Cardinal Health 2009 Annual Report Download - page 100

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The first phase of the program, announced in December 2004, focused on business consolidations and
process improvements, including rationalizing facilities worldwide, reducing the Company’s global workforce,
and rationalizing and discontinuing overlapping and under-performing product lines. The second phase of the
program, announced in August 2005, focused on longer-term integration activities that enhance service to
customers through improved integration across the Company’s segments and continued streamlining of internal
operations. The third phase of the program, announced in April 2007, focused on moving the Company’s medical
products distribution headquarters and certain corporate functions from Waukegan, Illinois to the Company’s
corporate headquarters in Dublin, Ohio.
At the beginning of fiscal 2009, the Company undertook a major restructuring of its segment operating
structure. Effective July 1, 2008, the Company consolidated its businesses into two primary operating and
reportable segments to reduce costs and align resources with the needs of each segment.
In addition, during fiscal 2009, the Company incurred restructuring expenses related to the Spin-Off
consisting of employee-related costs, costs to evaluate and execute the transaction, costs to start up certain stand
alone functions and information technology systems and other one-time transaction related costs. On
September 29, 2008 the Company announced its plans to separate its clinical and medical products businesses as
described in more detail in Note 1. Also during fiscal 2009, the Company announced that its Clinical and
Medical Products segment would reduce its global workforce by approximately 800 people over six months.
In addition to the restructuring programs discussed above, from time to time the Company incurs costs to
implement smaller restructuring efforts for specific operations within its segments. These 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.
The following table and paragraphs provide additional detail regarding the types of restructuring charges
incurred by the Company for the fiscal years ended June 30, 2009, 2008 and 2007:
Fiscal Year Ended
June 30,
(in millions) 2009 2008 2007
Restructuring Charges:
Employee-related costs ............................................... $ 74.6 $40.0 $20.3
Asset Impairments ................................................... 0.2 1.7 1.9
Facility exit and other costs ............................................ 89.5 24.0 17.9
Total restructuring charges ................................................. $164.3 $65.7 $40.1
Employee-Related Costs. These costs primarily consist of one-time termination benefits recognized in
accordance with the provisions of SFAS No. 146. Outplacement services provided to employees who have been
involuntarily terminated and duplicate payroll costs during transition periods are also included within this
category.
Facility Exit and Other Costs. Facility exit and other costs consist of accelerated depreciation, equipment
relocation costs, project consulting fees and costs associated with restructuring the Company’s delivery of
information technology infrastructure services. In addition, facility exit and other costs include certain costs
related to the Spin-Off such as costs to evaluate and execute the transaction, costs to start up certain stand alone
functions and information technology systems and other one-time transaction related costs.
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 fiscal 2009 and 2008 were primarily
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