Cardinal Health 2008 Annual Report Download - page 106

Download and view the complete annual report

Please find page 106 of the 2008 Cardinal Health annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 164

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164

Litigation, net
The following table summarizes the Company’s net litigation costs included within special items during
fiscal 2008, 2007 and 2006:
For the Fiscal Year Ended
June 30,
(in millions) 2008 2007 2006
Litigation charges/(income):
Derivative actions .................................................. $(58.0) $ — $ —
Pharmaceutical manufacturer antitrust litigation .......................... (0.2) (28.5) (25.5)
DEA matter ....................................................... 34.0 — —
Syncor ERISA litigation ............................................. 5.4 — —
Syncor federal securities litigation ..................................... 2.7 — —
DuPont litigation ................................................... 6.0 11.5 —
Cardinal Health federal securities litigation .............................. — 600.0 —
Cardinal Health ERISA litigation ...................................... — 40.0 —
New York Attorney General investigation ............................... — 3.0 8.0
Other ............................................................ 25.6 — (1.5)
Total litigation, net ..................................................... $15.5 $626.0 $(19.0)
Derivative Litigation. The Company recognized income of $58.0 million during fiscal 2008 related to
settlement of the Derivative Actions discussed in Note 12. This amount is comprised of the $70.0 million
received by the Company from directors and officers’ insurance policies less $12.0 million paid for plaintiffs’
attorneys’ fees and costs. For further information regarding this matter, see Note 12.
Pharmaceutical Manufacturer Antitrust Litigation. The Company recognized income of $0.2 million,
$28.5 million and $25.5 million in fiscal 2008, 2007 and 2006, respectively, resulting from settlement of class
action antitrust claims alleging certain prescription drug manufacturers took improper actions to delay or prevent
generic drug competition. The Company has not been a named plaintiff in any of these class actions, but has been
a member of the direct purchasers’ class (i.e., those purchasers who purchase directly from these drug
manufacturers). The total recovery of such claims through June 30, 2008 was $151.8 million (net of attorney
fees, payments due to other interested parties and expenses withheld). The Company is unable at this time to
estimate future recoveries, if any, it will receive as a result of these class actions.
DEA Matter. During fiscal 2008, the Company recorded a reserve of $34.0 million related to the DEA
matter. For further information regarding this matter, see Note 12.
Syncor ERISA Litigation. During fiscal 2008, the Company recorded a reserve of $5.4 million related to the
Syncor ERISA litigation. For further information regarding this matter, see Note 12.
Syncor Federal Securities Litigation. During fiscal 2008, the Company recorded a reserve of $2.7 million in
fiscal 2008 related to the Syncor federal securities litigation. For further information regarding this matter, see
Note 12.
DuPont Actions. During fiscal 2008, the Company incurred charges of $6.0 million related to the settlement
of previously-reported litigation with E.I. Du Pont De Nemours and Company (“DuPont”). The Company also
recognized charges of $11.5 million during fiscal 2007 related to the settlement of this same litigation. In
October 2006, the Company entered into a settlement agreement with DuPont that required the Company, in part,
to make an initial payment to DuPont of $11.5 million and a possible additional payment in the future that could
be offset by additional purchases. The $6.0 million referenced above relates to the additional payment called for
by the settlement agreement. For further information regarding this matter, see the Company’s Quarterly Report
on Form 10-Q for the quarter ended September 30, 2006.
82