Cardinal Health 2008 Annual Report Download - page 112

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Impairment charges of $47.3 million and $237.4 million were recorded in fiscal 2007 and 2006,
respectively, within discontinued operations for the HMS Disposal Group and IPD. In the first quarter of fiscal
2007, the Company completed the sale of IPD. In the third quarter of fiscal 2007, the Company completed the
sale of the HMS Disposal Group.
During the fourth quarter of fiscal 2005, the Company decided to close Humacao as part of its global
restructuring program and committed to sell the assets of the Humacao operations, thereby meeting the held for
sale criteria set forth in SFAS No. 144. During the fourth quarter of fiscal 2005, the Company recognized an
impairment charge to write the carrying value of the Humacao assets down to fair value, less costs to sell. During
the first quarter of fiscal 2006, the Company subsequently decided not to transfer production from Humacao to
other Company-owned facilities, thereby meeting the criteria for classification as discontinued operations in
accordance with SFAS No. 144 and EITF Issue No. 03-13. An impairment charge of $5.2 million was recorded
in fiscal 2007 as a result of recording the net assets held for sale to the net expected fair value less costs to sell.
At the beginning of fiscal 2008, Humacao was reclassified to continuing operations.
The combined results of the HMS Disposal Group, IPD, and Humacao included in discontinued operations
for the fiscal years ended June 30, 2007 and 2006 are summarized as follows:
For the Fiscal Year Ended
June 30,
(in millions) 2007 2006
Revenue ....................................................... $167.1 $ 531.5
Impairments/loss on sale .......................................... (52.5) (237.4)
Loss before income taxes ......................................... (75.8) (280.6)
Income tax benefit ............................................... 19.4 36.0
Loss from discontinued operations .................................. (56.4) (244.6)
Interest expense allocated to the HMS Disposal Group, IPD and Humacao discontinued operations was
$1.4 million and $3.1 million for fiscal 2007 and 2006, respectively. No interest expense was allocated for IPD
and the HMS Disposal Group for the quarters subsequent to the respective sales. Interest expense was allocated
to discontinued operations based upon a ratio of the net assets of discontinued operations versus the overall net
assets of the Company.
Cash flows generated from the discontinued operations are presented separately on the Company’s
consolidated statements of cash flows.
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