Cardinal Health 2009 Annual Report Download - page 124

The Common Shares repurchased were held in treasury to be used for general corporate purposes. During
fiscal 2008, the Company retired 128 million Common Shares in treasury. The retirement of these shares had no
impact on total shareholders’ equity; however, it did impact certain of the individual components of
shareholders’ equity as follows: $1.0 billion decrease in Common Shares, $7.5 billion decrease in retained
earnings and $8.5 billion decrease in Common Shares in treasury.
16. EARNINGS PER SHARE
Basic earnings per Common Share (“Basic EPS”) is computed by dividing net earnings (the numerator) by
the weighted average number of Common Shares outstanding during each period (the denominator). Diluted
earnings per Common Share (“Diluted EPS”) is similar to the computation for Basic EPS, except that the
denominator is increased by the dilutive effect of vested and unvested stock options, restricted shares, and
restricted share units computed using the treasury stock method.
The following table reconciles the number of Common Shares used to compute Basic EPS and Diluted EPS
for the three years ending June 30, 2009, 2008 and 2007:
(in millions) 2009 2008 2007
Weighted-average Common Shares-basic ...................................... 357.6 358.2 394.9
Effect of dilutive securities:
Employee stock options, restricted shares, and restricted share units ............. 3.9 5.8 9.8
Weighted-average Common Shares-diluted .................................... 361.5 364.0 404.7
The potentially dilutive employee stock options that were antidilutive for fiscal 2009, 2008 and 2007 were
28.8 million, 22.1 million, and 5.4 million, respectively.
The total number of Common Shares issued less the Common Shares held in treasury is used to determine
the Common Shares outstanding.
17. SEGMENT INFORMATION
The Company’s operations are principally managed on a products and services basis. Effective the first
quarter of fiscal 2009, the Company reorganized its businesses into three reportable segments — the Healthcare
Supply Chain Services segment, the Clinical and Medical Products segment and the All Other segment. The
factors for determining the reportable segments include the manner in which management evaluates the
performance of the Company combined with the nature of the individual business activities. In accordance with
SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information,” all prior period segment
information has been reclassified to conform to this new financial reporting presentation.
The Healthcare Supply Chain Services segment distributes pharmaceutical products, over-the-counter
healthcare products and consumer health products and provides support services to retail customers, hospitals
and alternate care providers in the United States and Puerto Rico. This segment also distributes medical and
surgical products to hospitals, surgery centers, laboratories and physician offices in the United States, Canada
and Puerto Rico and assembles and distributes sterile and non-sterile procedure kits. It provides services to
branded pharmaceutical manufacturers and operates a pharmaceutical repackaging and distribution program for
chain and independent pharmacy customers and alternate care customers. In addition, this segment operates
centralized nuclear (radiopharmaceutical) pharmacies, provides third-party logistics support services and
distributes therapeutic plasma to hospitals, clinics and other providers located in the United States. Lastly, this
segment operates a pharmacy for specialty pharmaceuticals.
The Clinical and Medical Products segment develops, manufactures, leases and sells medical technology
products for hospitals and other healthcare providers, including intravenous medication safety and infusion
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