Cardinal Health 2008 Annual Report Download - page 119

Download and view the complete annual report

Please find page 119 of the 2008 Cardinal Health annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 164

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164

Deferred income taxes arise from temporary differences between financial reporting and tax reporting bases
of assets and liabilities, and operating loss and tax credit carryforwards for tax purposes. The components of the
deferred income tax assets and liabilities as of June 30, 2008 and 2007 are as follows (in millions):
June 30,
2008
June 30,
2007
Deferred income tax assets:
Receivable basis difference ................................... $ 40.8 $ 45.7
Accrued liabilities ........................................... 214.2 134.7
Equity compensation ........................................ 115.8 98.9
Loss and tax credit carryforwards .............................. 209.2 178.2
Deferred tax assets under FIN48 ............................... 153.6 —
Other ..................................................... 100.8 117.2
Total deferred income tax assets ........................... $ 834.4 $ 574.7
Valuation allowance for deferred income tax assets .................... (178.0) (180.5)
Net deferred income tax assets ............................. $ 656.4 $ 394.2
Deferred income tax liabilities:
Inventory basis differences .................................... $ (724.9) $ (785.9)
Property-related ............................................ (88.2) (90.5)
Goodwill and other intangibles ................................ (391.1) (361.0)
Revenues on lease contracts ................................... (508.1) (444.9)
Other ..................................................... (11.6) (3.7)
Total deferred income tax liabilities ......................... $(1,723.9) $(1,686.0)
Net deferred income tax liabilities (1) ................... $(1,067.5) $(1,291.8)
(1) The decrease in the net deferred income tax liabilities is primarily attributable to the adoption of FIN 48,
which created deferred income tax assets for federal benefits related to state taxes and interest and reclasses
of deferred income tax liabilities to the FIN 48 liability totaling $229.9 million.
Deferred tax assets and liabilities in the preceding table, after netting by taxing jurisdiction, are in the
following captions in the consolidated balance sheet at June 30, 2008 and 2007 (in millions):
June 30,
2008
June 30,
2007
Current deferred tax asset (1) ...................................... $ 8.2 $ 5.1
Non current deferred tax asset (2) .................................. 11.2 8.0
Current deferred tax liability (3) .................................... (506.6) (650.0)
Non current deferred tax liability (4) ................................ (580.3) (654.9)
Net deferred tax liability ...................................... $(1,067.5) $(1,291.8)
(1) Included in “Prepaid expenses and other.”
(2) Included in “Other assets.”
(3) Included in “Other accrued liabilities.”
(4) Included in “Deferred income taxes and other liabilities.”
At June 30, 2008, the Company had gross federal, state and international loss and credit carryforwards of
$180.5 million, $943.1 million and $145.4 million, respectively, the tax effect of which is an aggregate deferred
tax asset of $200.0 million. Substantially all of these carryforwards are available for at least three years or have
an indefinite carryforward period. Approximately $162.1 million of the valuation allowance at June 30, 2008
applies to certain federal, international, and state and local carryforwards that, in the opinion of management, are
95