Cardinal Health 2009 Annual Report Download - page 109

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9. LONG-TERM OBLIGATIONS AND OTHER SHORT-TERM BORROWINGS
Long-term obligations and other short-term borrowings consist of the following as of June 30, 2009 and
2008:
June 30,
(in millions) 2009 2008
4.00% Notes due 2015 ...................................................... $ 523.8 $ 475.5
5.50% Notes due 2013 ...................................................... 300.0 300.0
5.65% Notes due 2012 ...................................................... 317.1 311.9
5.80% Notes due 2016 ...................................................... 526.4 507.2
5.85% Notes due 2017 ...................................................... 500.0 500.0
6.00% Notes due 2017 ...................................................... 350.4 320.0
6.25% Notes due 2008 ...................................................... — 150.0
6.75% Notes due 2011 ...................................................... 494.6 491.6
7.80% Debentures due 2016 .................................................. 75.7 75.7
7.00% Debentures due 2026 .................................................. 192.0 192.0
Preferred debt securities ..................................................... — 150.0
Floating Rate Notes due 2009 ................................................. 350.0 350.0
Other obligations ........................................................... 17.3 22.5
Total .................................................................... 3,647.3 3,846.4
Less: current portion and other short-term borrowings .............................. 367.3 159.0
Long-term obligations, less current portion and other short-term borrowings ............ $3,280.0 $3,687.4
The 4.00%, 5.50% 5.65%, 5.80%, 5.85%, 6.00% and 6.75% Notes and the Floating Rate Notes due 2009
represent unsecured obligations of the Company. The 7.80% and 7.00% Debentures represent unsecured
obligations of Allegiance Corporation (a wholly-owned subsidiary of the Company), which are guaranteed by the
Company. These obligations are not subject to a sinking fund and are not redeemable prior to maturity. Interest is
paid pursuant to the terms of the obligations. These notes of the Company are effectively subordinated to the
liabilities of the Company’s subsidiaries, including trade payables of $9.1 billion.
In June 2008, the Company sold $300 million aggregate principal amount of fixed rate notes due 2013 (“the
2013 Notes”) in a registered offering. The 2013 Notes mature on June 15, 2013. Interest on the 2013 Notes
accrues at 5.50% per year payable semi-annually. If the Company experiences specific types of change of control
and the notes are rated below investment grade by S&P, Moody’s, and Fitch, the Company will be required to
offer to purchase the 2013 Notes at 101% of the principal amount thereof, plus accrued and unpaid interest, if
any, to the date of repurchase. The Company used the proceeds to repay $150 million of 6.25% Notes due 2008
on July 15, 2008 and to repay $149 million for the preferred debt securities on October 3, 2008.
During fiscal 2001, the Company entered into an agreement to periodically sell trade receivables to a special
purpose accounts receivable and financing entity, which is exclusively engaged in purchasing trade receivables
from, and making loans to, the Company (the “Accounts Receivable and Financing Entity”). The Accounts
Receivable and Financing Entity, which is consolidated by the Company as it is the primary beneficiary of the
variable interest entity, issued $250.0 million and $400.0 million in preferred variable debt securities to parties
not affiliated with the Company during fiscal 2004 and 2001, respectively. On October 26, 2006, the Company
amended certain of the facility terms of the Company’s preferred debt securities. As part of this amendment, the
Company repaid $500.0 million of the principal balance with a portion of the proceeds of an October 2006 sale
of notes and a minimum net worth covenant was added whereby the minimum net worth of the Company cannot
fall below $5.0 billion at any time. The amendment eliminated a minimum adjusted tangible net worth covenant
(adjusted tangible net worth could not fall below $2.5 billion) and certain financial ratio covenants. On
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