product lines, including the exam glove business, as well as a slight shift in r evenue growth towards lower margin distributed products. In 1999, the improvement in this segment’s gross margin was primarily the result of improve- ments in the segment’s product mix, including the growth of self-manufactured products sales in both domestic and international markets, as well as the impact of manufac - turing and other cost efficiencies. The Pharmaceutical Technologies and Services segment’s gross margin increase in 2000 was a r esult  of revenue growth in the higher margin liquid fill contract manufacturing and drug delivery system businesses. The drug delivery system business’ shift to higher mar gin pharmaceutical products from lower margin health and nutrition products has also contributed to the impr ovement in gross margin. The decrease in gross margin in 1999 was a result of the business mix within this segment.  The Automation and Information Services segment’s gross margin increase in 2000 was mainly a r esult of price increases during the year and pr oduct mix. In 1999, the Automation and Information Services segment experienced a slight decrease in gross margin mainly due to pr oduct mix. resulting from a slight decrease in operating revenue from fiscal 1999 to fiscal 2000. In addition, the Medical- Surgical Products and Services segment’s selling, general and administrative expenses as a per centage of operating revenues increased in fiscal year 1999 as compar ed to fiscal year 1998. This increase was primarily due to the acquisition of businesses during fiscal 1999, which were accounted for under the purchase method of accounting. As such, the historical financial statements have not been restated for these acquisitions. These acquir ed businesses have a higher selling, general and administrative expense rate than the Medical-Surgical Products and Services seg- ment’s normal rate, resulting in an increase during fiscal 1999 compared to 1998. The 3% and 13% overall gr owth in selling, general and administrative expenses experi - enced in fiscal years 2000 and 1999, r espectively, was due primarily to increases in personnel costs and depr eci- ation expense, and compares favorably to the 17% and 19% growth in operating revenue for the same periods. The following is a summary of the special charges for the fiscal years ended June 30, 2000, 1999 and 1998. The decline in selling, general and administrative expenses as a percentage of operating revenue for fiscal years 2000 and 1999 reflects economies associated with the Company’s revenue growth, in addition to significant productivity gains resulting from continued cost control efforts in all segments and the continuation of consolida - tion and selective automation of operating facilities in the Pharmaceutical Distribution and Provider Services and  the Pharmaceutical Technologies and Services segments. Offsetting the improvements noted was an increase in selling, general and administrative expenses as a per cent- age of operating revenue for the Automation and Infor - mation Services segment for fiscal year 2000, primarily Selling, General and Administrative Expenses Special Charges (as a percentage of operating revenue) Years ended June 30 2000 1999 1998 Pharmaceutical Distribution and Provider Services 2.8% 3.0% 3.3% Medical-Surgical Products and Services 15.8% 16.9% 16.2% Pharmaceutical Technologies  and Services 14.5% 15.9% 15.9% Automation and  Information Services 34.9% 34.2% 39.2% Total Company 6.5% 7.3% 7.8% Fiscal Year Ended June 30,  (in millions,  except per share amounts) 2000 1999 1998 Transaction and employee- related costs $ (3.8) $ (95.4) $ (35.7) ALP transaction bonus (20.3) – – Exit costs (11.7) (9.4) (3.8) Scherer restructuring costs (9.6) (26.7) – Inventory write-offs – (4.0) – Owen Healthcare, Inc.  employee-related costs – (1.1) – Canceled merger transaction – 3.7 – Other integration costs (19.3) (13.7) (9.7) Total merger-related costs $ (64.7) $ (146.6) $ (49.2) Other special charges: Facilities closures $ – $ – $ (6.1) Employee severance – – (2.5) Total other special charges $ – $ – $ (8.6) Total special charges $ (64.7) $ (146.6) $ (57.8) Tax effect of special charges 14.9 29.0 22.0 Tax benefit for change  in tax status – – 11.7 Pro forma ALP taxes – 9.3 4.6 Net effect of special charges $ (49.8) $ (108.3) $ (19.5) Net effect on diluted  earnings per share $ (0.18) $ (0.38) $ (0.06) Cardinal Health, Inc. Annual Report 2000 27