Cardinal Health 2008 Annual Report Download - page 130

The counterparties to these contracts are major financial institutions and the Company does not have
significant exposure to any one counterparty. Management believes the risk of loss is remote and in any event
would not be material.
Fair Value of Financial Instruments. The carrying amounts of cash and equivalents, trade receivables,
accounts payable, notes payable-banks, other short-term borrowings and other accrued liabilities at June 30, 2008
and 2007 approximate their fair value because of the short-term maturities of these items.
Cash balances are invested in accordance with the Company’s investment policy. These investments are
exposed to market risk from interest rate fluctuations and credit risk from the underlying issuers, although this is
mitigated through diversification.
The estimated fair value of the Company’s long-term obligations and other short-term borrowings was
$3,765.5 million and $3,475.5 million as compared to the carrying amounts of $3,846.4 million and
$3,473.3 million at June 30, 2008 and 2007, respectively. The fair value of the Company’s long-term obligations
and other short-term borrowings is estimated based on either the quoted market prices for the same or similar
issues and the current interest rates offered for debt of the same remaining maturities or estimated discounted
cash flows.
The following is a summary of the fair value gain/(loss) of the Company’s derivative instruments, based
upon the estimated amount that the Company would receive (or pay) to terminate the contracts as of June 30,
2008 and 2007. The fair values are based on quoted market prices for the same or similar instruments.
2008 2007
(in millions)
Notional
Amount
Fair Value
Gain/(Loss)
Notional
Amount
Fair Value
Gain/(Loss)
Foreign currency forward contracts ........................ $1,203.2 $42.2 $1,117.8 $(21.8)
Interest rate swaps ...................................... 1,748.0 7.2 1,250.0 (68.7)
15. SHAREHOLDERS’ EQUITY
At June 30, 2008 and 2007, the Company’s authorized capital shares consisted of the following: 750 million
common shares, without par value (“Class A common shares”); 5 million Class B common shares, without par
value (“Class B common shares”); and 0.5 million 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 Company’s 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 as
of June 30, 2008 and 2007.
The Company repurchased approximately $6.4 billion of its Common Shares, in aggregate, through share
repurchase programs during fiscal 2008, 2007, and 2006, as described below.
Fiscal 2008. On August 8, 2007, the Company announced a $2.0 billion share repurchase program. Pursuant
to this program, the Company repurchased approximately 12.0 million Common Shares having an aggregate cost
of approximately $750 million during fiscal 2008. Also during fiscal 2008, the Company repurchased an
additional 4.8 million Common shares having an aggregate cost of approximately $342 million under a $4.5
billion combined share repurchase program first announced on July 11, 2006 and most recently amended on
January 31, 2007. The average price paid per common share for all Common Shares repurchased during fiscal
2008 was $64.81.
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