Cardinal Health 2009 Annual Report Download - page 74

Interest Rate and Currency Risk Management
The Company uses foreign currency forward contracts and interest rate swaps to manage its exposure to
cash flow variability. The Company also uses foreign currency forward contracts and interest rate swaps to
protect the value of its existing foreign currency assets and liabilities and the value of its debt. See Notes 1 and
13 of “Notes to Consolidated Financial Statements” for information regarding the use of financial instruments
and derivatives, including foreign currency hedging instruments.
Contractual Obligations
As of June 30, 2009, the Company’s contractual obligations, including estimated payments due by period,
were as follows:
(in millions) 2010 2011-2012 2013-2014 Thereafter Total
On Balance Sheet:
Long-term debt (1) ................................ $364.9 $ 837.8 $328.2 $2,105.4 $3,636.3
Interest on long-term debt .......................... 186.4 320.8 247.8 447.9 1,202.9
Capital lease obligations (2) ........................ 3.0 5.9 3.8 — 12.7
Other long-term liabilities (3) ....................... 24.1 20.3 8.2 0.4 53.0
Off-Balance Sheet:
Operating leases (4) ............................... 92.7 147.1 91.5 86.5 417.8
Purchase obligations (5) ........................... 259.1 77.0 14.6 3.3 354.0
Total financial obligations .......................... $930.2 $1,408.9 $694.1 $2,643.5 $5,676.7
(1) Represents maturities of the Company’s long-term debt obligations excluding capital lease obligations
described below. See Note 9 in “Notes to Consolidated Financial Statements” for further information.
(2) Represents maturities of the Company’s capital lease obligations included within long-term debt on the
Company’s consolidated balance sheet and the related estimated future interest payments.
(3) Represents cash outflows by period for certain of the Company’s long-term liabilities in which cash
outflows could be reasonably estimated. Certain long-term liabilities, such as unrecognized tax benefits
($848.8 million) and deferred taxes, have been excluded from the table above because of the inherent
uncertainty of the underlying tax positions or because of the inability to reasonably estimate the timing of
any cash outflows. See Note 10 of “Notes to Consolidated Financial Statements” for further discussion of
income taxes.
(4) Represents minimum rental payments and the related estimated future interest payments for operating leases
having initial or remaining non-cancelable lease terms as described in Note 11 of “Notes to Consolidated
Financial Statements.”
(5) Purchase obligations are defined as an agreement to purchase goods or services that is enforceable and
legally binding and specifying all significant terms, including the following: fixed or minimum quantities to
be purchased; fixed, minimum or variable price provisions; and approximate timing of the transaction. The
purchase obligation amounts disclosed above represent estimates of the minimum for which the Company is
obligated and the time period in which cash outflows will occur. Purchase orders and authorizations to
purchase that involve no firm commitment from either party are excluded from the above table. In addition,
contracts that can be unilaterally cancelled with no termination fee or with proper notice are excluded from
the Company’s total purchase obligations except for the amount of the termination fee or the minimum
amount of goods that must be purchased during the requisite notice period.
Off-Balance Sheet Arrangements
See “Liquidity and Capital Resources—Capital Resources” above and Note 19 in “Notes to Consolidated
Financial Statements,” which is incorporated herein by reference, for a discussion of off-balance sheet
arrangements.
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