Cardinal Health 2011 Annual Report Download - page 76

Distribution Service A
g
reement and Other Vendor Fees
.
Our Pharmaceutical segment recognizes fees
rece
i
ve
df
rom
i
ts
di
str
ib
ut
i
on serv
i
ce agreements an
d
ot
h
er
f
ees rece
i
ve
df
rom ven
d
ors re
l
ate
d
to t
h
e purc
h
ase or
d
istribution of the vendors’ inventor
y
when those fees have been earned and we are entitled to pa
y
ment. We
recognize the fees as a reduction in the carrying value of the inventory that generated the fees, and as such th
e
f
ees are recogn
i
ze
d
as a re
d
uct
i
on o
f
cost o
f
pro
d
ucts so
ld i
n our statements o
f
earn
i
ngs w
h
en t
h
at
i
nventory
i
s
sold
.
S
hippin
g
and Handlin
g
.
S
hipping and handling costs are included in SG&A expenses in our consolidate
d
statements o
f
earn
i
ngs. S
hi
pp
i
ng an
dh
an
dli
ng costs
i
nc
l
u
d
ea
ll d
e
li
very expenses as we
ll
as a
ll
costs to prepar
e
the
p
roduct for shi
p
ment to the end customer
.
T
he following table summarizes shipping and handling costs for fiscal 2011, 2010 and 2009:
F
iscal Year Ended
June
30,
(
in millions
)
2011
2010
2009
Shippin
g
and handlin
g
cost
s
..............................................
$325.7 $293.5 $289.7
R
evenue rece
i
ve
df
or s
hi
pp
i
ng an
dh
an
dli
ng was
i
mmater
i
a
lf
or a
ll
per
i
o
d
s presente
d.
Trans
l
ation of Foreign Currencies. F
i
nanc
i
a
l
statements o
f
our su
b
s
idi
ar
i
es outs
id
et
h
e
U
n
i
te
dS
tates ar
e
g
enerall
y
measured usin
g
the local currenc
y
as the functional currenc
y
.Ad
j
ustments to translate the assets and
li
a
bili
t
i
es o
f
t
h
ese
f
ore
i
gn su
b
s
idi
ar
i
es
i
nto U.S.
d
o
ll
ars are accumu
l
ate
di
ns
h
are
h
o
ld
ers’ equ
i
ty t
h
roug
h
a
ccumu
l
ate
d
ot
h
er compre
h
ens
i
ve
i
ncome ut
ili
z
i
n
g
per
i
o
d
-en
d
exc
h
an
g
e rates. Revenues an
d
expenses o
f
t
h
ese
f
orei
g
n subsidiaries are translated usin
g
avera
g
e exchan
g
e rates durin
g
the
y
ear.
Th
e
f
o
ll
ow
i
ng ta
bl
e summar
i
zes t
h
e
f
ore
i
gn currency trans
l
at
i
on ga
i
ns/(
l
osses)
i
nc
l
u
d
e
di
n accumu
l
ate
d
o
t
h
er compre
h
ens
i
ve
i
ncome at June 30, 2011 an
d
2010
:
J
une 30
,
(
in millions
)
2011
2010
Fore
ig
n currenc
y
trans
l
at
i
on
g
a
i
ns/(
l
osses)
..................................
$
71.1 $(1.0)
Forei
g
n currenc
y
transaction
g
ains and losses for the period are included in the consolidated statements o
f
earn
i
ngs
i
not
h
er (
i
ncome)/expense, net, an
d
were
i
mmater
i
a
lf
or
fi
sca
l
2011, 2010 an
d
2009, respect
i
ve
l
y
.
Interest Rate, Currency an
d
Commo
d
ity Ris
k
Management. A
ll d
er
i
vat
i
ve
i
nstruments are reco
g
n
i
ze
d
at
f
a
i
r
v
alue on the balance sheet, and all chan
g
es in fair value are reco
g
nized in net earnin
g
s or shareholders’ equit
y
t
h
roug
h
accumu
l
ate
d
ot
h
er compre
h
ens
i
ve
i
ncome, net o
f
tax
.
For contracts that qualif
y
for hed
g
e accountin
g
treatment, our polic
y
requires that the hed
g
e contracts must
be effective at reducin
g
the risk associated with the exposure bein
g
hed
g
ed and must be desi
g
nated as a hed
g
ea
t
t
h
e
i
ncept
i
on o
f
t
h
e contract. He
d
ge e
ff
ect
i
veness
i
s assesse
d
per
i
o
di
ca
ll
y. Any contract not
d
es
i
gnate
d
as
a
h
ed
g
e, or so desi
g
nated but ineffective, is ad
j
usted to fair value and reco
g
nized in net earnin
g
s immediatel
y
.Ifa
f
air value or cash flow hed
g
e ceases to qualif
y
for hed
g
e accountin
g
the contract would continue to be carried on
t
h
e
b
a
l
ance s
h
eet at
f
a
i
rva
l
ue unt
il
sett
l
e
d
,an
df
uture a
dj
ustments to t
h
e contract’s
f
a
i
rva
l
ue wou
ld b
e
reco
g
nized in earnin
g
s immediatel
y
. If a forecasted transaction was no lon
g
er probable to occur, amount
s
previousl
y
deferred in accumulated other comprehensive income would be reco
g
nized immediatel
y
in earnin
g
s
.
See Note 12
f
or a
ddi
t
i
ona
li
n
f
ormat
i
on regar
di
ng our
d
er
i
vat
i
ve
i
nstruments,
i
nc
l
u
di
ng t
h
e account
i
ng treatmen
t
f
or instruments desi
g
nated as fair value, cash flow and economic hed
g
es
.
E
arnin
g
s per Common Share
.
B
asic earnin
g
s per Common Share (“EPS”) is computed b
y
dividin
g
net
earn
i
ngs (t
h
e numerator)
b
yt
h
ewe
i
g
h
te
d
average num
b
er o
f
Common S
h
ares outstan
di
ng
d
ur
i
ng eac
h
per
i
o
d
5
0