Cardinal Health 2008 Annual Report Download - page 107

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Cardinal Health Federal Securities Litigation. During fiscal 2007, the Company recorded a reserve and
made a payment of $600.0 million related to the previously-reported Cardinal Health federal securities litigation.
For further information regarding this matter, see the 2007 Form 10-K.
Cardinal Health ERISA Litigation. During fiscal 2007, the Company incurred charges and made a payment
of $40.0 million related to the previously-reported Cardinal Health ERISA litigation. For further information
regarding this matter, see the 2007 Form 10-K.
New York Attorney General Investigation. The Company incurred charges of $3.0 million and $8.0 million
during fiscal 2007 and 2006, respectively, with respect to the previously-reported investigation by the New York
Attorney General’s Office. During fiscal 2007, the Company entered into a civil settlement that resolved this
investigation and made payments totaling $11.0 million as part of the settlement. For further information
regarding this matter, see the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31,
2006.
Other Litigation. The Company recorded reserves totaling $25.6 million during fiscal 2008 with respect to
the settlement of certain pending disputes and litigation matters in the Company’s Healthcare Supply Chain
Services-Pharmaceutical and Healthcare Supply Chain Services-Medical segments. During fiscal 2006, the
Company recorded settlement recoveries of $1.5 million related to certain immaterial litigation matters.
Other
During fiscal 2008, 2007 and 2006, the Company incurred costs recorded within other special items totaling
$4.0 million, $4.4 million and $26.5 million, respectively. These costs primarily relate to estimated settlement
costs, legal fees and document preservation and production costs incurred in connection with the SEC
investigation and the related Audit Committee internal review and related matters. Included within these costs
were additional reserves of $10.0 million recognized in fiscal 2006 for a settlement with the SEC to resolve its
investigation with respect to the Company. In fiscal 2007, the Company made payment of $35.0 million resulting
from final settlement of this matter with the SEC. For further information regarding this matter, see the 2007
Form 10-K.
Special Items Accrual Rollforward
The following table summarizes activity related to liabilities associated with the Company’s special items
for the fiscal years ended June 30, 2008, 2007 and 2006:
For the Fiscal Year Ended
June 30,
(in millions) 2008 2007 2006
Balance at beginning of year ........................................... $ 31.8 $ 76.8 $ 79.2
Additions (1) ....................................................... 188.3 800.5 107.5
Payments .......................................................... (122.3) (845.5) (109.9)
Balance at end of year ................................................ $ 97.8 $ 31.8 $ 76.8
(1) Amounts represent items that have been expensed as incurred or accrued in accordance with GAAP. These
amounts do not include gross litigation settlement income recorded during fiscal 2008, 2007 and 2006 of
$58.2 million, $28.5 million and $27.0 million, respectively, which were recorded as special items.
Future Spend
Certain acquisition and restructuring 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 in special items when incurred.
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