Merck 2008 Annual Report Download - page 88

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Disposals/Discontinued operations
On May 13, 2007, Merck and Mylan Inc., Canonsburg, PA (USA), entered into an agree-
ment concerning the sale of the Generics business. The business was transferred to the
acquirer with the closing on October 2, 2007.
In accordance with IFRS 5, the gain on the disposal pursuant to this agreement is
combined with the result of this activity up until the closing date under profit/loss
from discontinued operations.
Within the scope of the agreement, Mylan Inc. was granted an option to purchase
the Generics business remaining with the Merck Group after the transfer. This option
was already reflected in the purchase price. The remaining Generics business is
immaterial for Merck and is reported in 2008 as part of the Merck Serono division.
The reported profit/loss from discontinued operations for 2007 comprises the following:
€ million 2007
Total revenues 1,394.5
Cost of sales –737.7
Marketing and selling expenses –271.9
Administration expenses –66.0
Other operating income and expenses –34.9
Research and development costs –95.3
Operating result 188.7
Exceptional items 3,561.5
Earnings before interest and tax (EBIT) 3,750.2
Financial result 10.1
Profit before tax 3,760.3
Taxes on income –168.3
Profit after tax 3,592.0
Reversal of depreciation in accordance with IFRS 5 16.0
Profit after tax in accordance with IFRS 5 3,608.0
thereof:
Profit before tax of current business 207.2
Taxes on income –70.1
Profit after tax of current business 137.1
Gain on disposal before tax 3,569.1
Taxes on income –98.2
Gain on disposal after tax 3,470.9
72 Income Statement
73 Balance Sheet
74 Segment Reporting
CONSOLIDATED FINANCIAL STATEMENTS OF THE MERCK GROUP
76 Cash Flow Statement
77 Free Cash Flow
77 Statement of Recognized
Income and Expense
78 Statement of Changes
in Net Equity including
Minority Interest
79 Notes
83