Cardinal Health 2008 Annual Report Download - page 108

The Company estimates it will incur additional costs in future periods associated with various acquisition
integration and restructuring activities totaling approximately $133.3 million (approximately $84.4 million, net
of tax). These estimated costs are primarily associated with the integration of Viasys within the Medical Products
and Technologies segment and the consolidation of the Company’s business units into two reportable segments.
Impairments, (Gain)/Loss on Sale of Assets and Other, net
The Company classifies certain asset impairments related to restructurings in special items. Asset
impairments and gains and losses from the sale of assets not eligible to be classified as special items or
discontinued operations are classified within impairments, (gain)/loss on sale of assets and other, net within the
consolidated statements of earnings. During fiscal 2008, 2007 and 2006, the Company incurred impairments,
(gain)/loss on sale of assets and other, net of $(32.0) million, $17.3 million and $5.8 million, respectively. These
charges are included within 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— Pharmaceutical segment. Also included in impairments, (gains)/
loss on sale of assets and other, net was a $15.9 million gain related to the sale of a particular line of business
within the Medical Products and Technologies segment.
During fiscal 2007, the Company determined a certain investment was impaired and recognized a $12.3
million charge (see Note 4 for additional information). During fiscal 2006, the only significant charge was
approximately $6.2 million related to the loss on sale of a significant portion of the Company’s specialty
distribution business (see Note 8 for additional information).
4. INVESTMENTS
At June 30, 2008, the Company did not hold any short-term investments. The Company’s short-term
investments at June 30, 2007 included $132.0 million in tax exempt auction rate securities. These short-term
investments were classified as available-for-sale on the Company’s consolidated balance sheet. The Company’s
investments in these securities were carried at cost, which approximated fair value.
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 (see Note 3). At June 30, 2008 and 2007, the carrying amount of the investment was
$4.4 million. The Company will continue to monitor GHX’s financial performance in order to assess for
additional impairment.
5. ACCOUNTS RECEIVABLE
Trade receivables are primarily comprised of amounts owed to the Company through its distribution
businesses within the Healthcare Supply Chain Services—Pharmaceutical and the Healthcare Supply Chain
Services—Medical segments and are presented net of an allowance for doubtful accounts of $124.7 million and
$118.8 million at June 30, 2008 and 2007, 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
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