Cardinal Health 2008 Annual Report Download - page 111

The net periodic benefit cost included in discontinued operations for the PTS Business was $22.9 million
and $8.2 million for fiscal 2007 and 2006, respectively.
Interest expense allocated to discontinued operations for the PTS Business was $25.0 million and
$25.1 million for fiscal 2007 and 2006, respectively. Interest expense was allocated based upon a ratio of the
invested capital of the PTS Business versus the overall invested capital of the Company. In addition, a portion of
the corporate costs previously allocated to the PTS Business has been reclassified to the remaining four
segments. Prior period information has been reclassified to conform to the new presentation.
In accordance with EITF Issue No. 93-7, “Recognition of Deferred Tax Assets for a Parent Company’s
Excess Tax Basis in the Stock of a Subsidiary That is Accounted for as a Discontinued Operation,” during the
second quarter of fiscal 2007, the Company recognized a $425.0 million net tax benefit related to the difference
between the Company’s tax basis in the stock of the various PTS businesses included in discontinued operations
and the book basis of the Company’s investment in those businesses. This tax benefit was offset by the related
tax expense on the gain over net book value in the fourth quarter of fiscal 2007 upon completion of the PTS
Business sale.
The liabilities of the PTS Business included in liabilities held for sale and discontinued operations were $2.5
million and $34.2 million at June 30, 2008 and 2007, respectively.
Cash flows generated from the discontinued operations are presented separately on the Company’s
consolidated statements of cash flows.
Other
During the third quarter of fiscal 2008, the Company committed to plans to sell certain smaller, non-core
businesses within its Medical Products and Technologies segment, thereby meeting the held for sale criteria set
forth in SFAS No. 144. In accordance with SFAS No. 144 and EITF Issue No. 03-13, the net assets of these
businesses are presented separately as held for sale on the Company’s consolidated balance sheet at June 30,
2008. The results of these businesses are reported within earnings from continuing operations on the Company’s
consolidated statements of earnings.
At June 30, 2008, the major components of these businesses’ assets and liabilities held for sale were as
follows:
(in millions) 2008
Current assets ....................................................... $ 25.8
Property and equipment ............................................... 12.8
Other assets ........................................................ 101.8
Total assets ..................................................... $140.4
Current liabilities .................................................... $ 12.2
Long-term debt and other .............................................. 0.7
Total liabilities .................................................. $ 12.9
During the third quarter of fiscal 2006, the Company committed to plans to sell the HMS Disposal Group
and IPD, thereby meeting the held for sale criteria set forth in SFAS No. 144. The remaining portion of the
healthcare marketing services business remains within the Company. In accordance with SFAS No. 144 and
EITF Issue No. 03-13, the net assets of these businesses were presented separately as held for sale and the
operating results of these businesses are presented within discontinued operations. In accordance with
SFAS No. 144, the net assets held for sale of each business were recorded at the net expected fair value less costs
to sell, as this amount was lower than the businesses’ net carrying value.
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