Summary
Cardinal Health, Inc. (CAH) filed an 8-K on December 12, 2005, primarily to disclose the ongoing settlement discussions with the Securities and Exchange Commission (SEC) regarding its investigation into the company. These discussions are progressing, but the outcome and timing remain uncertain. As a result of initiating these discussions, Cardinal Health recorded a $25 million reserve in its fiscal year ended June 30, 2005. Looking ahead, the company anticipates recording an additional reserve in the second quarter of fiscal year 2006, which is not expected to be material. However, Cardinal Health emphasizes that there is no guarantee that the current reserves will be sufficient until the SEC investigation is resolved, and the reserve will be reviewed and adjusted quarterly as needed.
Key Highlights
- 1Cardinal Health is actively engaged in settlement discussions with the SEC concerning an ongoing investigation.
- 2The company recorded a $25 million reserve in FY2005 related to the SEC investigation.
- 3An additional, not expected to be material, reserve is anticipated for Q2 FY2006.
- 4The timing and outcome of the SEC investigation resolution are uncertain.
- 5The company will continue to review and adjust its reserve for the SEC investigation on a quarterly basis.
- 6The filing also includes exhibits related to a proposed debt securities issuance, computation of earnings to fixed charges ratio, and a trustee statement for the Trust Indenture Act of 1939.