Cardinal Health 2008 Annual Report Download - page 140

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Cash Flows from all Receivable-Related Arrangements
The Company’s net cash flow decrease related to receivable interest transfers for fiscal 2008, 2007 and 2006
were as follows:
(in millions) 2008 2007 2006
Proceeds received on transfer of receivables interests ......................... $ — $ — $150.0
Cash collected in servicing of related receivable interests ..................... 0.3 1.0 2.2
Cash inflow to the Company ............................................ $ 0.3 $ 1.0 $152.2
Repurchase of receivable interests ........................................ — (550.0) (150.0)
Cash collection remitted to the bank ...................................... (43.2) (99.6) (161.2)
Net impact to the Company’s cash flow ................................... $(42.9) $(648.6) $(159.0)
CHS and CHF were required to repurchase any receivables or interests sold only if it was determined the
representations and warranties with regard to the related receivables were not accurate on the date sold.
Operating Leases
The Company entered into an operating lease agreement with a third party bank for the construction of
various facilities and equipment. The lease agreement matures in June 2013. In the event of termination, the
Company is required (at its election) to either repurchase the facility or vacate the property and make
reimbursement for a portion of any unrecovered property cost. The maximum portion of unrecovered property
costs that the Company could be required to reimburse was $120.9 million at June 30, 2008. As of June 30, 2008,
the amount expended to acquire and/or construct the facilities was $151.2 million. The agreement provides for
maximum funding of $245.0 million, which is currently greater than the estimated cost to complete the
construction projects. The required lease payments equal the interest expense for the period on the amounts
drawn. Lease payments under the agreements are based primarily upon LIBOR and are subject to interest rate
fluctuations. As of June 30, 2008, the weighted average interest rate on the agreements approximated 3.32%. The
Company’s estimated minimum annual lease payments under the agreements at June 30, 2008 were
approximately $6.5 million.
During fiscal 2008, the Company did not repurchase any buildings, equipment, or land under operating lease
agreements. During fiscal 2007, the Company repurchased certain buildings, equipment and land of
approximately $51.2 million which were previously under operating lease agreements. Of this total amount
repurchased, approximately $44.2 million related to the PTS Business, which was divested in the fourth quarter
of fiscal 2007.
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