwithstanding anything to the contrary in this Release, this Release does not apply to any claims arising after Executive’s execution of this Release, enforcement of Executive’s rights to payments or benefits due or rights enforceable after the execution of this Release under the Plan, claims under any of the Company’s employee benefit or compensation plans or any rights Executive may have for indemnification under CareFusion’s Amended and Restated By-Laws, Amended and Restated Certificate of Incorporation, applicable law, or any indemnification agreement (including any rights to director and officer indemnification set forth in the transaction agreement with respect to the transaction that gives rise to a “Change in Control” under the Plan), or any rights as an insured under CareFusion’s D&O insurance policies, as in effect from time to time.

Complete Release

Executive also expressly agrees that Executive has read, understands, and intends to waive any and all rights or benefits described in Section 1542 of the California Civil Code, which provides as follows:

“A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.”

Thus, notwithstanding the provisions of Section 1542, and for the express purpose of implementing a full and complete release and discharge of CareFusion and the Releasees , Executive expressly acknowledges that this Release is intended to include within its effect, without limitation, all claims Executive does not know or suspect to exist in Executive’s favor at the time of execution of this Release, and this Release contemplates the extinguishment of any such claim(s).

Review of Release

Executive agrees and represents that Executive has been advised of and fully understands the right to discuss all aspects of this Release with an attorney of Executive’s choice. Executive’s execution of this Release establishes that, if Executive wishes the advice of an attorney, Executive has sought such advice by the date Executive signed this Release, and that Executive was given at least twenty-one (21) days to consider whether or not to sign. Executive may sign this Release before the end of the twenty-one (21)-day period and Executive agrees that if Executive decides to shorten this time period for signing, Executive’s decision was knowing and voluntary. Executive

2

agrees that a change to the Release, whether material or immaterial, does not restart the running of said period.

Executive will have seven (7) days from the date that Executive signs this Release to revoke the Release and to change Executive’s mind, in which case this Release shall be ineffective and of no legal force. If Executive so revokes this Release, there will be no obligation on the part of CareFusion to provide Executive with any of the payments and benefits specified in the Plan, as set forth in Section 1 of Exhibit A to this Release. Executive’s revocation must be in writing and received by CareFusion’s Executive Vice President, Human Resourceson the seventh day in order to be effective. If Executive does not revoke acceptance within the seven (7) day period, Executive’s acceptance of this Release shall become binding and enforceable on the eighth day (“Effective Date”).

Outstanding Equity Awards

Executive acknowledges and agrees that the CareFusion equity awards or equity awards of the acquiring or surviving company in the Change in Control, including Carefusion equity awards converted in such Change in Control, and any equity awards granted after such Change in Control (collectively, the “equity awards”) set forth on Section 2 of Exhibit A to this Release are the only equity awards held by Executive as of the date of this Release, that the details of the equity awards set forth on Section 2 of Exhibit A to this Release are complete and accurate, and that Executive is not entitled to the grant or payment of any equity awards other than those set forth on Section 2 of Exhibit A to this Release. However, for the avoidance of doubt, Executive’s rights with respect to such equity awards are not conditioned upon Executive’s execution and delivery of this Release.

Nondisparagement

Executive agrees that Executive will not make any written or verbal statements, or encourage others to make any such statements, that defame, disparage or criticize the personal or business reputation, practices or conduct of CareFusion or any of the other Releasees.

General Provisions

Executive agrees to comply with the continuing obligations set forth in the Plan.

By entering into this Release, CareFusion makes no admission that it has engaged, or is now engaging, in any unlawful conduct. The parties understand and acknowledge that this Release is not an admission of liability and shall not be used or construed as such in any legal or administrative proceeding.

In the event any provision of this Release shall be found unenforceable, the unenforceable provision shall be deemed deleted and the validity and enforceability of the remaining provisions shall not be affected thereby.

This Release may be pled as a full and complete defense to, and may be used as a basis for an injunction against, any action, suit or other proceeding that may be prosecuted, instituted or attempted by Executive in breach hereof.

3

The validity, interpretation and performance of this Release shall be construed and interpreted according to the laws of the United States of America and the state in which Executive is employed.

This Release, together with the Plan and the Executive’s Participation Agreement thereunder, is intended to be the entire agreement between the parties and supersedes and cancels any and all other and prior agreements, written or oral, between the parties regarding this subject matter. This Release may be amended only by a written instrument executed by all parties hereto.

[Signatures follow.]

4

IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and the Company has caused this Release to be executed in its name on its behalf, all as of the day and year first above written.

_________________________________________________    

Executive

Date:

CAREFUSION CORPORATION

By: _______________________________________

Name:

Title:

Date:

5

EXHIBIT A

Description	Timing of Payment	Amount1	Party Responsible for Making Payment
SECTION 1: Payments Pursuant to the Plan
Severance (Sections 2(b), 2(v) and 5(b) of the Plan) Base Salary: Target Bonus:	[Two][One and a half][One] times the sum of (i) base salary and (ii) Executive’s target bonus	[•]	$[•]	CareFusion Payroll
Prorated Bonus (Sections 2(v) and 5(b) of the Plan)	An amount equal to the product of (i) a fraction, the numerator of which is the number of whole and partial months (rounded up) worked from the beginning of CareFusion’s fiscal year until the termination date and the denominator of which is 12, and (ii) Executive’s target bonus	[•]	$[•]	CareFusion Payroll
[Prorated Long-term Incentive Award Value (Sections 2(r) and 5(b) of the Plan)]	[An amount equal to the product of (i) a fraction, the numerator of which is the number of whole and partial months (rounded up) worked from the beginning of CareFusion’s fiscal year until the termination date (provided that such numerator shall not exceed six) and the denominator of which is 12, and (ii) highest grant date dollar value (determined based on the methodology used by the Company as of the grant date as reflected in the Company’s records) of any annual long-term incentive award (cash and/or equity-based incentive) granted to Executive in CareFusion’s fiscal year in which the Change in Control occurs and the two preceding fiscal years of CareFusion]2	[•]	$[•]	CareFusion Payroll
Health Benefit Continuation (Section 5(c) of the Plan)	CareFusion shall pay the premium for COBRA coverage until the earlier of (i) the date that Executive becomes eligible for coverage under another group health plan and (ii) the end of the 18-month maximum COBRA coverage period and, if Executive does not become eligible for coverage under another group health plan by the end of such period, CareFusion shall provide coverage to Executive under its group health plan for active employees until the earlier of (a) the date that Executive becomes eligible for coverage under another group health plan and (b) the end of an additional [18-month][6-month] period	N/A	N/A	CareFusion

_____________________________

¹Note: For purposes of this Exhibit A, amounts are rounded (up or down) to the nearest whole cent. All amounts payable are subject to applicable employment and income tax withholding.

² To be included only for Tier II Executives with a position of senior vice president or vice president.

1

Outplacement Assistance (Section 5(d) of the Plan)	Reimbursement for outplacement services for [six][twelve] months following the termination date, so long as Executive commences utilization of services within six months following the date of termination and the services are provided by a recognized outplacement provider	N/A	N/A	Paid directly to outplacement provider following presentation to CareFusion of supporting documentation prior to the first anniversary of the termination date
		Total	$[•]

2

SECTION 2: OUTSTANDING EQUITY AWARDS3
Type of Award	Grant Date	Number of CareFusion Shares Underlying Award	Exercise Price	Expiration Date	Vesting Schedule
Stock Options					N/A
Restricted Stock Units			N/A	N/A
Performance Stock Units			N/A	N/A

_____________________________

³ Note to Draft: to be modified as appropriate to reflect outstanding awards at the date of termination.

3

LIMITED EXCLUSION NOTIFICATION

THIS IS TO NOTIFY you in accordance with Section 2872 of the California Labor Code that the foregoing Agreement between you and CareFusion Corporation, a Delaware corporation (the “Company”) does not require you to assign or offer to assign to the Company any invention that you developed entirely on your own time without using the Company’s equipment, supplies, facilities or trade secret information except for those inventions that either:

(1) Relate at the time of conception or reduction to practice of the invention to the Company’s business, or actual or demonstrably anticipated research or development of the Company; or

(2) Result from any work performed by you for the Company.

To the extent a provision in the Executive Change in Control Severance Plan purports to require you to assign an invention otherwise excluded from the preceding paragraph, the provision is against the public policy of this state and is unenforceable.

This limited exclusion does not apply to any patent or invention covered by a contract between the Company and the United States or any of its agencies requiring full title to such patent or invention to be in the United States.

I ACKNOWLEDGE RECEIPT of a copy of this notification.

By: ________________________________

___________________________________________    

Print Employee’s Name

Date: _______________________________

Witnessed by:

_____________________________________________

_____________________________________________

Company Representative’s Name and Position

Dated:    ______________________________________

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Kieran T. Gallahue, certify that:

1. I have reviewed this Form 10-Q for the quarterly period ended September 30, 2014 of CareFusion Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 7, 2014	/s/ Kieran T. Gallahue
	Kieran T. Gallahue
	Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, James F. Hinrichs, certify that:

1. I have reviewed this Form 10-Q for the quarterly period ended September 30, 2014 of CareFusion Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 7, 2014	/s/ James F. Hinrichs
	James F. Hinrichs
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the accompanying Quarterly Report of CareFusion Corporation (the “Company”) on Form 10-Q for the quarter ended September 30, 2014 (the “Report”), Kieran T. Gallahue, Chief Executive Officer of the Company, and James F. Hinrichs, Chief Financial Officer of the Company, each certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 7, 2014	/s/ Kieran T. Gallahue
	Kieran T. Gallahue
	Chief Executive Officer
Date: November 7, 2014	/s/ James F. Hinrichs
	James F. Hinrichs
	Chief Financial Officer

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Acquisitions (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended			3 Months Ended	1 Months Ended	0 Months Ended	3 Months Ended			0 Months Ended	3 Months Ended		1 Months Ended	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Jun. 30, 2014	Sep. 30, 2014 Minimum [Member]	Dec. 31, 2013 Maximum [Member]	Nov. 18, 2013 Vital Signs [Member]	Sep. 30, 2014 Vital Signs [Member]	Sep. 30, 2014 Developed Technology Rights [Member]	Sep. 30, 2014 Customer Relationships [Member]	Dec. 30, 2013 First Closing [Member] Vital Signs [Member]	Sep. 30, 2013 First Closing [Member] Vital Signs [Member]	Jun. 30, 2014 First Closing [Member] Vital Signs [Member]	Mar. 31, 2014 Second Closing [Member] Vital Signs [Member]	Sep. 30, 2014 Second Closing [Member] Vital Signs [Member]
Business Acquisition [Line Items]
Cash Paid						$ 500				$ 473	$ 492		$ 17	$ 8
Cash and Cash Equivalents Acquired, Net of Net Working Capital Adjustments											(2)			0
Net Purchase Price	32	0									490			8
Trade Receivables												19		0
Inventories												40		7
Other Current Assets												15		0
Property and Equipment												37		0
Intangible Assets								31	257			298		0
Goodwill	3,315		3,311									228		1
Current Liabilities and Borrowings												(41)		0
Deferred Income Taxes												(101)		0
Other Long-Term Liabilities												(5)		0
Net Assets Acquired												490		8
Fair Value Inputs, Discount Rate				10.50%	12.50%
Revenue	$ 922	$ 830					$ 68

XML

Goodwill and Other Intangible Assets Intangible Asset Useful Lives (Details)	3 Months Ended	12 Months Ended
	Sep. 30, 2014	Jun. 30, 2014
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	14 years	14 years
Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	3 years
Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	20 years

XML

Inventories (Details) (USD $) In Millions, unless otherwise specified	Sep. 30, 2014	Jun. 30, 2014
Inventory Disclosure [Abstract]
Inventory Valuation Reserves	$ 52.0	$ 52.0
Raw Materials	147	154
Work-in-Process	30	26
Finished Goods	318	261
Inventories, Net	$ 495	$ 441

XML

Segment Information (Schedule of Revenue and Net Property and Equipment by Geographic Area) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Jun. 30, 2014
Segment Reporting Information [Line Items]
Revenue	$ 922	$ 830
Property and Equipment, Net	437		448
United States [Member]
Segment Reporting Information [Line Items]
Revenue	695	649
Property and Equipment, Net	322		329
International [Member]
Segment Reporting Information [Line Items]
Revenue	227	181
Property and Equipment, Net	$ 115		$ 119

XML

Reclassifications Out of Accumulated Other Comprehensive Income (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other comprehensive income (loss), before tax	$ (55)	$ 26
Other comprehensive income (loss), tax	1	(5)
Other Comprehensive Income, Net of Tax	(54)	21
Foreign Currency Translation Adjustments [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax	0	0
Reclassification From Accumulated Other Comprehensive Income, Current Period, Tax	0	0
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax	0	0
Other comprehensive income (loss), before tax	(54)	19
Other comprehensive income (loss), tax	1	(2)
Other Comprehensive Income, Net of Tax	(53)	17
Other Comprehensive Income (Loss), before Reclassifications, before Tax	(54)	19
Other Comprehensive Income (Loss), Before Reclassifications, Tax	1	(2)
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax	(53)	17
Pension Plan [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax	0
Reclassification From Accumulated Other Comprehensive Income, Current Period, Tax	0
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax	0
Other comprehensive income (loss), before tax	(1)
Other comprehensive income (loss), tax	0
Other Comprehensive Income, Net of Tax	(1)
Other Comprehensive Income (Loss), before Reclassifications, before Tax	(1)
Other Comprehensive Income (Loss), Before Reclassifications, Tax	0
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax	(1)
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax		0
Reclassification From Accumulated Other Comprehensive Income, Current Period, Tax		0
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax		0
Other comprehensive income (loss), before tax		7
Other comprehensive income (loss), tax		(3)
Other Comprehensive Income, Net of Tax		4
Other Comprehensive Income (Loss), before Reclassifications, before Tax		7
Other Comprehensive Income (Loss), Before Reclassifications, Tax		(3)
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax		$ 4

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Restructuring and Acquisition Integration Charges (Schedule of Current Restructuring Programs) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Sep. 30, 2014		Sep. 30, 2013
Restructuring Reserve [Roll Forward]
Accrued, Beginning Balance	$ 10	[1]	$ 7	[1]
Accrued Costs	10		11
Cash Payments	(9)		(6)
Accrued, Ending Balance	$ 11		$ 12

[1] Included within “Other Accrued Liabilities” in the unaudited condensed consolidated balance sheets.

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Borrowings (Tables)

3 Months Ended

Sep. 30, 2014

Debt Disclosure [Abstract]

Schedule Of Borrowings

Borrowings consisted of the following:

(in millions)	September 30, 2014		June 30, 2014
Senior Notes due 2014, 5.125% Less Unamortized Discount of $0.0 million at September 30, 2014 and $0.1 million at June 30, 2014, Effective Rate 5.360%	$	—	$	450
Senior Notes due 2019, 6.375% Less Unamortized Discount of $9.0 million at September 30, 2014 and $9.4 million June 30, 2014, Effective Rate 6.601%	691		691
Senior Notes due 2023, 3.300% Less Unamortized Discount of $1.9 million at September 30, 2014 and $2.0 million June 30, 2014, Effective Rate 3.311%	298		298
Senior Notes due 2017, 1.450% Less Unamortized Discount of $1.6 million at September 30, 2014 and $1.7 million June 30, 2014, Effective Rate 1.498%	298		298
Senior Notes due 2024, 3.875% Less Unamortized Discount of $3.2 million at September 30, 2014 and $3.2 million June 30, 2014, Effective Rate 3.895%	397		397
Senior Notes due 2044, 4.875% Less Unamortized Discount of $4.7 million at September 30, 2014 and $4.7 million June 30, 2014, Effective Rate 4.919%	295		295
Euro Denominated Debt, Interest Averaging 3.52% at both September 30, 2014 and June 30, 2014, Due in Varying Installments through 2020	8		10
Other Obligations; Interest Averaging 8.34% at September 30, 2014 and 8.07% at June 30, 2014, Due in Varying Installments through 2017	4		5
Total Borrowings	1,991		2,444
Less: Current Portion	3		454
Long-Term Portion	$	1,988	$	1,990

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Borrowings (Narrative) (Details)		3 Months Ended	12 Months Ended	3 Months Ended	12 Months Ended	3 Months Ended	12 Months Ended	3 Months Ended	12 Months Ended		3 Months Ended	12 Months Ended	3 Months Ended	12 Months Ended	3 Months Ended	12 Months Ended	3 Months Ended	12 Months Ended	0 Months Ended
	Jun. 30, 2014 USD ($)	Sep. 30, 2014 One Point Four Five Zero Percentage Senior Notes Due Two Thousand Seventeen [Member] USD ($)	Jun. 30, 2014 One Point Four Five Zero Percentage Senior Notes Due Two Thousand Seventeen [Member] USD ($)	Sep. 30, 2014 Three Point Eight Seven Five Percentage Senior Notes Due Two Thousand Twenty Four [Member] USD ($)	Jun. 30, 2014 Three Point Eight Seven Five Percentage Senior Notes Due Two Thousand Twenty Four [Member] USD ($)	Sep. 30, 2014 Four Point Eight Seven Five Percentage Senior Notes Due Two Thousand Forty Four [Member] USD ($)	Jun. 30, 2014 Four Point Eight Seven Five Percentage Senior Notes Due Two Thousand Forty Four [Member] USD ($)	Sep. 30, 2014 Five Point One Two Five Percentage Senior Notes Due Two Thousand And Fourteen [Member] USD ($)	Jun. 30, 2014 Five Point One Two Five Percentage Senior Notes Due Two Thousand And Fourteen [Member] USD ($)	Aug. 01, 2014 Five Point One Two Five Percentage Senior Notes Due Two Thousand And Fourteen [Member] USD ($)	Sep. 30, 2014 Euro Denominated Debt, Due In Varying Installments Through 2020 [Member] USD ($)	Jun. 30, 2014 Euro Denominated Debt, Due In Varying Installments Through 2020 [Member] USD ($)	Sep. 30, 2014 Other Obligations; Due In Varying Installments Through 2017 and 2014 [Member] USD ($)	Jun. 30, 2014 Other Obligations; Due In Varying Installments Through 2017 and 2014 [Member] USD ($)	Sep. 30, 2014 Six Point Three Seven Five Percentage Senior Notes Due Two Thousand And Nineteen [Member] USD ($)	Jun. 30, 2014 Six Point Three Seven Five Percentage Senior Notes Due Two Thousand And Nineteen [Member] USD ($)	Sep. 30, 2014 Three Point Three Zero Zero Percentage Senior Notes Due Two Thousand Twenty Three [Member] USD ($)	Jun. 30, 2014 Three Point Three Zero Zero Percentage Senior Notes Due Two Thousand Twenty Three [Member] USD ($)	Feb. 13, 2014 Revolving Credit Facility [Member] USD ($)	Sep. 30, 2014 Revolving Credit Facility [Member] USD ($)	Jun. 30, 2014 Revolving Credit Facility [Member] USD ($)	Dec. 10, 2012 Revolving Credit Facility [Member] USD ($)	Aug. 01, 2011 Euro Debt Facility [Member] EUR (€)	Aug. 01, 2014 Euro Debt Facility [Member] Minimum [Member]	Aug. 01, 2011 Euro Debt Facility [Member] Minimum [Member]	Aug. 01, 2011 Euro Debt Facility [Member] Maximum [Member]
Unsecured Senior Notes [Line Items]
Senior Notes		$ 298,000,000	$ 298,000,000	$ 397,000,000	$ 397,000,000	$ 295,000,000	$ 295,000,000	$ 0	$ 450,000,000	$ 450,000,000					$ 691,000,000	$ 691,000,000	$ 298,000,000	$ 298,000,000
Interest rate		1.45%	1.45%	3.875%	3.875%	4.875%	4.875%	5.125%	5.125%						6.375%	6.375%	3.30%	3.30%						5.125%	2.65%	3.75%
Debt Instrument, Interest Rate, Effective Percentage		1.498%	1.498%	3.895%	3.895%	4.919%	4.919%	5.36%	5.36%						6.601%	6.601%	3.311%	3.311%
Assumed debt facility in connection with acquisition																							9,000,000
Credit facility, amount outstanding	23,000,000										8,000,000	10,000,000									0
Line of Credit Facility, Increase (Decrease), Net																			250,000,000
Increased aggregate commitments under credit facility																				750,000,000		750,000,000
Other Obligations													4,000,000	5,000,000
Unamortized discount		0	0	0	0	0	0	0	100,000						9,000,000	9,400,000	1,900,000	2,000,000
Letters of credit and bank guarantees outstanding	$ 23,000,000										$ 8,000,000	$ 10,000,000									$ 0
Debt Instrument Maturity Year		2014	2014	2024	2024	2044	2044	2014	2014		2020	2020	2017	2017	2019	2019	2023	2023

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Segment Information (Schedule of Revenue Information for Select Business Lines Within Each of Segments) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenue	$ 922	$ 830
Medical Systems [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenue	528	524
Medical Systems [Member] | Dispensing Technologies [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenue	225	211
Medical Systems [Member] | Infusion Systems [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenue	213	219
Medical Systems [Member] | Respiratory Technologies [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenue	85	88
Medical Systems [Member] | Other [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenue	5	6
Procedural Solutions [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenue	394	306
Procedural Solutions [Member] | Infection Prevention [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenue	167	149
Procedural Solutions [Member] | Medical Specialties [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenue	91	89
Procedural Solutions [Member] | Specialty Disposables [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenue	$ 136	$ 68

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Acquisitions (Tables)

3 Months Ended

Sep. 30, 2014

Business Combinations [Abstract]

Schedule of Business Acquisitions

The following table summarizes the assignment of the net purchase price to the fair values of the tangible and identifiable intangible assets acquired and liabilities assumed in these closings, based on their estimated fair values at the applicable acquisition date. Balances are reflected in the accompanying condensed consolidated balance sheets as of September 30, 2014.

(in millions)	Fiscal Year 2014 Closings			Fiscal Year 2015 Closings
Cash Paid	$	492		$	8
Cash and Cash Equivalents Acquired, Net of Net Working Capital Adjustments	(2		)	—
Net Purchase Price	$	490		$	8

(in millions)	Fiscal Year 2014 Closings			Fiscal Year 2015 Closings
Trade Receivables	$	19		$	—
Inventories	40			7
Other Current Assets	15			—
Property and Equipment	37			—
Intangible Assets	298			—
Goodwill	228			1
Current Liabilities and Borrowings	(41		)	—
Deferred Income Taxes	(101		)	—
Other Long-Term Liabilities	(5		)	—
Net Assets Acquired	$	490		$	8

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Financing Receivables (Schedule Of Change In Allowance For Credit Losses On Financing Receivables) (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Sep. 30, 2014
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance of allowance for credit losses	$ 6
Charge-offs	0
Recoveries	0
Provisions	0
Ending balance of allowance for credit losses	$ 6

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Investments in Unconsolidated Entities (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		7 Months Ended	12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Jun. 30, 2014
Equity Method Investments and Joint Ventures [Abstract]
Equity Method Investment, Aggregate Cost	$ 87		$ 87	$ 87
Income (Loss) from Equity Method Investments	2	0	5	3
Equity Method Investments	92		92	90
Cost Method Investments	10		10	9
Equity Method and Cost Method Investments	$ 102		$ 102	$ 99

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Segment Information (Tables)

3 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

Schedule of Information about Reporting Segments

The following table presents information about our reportable segments for the quarters ended September 30, 2014 and 2013:

(in millions)	Medical Systems		Procedural Solutions		Total
September 30, 2014:
External Revenues	$	528	$	394	$	922
Depreciation and Amortization	$	28	$	21	$	49
Operating Income	$	84	$	42	$	126
September 30, 2013:
External Revenues	$	524	$	306	$	830
Depreciation and Amortization	$	32	$	14	$	46
Operating Income	$	74	$	42	$	116

Schedule of Revenue and Net Property and Equipment by Geographic Area

The following table presents revenue and net property and equipment by geographic area:

	Revenue				Property and Equipment, Net
	Quarters Ended September 30,				As of September 30,		As of June 30,
(in millions)	2014		2013		2014		2014
United States	$	695	$	649	$	322	$	329
International	227		181		115		119
Total	$	922	$	830	$	437	$	448

Schedule of Revenue Information for Select Business Lines Within Each of Segments

The following table presents the revenue information for select business lines within each of the segments for the quarters ended September 30, 2014 and 2013:

	Quarters Ended September 30,
(in millions)	2014		2013
Medical Systems
Dispensing Technologies	$	225	$	211
Infusion Systems	213		219
Respiratory Technologies	85		88
Other	5		6
Total Medical Systems	$	528	$	524
Procedural Solutions
Infection Prevention	$	167	149
Medical Specialties	91		89
Specialty Disposables	136		68
Total Procedural Solutions	$	394	$	306
Total CareFusion	$	922	$	830

XML

Goodwill and Other Intangible Assets (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Jun. 30, 2014
Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	14 years		14 years
Finite-Lived Intangible Assets, Gross	$ 1,353		$ 1,353
Finite-Lived Intangible Assets, Accumulated Amortization	663		644
Finite-Lived Intangible Assets, Net	690		709
Intangible Assets, Gross (Excluding Goodwill)	1,660		1,660
Intangible Assets Accumulated Amortization Net	663		644
Intangible Assets, Net (Excluding Goodwill)	997		1,016
Amortization of Intangible Assets	22	19
Goodwill Acquired, Net of Purchase Price Adjustments	14
Finite-Lived Intangible Assets, Amortization Expense, Remainder of Fiscal Year	88
Foreign Currency Translation Adjustments	(10)
Finite-Lived Intangible Assets, Amortization Expense, Year Two	83
Finite-Lived Intangible Assets, Amortization Expense, Year Three	76
Finite-Lived Intangible Assets, Amortization Expense, Year Four	67
Finite-Lived Intangible Assets, Amortization Expense, Year Five	46
Trademarks [Member]
Intangible Assets [Line Items]
Indefinite Lived Intangible Assets Gross	307		307
Indefinite-Lived Intangible Amortization	0		0
Indefinite-Lived Intangible Assets (Excluding Goodwill)	307		307
Patents [Member]
Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life			10 years
Trademarks And Patents [Member]
Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	10 years
Finite-Lived Intangible Assets, Gross	99		100
Finite-Lived Intangible Assets, Accumulated Amortization	57		55
Finite-Lived Intangible Assets, Net	42		45
Developed Technology Rights [Member]
Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	10 years		10 years
Finite-Lived Intangible Assets, Gross	445		451
Finite-Lived Intangible Assets, Accumulated Amortization	252		245
Finite-Lived Intangible Assets, Net	193		206
Customer Relationships [Member]
Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	18 years		18 years
Finite-Lived Intangible Assets, Gross	742		741
Finite-Lived Intangible Assets, Accumulated Amortization	312		304
Finite-Lived Intangible Assets, Net	430		437
Other Intangible [Member]
Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	6 years		7 years
Finite-Lived Intangible Assets, Gross	67		61
Finite-Lived Intangible Assets, Accumulated Amortization	42		40
Finite-Lived Intangible Assets, Net	$ 25		$ 21

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Product Warranties (Narrative) (Details) (USD $) In Millions, unless otherwise specified	Sep. 30, 2014	Sep. 30, 2013
Product Warranties Disclosures [Abstract]
Liability related to accruals for product recalls	$ 2	$ 6

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Financial Instruments (Schedule of Fair Value of Assets and Liabilities Related to Derivative Instruments) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Gain (Loss) on Foreign Currency Fair Value Hedge Derivatives	$ 2	$ (2)

XML

Restructuring and Acquisition Integration Charges (Schedule of Segment Restructuring Charges) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Restructuring Cost and Reserve [Line Items]
Total Restructuring Charges	$ 10	$ 11
Medical Systems [Member]
Restructuring Cost and Reserve [Line Items]
Total Restructuring Charges	7	7
Procedural Solutions [Member]
Restructuring Cost and Reserve [Line Items]
Total Restructuring Charges	$ 3	$ 4

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Investments in Unconsolidated Entities

3 Months Ended

Sep. 30, 2014

Equity Method Investments and Joint Ventures [Abstract]

Investments in Unconsolidated Entities

INVESTMENTS IN UNCONSOLIDATED ENTITIES

Investments in unconsolidated entities reflect investments that we make from time to time in privately held companies. When an investment allows us to exert significant influence over the investee, we account for the investment under the equity method, and we record a share of the net earnings of the investee in our consolidated statements of income. When an investment does not allow us to exert significant influence, and it lacks a readily determinable fair value, we account for the investment under the cost method. The following table sets forth information relating to these investments:

(in millions)	September 30, 2014		June 30, 2014
Equity Method Investments
Cost	$	87	$	87
Share of Net Earnings of Equity Method Investee	5		3
Carrying Value of Equity Method Investments	$	92	$	90
Cost Method Investments
Carrying Value of Cost Method Investments	$	10	$	9
Total Investments in Unconsolidated Entities	$	102	$	99

As of September 30, 2014, our equity method investments consisted primarily of our investment in Caesarea Medical Electronics Ltd. (“CME”), a global infusion pump manufacturer. CME, headquartered in Israel, designs, manufactures and markets a range of infusion and syringe pumps as well as related accessories and disposable administration sets for both homecare and hospital settings. We completed this investment transaction in March 2014 and received a 40 percent non-controlling equity interest in CME for approximately $86 million, which we funded with existing cash on hand. CME continues to operate independently from us. Additionally, we have the right to increase our ownership percentage by purchasing an additional 40 percent equity interest of CME (“Call Option”), exercisable any time before March 2017. The seller also has the right to require CareFusion to acquire the remaining 60 percent of CME (“Put Option”), which is exercisable only upon certain conditions, one of which is if we fail to exercise our Call Option. The Call Option and Put Option were deemed to be freestanding financial instruments. The Call Option does not meet the definition of a derivative and the Put Option's fair value is not significant. The Company determined that CME did not meet the definition of a Variable Interest Entity (“VIE”).

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Financial Instruments (Schedule of Unsettled Derivative Instruments and Associated Amount) (Details) (Foreign Currency Forward Contracts [Member], USD $) In Millions, unless otherwise specified	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Foreign Currency Forward Contracts [Member]
Derivative [Line Items]
Notional Amount	$ 58	$ 60

XML

Earnings Per Share (Reconciliation Of Basic And Diluted Earnings Per Share) (Detail) In Millions, unless otherwise specified	3 Months Ended
	Sep. 30, 2014	Jun. 30, 2014	Sep. 30, 2013
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Denominator for Basic Earnings per Share (shares)	204.1		214.0
Effect of Dilutive Securities:
Number of Securities (in shares)	0.8	1.4
Denominator for Diluted Earnings per Share - Adjusted for Dilutive Securities (shares)	207.0		217.4
Stock Options [Member]
Effect of Dilutive Securities:
Number of Securities (in shares)	1.9		2.1
Restricted Stock Units and Performance Stock Units [Member]
Effect of Dilutive Securities:
Number of Securities (in shares)	1.0		1.3

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Inventories (Tables)

3 Months Ended

Sep. 30, 2014

Inventory Disclosure [Abstract]

Schedule of Inventory, Current [Table Text Block]

Inventories, accounted for at the lower of cost or market on a first-in, first-out basis, consisted of the following:

(in millions)	September 30, 2014		June 30, 2014
Raw Materials	$	147	$	154
Work-in-Process	30		26
Finished Goods	318		261
Inventories, Net	$	495	$	441

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Restructuring and Acquisition Integration Charges (Tables)

3 Months Ended

Sep. 30, 2014

Restructuring and Related Activities [Abstract]

Summary of Restructuring and Acquisition Integration Charges

The following is a summary of restructuring and acquisition integration charges for the quarters ended September 30, 2014 and 2013:

	Quarters Ended September 30,
(in millions)	2014		2013
Restructuring Charges	$	10	$	11
Acquisition Integration Charges	9		—
Total Restructuring and Acquisition Integration Charges	$	19	$	11

Schedule of Current Restructuring Programs

The following tables include information regarding our current restructuring programs:

	Quarter Ended September 30, 2014
(in millions)	Accrued at June 30, 20141		Accrued Costs		Cash Payments			Accrued at September 30, 20141
Total Restructuring Programs	$	10	$	10	$	(9	)	$	11

________________

¹ Included within “Other Accrued Liabilities” in the unaudited condensed consolidated balance sheets.

	Quarter Ended September 30, 2013
(in millions)	Accrued at June 30, 20131		Accrued Costs		Cash Payments			Accrued at September 30, 20131
Total Restructuring Programs	$	7	$	11	$	(6	)	$	12

________________

¹ Included within “Other Accrued Liabilities” in the unaudited condensed consolidated balance sheets.

Schedule of Segment Restructuring Charges

The following table segregates our restructuring charges into our reportable segments for the quarters ended September 30, 2014 and 2013:

	Quarters Ended September 30,
(in millions)	2014		2013
Medical Systems	$	7	$	7
Procedural Solutions	3		4
Total Restructuring Charges	$	10	$	11

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Borrowings (Schedule of Borrowings) (Details) (USD $)	3 Months Ended	12 Months Ended
	Sep. 30, 2014	Jun. 30, 2014	Aug. 01, 2014
Debt Instrument [Line Items]
Credit facility, amount outstanding		$ 23,000,000
Total Borrowings	1,991,000,000	2,444,000,000
Less: Current Portion	3,000,000	454,000,000
Long-Term Portion	1,988,000,000	1,990,000,000
5.125% Senior Notes, Due 2014 [Member]
Debt Instrument [Line Items]
Senior Notes, Maturity Year	2014	2014
Interest rate	5.125%	5.125%
Unamortized Discount on Senior Notes	0	100,000
Debt Instrument, Interest Rate, Effective Percentage	5.36%	5.36%
Senior Notes	0	450,000,000	450,000,000
6.375% Senior Notes, Due 2019 [Member]
Debt Instrument [Line Items]
Senior Notes, Maturity Year	2019	2019
Interest rate	6.375%	6.375%
Unamortized Discount on Senior Notes	9,000,000	9,400,000
Debt Instrument, Interest Rate, Effective Percentage	6.601%	6.601%
Senior Notes	691,000,000	691,000,000
3.300% Senior Notes, Due 2023 [Member]
Debt Instrument [Line Items]
Senior Notes, Maturity Year	2023	2023
Interest rate	3.30%	3.30%
Unamortized Discount on Senior Notes	1,900,000	2,000,000
Debt Instrument, Interest Rate, Effective Percentage	3.311%	3.311%
Senior Notes	298,000,000	298,000,000
One Point Four Five Zero Percentage Senior Notes Due Two Thousand Seventeen [Member]
Debt Instrument [Line Items]
Senior Notes, Maturity Year	2014	2014
Interest rate	1.45%	1.45%
Unamortized Discount on Senior Notes	0	0
Debt Instrument, Interest Rate, Effective Percentage	1.498%	1.498%
Senior Notes	298,000,000	298,000,000
Three Point Eight Seven Five Percentage Senior Notes Due Two Thousand Twenty Four [Member]
Debt Instrument [Line Items]
Senior Notes, Maturity Year	2024	2024
Interest rate	3.875%	3.875%
Unamortized Discount on Senior Notes	0	0
Debt Instrument, Interest Rate, Effective Percentage	3.895%	3.895%
Senior Notes	397,000,000	397,000,000
Four Point Eight Seven Five Percentage Senior Notes Due Two Thousand Forty Four [Member]
Debt Instrument [Line Items]
Senior Notes, Maturity Year	2044	2044
Interest rate	4.875%	4.875%
Unamortized Discount on Senior Notes	0	0
Debt Instrument, Interest Rate, Effective Percentage	4.919%	4.919%
Senior Notes	295,000,000	295,000,000
Euro Denominated Debt, Due In Varying Installments Through 2020 [Member]
Debt Instrument [Line Items]
Average interest rate	3.52%	3.52%
Senior Notes, Maturity Year	2020	2020
Credit facility, amount outstanding	8,000,000	10,000,000
Other Obligations; Due In Varying Installments Through 2017 and 2014 [Member]
Debt Instrument [Line Items]
Average interest rate	8.34%	8.07%
Senior Notes, Maturity Year	2017	2017
Other Obligations	4,000,000	5,000,000
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Credit facility, amount outstanding	$ 0	$ 0

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Earnings Per Share (Narrative) (Detail) (USD $) Share data in Millions, unless otherwise specified		17 Months Ended	3 Months Ended	14 Months Ended
	Feb. 29, 2012	Jun. 30, 2013 Share Repurchase Program, February 2012 [Member]	Sep. 30, 2014 Share Repurchase Program, August 2013 [Member]	Sep. 30, 2014 Share Repurchase Program, August 2013 [Member]	Aug. 31, 2013 Share Repurchase Program, August 2013 [Member]
Equity, Class of Treasury Stock [Line Items]
Shares Authorized To Repurchase Value					$ 750,000,000
Stock Repurchased During Period, Shares		15.3	2.3	16.9
Stock Repurchase Program, Authorized Amount	500,000,000		750,000,000	750,000,000
Stock Repurchased During Period, Value		500,000,000	103,000,000	680,000,000
Stock Repurchase Program, Authorized Amount	500,000,000		750,000,000	750,000,000
Stock Repurchased During Period, Value		$ 500,000,000	$ 103,000,000	$ 680,000,000

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Financing Receivables (Tables)

3 Months Ended

Sep. 30, 2014

Receivables [Abstract]

Schedule of Change in Allowance for Credit Losses on Financing Receivables

The change in the allowance for credit losses on financing receivables for the quarter ended September 30, 2014, consisted of the following:

(in millions)
Balance of allowance for credit losses at June 30, 2014	$	6
Charge-offs	—
Recoveries	—
Provisions	—
Balance of allowance for credit losses at September 30, 2014	$	6

Summary of Credit Losses and Recorded Investment in Sales-Type Leases

The following table summarizes the credit losses and recorded investment in sales-type leases as of September 30, 2014:

(in millions)
Allowance for credit losses:
Balance at September 30, 2014	$	6
Balance: individually evaluated for impairment	$	2
Balance: collectively evaluated for impairment	$	4
Net Investment in Sales-Type Leases:
Balance at September 30, 2014	$	1,233
Balance: individually evaluated for impairment	$	2
Balance: collectively evaluated for impairment	$	1,231

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Goodwill and Other Intangible Assets (Tables)

3 Months Ended

Sep. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The following table summarizes the changes in the carrying amount of goodwill:

(in millions)	Total
Balance at June 30, 2014	$	3,311
Goodwill Acquired, Net of Purchase Price Adjustments	14
Foreign Currency Translation Adjustments	(10		)
Balance at September 30, 2014	$	3,315

Schedule of Intangible Assets

Intangible assets with definite lives are amortized over their useful lives which range from 3 to 20 years. The detail of intangible assets by class is as follows:

(in millions)	Weighted Average Life (years)	Gross Intangibles		Accumulated Amortization		Net Intangibles
September 30, 2014
Unamortized Intangibles:
Trademarks	Indefinite	$	307	$	—	$	307
Total Unamortized Intangibles		307		—		307
Amortized Intangibles:
Trademarks and Patents	10	99		57		42
Developed Technology	10	445		252		193
Customer Relationships	18	742		312		430
Other	6	67		42		25
Total Amortized Intangibles	14	1,353		663		690
Total Intangibles		$	1,660	$	663	$	997
June 30, 2014
Unamortized Intangibles:
Trademarks	Indefinite	$	307	$	—	$	307
Total Unamortized Intangibles		307		—		307
Amortized Intangibles:
Trademarks and Patents	10	100		55		45
Developed Technology	10	451		245		206
Customer Relationships	18	741		304		437
Other	7	61		40		21
Total Amortized Intangibles	14	1,353		644		709
Total Intangibles		$	1,660	$	644	$	1,016

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

Amortization expense for each of the next five fiscal years is estimated to be:

(in millions)	2015		2016		2017		2018		2019
Amortization Expense	$	88	$	83	$	76	$	67	$	46

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Acquisitions

3 Months Ended

Sep. 30, 2014

Business Combinations [Abstract]

Acquisitions

ACQUISITIONS

Acquisition of Vital Signs. On November 18, 2013, we announced the signing of a definitive agreement to acquire the Vital Signs business of General Electric Company’s Healthcare division (“Vital Signs”) for $500 million. Vital Signs is a leading manufacturer of single-use consumables for respiratory care and anesthesiology, and also markets products for temperature management and patient monitoring consumables. On December 30, 2013, we acquired the outstanding equity of certain entities included within the Vital Signs business and other business assets and liabilities in the U.S., China and certain other geographies using approximately $473 million of cash on hand. In March 2014, we completed additional closings for various countries using approximately $17 million of cash on hand. During the quarter ended September 30, 2014, we completed the closing of the Vital Signs business in Germany, using approximately $8 million of cash on hand. The payment of purchase prices in connection with each closing is subject to customary closing conditions and regulatory review. The results of operations of all closings completed as of September 30, 2014, for the Vital Signs transaction are included in the Procedural Solutions segment.

The transaction has been accounted for as a business combination and requires, among other things, that assets acquired and liabilities assumed are recognized at their fair values as of the acquisition date.

Based on our estimate for the net working capital adjustment, and net of cash and cash equivalents acquired, we determined a net purchase price associated with the fiscal year 2014 and the fiscal year 2015 closings, as set forth below. The following table summarizes the assignment of the net purchase price to the fair values of the tangible and identifiable intangible assets acquired and liabilities assumed in these closings, based on their estimated fair values at the applicable acquisition date. Balances are reflected in the accompanying condensed consolidated balance sheets as of September 30, 2014.

(in millions)	Fiscal Year 2014 Closings			Fiscal Year 2015 Closings
Cash Paid	$	492		$	8
Cash and Cash Equivalents Acquired, Net of Net Working Capital Adjustments	(2		)	—
Net Purchase Price	$	490		$	8

(in millions)	Fiscal Year 2014 Closings			Fiscal Year 2015 Closings
Trade Receivables	$	19		$	—
Inventories	40			7
Other Current Assets	15			—
Property and Equipment	37			—
Intangible Assets	298			—
Goodwill	228			1
Current Liabilities and Borrowings	(41		)	—
Deferred Income Taxes	(101		)	—
Other Long-Term Liabilities	(5		)	—
Net Assets Acquired	$	490		$	8

Intangible assets represent customer relationships ($257 million), developed technology ($31 million), and trademarks and patents ($10 million) which have estimated weighted average useful lives of 20 years, 7 years and 6 years, respectively. The intangible assets have a total estimated weighted average useful life of 18 years. The estimated fair value of the identifiable intangible assets was determined using the “income based approach,” which is a valuation technique that provides an estimate of the fair value of an asset based on market participant expectations of the cash flows an asset would generate over its remaining useful life. Some of the more significant assumptions inherent in the development of those asset valuations include the estimated net cash flows for each year for each asset or product (including net revenues, cost of sales, research and development expenses, selling and marketing costs and working capital/asset contributory asset charges), the appropriate discount rate to select in order to measure the risk inherent in each future cash flow stream, the assessment of each asset’s life cycle, competitive trends impacting the asset and each cash flow stream as well as other factors. The discount rates used to arrive at the present value of intangible assets as of the acquisition date ranged from 10.5% to 12.5% to reflect the internal rate of return and incremental commercial uncertainty in the cash flow projections. No assurances can be given that the underlying assumptions used to prepare the discounted cash flow analysis will not change. Actual results may vary significantly from estimated results.

Various factors contributed to the establishment of goodwill, including an expanded global footprint and scale, Vital Signs’ history of operating margins and profitability, and the opportunity for us to generate revenue by supplementing our existing respiratory and anesthesia consumables product portfolios. The goodwill recognized from the Vital Signs acquisition may be deductible for tax purposes to the extent related to the acquisition of identifiable intangible assets. All goodwill from the Vital Signs acquisition was assigned to the Procedural Solutions segment.

Deferred income taxes primarily result from fair value adjustments to identifiable intangible assets. In a stock acquisition associated with the purchase of a business, the fair value adjustments create excess book basis over the tax basis of those assets for which we record deferred income tax liabilities using the statutory tax rate for the jurisdiction in which the deferred income taxes exist.

For the quarter ended September 30, 2014, revenue associated with Vital Signs was $68 million. Pro forma results of operations have not been presented because the effect of the acquisition was not material to our unaudited condensed consolidated financial statements.

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Reclassifications Out of Accumulated Other Comprehensive Income (Tables)

3 Months Ended

Sep. 30, 2014

Equity [Abstract]

Summary of Activity of Comprehensive Income (Loss)

The summary of activity of comprehensive income (loss) for the quarter ended September 30, 2014 and 2013, is as follows:

	Quarter Ended September 30, 2014
	Before-Tax Amount			Tax (Expense) or Benefit		Net-of-Tax Amount
(in millions)
Foreign Currency Translation Adjustments:
Translation Adjustments Arising During the Period	$	(54	)	$	1	$	(53	)
Reclassification Adjustments Recognized in Net Income	—			—		—
Net Foreign Currency Translation Adjustments	(54		)	1		(53		)
Minimum Pension Liability:
Net Loss on Minimum Pension Liability Arising During the Period	(1		)	—		(1		)
Reclassification Adjustments Recognized in Net Income	—			—		—
Net Loss on Minimum Pension Liability	(1		)	—		(1		)
Total Other Comprehensive Income (Loss)	$	(55	)	$	1	$	(54	)

	Quarter Ended September 30, 2013
	Before-Tax Amount		Tax (Expense) or Benefit			Net-of-Tax Amount
(in millions)
Foreign Currency Translation Adjustments:
Translation Adjustments Arising During the Period	$	19	$	(2	)	$	17
Reclassification Adjustments Recognized in Net Income	—		—			—
Net Foreign Currency Translation Adjustments	19		(2		)	17
Interest Rate Swaps:
Unrealized Gain (Loss) Arising During the Period	7		(3		)	4
Reclassification Adjustment Recognized in Net Income	—		—			—
Net Gain (Loss) on Interest Rate Swaps	7		(3		)	4
Total Other Comprehensive Income (Loss)	$	26	$	(5	)	$	21

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Acquisitions (Intangible Assets) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended					0 Months Ended	3 Months Ended		1 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014 Customer Relationships [Member]	Sep. 30, 2014 Developed Technology Rights [Member]	Sep. 30, 2014 Intellectual Property [Member]	Nov. 18, 2013 Vital Signs [Member]	Sep. 30, 2014 Vital Signs [Member]	Sep. 30, 2014 Minimum [Member]	Dec. 31, 2013 Maximum [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible Assets			$ 257	$ 31	$ 10
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	18 years		20 years	7 years	6 years
Fair Value Inputs, Discount Rate								10.50%	12.50%
Cash Paid						500
Revenue	$ 922	$ 830					$ 68

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Goodwill and Other Intangible Assets Goodwill by Segment (Details) (USD $) In Millions, unless otherwise specified	Sep. 30, 2014	Jun. 30, 2014	Sep. 30, 2014 Medical Systems [Member]	Jun. 30, 2013 Medical Systems [Member]	Sep. 30, 2014 Procedural Solutions [Member]	Jun. 30, 2013 Procedural Solutions [Member]
Goodwill [Line Items]
Goodwill	$ 3,315	$ 3,311	$ 2,102	$ 2,107	$ 1,213	$ 1,204

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Subsequent Events (Details) (USD $)		0 Months Ended	3 Months Ended
	Sep. 30, 2014	Oct. 05, 2014 Subsequent Event [Member]	Dec. 31, 2014 Subsequent Event [Member]	Oct. 05, 2014 Subsequent Event [Member]	Sep. 30, 2014 Revolving Credit Facility [Member]	Dec. 10, 2012 Revolving Credit Facility [Member]
Subsequent Event [Line Items]
Business Acquisition, Date of Acquisition Agreement		Oct. 05, 2014
Business Acquisition, Share Price				$ 49.00
Business Acquisition, Equity Transferred				0.0777
Business Acquisition, Equity Transferred, Par Value				$ 1.00
Line of Credit Facility, Current Borrowing Capacity					$ 750,000,000	$ 750,000,000
Settlement Amount Payable Under Settlement Agreement			4,000,000
Settlement Amount Payable Under Settlement Agreement Net			3,000,000
Income Tax Settlement Interest Paid			1,000,000
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued	$ 50,000,000

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Condensed Consolidated Statements of Income (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Income Statement [Abstract]
Revenue	$ 922	$ 830
Cost of Products Sold	465	407
Gross Profit	457	423
Selling, General and Administrative Expenses	265	248
Research and Development Expenses	49	48
Restructuring and Acquisition Integration Charges	19	11
Share of Net (Earnings) Loss of Equity Method Investee	(2)	0
Operating Income	126	116
Interest Expense and Other, Net	28	20
Income Before Income Tax	98	96
Provision for Income Tax	22	18
Net Income	$ 76	$ 78
Basic Earnings (Loss) per Common Share:
Basic Earnings per Common Share (in USD per share)	$ 0.37	$ 0.36
Diluted Earnings (Loss) per Common Share:
Diluted Earnings per Common Share (in USD per share)	$ 0.37	$ 0.36
Weighted-Average Number of Common Shares Outstanding:
Basic (shares)	204.1	214.0
Diluted (shares)	207.0	217.4

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Restructuring and Acquisition Integration Charges (Summary of Restructuring and Acquisition Integration Charges) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Restructuring and Related Activities [Abstract]
Restructuring Charges	$ 10	$ 11
Acquisition Integration Charges	9	0
Total Restructuring and Acquisition Integration Charges	$ 19	$ 11

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Condensed Consolidated Statements of Cash Flows (USD $) In Millions, unless otherwise specified	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Statement of Cash Flows [Abstract]
Net Income	$ 76	$ 78
Cash and Cash Equivalents at July 1	2,303	1,798
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation and Amortization	49	46
Other Non-Cash Items	24	36
Change in Operating Assets and Liabilities, Excluding Impact of Acquired Assets and Assumed Liabilities:
Trade Receivables	115	25
Inventories	(51)	(23)
Net Investment in Sales-Type Leases	27	39
Accounts Payable	(28)	(23)
Other Accrued Liabilities and Operating Items, Net	(144)	(104)
Net Cash Provided by Operating Activities	68	74
Cash Flows from Investing Activities:
Payments to Acquire Businesses, Net of Cash Acquired	(32)	0
Additions to Property and Equipment	(21)	(18)
Other Investing Activities	(4)	0
Net Cash Used in Investing Activities	(57)	(18)
Cash Flows from Financing Activities:
Repayment of Long-Term Obligations	(452)	(1)
Share Repurchase Programs	(111)	(114)
Proceeds from Stock Option Exercises	17	34
Other Financing Activities	(9)	(10)
Net Cash Used in Financing Activities	(555)	(91)
Effect of Exchange Rate Changes on Cash	(23)	10
Net Decrease in Cash and Cash Equivalents	(567)	(25)
Cash and Cash Equivalents at September 30, Attributable to Net Income	1,736	1,773
Non-cash Investing and Financing Activities:
Asset Acquired by Entering into Capital Lease	$ 0	$ 4

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Commitments and Contingencies (Details) (USD $)	0 Months Ended	1 Months Ended	3 Months Ended	1 Months Ended
	Aug. 31, 2012 subpoena	Apr. 30, 2013	Mar. 31, 2014	Jul. 31, 2010 Food and Drug Administration [Member]
Loss Contingencies [Line Items]
Number of Subpoenas	3
Reserve for Expected Government Settlement		$ 41,000,000
Audit Inspection Period				4 years
Potential damages payment per day per violation			15,000
Potential damages payment per year			$ 15,000,000

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Fair Value Measurements (Tables)

3 Months Ended

Sep. 30, 2014

Fair Value Disclosures [Abstract]

Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table presents information about our financial assets and liabilities that are measured at fair value on a recurring basis, and indicates the fair value hierarchy of the valuation techniques we utilize to determine such fair value as of September 30, 2014 and June 30, 2014:

	As of September 30, 2014
(in millions)	Total		Level 1		Level 2		Level 3
Financial Assets:
Cash Equivalents	$	1,416	$	1,416	$	—	$	—
Other Investments	27		23		4		—
Total Financial Assets	$	1,443	$	1,439	$	4	$	—
Financial Liabilities:
Contingent Consideration	$	—	$	—	$	—	$	—
Total Financial Liabilities	$	—	$	—	$	—	$	—

	As of June 30, 2014
(in millions)	Total		Level 1		Level 2		Level 3
Financial Assets:
Cash Equivalents	$	1,988	$	1,988	$	—	$	—
Other Investments	25		22		3		—
Total Financial Assets	$	2,013	$	2,010	$	3	$	—
Financial Liabilities:
Contingent Consideration	$	8	$	—	$	—	$	8
Total Financial Liabilities	$	8	$	—	$	—	$	8

Schedule of Changes in Contingent Consideration Liability

The following table summarizes the changes in liabilities classified as contingent consideration:

(in millions)	Total
Future Gross Expected Payments at June 30, 2014	$	16
Carrying Value at June 30, 2014	$	8
Acquisition Date Fair Value of Contingent Consideration	—
Change in Fair Value Included in Expense	(8		)
Payments	—
Carrying Value at September 30, 2014	$	—
Future Gross Expected Payments at September 30, 2014	$	—

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Fair Value Measurements (Schedule of Changes in Contingent Consideration Liability) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Sep. 30, 2014
Business Combination, Contingent Consideration Liability Reconciliation [Roll Forward]
Future Gross Expected Payments	$ 16
Carrying Value, beginning of period	8
Acquisition Date Fair Value of Contingent Consideration	0
Carrying Value, end of period	0
Future Gross Expected Payments	0
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Gain (Loss) Included in Earnings	(8)
Proceeds from (Payments for) Other Financing Activities	$ 0

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Segment Information

3 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

Segment Information

SEGMENT INFORMATION

Our operations are principally managed on a products and services basis, and the Medical Systems and Procedural Solutions segments focus primarily on our medical equipment business lines and disposable products business lines, respectively.

We report segment information based on the management approach. The management approach designates the internal reporting used by the Chief Operating Decision Maker (“CODM”), for making decisions and assessing performance as the source of our reportable segments. The CODM is our Chief Executive Officer. The CODM allocates resources to and assesses the performance of each operating segment using information about its revenues and operating income (loss) before interest and taxes. We have determined our reportable segments as follows based on the information used by the CODM.

Medical Systems. The Medical Systems segment is organized around our medical equipment business lines. Within the Medical Systems segment, we operate our Dispensing Technologies, Infusion Systems and Respiratory Technologies business lines. The Dispensing Technologies business line includes equipment and related services for medication and supply dispensing. The Infusion Systems business line includes infusion pumps and dedicated disposable infusion sets and accessories. The Respiratory Technologies business line includes respiratory ventilation and diagnostics equipment and dedicated consumables used during respiratory diagnostics and therapy. We also include our data mining surveillance service business within the Medical Systems segment, which we report as “Other.”

Procedural Solutions. The Procedural Solutions segment is organized around our disposable products and reusable surgical instruments business lines. Within the Procedural Solutions segment, we operate our Infection Prevention, Medical Specialties and Specialty Disposables business lines. The Infection Prevention business line includes single-use skin antiseptic and other patient-preparation products and specialty IV infusion valves, administration sets and accessories. The Medical Specialties business line includes interventional specialty products used for biopsy, drainage and other procedures, as well as reusable surgical instruments. The Specialty Disposables business line includes non-dedicated disposable ventilator circuits and oxygen masks used for providing respiratory therapy, as well as single-use consumables for respiratory care and anesthesiology.

We evaluate the performance of our operating segments based upon, among other things, segment profit. Segment profit is segment revenue less segment cost of products sold, SG&A expenses, research and development expenses and restructuring and acquisition integration charges. With the exception of testing for goodwill impairment, we do not identify or allocate assets by operating segment; accordingly, certain segment related disclosures with respect to assets have been omitted. See note 8.

The following table presents information about our reportable segments for the quarters ended September 30, 2014 and 2013:

(in millions)	Medical Systems		Procedural Solutions		Total
September 30, 2014:
External Revenues	$	528	$	394	$	922
Depreciation and Amortization	$	28	$	21	$	49
Operating Income	$	84	$	42	$	126
September 30, 2013:
External Revenues	$	524	$	306	$	830
Depreciation and Amortization	$	32	$	14	$	46
Operating Income	$	74	$	42	$	116

The following table presents revenue and net property and equipment by geographic area:

	Revenue				Property and Equipment, Net
	Quarters Ended September 30,				As of September 30,		As of June 30,
(in millions)	2014		2013		2014		2014
United States	$	695	$	649	$	322	$	329
International	227		181		115		119
Total	$	922	$	830	$	437	$	448

The following table presents the revenue information for select business lines within each of the segments for the quarters ended September 30, 2014 and 2013:

	Quarters Ended September 30,
(in millions)	2014		2013
Medical Systems
Dispensing Technologies	$	225	$	211
Infusion Systems	213		219
Respiratory Technologies	85		88
Other	5		6
Total Medical Systems	$	528	$	524
Procedural Solutions
Infection Prevention	$	167	149
Medical Specialties	91		89
Specialty Disposables	136		68
Total Procedural Solutions	$	394	$	306
Total CareFusion	$	922	$	830

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Product Warranties (Tables)

3 Months Ended

Sep. 30, 2014

Product Warranties Disclosures [Abstract]

Summary of Changes in Carrying Amount of Liability for Product Warranties

The tables below summarize the changes in the carrying amount of the liability for product warranties for the quarters ended September 30, 2014 and 2013:

(in millions)
Balance at June 30, 2014	$	16
Warranty Accrual	5
Warranty Claims Paid	(4		)
Adjustments to Preexisting Accruals	(1		)
Balance at September 30, 2014	$	16

(in millions)
Balance at June 30, 2013	$	18
Warranty Accrual	3
Warranty Claims Paid	(2		)
Adjustments to Preexisting Accruals	(2		)
Balance at September 30, 2013	$	17

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Basis of Presentation (Policies)

3 Months Ended

Sep. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis Of Presentation

BASIS OF PRESENTATION

Basis of Presentation. Unless the context otherwise requires, references in these notes to the unaudited condensed consolidated financial statements to “CareFusion Corporation”, “CareFusion”, “we”, “us”, “our”, “the company” and “our company” refer to CareFusion Corporation and its consolidated subsidiaries. References in these notes to the unaudited condensed consolidated financial statements to “Cardinal Health” refer to Cardinal Health, Inc., an Ohio corporation, and its consolidated subsidiaries.

We were incorporated in Delaware on January 14, 2009, for the purpose of holding the clinical and medical products businesses of Cardinal Health in anticipation of spinning off from Cardinal Health. We completed the spinoff from Cardinal Health on August 31, 2009.

The unaudited condensed consolidated financial statements included in this Form 10-Q have been prepared in accordance with the U.S. Securities and Exchange Commission (“SEC”) instructions for Quarterly Reports on Form 10-Q. Accordingly, the condensed consolidated financial statements are unaudited and do not contain all the information required by U.S. Generally Accepted Accounting Principles (“GAAP”) to be included in a full set of financial statements. The unaudited condensed consolidated balance sheet at June 30, 2014, has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by GAAP for a complete set of financial statements. The audited consolidated financial statements for our fiscal year ended June 30, 2014, filed with the SEC with our Annual Report on Form 10-K on August 11, 2014, include a summary of our significant accounting policies and should be read in conjunction with this Form 10-Q. In the opinion of management, all material adjustments necessary to present fairly the results of operations for such periods have been included in this Form 10-Q. All such adjustments are of a normal recurring nature. The results of operations for interim periods are not necessarily indicative of the results of operations for the entire year.

We have evaluated subsequent events for recognition or disclosure through the date these financial statements were issued.

Our two global operating and reportable segments are Medical Systems and Procedural Solutions, which focus primarily on our medical equipment business lines and disposable products business lines, respectively:

Medical Systems. The Medical Systems segment is organized around our medical equipment business lines. Within the Medical Systems segment, we operate our Dispensing Technologies, Infusion Systems and Respiratory Technologies business lines. The Dispensing Technologies business line includes equipment and related services for medication and supply dispensing. The Infusion Systems business line includes infusion pumps and dedicated disposable infusion sets and accessories. The Respiratory Technologies business line includes respiratory ventilation and diagnostics equipment and dedicated consumables used during respiratory diagnostics and therapy. We also include our data mining surveillance service business within the Medical Systems segment, which we report as “Other.”

Procedural Solutions. The Procedural Solutions segment is organized around our disposable products and reusable surgical instruments business lines. Within the Procedural Solutions segment, we operate our Infection Prevention, Medical Specialties and Specialty Disposables business lines. The Infection Prevention business line includes single-use skin antiseptic and other patient-preparation products and specialty intravenous (“IV”) infusion valves, administration sets and accessories. The Medical Specialties business line includes interventional specialty products used for biopsy, drainage and other procedures, as well as reusable surgical instruments. The Specialty Disposables business line includes non-dedicated disposable ventilator circuits and oxygen masks used for providing respiratory therapy, as well as single-use consumables for respiratory care and anesthesiology.

New Accounting Pronouncements (Adopted during fiscal year 2015)

ASU 2013-05. In March 2013, the FASB issued ASU 2013-05 – Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity (“ASU 2013-05”). ASU 2013-05 requires that the entire amount of a cumulative translation adjustment (“CTA”) related to an entity's investment in a foreign entity should be released when there has been (i) a sale of a subsidiary or a group of net assets within a foreign entity and the sale represents the substantially complete liquidation of the investment in the foreign entity, or (ii) loss of controlling financial interest in an investment on, or (iii) a step acquisition for a foreign entity. The adoption of ASU 2013-05 had no impact on our financial condition, results of operations or cash flows.

ASU 2013-11. In July 2013, the FASB issued ASU 2013-11 – Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU 2013-11”). ASU 2013-11 requires an entity to present an unrecognized tax benefit as a reduction to deferred tax assets for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward rather than as liabilities except when (i) the net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the governing tax law to settle any additional income taxes that would result from disallowance of the tax position or (ii) the entity does not intend to or the applicable jurisdiction does not require the entity to use the deferred tax asset for such purpose. The adoption of ASU 2013-11 had no impact on our financial condition, results of operations or cash flows.

New Accounting Pronouncements (Adopted During Fiscal Year 2014)

New Accounting Pronouncements (Adopted during fiscal year 2015)

ASU 2013-05. In March 2013, the FASB issued ASU 2013-05 – Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity (“ASU 2013-05”). ASU 2013-05 requires that the entire amount of a cumulative translation adjustment (“CTA”) related to an entity's investment in a foreign entity should be released when there has been (i) a sale of a subsidiary or a group of net assets within a foreign entity and the sale represents the substantially complete liquidation of the investment in the foreign entity, or (ii) loss of controlling financial interest in an investment on, or (iii) a step acquisition for a foreign entity. The adoption of ASU 2013-05 had no impact on our financial condition, results of operations or cash flows.

ASU 2013-11. In July 2013, the FASB issued ASU 2013-11 – Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU 2013-11”). ASU 2013-11 requires an entity to present an unrecognized tax benefit as a reduction to deferred tax assets for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward rather than as liabilities except when (i) the net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the governing tax law to settle any additional income taxes that would result from disallowance of the tax position or (ii) the entity does not intend to or the applicable jurisdiction does not require the entity to use the deferred tax asset for such purpose. The adoption of ASU 2013-11 had no impact on our financial condition, results of operations or cash flows.

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Segment Information (Schedule of Information About Reporting Segments) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Segment Reporting Information [Line Items]
External Revenues	$ 922	$ 830
Operating Income	126	116
Medical Systems [Member]
Segment Reporting Information [Line Items]
External Revenues	528	524
Depreciation and Amortization	28	32
Operating Income	84	74
Procedural Solutions [Member]
Segment Reporting Information [Line Items]
External Revenues	394	306
Depreciation and Amortization	21	14
Operating Income	42	42
Operating Segments [Member]
Segment Reporting Information [Line Items]
External Revenues	922	830
Depreciation and Amortization	49	46
Operating Income	$ 126	$ 116

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Basis of Presentation

3 Months Ended

Sep. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

BASIS OF PRESENTATION

Basis of Presentation. Unless the context otherwise requires, references in these notes to the unaudited condensed consolidated financial statements to “CareFusion Corporation”, “CareFusion”, “we”, “us”, “our”, “the company” and “our company” refer to CareFusion Corporation and its consolidated subsidiaries. References in these notes to the unaudited condensed consolidated financial statements to “Cardinal Health” refer to Cardinal Health, Inc., an Ohio corporation, and its consolidated subsidiaries.

We were incorporated in Delaware on January 14, 2009, for the purpose of holding the clinical and medical products businesses of Cardinal Health in anticipation of spinning off from Cardinal Health. We completed the spinoff from Cardinal Health on August 31, 2009.

The unaudited condensed consolidated financial statements included in this Form 10-Q have been prepared in accordance with the U.S. Securities and Exchange Commission (“SEC”) instructions for Quarterly Reports on Form 10-Q. Accordingly, the condensed consolidated financial statements are unaudited and do not contain all the information required by U.S. Generally Accepted Accounting Principles (“GAAP”) to be included in a full set of financial statements. The unaudited condensed consolidated balance sheet at June 30, 2014, has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by GAAP for a complete set of financial statements. The audited consolidated financial statements for our fiscal year ended June 30, 2014, filed with the SEC with our Annual Report on Form 10-K on August 11, 2014, include a summary of our significant accounting policies and should be read in conjunction with this Form 10-Q. In the opinion of management, all material adjustments necessary to present fairly the results of operations for such periods have been included in this Form 10-Q. All such adjustments are of a normal recurring nature. The results of operations for interim periods are not necessarily indicative of the results of operations for the entire year.

We have evaluated subsequent events for recognition or disclosure through the date these financial statements were issued.

Our two global operating and reportable segments are Medical Systems and Procedural Solutions, which focus primarily on our medical equipment business lines and disposable products business lines, respectively:

Medical Systems. The Medical Systems segment is organized around our medical equipment business lines. Within the Medical Systems segment, we operate our Dispensing Technologies, Infusion Systems and Respiratory Technologies business lines. The Dispensing Technologies business line includes equipment and related services for medication and supply dispensing. The Infusion Systems business line includes infusion pumps and dedicated disposable infusion sets and accessories. The Respiratory Technologies business line includes respiratory ventilation and diagnostics equipment and dedicated consumables used during respiratory diagnostics and therapy. We also include our data mining surveillance service business within the Medical Systems segment, which we report as “Other.”

Procedural Solutions. The Procedural Solutions segment is organized around our disposable products and reusable surgical instruments business lines. Within the Procedural Solutions segment, we operate our Infection Prevention, Medical Specialties and Specialty Disposables business lines. The Infection Prevention business line includes single-use skin antiseptic and other patient-preparation products and specialty intravenous (“IV”) infusion valves, administration sets and accessories. The Medical Specialties business line includes interventional specialty products used for biopsy, drainage and other procedures, as well as reusable surgical instruments. The Specialty Disposables business line includes non-dedicated disposable ventilator circuits and oxygen masks used for providing respiratory therapy, as well as single-use consumables for respiratory care and anesthesiology.

New Accounting Pronouncements (Adopted during fiscal year 2015)

ASU 2013-05. In March 2013, the FASB issued ASU 2013-05 – Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity (“ASU 2013-05”). ASU 2013-05 requires that the entire amount of a cumulative translation adjustment (“CTA”) related to an entity's investment in a foreign entity should be released when there has been (i) a sale of a subsidiary or a group of net assets within a foreign entity and the sale represents the substantially complete liquidation of the investment in the foreign entity, or (ii) loss of controlling financial interest in an investment on, or (iii) a step acquisition for a foreign entity. The adoption of ASU 2013-05 had no impact on our financial condition, results of operations or cash flows.

ASU 2013-11. In July 2013, the FASB issued ASU 2013-11 – Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU 2013-11”). ASU 2013-11 requires an entity to present an unrecognized tax benefit as a reduction to deferred tax assets for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward rather than as liabilities except when (i) the net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the governing tax law to settle any additional income taxes that would result from disallowance of the tax position or (ii) the entity does not intend to or the applicable jurisdiction does not require the entity to use the deferred tax asset for such purpose. The adoption of ASU 2013-11 had no impact on our financial condition, results of operations or cash flows.

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Condensed Consolidated Statements of Comprehensive Income (USD $) In Millions, unless otherwise specified	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Statement of Comprehensive Income [Abstract]
Net Income	$ 76	$ 78
Other Comprehensive Income (Loss), Net of Tax:
Foreign Currency Translation Adjustments	(53)	17
Unrealized Loss on Minimum Pension Liability	(1)	0
Unrealized Gain on Derivatives	0	4
Comprehensive Income, Net of Tax	$ 22	$ 99

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Income Taxes

3 Months Ended

Sep. 30, 2014

Income Tax Disclosure [Abstract]

Income Tax

INCOME TAXES

The effective tax rate was 22.8% and 18.5% for the quarters ended September 30, 2014 and 2013, respectively.

The difference between the effective tax rate for the quarter ended September 30, 2014, and the U.S. federal statutory rate of 35% is attributable to the favorable impact of foreign earnings taxed at less than the U.S. statutory rate partially offset by unfavorable adjustments related to the United States taxation of certain foreign earnings as Subpart F income.

During the quarter ended September 30, 2008, Cardinal Health received an IRS Revenue Agent’s Report for the fiscal years 2003 through 2005 that included Notices of Proposed Adjustment for additional taxes related to transfer pricing arrangements between foreign and domestic subsidiaries. During the quarter ended September 30, 2013, we and Cardinal Health entered into a closing agreement with the IRS to settle the remaining tax uncertainties for fiscal years 2003 through 2005. As part of the closing agreement, we agreed to pay $12 million ($11 million, net of tax) including $5 million of interest, which is reflected in our financial results for the quarter ended September 30, 2013.

During the quarter ended December 31, 2010, we received an IRS Revenue Agent’s Report for fiscal years 2006 and 2007 that included Notices of Proposed Adjustment for additional taxes related to transfer pricing arrangements between foreign and domestic subsidiaries. Additionally, during the quarter ended September 30, 2013, we received an IRS Revenue Agent’s Report for fiscal years 2008 and 2009 that included Notices of Proposed Adjustment for additional taxes related to certain foreign earnings. We and Cardinal Health disagree with the IRS regarding its application of the United States Treasury regulations to the arrangements under review and the valuations underlying such adjustments and intend to vigorously contest them. The tax matters agreement that we entered into with Cardinal Health in connection with the spinoff generally provides that the control of audit proceedings and payment of any additional liability related to our business is our responsibility. We are currently before the IRS Appeals office for fiscal years 2006 and 2007, and continue to engage in substantive discussions related to these fiscal years. We expect to appeal the Notices of Proposed Adjustment for fiscal years 2008 and 2009.

Subsequent to the quarter ended September 30, 2014, we entered into a settlement with the IRS in connection with an IRS Revenue Agent’s Report for the short period September 1, 2009 through June 30, 2010 that includes Notices of Proposed Adjustment for additional taxes related to various matters. As a result of the settlement, we agreed to pay $4 million ($3 million, net of tax) including $1 million of interest that will be reflected in our financial results for the quarter ended December 31, 2014. In addition, we received an IRS Revenue Agent’s Report for fiscal year 2010 that includes a Notice of Proposed Adjustment for additional taxes related to certain foreign earnings. We disagree with the IRS regarding its application of the United States Treasury regulations to the arrangements under review and we expect to appeal this Notice of Proposed Adjustment for fiscal year 2010.

We are currently subject to IRS audits for fiscal years 2011 through 2013.

It is reasonably possible that the amount of unrecognized tax benefits will significantly change due to one or more of the following events in the next twelve months: expiring statutes, audit activity, tax payments, other activity, or final decisions in matters that are the subject of controversy in various taxing jurisdictions in which we operate. The majority of this possible change relates to issues involving transfer pricing among our subsidiaries. Depending upon open tax examinations and/or the expiration of applicable statutes of limitation, we believe that the total amount of unrecognized tax benefits may decrease in an amount up to $160 million a portion of which, if recognized upon audit settlement, statute expiration, or other activity, would affect the 2015 effective tax rate. We believe up to $50 million may benefit the 2015 effective tax rate for the quarter ending December 31, 2014 as a result of various audit settlements, statute expirations and other activities.

We believe that we have provided adequate tax reserves for these matters. However, if upon the conclusion of these audits, the ultimate determination of taxes owed is for an amount that is materially different than our current reserves, our overall tax expense and effective tax rate may be materially impacted in the period of adjustment.

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Document and Entity Information	3 Months Ended
	Sep. 30, 2014	Oct. 24, 2014
Document Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2014
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1
Trading Symbol	CFN
Entity Registrant Name	CAREFUSION Corp
Entity Central Index Key	0001457543
Current Fiscal Year End Date	--06-30
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		203,918,151

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Commitments and Contingencies

3 Months Ended

Sep. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments And Contingencies

COMMITMENTS AND CONTINGENCIES

In addition to commitments and obligations in the ordinary course of business, we are subject to various claims, other pending and potential legal actions for damages, investigations relating to governmental laws and regulations and other matters arising out of the normal conduct of our business. We assess contingencies to determine the degree of probability and range of possible loss for potential accrual or disclosure in our consolidated financial statements. An estimated loss contingency is accrued in our consolidated financial statements if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Because litigation is inherently unpredictable and unfavorable resolutions could occur, assessing contingencies is highly subjective and requires judgments about future events. When evaluating contingencies, we may be unable to provide a meaningful estimate due to a number of factors, including the procedural status of the matter in question, the presence of complex or novel legal theories, and/or the ongoing discovery and development of information important to the matters. In addition, damage amounts claimed in litigation against us may be unsupported, exaggerated or unrelated to reasonably possible outcomes, and as such are not meaningful indicators of our potential liability. We regularly review contingencies to determine the adequacy of our accruals and related disclosures. The amount of ultimate loss may differ from these estimates. It is possible that cash flows, financial position, or results of operations could be materially affected in any particular period by the unfavorable resolution of one or more of these contingencies. Whether any losses finally determined in any claim, action, investigation or proceeding could reasonably have a material effect on our business and financial condition will depend on a number of variables, including: the timing and amount of such losses; the structure and type and significance of any remedies; and the unique facts and circumstances of the particular matter that may give rise to additional factors.

Administrative Subpoenas. In April 2011, we received a federal administrative subpoena from the U.S. Department of Justice (“Department of Justice”) through the U.S. Attorney for the District of Kansas. In addition, in September 2011, we received a federal administrative subpoena from the Office of Inspector General (“OIG”) of the Department of Health and Human Services. In August 2012, we received another federal subpoena from the Department of Justice containing additional information requests. All three subpoenas requested documents and other materials that related primarily to our sales and marketing practices for our ChloraPrep skin preparation product and information regarding our relationships with healthcare professionals. In April 2013, we announced that we had reached an agreement in principle to pay the government approximately $41 million to resolve the government’s allegations. In connection with these matters, we also entered into a non-prosecution agreement and agreed to continue to cooperate with the government. During the year ended June 30, 2013, we recorded a charge to establish a reserve for the amount of the expected payment. In January 2014, we entered into a final settlement agreement with the government, and we paid the settlement.

FDA Consent Decree. We are operating under an amended consent decree with the FDA related to our infusion pump business in the United States. We entered into a consent decree with the FDA in February 2007 related to our Alaris SE pumps, and in February 2009, we and the FDA amended the consent decree to include all infusion pumps manufactured by or for CareFusion 303, Inc., our subsidiary that manufactures and sells infusion pumps in the United States. The amended consent decree does not apply to intravenous administration sets and accessories.

While we remain subject to the amended consent decree, which includes the requirements of the consent decree, we have made substantial progress in our compliance efforts. In accordance with the consent decree, we reconditioned Alaris SE pumps that had been seized by the FDA, remediated Alaris SE pumps in use by customers, and had an independent expert inspect the Alaris SE pump facilities and provide a certification to the FDA as to compliance. As a result of these efforts, in January 2010, we announced that the FDA had given us permission to resume the manufacturing and marketing of our Alaris SE pumps. In accordance with the amended consent decree, and in addition to the requirements of the original consent decree, we also implemented a corrective action plan to bring the Alaris System and all other infusion pumps in use in the United States market into compliance, had our infusion pump facilities inspected by an independent expert, and had our recall procedures and all ongoing recalls involving our infusion pumps inspected by an independent recall expert. In July 2010, the FDA notified us that we could proceed to the audit inspection phase of the amended consent decree, which included the requirement to retain an independent expert to conduct periodic audits of our infusion pump facilities over a four-year period. While we are no longer subject to these periodic audits, the FDA maintains the ability to conduct inspections of our infusion pump facilities. In addition, the amended consent decree authorizes the FDA, in the event of any violations in the future, to order us to cease manufacturing and distributing, recall products and take other actions. We may be required to pay

damages of $15,000 per day per violation if we fail to comply with any provision of the amended consent decree, up to $15 million per year.

We cannot currently predict the outcome of this matter, whether additional amounts will be incurred to resolve this matter, if any, or the matter’s ultimate impact on our business. We may be obligated to pay more costs in the future because, among other things, the FDA may determine that we are not fully compliant with the amended consent decree and therefore impose penalties under the amended consent decree, and/or we may be subject to future proceedings and litigation relating to the matters addressed in the amended consent decree. As of September 30, 2014, we do not believe that a loss is probable in connection with the amended consent decree, and accordingly, we have no reserves associated with compliance with the amended consent decree.

Other Matters. In addition to the matters described above, we also become involved in other litigation and regulatory matters incidental to our business. These matters arise in the ordinary course and conduct of our business, and at times, as a result of our mergers, acquisitions and divestitures. They include, but are not limited to, product liability claims, employment matters, commercial disputes, intellectual property matters, inclusion as a potentially responsible party for environmental clean-up costs, and employment matters. As a result of our proposed merger transaction with Becton, Dickinson and Company (“BD”), we are also subject to putative class action lawsuits challenging the proposed merger transaction with BD. We intend to defend ourselves in any such matters.

We may also determine that products manufactured or marketed by us, or our sales and marketing practices for such products, do not meet our specifications, published standards or regulatory requirements. When a quality or regulatory issue is identified, we investigate the issue and take appropriate corrective action. We may be required to report such issues to regulatory authorities, which could result in fines, sanctions or other penalties. In some cases, we may also withdraw a product from the market, correct a product at the customer location, notify the customer of revised labeling and take other actions. We have recalled, and/or conducted field alerts relating to, certain of our products from time to time. These activities can lead to costs to repair or replace affected products, temporary interruptions in product sales and action by regulators, and can impact reported results of operations. We currently do not believe that these activities (other than those specifically disclosed herein) have had or will have a material adverse effect on our business or results of operations.

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Condensed Consolidated Balance Sheets (USD $) In Millions, unless otherwise specified	Sep. 30, 2014	Jun. 30, 2014
Current Assets:
Cash and Cash Equivalents	$ 1,736	$ 2,303
Trade Receivables, Net	459	574
Current Portion of Net Investment in Sales-Type Leases	272	290
Inventories, Net	495	441
Prepaid Expenses	37	29
Other Current Assets	107	84
Total Current Assets	3,106	3,721
Property and Equipment, Net	437	448
Net Investment in Sales-Type Leases, Less Current Portion	961	970
Goodwill	3,315	3,311
Intangible Assets, Net (Excluding Goodwill)	997	1,016
Investments in Unconsolidated Entities	102	99
Other Assets	89	90
Total Assets	9,007	9,655
Current Liabilities:
Current Portion of Long-Term Obligations and Other Short-Term Borrowings	3	454
Accounts Payable	178	206
Deferred Revenue	96	95
Accrued Compensation and Benefits	126	194
Other Accrued Liabilities	223	246
Total Current Liabilities	626	1,195
Long-Term Obligations, Less Current Portion	1,988	1,990
Deferred Income Taxes	610	607
Other Liabilities	452	473
Total Liabilities	3,676	4,265
Commitments and Contingencies
Stockholders' Equity:
Preferred Stock (50.0 Authorized Shares; $.01 Par Value) Issued – None	0	0
Common Stock (1,200.0 Authorized Shares; $.01 Par Value) Issued – 235.9 and 234.5 shares at September 30, 2014 and June 30, 2014, respectively	2	2
Treasury Stock, at cost, 32.4 and 30.1 shares at September 30, 2014 and June 30, 2014, respectively	(1,185)	(1,082)
Additional Paid-In Capital	5,070	5,048
Retained Earnings	1,541	1,465
Accumulated Other Comprehensive Loss	(97)	(43)
Total Stockholders' Equity	5,331	5,390
Total Liabilities and Stockholders' Equity	$ 9,007	$ 9,655

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Inventories

3 Months Ended

Sep. 30, 2014

Inventory Disclosure [Abstract]

Inventories

INVENTORIES

Inventories, accounted for at the lower of cost or market on a first-in, first-out basis, consisted of the following:

(in millions)	September 30, 2014		June 30, 2014
Raw Materials	$	147	$	154
Work-in-Process	30		26
Finished Goods	318		261
Inventories, Net	$	495	$	441

The allowance for excess and obsolete inventories was $52 million and $52 million at September 30, 2014 and June 30, 2014, respectively.

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Restructuring and Acquisition Integration Charges

3 Months Ended

Sep. 30, 2014

Restructuring and Related Activities [Abstract]

Restructuring and Acquisition Integration Charges

RESTRUCTURING AND ACQUISITION INTEGRATION CHARGES

Restructuring liabilities are measured at fair value and recognized as incurred. Acquisition integration charges are expensed as incurred.

The following is a summary of restructuring and acquisition integration charges for the quarters ended September 30, 2014 and 2013:

	Quarters Ended September 30,
(in millions)	2014		2013
Restructuring Charges	$	10	$	11
Acquisition Integration Charges	9		—
Total Restructuring and Acquisition Integration Charges	$	19	$	11

Restructuring Charges

We periodically incur costs to implement restructuring efforts for specific operations, which are recorded within our unaudited condensed consolidated statements of income as they are incurred. Our restructuring efforts focus on various aspects of operations, including closing and consolidating certain manufacturing operations, rationalizing headcount, and aligning operations in the most strategic and cost-efficient structure.

The following tables include information regarding our current restructuring programs:

	Quarter Ended September 30, 2014
(in millions)	Accrued at June 30, 20141		Accrued Costs		Cash Payments			Accrued at September 30, 20141
Total Restructuring Programs	$	10	$	10	$	(9	)	$	11

________________

¹ Included within “Other Accrued Liabilities” in the unaudited condensed consolidated balance sheets.

	Quarter Ended September 30, 2013
(in millions)	Accrued at June 30, 20131		Accrued Costs		Cash Payments			Accrued at September 30, 20131
Total Restructuring Programs	$	7	$	11	$	(6	)	$	12

________________

¹ Included within “Other Accrued Liabilities” in the unaudited condensed consolidated balance sheets.

The following table segregates our restructuring charges into our reportable segments for the quarters ended September 30, 2014 and 2013:

	Quarters Ended September 30,
(in millions)	2014		2013
Medical Systems	$	7	$	7
Procedural Solutions	3		4
Total Restructuring Charges	$	10	$	11

Acquisition Integration Charges

Costs of integrating operations of various acquired companies are recorded as acquisition integration charges when incurred. The acquisition integration charges incurred during the quarter ended September 30, 2014 were primarily a result of the acquisition of Vital Signs.

Certain restructuring and acquisition costs are based upon estimates. Actual amounts paid may ultimately differ from these estimates. If additional costs are incurred or recognized amounts exceed costs, such changes in estimates will be recognized when they occur.

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Subsequent Events

3 Months Ended

Sep. 30, 2014

Subsequent Events [Abstract]

Subsequent Events

SUBSEQUENT EVENTS

On October 5, 2014, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Becton, Dickinson and Company, a New Jersey corporation (“BD”), and Griffin Sub, Inc., a Delaware corporation and wholly owned subsidiary of BD (“Merger Corp”).  The Merger Agreement provides, among other things, that, upon the terms and subject to the conditions set forth therein, Merger Corp will merge with and into our company, with our company surviving as a wholly-owned subsidiary of BD (the “Merger”). In the Merger, holders of our common stock will receive (i) $49.00 in cash, without interest and (ii) 0.0777 of a share of common stock, par value $1.00 per share, of BD.  Completion of the Merger is subject to customary closing conditions, including, among others, (1) the adoption of the Merger Agreement by our stockholders, (2) declaration of the effectiveness by the SEC of the Registration Statement on Form S-4 to be filed with the SEC by BD in connection with the registration of the shares of BD Stock to be issued in the Merger, (3) approval for listing on the New York Stock Exchange of the BD Stock to be issued in the Merger, (4) obtaining antitrust approvals in the United States and Europe, (5) subject to certain exceptions, the accuracy of the representations and warranties of the other party and (6) material compliance by the other party with its obligations under the Merger Agreement.  For additional information related to the Merger Agreement, please refer to our Current Report on Form 8-K filed with the SEC on October 6, 2014 (the “October 6th Form 8-K”). The foregoing description of the Merger Agreement is qualified in its entirety by reference to the full text of the Merger Agreement attached as Exhibit 2.1 to the October 6th Form 8-K.

In addition, the entering into of the Merger Agreement constituted an event of default under our $750 million senior unsecured revolving credit facility.  We have obtained a waiver for this event of default from the lenders under the credit facility.

Subsequent to the quarter ended September 30, 2014, we entered into a settlement with the IRS in connection with an IRS Revenue Agent’s Report for the short period September 1, 2009 through June 30, 2010 that includes Notices of Proposed Adjustment for additional taxes related to various matters. As a result of the settlement, we agreed to pay $4 million ($3 million, net of tax) including $1 million of interest that will be reflected in our financial results for the quarter ended December 31, 2014. As a result of the settlement, we recognized a tax benefit, which is expected to benefit the 2015 effective tax rate for the quarter ending December 31, 2014, by approximately $50 million.

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Financial Instruments

3 Months Ended

Sep. 30, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Financial Instruments

FINANCIAL INSTRUMENTS

We use derivative instruments to partially mitigate our business exposure to foreign currency exchange and interest rate risk. We may enter into foreign currency forward contracts to offset some of the foreign exchange risk of expected future cash flows on certain forecasted revenues and expenses and on certain assets and liabilities. We hedge foreign currency exposure up to a maximum period of twelve months. We may also enter into interest rate swap agreements to manage variability of expected future cash flows and interest expense related to our existing debt, and future debt issuances.

We had no derivatives designated as hedging instruments as of September 30, 2014 and June 30, 2014.

Cash Flow Hedges. We may enter into foreign currency forward contracts to protect the value of anticipated foreign currency revenues and expenses associated with certain forecasted transactions. We also enter into interest rate swap contracts to manage the variability of expected future cash flows from changing interest rates. These derivative instruments are designated and qualify as cash flow hedges. Accordingly, the effective portion of the gain (loss) on the derivative instrument is reported as a component of Accumulated Other Comprehensive Income (“AOCI”) and reclassified into earnings in the same line item associated with the forecasted transaction and in the same period during which the hedged transaction affects earnings. The ineffective portion of the gain (loss) on the derivative instrument is recognized in earnings immediately. The impact of interest rate swap contract and foreign currency forward contract cash flow hedges is included in the unaudited condensed consolidated statements of cash flows in “Other Accrued Liabilities and Operating Items, Net”.

No foreign currency forward contracts were outstanding at September 30, 2014 and June 30, 2014.

No interest rate swap contracts were outstanding at September 30, 2014 and June 30, 2014.

The amounts reclassified from AOCI to the consolidated statements of income related to the interest rate swaps, which were settled in May 2014, were not material for the quarters ended September 30, 2014 and 2013.

Fair Value (Non-Designated) Hedges. We enter into foreign currency forward contracts to manage foreign exchange exposure related to intercompany financing transactions and other balance sheet items subject to revaluation that do not meet the requirements for hedge accounting treatment. Accordingly, these derivative instruments are adjusted to current market value at the end of each period. The gain (loss) recorded on these instruments is substantially offset by the remeasurement adjustment on the foreign currency denominated asset or liability. The settlement of the derivative instrument and the remeasurement adjustment on the foreign currency denominated asset or liability are both recorded in the unaudited condensed consolidated statements of income in “Interest Expense and Other, Net”. The maximum period of time that we hedge exposure for foreign currency fair value hedges is 31 days.

The following table summarizes the notional amount of the fair value hedges outstanding as of September 30, 2014 and June 30, 2014:

(in millions)	September 30, 2014		June 30, 2014
Foreign Currency Forward Contracts	$	58	$	60

The following table summarizes the gain (loss) recognized in earnings for fair value hedges outstanding for the quarters ended September 30, 2014 and 2013:

	For the Quarters Ended September 30,
(in millions)	2014		2013
Foreign Currency Forward Contracts	$	2	$	(2	)

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Reclassifications Out of Accumulated Other Comprehensive Income Reclassifications Out of Accumulated Other Comprehensive Income

3 Months Ended

Sep. 30, 2014

Equity [Abstract]

Reclassifications Out of Accumulated Other Comprehensive Income

RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME

The summary of activity of comprehensive income (loss) for the quarter ended September 30, 2014 and 2013, is as follows:

	Quarter Ended September 30, 2014
	Before-Tax Amount			Tax (Expense) or Benefit		Net-of-Tax Amount
(in millions)
Foreign Currency Translation Adjustments:
Translation Adjustments Arising During the Period	$	(54	)	$	1	$	(53	)
Reclassification Adjustments Recognized in Net Income	—			—		—
Net Foreign Currency Translation Adjustments	(54		)	1		(53		)
Minimum Pension Liability:
Net Loss on Minimum Pension Liability Arising During the Period	(1		)	—		(1		)
Reclassification Adjustments Recognized in Net Income	—			—		—
Net Loss on Minimum Pension Liability	(1		)	—		(1		)
Total Other Comprehensive Income (Loss)	$	(55	)	$	1	$	(54	)

	Quarter Ended September 30, 2013
	Before-Tax Amount		Tax (Expense) or Benefit			Net-of-Tax Amount
(in millions)
Foreign Currency Translation Adjustments:
Translation Adjustments Arising During the Period	$	19	$	(2	)	$	17
Reclassification Adjustments Recognized in Net Income	—		—			—
Net Foreign Currency Translation Adjustments	19		(2		)	17
Interest Rate Swaps:
Unrealized Gain (Loss) Arising During the Period	7		(3		)	4
Reclassification Adjustment Recognized in Net Income	—		—			—
Net Gain (Loss) on Interest Rate Swaps	7		(3		)	4
Total Other Comprehensive Income (Loss)	$	26	$	(5	)	$	21

Reclassification adjustment gains and losses are included in the unaudited condensed consolidated statements of income in

“Interest Expense and Other, Net”.

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Financial Instruments (Narrative) (Details) (USD $)	3 Months Ended
	Sep. 30, 2014	Jun. 30, 2014
Derivative [Line Items]
Derivative Instruments in Hedges, at Fair Value, Net	$ 0	$ 0
Maximum period of time on hedge exposure for foreign currency fair value hedges	31 days
Foreign Currency Forward Contracts [Member]
Derivative [Line Items]
Derivative, Notional Amount, Outstanding	0	0
Interest Rate Swap [Member]
Derivative [Line Items]
Derivative, Notional Amount, Outstanding	$ 0	$ 0
Foreign Currency Forward Contracts [Member]
Derivative [Line Items]
Maximum period to hedge foreign currency exposure	12 months

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Financing Receivables

3 Months Ended

Sep. 30, 2014

Receivables [Abstract]

Financing Receivables

FINANCING RECEIVABLES

Our net investment in sales-type leases are considered financing receivables. As our portfolio of financing receivables primarily arise from the leasing of our dispensing equipment, the methodology for determining our allowance for credit losses is based on the collective population and not stratified by class or portfolio segment. Allowances for credit losses on the entire portfolio are based on historical experience loss rates and the potential impact of anticipated changes in business practices, market dynamics, and economic conditions. We also reserve individual balances based on the evaluation of customers’ specific circumstances. We write off amounts that are deemed uncollectible. Financing receivables are generally considered past due 30 days after the billing date. We do not accrue interest on past due financing receivables.

The change in the allowance for credit losses on financing receivables for the quarter ended September 30, 2014, consisted of the following:

(in millions)
Balance of allowance for credit losses at June 30, 2014	$	6
Charge-offs	—
Recoveries	—
Provisions	—
Balance of allowance for credit losses at September 30, 2014	$	6

The following table summarizes the credit losses and recorded investment in sales-type leases as of September 30, 2014:

(in millions)
Allowance for credit losses:
Balance at September 30, 2014	$	6
Balance: individually evaluated for impairment	$	2
Balance: collectively evaluated for impairment	$	4
Net Investment in Sales-Type Leases:
Balance at September 30, 2014	$	1,233
Balance: individually evaluated for impairment	$	2
Balance: collectively evaluated for impairment	$	1,231

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Goodwill and Other Intangible Assets

3 Months Ended

Sep. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

The following table summarizes the changes in the carrying amount of goodwill:

(in millions)	Total
Balance at June 30, 2014	$	3,311
Goodwill Acquired, Net of Purchase Price Adjustments	14
Foreign Currency Translation Adjustments	(10		)
Balance at September 30, 2014	$	3,315

As of September 30, 2014, goodwill for the Medical Systems segment and the Procedural Solutions segment was $2,102 million and $1,213 million, respectively. As of June 30, 2014, goodwill for the Medical Systems segment and the Procedural Solutions segment was $2,107 million and $1,204 million, respectively. The amount set forth above for goodwill acquired reflects the impact of business acquisitions. See note 2 for further information.

Intangible Assets

Intangible assets with definite lives are amortized over their useful lives which range from 3 to 20 years. The detail of intangible assets by class is as follows:

(in millions)	Weighted Average Life (years)	Gross Intangibles		Accumulated Amortization		Net Intangibles
September 30, 2014
Unamortized Intangibles:
Trademarks	Indefinite	$	307	$	—	$	307
Total Unamortized Intangibles		307		—		307
Amortized Intangibles:
Trademarks and Patents	10	99		57		42
Developed Technology	10	445		252		193
Customer Relationships	18	742		312		430
Other	6	67		42		25
Total Amortized Intangibles	14	1,353		663		690
Total Intangibles		$	1,660	$	663	$	997
June 30, 2014
Unamortized Intangibles:
Trademarks	Indefinite	$	307	$	—	$	307
Total Unamortized Intangibles		307		—		307
Amortized Intangibles:
Trademarks and Patents	10	100		55		45
Developed Technology	10	451		245		206
Customer Relationships	18	741		304		437
Other	7	61		40		21
Total Amortized Intangibles	14	1,353		644		709
Total Intangibles		$	1,660	$	644	$	1,016

Amortization expense is as follows:

	Quarters Ended September 30,
(in millions)	2014		2013
Amortization Expense	$	22	$	19

Amortization expense for each of the next five fiscal years is estimated to be:

(in millions)	2015		2016		2017		2018		2019
Amortization Expense	$	88	$	83	$	76	$	67	$	46

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Borrowings

3 Months Ended

Sep. 30, 2014

Debt Disclosure [Abstract]

Borrowings

BORROWINGS

Borrowings consisted of the following:

(in millions)	September 30, 2014		June 30, 2014
Senior Notes due 2014, 5.125% Less Unamortized Discount of $0.0 million at September 30, 2014 and $0.1 million at June 30, 2014, Effective Rate 5.360%	$	—	$	450
Senior Notes due 2019, 6.375% Less Unamortized Discount of $9.0 million at September 30, 2014 and $9.4 million June 30, 2014, Effective Rate 6.601%	691		691
Senior Notes due 2023, 3.300% Less Unamortized Discount of $1.9 million at September 30, 2014 and $2.0 million June 30, 2014, Effective Rate 3.311%	298		298
Senior Notes due 2017, 1.450% Less Unamortized Discount of $1.6 million at September 30, 2014 and $1.7 million June 30, 2014, Effective Rate 1.498%	298		298
Senior Notes due 2024, 3.875% Less Unamortized Discount of $3.2 million at September 30, 2014 and $3.2 million June 30, 2014, Effective Rate 3.895%	397		397
Senior Notes due 2044, 4.875% Less Unamortized Discount of $4.7 million at September 30, 2014 and $4.7 million June 30, 2014, Effective Rate 4.919%	295		295
Euro Denominated Debt, Interest Averaging 3.52% at both September 30, 2014 and June 30, 2014, Due in Varying Installments through 2020	8		10
Other Obligations; Interest Averaging 8.34% at September 30, 2014 and 8.07% at June 30, 2014, Due in Varying Installments through 2017	4		5
Total Borrowings	1,991		2,444
Less: Current Portion	3		454
Long-Term Portion	$	1,988	$	1,990

Senior Unsecured Notes. We have outstanding unsecured senior obligations, including those indicated as “Senior Notes” in the borrowings table above (collectively, the “Senior Notes”). The Senior Notes are unsecured obligations and the discount on sale of the Senior Notes is amortized to interest expense utilizing the effective interest rate method. The indentures under which the Senior Notes were issued contain customary covenants, all of which we were in compliance with at September 30, 2014. We use the net proceeds from the sale of these Senior Notes for general corporate purposes, which include the repayment of our existing indebtedness.

On August 1, 2014, we used $450 million of our cash balances to repay upon maturity the $450 million aggregate principal amount of 5.125% senior notes due 2014.

For additional information regarding the terms of the Senior Notes, refer to note 13 to the audited consolidated financial statements included in our 2014 Annual Report on Form 10-K for the fiscal year ended June 30, 2014, filed with the SEC on August 11, 2014.

Euro Denominated Debt. In connection with our acquisition of Rowa in August 2011, we assumed a 9 million Euro debt facility comprised of four tranches with annual interest rates ranging from 2.65% to 3.75%. These loans are subject to certain customary covenants and payable in quarterly or semi-annual installments, with the final payment due in September 30, 2020. The aggregate outstanding balance on these loans was $8 million and $10 million at September 30, 2014 and June 30, 2014, respectively.

Revolving Credit Facility. We maintain a $750 million senior unsecured revolving credit facility which is set to mature on February 13, 2019. The credit facility, subject to certain conditions, provides us the option to increase the commitments by up to $250 million.  At both September 30, 2014 and June 30, 2014, we had no amounts outstanding under the credit facility.

Borrowings under the credit facility bear interest at a rate per annum that is comprised of a reference rate, which is generally based upon the British Bankers Association LIBOR Rate, Federal Funds Rate, or prime rate, plus an applicable margin, which varies based upon CareFusion’s debt ratings. The credit facility also requires us to pay a quarterly commitment fee to the lenders under the credit facility on the amount of the lender’s unused commitments thereunder based upon CareFusion’s debt ratings. The credit facility also contains several customary covenants, all of which we were in compliance with at September 30, 2014. For additional information regarding the terms of the credit facility, refer to note 13 to the audited consolidated financial statements included in our 2014 Annual Report on Form 10-K, filed with the SEC on August 11, 2014.

Other Borrowings. We maintain other borrowings that consist primarily of additional notes, loans and capital leases, which totaled $4 million and $5 million at September 30, 2014 and June 30, 2014, respectively. Obligations related to capital leases are secured by the underlying assets.

Letters of Credit and Bank Guarantees. At both September 30, 2014 and June 30, 2014, we had $23 million of letters of credit and bank guarantees outstanding.

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Fair Value Measurements (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Sep. 30, 2014	Mar. 31, 2014	Jun. 30, 2013
Fair Value Disclosures [Abstract]
Short Term Liquid Instruments Maturity Term	three months or less
Estimated fair value of long-term obligations and other short-term borrowings		$ 2,100	$ 2,588
Net carrying amounts of long-term obligations and other short-term borrowings		$ 1,991	$ 2,444

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Product Warranties (Summary of Changes in Carrying Amount of Liability for Product Warranties) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Movement in Standard Product Warranty Accrual [Roll Forward]
Beginning Balance	$ 16	$ 18
Warranty Accrual	5	3
Warranty Claims Paid	(4)	(2)
Adjustments to Preexisting Accruals	(1)	(2)
Ending Balance	$ 16	$ 17

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Fair Value Measurements (Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis) (Details) (USD $) In Millions, unless otherwise specified	Sep. 30, 2014	Jun. 30, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash Equivalents	$ 1,416	$ 1,988
Other Investments	27	25
Total Assets	1,443	2,013
Liabilities - Contingent Consideration	0	8
Total Financial Liabilities	0	8
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash Equivalents	1,416	1,988
Other Investments	23	22
Total Assets	1,439	2,010
Liabilities - Contingent Consideration	0	0
Total Financial Liabilities	0	0
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash Equivalents	0	0
Other Investments	4	3
Total Assets	4	3
Liabilities - Contingent Consideration	0	0
Total Financial Liabilities	0	0
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash Equivalents	0	0
Other Investments	0	0
Total Assets	0	0
Liabilities - Contingent Consideration	0	8
Total Financial Liabilities	$ 0	$ 8

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Financial Instruments (Tables)

3 Months Ended

Sep. 30, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Unsettled Derivative Instruments and Associated Amount

The following table summarizes the notional amount of the fair value hedges outstanding as of September 30, 2014 and June 30, 2014:

(in millions)	September 30, 2014		June 30, 2014
Foreign Currency Forward Contracts	$	58	$	60

The following table summarizes the gain (loss) recognized in earnings for fair value hedges outstanding for the quarters ended September 30, 2014 and 2013:

	For the Quarters Ended September 30,
(in millions)	2014		2013
Foreign Currency Forward Contracts	$	2	$	(2	)

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Financing Receivables (Summary Of Credit Losses And Recorded Investment In Sales-Type Leases) (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Sep. 30, 2014	Jun. 30, 2014
Allowance for credit losses:
Balance: Allowance for credit losses	$ 6	$ 6
Balance: individually evaluated for impairment	2
Balance: collectively evaluated for impairment	4
Net Investment in Sales-Type Leases:
Balance: Sales-Type Leases	1,233
Balance: individually evaluated for impairment	2
Balance: collectively evaluated for impairment	$ 1,231

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Product Warranties

3 Months Ended

Sep. 30, 2014

Product Warranties Disclosures [Abstract]

Product Warranties

PRODUCT WARRANTIES

We offer warranties on certain products for various periods of time. We accrue for the estimated cost of product warranties at the time revenue is recognized. Our product warranty liability reflects management’s best estimate of probable liability based on current and historical product sales data and warranty costs incurred.

The tables below summarize the changes in the carrying amount of the liability for product warranties for the quarters ended September 30, 2014 and 2013:

(in millions)
Balance at June 30, 2014	$	16
Warranty Accrual	5
Warranty Claims Paid	(4		)
Adjustments to Preexisting Accruals	(1		)
Balance at September 30, 2014	$	16

(in millions)
Balance at June 30, 2013	$	18
Warranty Accrual	3
Warranty Claims Paid	(2		)
Adjustments to Preexisting Accruals	(2		)
Balance at September 30, 2013	$	17

As of September 30, 2014 and 2013, approximately $2 million and $6 million, respectively, of the ending liability balances related to accruals for product recalls.

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Investments in Unconsolidated Entities (Tables)

3 Months Ended

Sep. 30, 2014

Equity Method Investments and Joint Ventures [Abstract]

Equity and Cost Method Investments [Table Text Block]

The following table sets forth information relating to these investments:

(in millions)	September 30, 2014		June 30, 2014
Equity Method Investments
Cost	$	87	$	87
Share of Net Earnings of Equity Method Investee	5		3
Carrying Value of Equity Method Investments	$	92	$	90
Cost Method Investments
Carrying Value of Cost Method Investments	$	10	$	9
Total Investments in Unconsolidated Entities	$	102	$	99

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Financing Receivables (Narrative) (Detail)	3 Months Ended
	Sep. 30, 2014
Receivables [Abstract]
Financing receivables past due threshold after billing date	30 days

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Investments in Unconsolidated Entities (Details) (USD $) In Millions, unless otherwise specified	Sep. 30, 2014	Jun. 30, 2014	Sep. 30, 2014 Caesarea Medical Electronics [Member]	Mar. 31, 2014 Caesarea Medical Electronics [Member]
Investment [Line Items]
Equity Method Investment Call Option - Percentage Increase			40.00%
Equity Method Investment Put Option - Percentage Increase			60.00%
Equity Method Investment, Ownership Percentage			40.00%
Equity Method Investment, Aggregate Cost	$ 87	$ 87		$ 86

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Sep. 30, 2014	Jun. 30, 2014
Statement of Financial Position [Abstract]
Preferred Stock, Par Value (usd per share)	$ 0.01	$ 0.01
Preferred Stock, Shares Authorized (shares)	50,000,000	50,000,000.00
Preferred Stock, Shares Issued (shares)	0	0
Common Stock, Par Value (usd per share)	$ 0.01	$ 0.01
Common Stock, Shares Authorized (shares)	1,200,000,000	1,200,000,000
Common Stock, Shares Issued (shares)	235,900,000	234,500,000
Treasury Stock, Shares (shares)	32,400,000	30,100,000

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Earnings Per Share (Notes)

3 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Earnings Per Share

EARNINGS PER SHARE

For the quarters ended September 30, 2014 and 2013, basic earnings per common share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per common share is calculated to give effect to all dilutive securities, using the treasury stock method.

The following table sets forth the reconciliation of basic and diluted earnings per share for the quarters ended September 30, 2014 and 2013:

	Quarters Ended September 30,
(shares in millions)	2014	2013
Denominator for Basic Earnings per Share	204.1	214.0
Effect of Dilutive Securities:
Stock Options	1.9	2.1
Restricted Stock Units and Performance Stock Units	1.0	1.3
Denominator for Diluted Earnings per Share - Adjusted for Dilutive Securities	207.0	217.4

The potentially dilutive stock options, restricted stock units and performance stock units that would have been excluded because the effect would have been antidilutive for the quarters ended September 30, 2014 and 2013 were 0.8 million and 1.4 million, respectively. Basic and diluted earnings per share amounts are computed independently in the unaudited condensed consolidated statements of income. Therefore, the sum of per share components may not equal the per share amounts presented.

From time to time, our Board of Directors authorizes share repurchase programs for the repurchase of our common stock through open market and private transactions. The manner and pace of our repurchases under these programs is based on market conditions and other relevant factors.

In February 2012, we announced that our Board of Directors had approved a share repurchase program authorizing the repurchase of up to $500 million of our common stock. We completed this share repurchase program in June 2013 and as a result repurchased a total of 15.3 million shares of our common stock for an aggregate of $500 million (excluding commissions and fees).

In August 2013, we announced that our Board of Directors had approved a share repurchase program authorizing the repurchase of up to $750 million of our common stock. We have repurchased a total of 16.9 million shares of our common stock under this program for an aggregate of $680 million (excluding commissions and fees), of which we repurchased a total of 2.3 million shares for an aggregate of $103 million (excluding commissions and fees) during the quarter ended September 30, 2014.

In August 2014, our Board of Directors authorized the repurchase of an additional $750 million of our common stock through June 2016. We have not repurchased any shares under this program.

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Income Taxes (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended			3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014 Maximum [Member]	Dec. 31, 2014 Subsequent Event [Member]
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued	$ 50		$ 160
Effective Income Tax Rate Reconciliation, Tax Contingency, Percent	22.80%	18.50%
U.S. federal statutory rate	35.00%
Tax settlement amount		12
Tax settlement amount, net of tax		11
Tax settlement amount, interest		5
Settlement Amount Payable Under Settlement Agreement				4
Settlement Amount Payable Under Settlement Agreement Net				3
Income Tax Settlement Interest Paid				$ 1

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Segment Information (Reconciliation of Segment Income to Consolidated) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Operating Income	$ 126	$ 116
Operating Segments [Member]
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Operating Income	$ 126	$ 116

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Earnings Per Share (Tables)

3 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Reconciliation of Basic and Diluted Earnings Per Share

The following table sets forth the reconciliation of basic and diluted earnings per share for the quarters ended September 30, 2014 and 2013:

	Quarters Ended September 30,
(shares in millions)	2014	2013
Denominator for Basic Earnings per Share	204.1	214.0
Effect of Dilutive Securities:
Stock Options	1.9	2.1
Restricted Stock Units and Performance Stock Units	1.0	1.3
Denominator for Diluted Earnings per Share - Adjusted for Dilutive Securities	207.0	217.4

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Basis of Presentation Basis of Presentation (Details)	3 Months Ended
	Sep. 30, 2014 Segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of Operating Segments	2

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Fair Value Measurements

3 Months Ended

Sep. 30, 2014

Fair Value Disclosures [Abstract]

Fair Value Measurements

FAIR VALUE MEASUREMENTS

Assets and Liabilities Measured at Fair Value on a Recurring Basis. The following table presents information about our financial assets and liabilities that are measured at fair value on a recurring basis, and indicates the fair value hierarchy of the valuation techniques we utilize to determine such fair value as of September 30, 2014 and June 30, 2014:

	As of September 30, 2014
(in millions)	Total		Level 1		Level 2		Level 3
Financial Assets:
Cash Equivalents	$	1,416	$	1,416	$	—	$	—
Other Investments	27		23		4		—
Total Financial Assets	$	1,443	$	1,439	$	4	$	—
Financial Liabilities:
Contingent Consideration	$	—	$	—	$	—	$	—
Total Financial Liabilities	$	—	$	—	$	—	$	—

	As of June 30, 2014
(in millions)	Total		Level 1		Level 2		Level 3
Financial Assets:
Cash Equivalents	$	1,988	$	1,988	$	—	$	—
Other Investments	25		22		3		—
Total Financial Assets	$	2,013	$	2,010	$	3	$	—
Financial Liabilities:
Contingent Consideration	$	8	$	—	$	—	$	8
Total Financial Liabilities	$	8	$	—	$	—	$	8

The cash equivalents balance is comprised of highly liquid investments purchased with a maturity of three months or less from the original purchase date. The other investments balance includes investments in mutual funds classified as “Other Assets” in the unaudited condensed consolidated balance sheets, all related to our deferred compensation plan. Both the cash equivalents and other investments classified as Level 1 were valued based on quoted market prices for identical instruments. Assets classified as Level 2 relate to a portion of other investments not classified as Level 1. The fair value of other investments classified as Level 2 is determined based on quoted market prices for similar instruments or observable inputs other than quoted market prices. The amount of assets classified as Level 3 at September 30, 2014 and June 30, 2014 were not material. Liabilities classified as Level 3 relate to business combination contingent consideration arrangements and are recorded within either “Other Accrued Liabilities” or “Other Liabilities” in the unaudited condensed consolidated balance sheets based on the timing of the associated underlying payments. The corresponding purchase agreements require future payments based on the achievement of certain post-combination performance metrics of the acquired businesses, such as net revenues, gross profit, or date of first commercial sale. Following the quarter ended September 30, 2014 and prior to the date of this filing, the earn-out contingency was settled in full resulting in no additional consideration being paid.  As a result, we revised the corresponding amounts related to the earn-out contingency, as summarized in the table below for the quarter ended September 30, 2014.

The following table summarizes the changes in liabilities classified as contingent consideration:

(in millions)	Total
Future Gross Expected Payments at June 30, 2014	$	16
Carrying Value at June 30, 2014	$	8
Acquisition Date Fair Value of Contingent Consideration	—
Change in Fair Value Included in Expense	(8		)
Payments	—
Carrying Value at September 30, 2014	$	—
Future Gross Expected Payments at September 30, 2014	$	—

Other Instruments. The estimated fair value of our long-term obligations and other short-term borrowings was $2,100 million and $2,588 million as of September 30, 2014 and June 30, 2014, respectively, as compared to the net carrying amounts of $1,991 million and $2,444 million at September 30, 2014 and June 30, 2014, respectively. The fair value of our senior notes at September 30, 2014 and June 30, 2014 was based on quoted market prices, which involved the use of Level 1 inputs. The fair value of the other obligations at September 30, 2014 and June 30, 2014, was based on the quoted market prices for either the same or similar debt, which involved the use of observable Level 2 inputs. The fair value of the Rowa debt facility at September 30, 2014 and June 30, 2014 were determined using a discounted cash flow analysis, which approximated its carrying value. We considered the interest rates of European instruments with similar maturity dates, which involved the use of significant unobservable Level 3 inputs. See note 10 for further information.