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Supplemental Information Non-GAAP Financial Measures
23 Cardinal Health | Fiscal 2015 Form 10-K
Supplemental Information
Financial Measures That Supplement U.S. Generally Accepted Accounting Principles
Measures (Non-GAAP Financial Measures)
The 'Key Highlights" section and the "Fiscal 2015 Overview"
discussion within MD&A in this Form 10-K contains financial
measures that are not calculated in accordance with GAAP. In
general, the measures exclude items and charges that we do not
believe reflect our core business and relate more to strategic, multi-
year corporate activities, or the items and charges relate to activities
or actions that may have occurred over multiple or in prior periods
without predictable trends. We use these non-GAAP financial
measures internally to evaluate our performance, evaluate the
balance sheet, engage in financial and operational planning and
determine incentive compensation.
We provide these non-GAAP financial measures to investors as
supplemental metrics to assist readers in assessing the effects of
items and events on our financial and operating results and in
comparing our performance to that of our competitors. However, the
non-GAAP financial measures used by us may be calculated
differently from, and therefore may not be comparable to, similarly
titled measures used by other companies.
The non-GAAP financial measures disclosed by us should not be
considered a substitute for, or superior to, financial measures
calculated in accordance with GAAP, and the financial results
calculated in accordance with GAAP and reconciliations to those
financial statements should be carefully evaluated.
Following are definitions of the non-GAAP financial measures
presented in this Form 10-K and reconciliations of the differences
between the non-GAAP financial measures and their most directly
comparable GAAP financial measures.
Definitions
Growth rate calculation: Except for compound annual growth rates (CAGR), growth rates in this Form 10-K are determined by dividing the
difference between current period results and prior period results by prior period results. CAGR is determined by subtracting one from ((the
ending value divided by the beginning value) raised to the power of (one divided by the number of years)), calculated using fiscal 2011 as the
base year.
Non-GAAP diluted EPS from continuing operations: non-GAAP earnings from continuing operations divided by diluted weighted-average
shares outstanding.
Non-GAAP earnings from continuing operations: earnings from continuing operations excluding (1) restructuring and employee severance,
(2) amortization and other acquisition-related costs, (3) impairments and (gain)/loss on disposal of assets, (4) litigation (recoveries)/charges,
net, (5) LIFO charges/(credits)1, (6) loss on extinguishment of debt, (7) other spin-off costs2 and (8) gain on sale of CareFusion stock, each
net of tax.
Non-GAAP operating earnings: operating earnings excluding (1) restructuring and employee severance, (2) amortization and other
acquisition-related costs, (3) impairments and (gain)/loss on disposal of assets, (4) litigation (recoveries)/charges, net, (5) LIFO charges/
(credits) and (6) other spin-off costs.
1 The inventories of our core pharmaceutical distribution facilities in the Pharmaceutical segment are valued at the lower of cost, using the LIFO method,
or market. These charges or credits are included in cost of products sold, and represent changes in our LIFO inventory reserve. We did not record any
LIFO charges or credits in fiscal 2015, 2014 or 2013, respectively.
2 Costs incurred in connection with our spin-off of CareFusion which are included in distribution, selling, general and administrative expenses.