Cardinal Health 2008 Annual Report Download - page 103

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 headquarters of the
Company’s Healthcare Supply Chain Services—Medical segment and certain corporate functions from
Waukegan, Illinois to the Company’s corporate headquarters in Dublin, Ohio.
During fiscal 2009, the Company is undertaking 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 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. The 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 segregates the Company’s restructuring charges into the various reportable segments
affected by the restructuring projects for the fiscal years ended June 30, 2008, 2007 and 2006:
For the Fiscal Year Ended
June 30,
(in millions) 2008 2007 (3) 2006
Healthcare Supply Chain Services—Pharmaceutical
Employee-related costs (1) ............................................. $ 7.5 $ 0.9 $ 1.4
Facility exit and other costs (2) ......................................... 2.4 0.4 1.9
Asset impairments ................................................... 1.2 — 0.1
Total Healthcare Supply Chain Services—Pharmaceutical ................ $11.1 $ 1.3 $ 3.4
Healthcare Supply Chain Services—Medical
Employee-related costs (1) (3) .......................................... 1.9 1.3 0.9
Facility exit and other costs (2) (3) ...................................... 3.0 1.2 0.7
Total Healthcare Supply Chain Services—Medical ...................... $ 4.9 $ 2.5 $ 1.6
Clinical Technologies and Services
Employee-related costs (1) ............................................. 0.1 1.7 —
Facility exit and other costs (2) ......................................... 0.2 3.5 —
Total Clinical Technologies and Services ............................. $ 0.3 $ 5.2 $—
Medical Products and Technologies
Employee-related costs (1) ............................................. 11.3 0.6 0.5
Facility exit and other costs (2) ......................................... 0.4 3.7 7.4
Asset impairments ................................................... — — 1.2
Total Medical Products and Technologies ............................. $11.7 $ 4.3 $ 9.1
Other
Employee-related costs (1) (3) .......................................... 19.2 15.8 11.3
Facility exit and other costs (2) (3) ...................................... 18.1 9.1 22.2
Asset impairments ................................................... 0.4 1.9 —
Total Other ..................................................... $37.7 $26.8 $33.5
Total restructuring charges ................................................. $65.7 $40.1 $47.6
(1) Employee-related costs consist primarily of severance accrued upon either communication of terms to
employees or over the required service period. Outplacement services provided to employees who have been
involuntarily terminated and duplicate payroll costs during transition periods are also included within this
classification.
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