Cardinal Health 2011 Annual Report Download - page 51

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S
egment Pro
f
it an
d
O
p
erating Earnings
C
hang
e
S
egment Profit and Operatin
g
Earn
i
ng
s
(
in millions, except
g
rowth rates
)
2011
2010
2011
2010
2009
P
h
armaceut
i
ca
l
................................... 2
6%
(
3)% $1,264.8 $1,001.8 $1,035.7
M
ed
i
cal
.........................................
(
14)% 11% 369.9 427.7 384.9
T
otal Se
g
ment Profit
.
.............................
14% 1%
1,634.7 1,429.
5
1,420.6
C
or
p
orate
.
.....................................
.
N.M. N.M. (120.7) (122.6) (133.2)
C
onsolidated Operatin
g
Earnin
gs
.
.................... 16% 2% $1,514.0 $1,306.9 $1,287.
4
S
egment Pro
f
i
t
We eva
l
uate t
h
e per
f
ormance o
f
t
h
e
i
n
di
v
id
ua
l
segments
b
ase
d
upon, among ot
h
er t
hi
ngs, segment pro
fi
t
,
which is se
g
ment revenue, less se
g
ment cost of products sold, less se
g
ment SG&A expenses. We do not allocate
restructur
i
ng an
d
emp
l
oyee severance, acqu
i
s
i
t
i
on-re
l
ate
d
costs,
i
mpa
i
rments an
d
(ga
i
n)/
l
oss on sa
l
eo
f
assets,
li
t
i
gat
i
on (recover
i
es)/c
h
arges, net, certa
i
n
i
nvestment an
d
ot
h
er spen
di
ng to our segments. T
h
ese costs ar
e
retained at Corporate. Investment spendin
gg
enerall
y
includes the first
y
ear spend for certain pro
j
ects which
requ
i
re
i
ncrementa
l
strateg
i
c
i
nvestments
i
nt
h
e
f
orm o
f
a
ddi
t
i
ona
l
operat
i
ng expenses. We encourage our
segments to
id
ent
if
y
i
nvestment pro
j
ects w
hi
c
h
w
ill
promote
i
nnovat
i
on an
d
prov
id
e
f
uture returns. As approva
l
d
ecisions for such pro
j
ects are dependent upon executive mana
g
ement, the expenses for such pro
j
ects are often
reta
i
ne
d
at Corporate. In a
ddi
t
i
on, Sp
i
n-O
ff
costs
i
nc
l
u
d
e
d
w
i
t
hi
n SG&A are not a
ll
ocate
d
to our segments.
Ph
armaceutica
l
se
g
men
t
Th
epr
i
nc
i
pa
ld
r
i
vers
f
or
fi
sca
l
2011 compare
d
to t
h
epr
i
or year were strong per
f
ormance
i
n our gener
ic
p
h
armaceut
i
ca
l
pro
g
rams,
i
nc
l
u
di
n
g
t
h
e
i
mpact o
f
new pro
d
uct
l
aunc
h
es, t
h
e pos
i
t
i
ve
i
mpact o
f
acqu
i
s
i
t
i
ons, an
d
increased mar
g
in from branded pharmaceutical sales, offset b
y
customer pricin
g
chan
g
es. See the
g
ross mar
g
in
sect
i
on a
b
ove
f
or
di
scuss
i
on o
f
t
h
ese
i
tems
.
Th
epr
i
nc
i
pa
ld
r
i
vers
f
or t
h
e
d
ecrease
d
ur
i
ng
fi
sca
l
2010 were pr
i
c
i
ng c
h
anges on renewe
d
custome
r
contracts,
f
ewer s
i
gn
ifi
cant gener
i
cp
h
armaceut
i
ca
ll
aunc
h
es t
h
an t
h
epr
i
or year an
d
t
h
eMe
di
c
i
ne S
h
opp
e
f
ranchise transformation. The decline in se
g
ment profit was partiall
y
offset b
y
contributions from our
g
eneric
programs,
di
sc
i
p
li
ne
d
cost contro
l
san
di
ncrease
d
marg
i
n
f
rom
b
ran
d
e
d
p
h
armaceut
i
ca
l
sa
l
es.
S
egment profit from bulk sales increased
$
20 million in fiscal 2011 as compared to fiscal 2010 and was 1
1
percent of Pharmaceutical se
g
ment profit in both
y
ears. Se
g
ment profit from non-bulk sales increased
$
24
3
million in fiscal 2011 as compared to fiscal 2010 and was 89 percent of Pharmaceutical se
g
ment profit in bot
h
years. T
h
e gener
i
cp
h
armaceut
i
ca
li
tems an
d
acqu
i
s
i
t
i
ons
di
scusse
d
a
b
ove pr
i
mar
il
y
i
mpacte
d
segment pro
fi
t
f
rom non-
b
u
lk
sa
l
es
.
M
e
d
ica
l
segment
Compare
d
to t
h
epr
i
or
y
ear, resu
l
ts
f
or
fi
sca
l
2011 were a
d
verse
ly
a
ff
ecte
dbyi
ncrease
d
cost o
f
commo
di
t
i
es
u
sed in our self-manufactured and private brand products partiall
y
offset b
y
increased sales volume. Results also
were
i
mpacte
db
yt
h
e negat
i
ve year-over-year
i
mpact o
f
recogn
i
z
i
ng
i
n
fi
sca
l
2010 a one-t
i
me ga
i
nre
l
ate
d
to
prev
i
ous
ly d
e
f
erre
di
ntercompan
y
revenue
f
or sa
l
es to CareFus
i
on.
Th
epr
i
nc
i
pa
ld
r
i
vers
f
or t
h
e
i
ncrease
d
ur
i
n
gfi
sca
l
2010 were
g
rowt
hi
nsa
l
es to certa
i
nex
i
st
i
n
g
customer
s
a
nd decreased cost of raw materials associated with commodit
y
price movements. Results were also positivel
y
aff
ecte
db
yt
h
e one-t
i
me ga
i
nre
l
ate
d
to prev
i
ous
l
y
d
e
f
erre
di
ntercompany revenue
f
or sa
l
es to CareFus
i
on.
Se
g
ment pro
fi
t
g
rowt
h
was part
i
a
lly d
ampene
df
rom
i
ncrease
d
spen
di
n
g
on strate
gi
c pro
j
ects
.
25