Cardinal Health 2011 Annual Report Download - page 77

(the denominator). Diluted EPS is similar to the com
p
utation for Basic EPS, exce
p
t that the denominator is
i
ncrease
db
yt
h
e
dil
ut
i
ve e
ff
ect o
f
veste
d
an
d
unveste
d
stoc
k
opt
i
ons, restr
i
cte
d
s
h
ares an
d
restr
i
cte
d
s
h
are un
i
ts
a
s computed usin
g
the treasur
y
stock method.
Recent Financia
l
Accounting Stan
d
ar
d
s. In June 2009, t
h
eF
i
nanc
i
a
l
Account
i
ng Stan
d
ar
d
s Boar
d
(“FASB”)
issued new accountin
gg
uidance on the accountin
g
for transfers of financial assets. This
g
uidance improves th
e
re
l
evance, representat
i
ona
lf
a
i
t
hf
u
l
ness an
d
compara
bili
ty o
fi
n
f
ormat
i
on prov
id
e
d
a
b
out a trans
f
er o
ffi
nanc
i
a
l
a
ssets, t
h
ee
ff
ects o
f
a trans
f
er o
ffi
nanc
i
a
l
assets on an ent
i
ty’s
fi
nanc
i
a
l
statements, an
d
a trans
f
eror’s cont
i
nu
i
ng
involvement, if an
y
, in financial assets transferred. This
g
uidance was effective for fiscal
y
ears be
g
innin
g
after
November 15, 2009. As a result of this new guidance, we determined that our committed receivables sale
s
f
ac
ili
t
y
no
l
on
g
er qua
lifi
e
d
as an o
ff
-
b
a
l
ance s
h
eet arran
g
ement
b
e
gi
nn
i
n
gi
n
fi
sca
l
2011. At June 30, 2011 an
d
2010, we had no amounts outstandin
g
under this facilit
y.
I
n Jul
y
2010, the FASB issued new accountin
gg
uidance which requires additional disclosures re
g
ardin
g
the
a
llowance for credit loss for financin
g
receivables. This
g
uidance requires an entit
y
to provide additional
di
sc
l
osures re
l
ate
d
to t
h
e cre
di
tr
i
s
k
re
l
ate
d
to
fi
nanc
i
ng rece
i
va
bl
es an
dh
ow t
h
at r
i
s
ki
s ana
l
yze
di
n
d
eterm
i
n
i
ng
the related allowance for credit losses. We adopted this
g
uidance on Januar
y
1, 2011. The adoption of thi
s
g
uidance did not have a material impact on our financial position or results of operations
.
2
. ACQUISITION
S
Fisc
a
l2
0
1
1
D
ur
i
ng
fi
sca
l
2011, we comp
l
ete
d
severa
l
acqu
i
s
i
t
i
ons, t
h
e most s
i
gn
ifi
cant o
f
w
hi
c
h
are
d
escr
ib
e
di
n more
d
eta
il b
e
l
ow. T
h
e resu
l
ts o
f
t
h
e acqu
i
s
i
t
i
ons
d
escr
ib
e
db
e
l
ow are
i
nc
l
u
d
e
d
w
i
t
hi
n our P
h
armaceut
i
ca
l
se
g
ment.
We also completed other acquisitions durin
g
this period that were not si
g
nificant, individuall
y
or in the
a
ggregate. T
h
eva
l
uat
i
on o
fid
ent
ifi
a
bl
e
i
ntang
ibl
e assets ut
ili
zes s
i
gn
ifi
cant uno
b
serva
bl
e
i
nputs an
d
t
h
u
s
represents a Leve
l
3
f
a
i
rva
l
ue measurement. T
h
e
f
a
i
rva
l
ue measurements o
f
assets acqu
i
re
d
an
dli
a
bili
t
i
e
s
a
ssumed as of the acquisition dates were completed durin
g
fiscal 2011. The consolidated financial statement
s
i
nc
l
u
d
et
h
e resu
l
ts o
f
operat
i
ons
f
rom t
h
ese
b
us
i
ness com
bi
nat
i
ons
f
rom t
h
e
d
ate o
f
acqu
i
s
i
t
i
on. For
fi
sca
l
2011,
these three acquisitions increased revenues b
y
$2.9 billion and operatin
g
earnin
g
sb
y
$61.3 million, compared to
f
iscal 2010
.
K
inray. On December 21, 2010, we completed the acquisition of privatel
y
held Kinra
y
, Inc. (“Kinra
y
”) for
$
1.3 billion in an all-cash transaction. Kinray is a wholesale pharmaceutical distribution company which serve
s
reta
il i
n
d
epen
d
ent p
h
armac
i
es pr
i
mar
il
y
i
nt
h
e New Yor
k
metropo
li
tan area.
Y
on
gY
u.
O
n Novem
b
er 29, 2010, we comp
l
ete
d
t
h
e acqu
i
s
i
t
i
on o
f
w
h
at
i
s now our Yong Yu su
b
s
idi
ary
f
o
r
$
457.7 million, including the assumption of
$
57.4 million in debt. Yong Yu is a health care distribution busines
s
h
eadquartered in Shan
g
hai, China.
P
4H
ealthca
r
e.
O
n Jul
y
15, 2010, we completed the acquisition of privatel
y
held Healthcare Solution
s
H
oldin
g
, LLC (“P4 Healthcare”) for $506.1 million in cash and certain contin
g
ent consideration. P4 Healthcar
e
serves
k
ey part
i
c
i
pants across t
h
ec
h
a
i
no
f
spec
i
a
l
ty care,
i
nc
l
u
di
ng p
h
ys
i
c
i
ans, p
h
armaceut
i
ca
l
compan
i
es an
d
pa
y
ors
by
prov
idi
n
g
essent
i
a
l
too
l
s, serv
i
ces an
dd
ata to
h
e
l
p
i
mprove t
h
e qua
li
t
y
o
f
pat
i
ent outcomes an
d
increase efficienc
y
in the deliver
y
of health care services.
I
n accordance with the a
g
reement, the former owners of P4 Healthcare have the ri
g
ht to receive certain
contingent payments based on targeted earnings before interest, taxes, depreciation, and amortization
(“EBITDA”). T
h
e cont
i
ngent cons
id
erat
i
on was to
b
e earne
d
over
f
our measurement per
i
o
d
s, w
hi
c
h
spanne
d
three
y
ears, and each measurement period had specific tar
g
ets and pa
y
out amounts. The contin
g
ent consideration
payout was limited to
$
150.0 million. Subsequent to June 30, 2011, we amended the agreement with the former
o
wners to exten
d
t
h
e
f
ourt
h
measurement per
i
o
d
(
b
eg
i
nn
i
ng January 1, 2013)
f
rom s
i
x mont
h
stoe
i
g
h
teen
months and reduce the maximum contin
g
ent consideration pa
y
out to $100.0 million.
5
1