Henry Schein 2014 Annual Report Download - page 86

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HENRY SCHEIN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(in thousands, except per share data)
72
Note 1 – Significant Accounting Policies – (Continued)
For the years ended December 27, 2014, December 28, 2013 and December 29, 2012, the results of our
goodwill impairment analysis did not result in any impairments.
Long-Lived Assets
Long-lived assets, other than goodwill and other indefinite-lived intangibles, are evaluated for impairment
whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable
through the estimated undiscounted future cash flows to be derived from such assets.
Definite-lived intangible assets primarily consist of non-compete agreements, trademarks, trade names,
customer lists, customer relationships and intellectual property. For long-lived assets used in operations,
impairment losses are only recorded if the asset’ s carrying amount is not recoverable through its undiscounted,
probability-weighted future cash flows. We measure the impairment loss based on the difference between the
carrying amount and the estimated fair value. When an impairment exists, the related assets are written down to
fair value.
Cost of Sales
The primary components of cost of sales include the cost of the product (net of purchase discounts, supplier
chargebacks and rebates) and inbound and outbound freight charges. Costs related to purchasing, receiving,
inspections, warehousing, internal inventory transfers and other costs of our distribution network are included in
selling, general and administrative expenses along with other operating costs.
As a result of different practices of categorizing costs associated with distribution networks throughout our
industry, our gross margins may not necessarily be comparable to other distribution companies. Total distribution
network costs were $64.5 million, $62.2 million and $59.5 million for the years ended December 27, 2014,
December 28, 2013 and December 29, 2012.
Comprehensive Income
Comprehensive income includes certain gains and losses that, under accounting principles generally accepted in
the United States, are excluded from net income as such amounts are recorded directly as an adjustment to
stockholders’ equity. Our comprehensive income is primarily comprised of net income, foreign currency
translation gain (loss), unrealized gain (loss) on foreign currency hedging activities, unrealized investment gain
(loss) and pension adjustment gain (loss).