Cardinal Health 2010 Annual Report Download - page 78

Download and view the complete annual report

Please find page 78 of the 2010 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 130

  • 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

I
n January 2010, the FASB issued new disclosure guidance regarding fair value measurements. This
guidance improves the transparency of disclosures about the use of fair value measurements in financial
statements. This guidance is effective for interim and annual reporting periods beginning after December 1
5,
2009, with the exception of certain disclosure requirements regarding gross changes in Level 3 measurements
,
which are not effective until fiscal years beginning after December 1
5
, 2010. We adopted this new disclosur
e
guidance in the third quarter of fiscal 2010 and have included the required additional disclosures in this
Form
10
-K.
2
. ACQUI
S
ITION
S
Fisca
l
2010. Dur
i
ng
fi
sca
l
2010, we comp
l
ete
d
an acqu
i
s
i
t
i
on t
h
at
i
n
di
v
id
ua
ll
y was not s
i
gn
ifi
cant. T
h
e
aggregate purchase price of this acquisition, which was paid in cash, was $32.0 million, including the assumptio
n
o
f $1.9 million of liabilities. The consolidated financial statements include the results of operations from this
b
us
i
ness com
bi
nat
i
on
f
rom t
h
e
d
ate o
f
t
h
e acqu
i
s
i
t
i
on. Ha
d
t
h
e transact
i
on occurre
d
at t
h
e
b
eg
i
nn
i
ng o
ffi
sca
l
2009, conso
lid
ate
d
resu
l
ts o
f
operat
i
ons wou
ld
not
h
ave
diff
ere
d
mater
i
a
ll
y
f
rom reporte
d
resu
l
ts.
Fiscal 2009. During fiscal 2009, we completed an acquisition that individually was not significant. The
aggregate purchase price of this acquisition, which was paid in cash, was
$
128.6 million including potentia
l
maximum contingent payments of
$
14.0 million. Assumed liabilities of this acquired business were
$
102.1
million. The consolidated financial statements include the results of o
p
erations from this business combinatio
n
f
rom the date of acquisition. Had the transaction occurred at the beginning of fiscal 2008, consolidated results of
o
perations would not have differed materially from reported results.
Fi
s
cal 200
8
.OnMa
y
12, 2008, we completed the acquisition of assets of privatel
y
held Enturia Inc.
(“Enturia”), a Leawood, Kansas-based manufacturer of
p
roducts and services directed at the infection
p
revention
markets. The purchase price of the acquisition, which was paid in cash, was $490.0 million, includin
g
the
assum
p
tion of $14.2 million of liabilities, which included $5.1 million of debt.
The valuation of the acquired assets and liabilities resulted in
g
oodwill of $327.8 million and identifiable
intan
g
ible assets of $129.4 million. We identified and valued intan
g
ible assets related to trade names and
tra
d
emar
k
s,
d
eve
l
ope
d
tec
h
no
l
o
gy
an
d
customer re
l
at
i
ons
hi
ps. T
h
e
d
eta
il by
cate
g
or
yi
sas
f
o
ll
ows
.
C
ategory
A
m
ou
nt
(
in millions
)
A
verage
Life
(
Years
)
Tr
ade
n
a
m
es a
n
dt
r
ade
m
a
rk
s
....................................
$
1
9
.1 1
0
D
eveloped technolo
gy
.........................................
2
5
.
3
1
0
C
ustomer relationshi
p
s
.........................................
85
.
0
1
0
Total intangible assets acquire
d
..................................
$
129.
4
Durin
g
fiscal 2008, we recorded a char
g
e of $17.7 million related to the write-off of estimated in-proces
s
r
esearch and development costs (“IPR&D”) associated with the Enturia acquisition. The portion of the purchase
p
rice allocated to IPR&D in fiscal 2008 represented our preliminar
y
estimate of the fair value of the research and
d
eve
l
opment pro
j
ects
i
n-process at t
h
et
i
me o
f
t
h
e acqu
i
s
i
t
i
on. T
h
ese pro
j
ects
h
a
d
not
y
et reac
h
e
d
tec
h
no
l
o
gi
ca
l
f
eas
ibili
t
y
, were
d
eeme
d
to
h
ave no a
l
ternat
i
ve use an
d
, accor
di
n
gly
, were
i
mme
di
ate
ly
expense
d
as acqu
i
s
i
t
i
o
n
r
e
l
ate
d
costs at t
h
e acqu
i
s
i
t
i
on
d
ate.
I
n connect
i
on w
i
t
h
t
h
eSp
i
n-O
ff
, Entur
i
a was trans
f
erre
d
to CareFus
i
on an
dh
as
b
een rec
l
ass
ifi
e
d
t
o
di
scont
i
nue
d
operat
i
ons
f
or a
ll
per
i
o
d
st
h
roug
h
t
h
e
d
ate o
f
t
h
eSp
i
n-O
ff
.
I
n addition, during fiscal 2008, we completed other acquisitions that individually were not significant. The
aggregate purchase price of these acquisitions, which was paid in cash, was
$
35.3 million, including the
assum
p
tion of
$
5.6 million of liabilities. In connection with the S
p
in-Off,
$
30.6 million of the total cash
p
aid has
been reclassified to net cash used in investing activities—discontinued operations. The consolidated financial
52