The decrease in gross margins excluding the items noted above can generally be attributed to the fact that, on average, the newly acquired former Merck Generics business, particularly in countries outside of the United States, contributes margins that are lower than those realized by Mylan's U.S. subsidiaries. The impact of these lower margins was realized for a full twelve months in calendar year 2008 compared to only three months in calendar year 2007.
For calendar year 2008, the company reported income from operations of $297.9 million compared to a loss from operations of $996.1 million in the prior year. In addition to the items which affected gross profit as discussed above, operating income in the current year was impacted by a non-cash goodwill impairment charge of $385.0 million related to Specialty and net charges related to the settlement of certain litigation in the amount of $16.6 million, while the prior year included a charge of $1.42 billion to write off in-process research and development related to the acquisitions of Matrix and the former Merck Generics business. Excluding these items, operating income was $712.7 million in the current year compared to $590.8 million in the prior.
Interest expense for calendar year 2008 totaled $357.0 million compared to $200.4 million for calendar year 2007. The increase is due to the additional debt incurred to finance the acquisition of the former Merck Generics business during the fourth quarter of calendar year 2007.
Other income, net, was $11.3 million for calendar year 2008, compared to $97.1 million in calendar year 2007. Calendar year 2007 included a $85.0 million non-cash mark
|SOURCE Mylan Inc.|
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