Cardinal Health 2009 Annual Report Download - page 133

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The Company did not record any significant adjustments in the fourth quarter of fiscal 2009 other than those
disclosed above and within the Notes.
(in millions, except per common share amounts)
First
Quarter(1)
Second
Quarter(1)
Third
Quarter(1)
Fourth
Quarter(1)
(2) (3) (4)
Fiscal 2008
Revenue ............................................ $21,945.4 $23,253.4 $22,882.4 $22,894.3
Gross margin ........................................ 1,329.1 1,340.2 1,455.7 1,454.7
Selling, general and administrative expenses ............... 824.0 822.0 849.1 895.0
Earnings continuing operations .......................... 298.6 320.1 361.3 315.9
Earnings/(loss) from discontinued operations ............... 3.2 4.6 (5.3) 2.1
Net earnings ......................................... $ 301.8 $ 324.7 $ 356.0 $ 318.0
Earnings from continuing operations per Common Share:
Basic .............................................. $ 0.82 $ 0.89 $ 1.01 $ 0.89
Diluted ............................................. 0.81 0.88 1.00 0.88
(1) Amounts do not agree to those previously reported as they have been updated to reflect the classification of
Martindale as discontinued operations.
(2) During the fourth quarter of fiscal 2008, the Company’s Clinical and Medical Products segment discovered
it had failed to recognize a portion of profit on sales pertaining to prior years. The error resulted from
system interface and reconciliation discrepancies over a period of several years. As a result, the Company
recorded income of approximately $15.9 million in the fourth quarter of fiscal 2008 of which $4.8 million
pertained to the first three quarters of fiscal 2008, $7.4 million pertained to fiscal 2007 and $3.7 million
pertained to fiscal 2006. In connection with this matter, the Company implemented an action plan that has
addressed the issues related to the error.
(3) During the fourth quarter of fiscal 2008, the Company recognized equity-based compensation expense
related to unvested equity awards held by the former Executive Director of the Company. The Company
also recognized consulting arrangement fees to be paid to the former Executive Director of the Company.
The acceleration of the equity-based compensation expense and the consulting arrangement fees, which
totaled $12.2 million, resulted from a change in status from an employee to a nonemployee director.
(4) During the fourth quarter of fiscal 2008, the Company recognized $37.3 million of additional tax expense
related to an increase in the estimated state income tax rate on deferred tax items and recognized a $30.4
million reduction in tax expense for items pertaining to fiscal 2002 and 2001 for which the statute of
limitations had lapsed.
The Company did not record any significant adjustments in the fourth quarter of fiscal 2008 other than those
disclosed above and within the Notes.
21. SUBSEQUENT EVENTS
The Company has disclosed all material subsequent events through August 27, 2009, the date the financial
statements were issued.
Capital Structure Related to the Spin-Off
Subsequent to fiscal 2009, the Company and CareFusion entered into several transactions in order to
establish their respective capital structures after the Spin-Off. Immediately prior to the Spin-Off, CareFusion will
distribute approximately $1.4 billion in cash to the Company. In order to finance the distribution, on July 1, 2009
CareFusion entered into a $1.4 billion senior unsecured bridge loan facility with a term of 364 days from the date
of funding. Subsequently, on July 14, 2009 CareFusion obtained permanent financing of $1.4 billion in the form
of fixed rate senior notes. As CareFusion was able to obtain permanent financing prior to the Spin-Off, the bridge
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