Cardinal Health 2010 Annual Report Download - page 76

The following table summarizes sales returns and allowances for the fiscal years ended June 30, 2010, 2009
and 2008:
Fiscal Year Ended June 30
,
(
in millions
)
201
0
200
9
2008
S
a
l
es returns an
d
a
ll
o
w
ance
s
.........................................
$
1
,
516.2 $1
,
391.4 $1
,
191.
5
S
ince we
g
enerall
y
do not accept non-merchantable product returns from our customers, man
y
of our
customers return non-merchantable pharmaceutical products to our vendors via third-parties. Generall
y
,ou
r
customers do not have a direct relationshi
p
with our vendors and, as such, our vendors
p
ass the value of th
e
r
eturns to us (usuall
y
in the form of an accounts pa
y
able deduction). We in turn pass the value received, less an
administrative fee, to our customer. In certain instances, we
p
ass the estimated value of the return to our
customer prior to processin
g
the deduction with our vendors. Althou
g
hin
g
eneral we believe we have
satisfactor
y
contractual protections, we could be sub
j
ect to alle
g
ations of liabilit
y
from customers or vendors if
o
ur administration of this overall process was deficient in some si
g
nificant respect. In certain situations, we hav
e
maintained reserves for such alle
g
ations based on their nature and our historical experience with their resolution.
T
hose reserves were not si
g
nificant in fiscal 2010, 2009 or 2008.
Distribution Service Agreement and Other Vendor Fees
.
Our Pharmaceutical segment recognizes fees
r
eceived from its distribution service agreements and other fees received from vendors related to the purchase o
r
distribution of the vendor’s inventory when those fees have been earned and we are entitled to payment. We
r
ecognize the fees as a reduction in the carrying value of the inventory that generated the fees and, as such, the
f
ees are recognized as a reduction of cost of products sold in our statements of earnings when that inventory is
sold
.
S
h
ippin
g
an
d
Han
dl
in
g.
Shi
pp
i
n
g
an
dh
an
dli
n
g
costs are
i
nc
l
u
d
e
di
n SG&A expenses
i
n our conso
lid
ate
d
statements o
f
earn
i
n
g
s. S
hi
pp
i
n
g
an
dh
an
dli
n
g
costs
i
nc
l
u
d
ea
ll d
e
li
ver
y
expenses as we
ll
as a
ll
costs to prepare
t
h
e pro
d
uct
f
or s
hi
pment to t
h
een
d
customer
.
The followin
g
table summarizes shippin
g
and handlin
g
costs for fiscal 2010, 2009 and 2008
:
Fi
scal Year Ended
J
une
30,
(
in millions
)
2010
2009
2008
S
hi
pp
i
n
g
an
dh
an
dli
n
g
cost
s
..............................................
$293.5 $289.7 $270.0
S
hipping and handling revenue received was immaterial for all periods presented.
Trans
l
ation o
f
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.S. genera
ll
yar
e
measure
d
us
i
ng t
h
e
l
oca
l
currency as t
h
e
f
unct
i
ona
l
currency. A
dj
ustments to trans
l
ate t
h
e assets an
dli
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
ot
h
er compre
h
ens
i
ve
i
ncome ut
ili
z
i
ng per
i
o
d
-en
d
exc
h
ange rates. Revenues an
d
expenses o
f
t
h
ese
f
ore
i
gn su
b
s
idi
ar
i
es are trans
l
ate
d
us
i
ng average exc
h
ange rates
d
ur
i
ng t
h
e year.
T
h
e
f
o
ll
ow
i
n
g
ta
bl
e summar
i
zes t
h
e
f
ore
ig
n currenc
y
trans
l
at
i
on
g
a
i
ns/(
l
osses) reco
g
n
i
ze
di
n accumu
l
ate
d
o
t
h
er compre
h
ens
i
ve
i
ncome at June 30, 2010 an
d
2009:
J
une 30
,
(in millions)
20
1
0
2
009
F
oreign currency translation (gains)/losse
s
..................................
$(
1
.0)
$
96.2
F
ore
ig
n currenc
y
transact
i
on
g
a
i
ns an
dl
osses, ca
l
cu
l
ate
dby
ut
ili
z
i
n
g
we
igh
te
d
avera
g
e exc
h
an
g
e rates
f
or
t
h
e per
i
o
d
, are
i
nc
l
u
d
e
di
nt
h
e conso
lid
ate
d
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
2010, 2009 an
d
2008, respect
i
ve
l
y.
5
0