Notes to Consolidated Financial Statements the completion of implementation/set up training neces - sary to operate the software. The portion of the license fee related to system support is deferred and recognized over the annual license period. Translation of Foreign Currencies. The financial position and the results of operations of the Company’s foreign operations, excluding the Company’s Malaysian and Mexi- can manufacturing operations which are denominated  in U.S. dollars, are measured using the local currencies  of the countries in which they operate and ar e translated into U.S. dollars. Although the ef fects of foreign currency fluctuations are mitigated by the fact that expenses  of foreign subsidiaries are generally incurred in the same currencies in which sales are generated, the reported results of operations of the Company’s foreign subsidiaries are affected by changes in foreign currency exchange rates and, as compared to prior periods, will be higher  or lower depending upon a weakening or str engthening  of the U.S. dollar. In addition, the net assets of for eign subsidiaries are translated into U.S. dollars at the for eign currency exchange rates in effect at the end of each period. Accordingly, the Company’s consolidated share- holders’ equity will fluctuate depending upon the r elative strengthening or weakening of the U.S. dollar versus r ele- vant foreign currencies.  Derivative Financial Instrument Risk. The Company uses derivative financial instruments to minimize the impact of foreign exchange rate changes on ear nings and cash flows. The Company also periodically enters into for - eign currency exchange contracts to hedge cer tain expo- sures related to selected transactions that ar e relatively certain as to both timing and amount. The Company does not use derivative financial instruments for trading or speculative purposes (see Note 5 for fur ther discussion).  Research and Development Costs. Costs incurred  in connection with the development of new pr oducts  and manufacturing methods are charged to expense  as incurred. Research and development expenses, net  of customer reimbursements, were $48.5 million,  $49.7 million, and $45.7 million in fiscal 2000, 1999, and 1998, respectively. Customer reimbursements in the amount of $10.4 million, $11.8 million, and $13.0 mil - lion were received for the fiscal years ended June 30, 2000, 1999, and 1998, respectively.  Income Taxes. No provision is made for U.S. income taxes on earnings of foreign subsidiary companies which the Company controls but does not include in the consoli - dated federal income tax return since it is management’s practice and intent to permanently reinvest the earnings. Pro forma Adjustment for Income Taxes. On September 10, 1999, the Company completed a mer ger transaction with ALP (the “ALP Merger”). As of April 1998, ALP had elected S-Corporation status for income tax purposes. As a result of the merger, ALP terminated its S-Corporation election. The pro forma adjustment for income taxes pr es- ents the pro forma tax expense of ALP as if ALP had been subject to federal income taxes during the periods pr e- sented (see Note 2). Earnings Per Common Share. Basic earnings per Common Share (“Basic”) is computed by dividing net earnings (the numerator) by the weighted average num - ber of Common Shares outstanding during each period (the denominator). Diluted earnings per Common Share is similar to the computation for Basic, except that  the denominator is increased by the dilutive effect  of stock options outstanding, computed using the tr eas- ury stock method. Excluding dividends paid by all entities with which  the Company has merged, the Company paid cash divi - dends per Common Share of $0.100, $0.095, and $0.070 for the fiscal years ended June 30, 2000, 1999, and 1998, respectively. Stock Splits. On August 12, 1998, the Company declared a three-for-two stock split which was ef fected  as a stock dividend and distributed on October 30, 1998 to shareholders of record on October 9, 1998. All shar e and per share amounts included in the consolidated financial statements, except the Consolidated Statements of Shareholders’ Equity, have been adjusted to r etroac- tively reflect these stock splits. New Accounting Pronouncement. As of July 1, 1999, the Company adopted the Statement of Position 98-1 (“SOP 98-1”), “Accounting for the Costs of Computer Software Developed or Obtained for Inter nal Use.” SOP 98-1 provides guidance on accounting for costs of com - puter software developed or obtained for inter nal use. The adoption of this statement did not have a material impact on the Company’s consolidated financial statements. 38 Cardinal Health, Inc. Annual Report 2000