Intercompany transactions and balances have been eliminated in consolidation.  The financial results of the Compan y’s Canadian 
and Mexican subsidiaries are included in the consolidated financial statements for the twelve months ended May 31. 
Statements of Consolidated Comprehensive Income 
Accounting Standards Codification (ASC) Topic 220 "Compr ehensive Income" requires the reporting of comprehensive income in 
addition to net income.  Effective for fiscal 2012 and retrospective for fiscal 2011 and 2010, the Company has elected to incl ude a 
statement of consolidated comprehensive income as pa rt  of its basic consolidated financial statements.  Prior to inclusion of the 
statement of consolidated comprehensive income , comprehensive income, other comprehensive income a nd the components of 
other comprehensive income were re ported as part of the statement of c onsolidated shareholders' equity. 
Foreign Currency 
The financial statements of the Company’s Canadian and Mexican subsidiaries are mea sured using local currencies as their 
functional currencies.  Assets and liabilities are translated into U.S. dollars at current exchange rates, while income and expenses are 
translated at average exchange rates.  Translation gains and losses are reported in other comprehensi ve income (loss) in the 
statements of consolidated comprehensive income.  Gains and losses resulting from transactions denominated in foreign currencies 
are included in the statements of consolidated income as a compon ent of other expense (income), net. 
Estimates 
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 
requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of 
contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during  
the period.  Actual results may differ from the estimates and assumptions used in preparing the consolidated financial statements. 
Cash and Cash Equivalents 
The Company considers all short-term, highly liquid investments with maturities of thr ee months or less at the date of purchase to 
be cash equivalents.  Cash and cash equivalents are carried at cost, which approximates fair value. 
Marketable Securities 
The primary marketable security invest ments of the Company include money market and mutual funds held in a rabbi trust for a 
non-qualified compensation plan.  These are included in other assets in the consolidated balance sheets, are classified as trading 
securities, and reported at fair value based on quoted market prices.  Unrealized gains and losses are recorded in other expense 
(income), net in the statements of c onsolidated income and reflect changes in the fair value of the investments du ring the period. 
Concentration of Credit Risk 
The Company has a broad cu stomer base representing many diverse industries primarily across North America.  As such, the 
Company does not believe that a significant concentration of credit risk exists in its accounts receivable.  
19Applied Industrial Technologies, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share amounts)
25358_AIT_Report_WT.indd   19 8/23/12   8:33 AM