Cardinal Health 2014 Annual Report Download - page 47

Cardinal Health, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
45
The following table is a summary of the fair value gain/(loss) of
our derivative instruments, based upon the estimated amount
that we would receive (or pay) to terminate the contracts at June
30:
2014 2013
(in millions)
Notional
Amount
Fair Value
Gain/(Loss)
Notional
Amount
Fair Value
Gain/(Loss)
Pay-floating
interest rate
swaps $ 1,438 $ — $ 1,138 $ (11)
Foreign currency
contracts 643 — 643 3
Forward interest
rate swaps 300 9 250 20
Commodity
contracts 24 1 24 —
The fair values are based on quoted market prices for the same
or similar instruments, which represents a Level 2
measurement.
13. Shareholders' Equity
At June 30, 2014 and 2013, authorized capital shares consisted
of the following: 750 million Class A common shares, without
par value; 5 million Class B common shares, without par value;
and 500 thousand non-voting preferred shares, without par
value. The Class A common shares and Class B common shares
are collectively referred to below as “common shares”. Holders
of common shares are entitled to share equally in any dividends
declared by the Board of Directors and to participate equally in
all distributions of assets upon liquidation. Generally, the holders
of Class A common shares are entitled to one vote per share,
and the holders of Class B common shares are entitled to one-
fifth of one vote per share on proposals presented to
shareholders for vote. Under certain circumstances, the holders
of Class B common shares are entitled to vote as a separate
class. Only Class A common shares were outstanding at
June 30, 2014 and 2013.
We repurchased $1.6 billion of our common shares, in the
aggregate, through share repurchase programs during fiscal
2014, 2013 and 2012, as described below. We funded the
repurchases with available cash. The common shares
repurchased are held in treasury to be used for general
corporate purposes.
During fiscal 2014, we repurchased 9.9 million common shares
having an aggregate cost of $673 million. The average price
paid per common share was $67.85.
During fiscal 2013, we repurchased 10.2 million common shares
having an aggregate cost of $450 million. The average price
paid per common share was $44.11.
During fiscal 2012, we repurchased 10.3 million common shares
having an aggregate cost of $450 million. The average price
paid per common share was $43.64.
Accumulated Other Comprehensive Income
The following table summarizes the changes in the balance of
AOCI by component and in total:
(in millions)
Foreign
Currency
Translation
Adjustments
Unrealized
Gain on
Derivatives,
net of tax
Accumulated
Other
Comprehensive
Income
Balance at June 30,
2012 $ 36 $ 1 $ 37
Other comprehensive
income/(loss), net of tax
before reclassifications 18 8 26
Amounts reclassified to
earnings — 5 5
Total other
comprehensive
income, net of tax of
$9 million 18 13 31
Balance at June 30,
2013 $ 54 $ 14 $ 68
Other comprehensive
income/(loss), net of tax
before reclassifications 9 (10) (1)
Amounts reclassified to
earnings — 3 3
Total other
comprehensive
income/(loss), net of
tax of $5 million 9 (7) 2
Balance at June 30,
2014 $ 63 $ 7 $ 70
Activity related to unrealized gains and losses on available-for-
sale securities as described in Note 6, was immaterial during
fiscal 2014.
14. Earnings Per Share
The following table reconciles the number of common shares
used to compute basic and diluted earnings per share:
(in millions) 2014 2013 2012
Weighted-average common shares–basic 341 341 345
Effect of dilutive securities:
Employee stock options, restricted shares,
restricted share units and performance
share units 43 4
Weighted-average common shares–
diluted 345 344 349
The potentially dilutive employee stock options, restricted
shares, restricted share units and performance share units that
were antidilutive for fiscal 2014, 2013 and 2012 were zero, 9
million and 10 million, respectively.
15. Segment Information
Our operations are principally managed on a products and
services basis and are comprised of two operating segments,
which are the same as our reportable segments:
Pharmaceutical and Medical. The factors for determining the
reportable segments include the manner in which management