Cardinal Health 2009 Annual Report Download - page 103

consolidated statements of earnings. During fiscal 2009, 2008 and 2007, the Company incurred impairments,
(gain)/loss on sale of assets and other, net of $25.0 million, $(32.0) million, and $17.3 million, respectively.
These amounts are included within the Corporate segment results. See Note 17 for further information regarding
items that are included within Corporate.
During fiscal 2008, the Company recognized a $23.3 million gain from the divestiture of an investment
within the Healthcare Supply Chain Services segment.
At June 30, 2006, the Company held a $16.7 million cost investment in Global Healthcare Exchange, LLC
(“GHX”). During fiscal 2007, the Company determined the investment was impaired and recognized a $12.3
million charge. The Company will continue to monitor GHX’s financial performance in order to assess for
additional impairment.
4. ACCOUNTS RECEIVABLE
Trade receivables are primarily comprised of amounts owed to the Company through its distribution
businesses within the Healthcare Supply Chain Services segment and are presented net of an allowance for
doubtful accounts of $127.2 million and $124.7 million at June 30, 2009 and 2008, respectively. An account is
considered past due on the first day after its due date. In accordance with contract terms, the Company generally
has the ability to charge customer service fees or higher prices if an account is considered past due. The
Company continuously monitors past due accounts and establishes appropriate reserves to cover potential losses.
The Company will write-off any amounts deemed uncollectible against the established allowance for doubtful
accounts.
The Company provides financing to various customers. Such financing arrangements range from
approximately 90 days to 10 years, at interest rates that generally are subject to fluctuation. Interest income on
these accounts is recognized by the Company as it is earned. The financings may be collateralized, guaranteed by
third parties or unsecured. Finance notes and accrued interest receivables were $44.5 million and $29.0 million at
June 30, 2009 and 2008, respectively, (current portions were $27.0 million and $20.4 million, respectively) and
are included in other assets. Finance notes receivable are reported net of an allowance for doubtful accounts of
$5.3 million and $4.4 million at June 30, 2009 and 2008, respectively.
The Company has formed special purpose entities with the sole purpose of buying receivables or sales-type
leases from various legal entities of the Company and selling those receivables or sales-type leases to certain
multi-seller conduits administered by banks or other third party investors.
During fiscal 2001, the Company entered into an agreement to periodically sell trade receivables to a special
purpose accounts receivable and financing entity (the “Accounts Receivable and Financing Entity”) which was
exclusively engaged in purchasing trade receivables from, and making loans to, the Company. The Accounts
Receivable and Financing Entity, which is consolidated by the Company, issued $250.0 million and
$400.0 million in preferred variable debt securities to parties not affiliated with the Company during fiscal 2004
and 2001, respectively. As part of an amendment to certain of the facility terms of the preferred debt securities in
October 2006, the Company repaid $500.0 million of the principal balance. In October 2008, the Company
repaid the remaining balance and the agreement was terminated. See Note 9 for additional information. This
arrangement was separate and distinct from the Company’s committed receivables sales facility program. See
Note 19 for a discussion of the committed receivables sales facility program.
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