Cardinal Health 2014 Annual Report Download - page 40

Cardinal Health, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
38
Maturities of long-term obligations and other short-term
borrowings for fiscal 2015 through 2019 and thereafter are as
follows: $801 million, $22 million, $788 million, $561 million, $1
million and $1,799 million.
Long-Term Debt
The 1.7%, 1.9%, 3.2%, 4.0%, 4.6%, 4.625%, 5.8%, 5.85% and
6.0% Notes represent unsecured obligations of Cardinal Health,
Inc. The 7.0% and 7.8% Debentures represent unsecured
obligations of Allegiance Corporation (a wholly-owned
subsidiary), which Cardinal Health, Inc. has guaranteed. None
of these obligations are subject to a sinking fund and the
Allegiance obligations are not redeemable prior to maturity.
Interest is paid pursuant to the terms of the obligations. These
notes are effectively subordinated to the liabilities of our
subsidiaries, including trade payables of $12.1 billion.
In June 2013, we used cash on hand to repay $300 million of
our 5.5% Notes that were due on June 15, 2013.
In February 2013, we sold in a registered offering $400 million
aggregate principal amount of 1.7% Notes that mature on
March 15, 2018, $550 million aggregate principal amount of
3.2% Notes that mature on March 15, 2023 and $350 million
aggregate principal amount of 4.6% Notes that mature on
March 15, 2043. These notes are unsecured obligations and
rank equally in right of payment with all of our existing and future
unsecured and unsubordinated indebtedness. We used the
proceeds to fund a portion of the purchase price of AssuraMed
as discussed in Note 2.
In May 2012, we sold in a registered offering $250 million
aggregate principal amount of 1.9% Notes that mature on
June 15, 2017 and $250 million aggregate principal amount of
3.2% Notes that mature on June 15, 2022. These notes are
unsecured and unsubordinated obligations and rank equally in
right of payment with all of our existing and future unsecured
and unsubordinated indebtedness.
The 6.0% Notes due 2017, 1.9% Notes due 2017, 1.7% Notes
due 2018, 4.625% Notes due 2020, 3.2% Notes due 2022, 3.2%
Notes due 2023 and 4.6% Notes due 2043 require us to offer
to purchase the notes at 101% of the principal amount plus
accrued and unpaid interest, if we have a defined change of
control and specified ratings below investment grade by
Standard & Poor's Ratings Services, Moody's Investors Service,
Inc. and Fitch Ratings.
Other Financing Arrangements
In addition to cash and equivalents, at June 30, 2014 and 2013,
our sources of liquidity include a $1.5 billion revolving credit
facility and a commercial paper program of up to $1.5 billion,
backed by the revolving credit facility. The revolving credit facility
exists largely to support issuances of commercial paper as well
as other short-term borrowings for general corporate purposes.
On November 6, 2012, we renewed our $950 million committed
receivables sales facility program through Cardinal Health
Funding, LLC ("CHF") until November 6, 2014. On October 15,
2013, we reduced our committed receivables sales facility
program from $950 million to $700 million in light of the
Walgreens contract expiration. CHF was organized for the sole
purpose of buying receivables and selling undivided interests
in those receivables to third-party purchasers. Although
consolidated in accordance with GAAP, CHF is a separate legal
entity from Cardinal Health and from our subsidiary that sells
the receivables to CHF. CHF is designed to be a special purpose,
bankruptcy-remote entity whose assets are available solely to
satisfy the claims of its creditors.
We had no outstanding balance under the revolving credit facility
at June 30, 2014 and 2013, except for standby letters of credit
of zero and $43 million at June 30, 2014 and 2013, respectively.
We had no outstanding borrowings from the commercial paper
program at June 30, 2014 and 2013. We had no outstanding
balance under the committed receivables sales facility program
at June 30, 2014 and 2013, except for standby letters of credit
of $41 million and zero at June 30, 2014 and 2013, respectively.
Our revolving credit facility and committed receivables sales
facility program require us to maintain a consolidated interest
coverage ratio, as of any fiscal quarter end, of at least 4-to-1
and a consolidated leverage ratio of no more than 3.25-to-1. As
of June 30, 2014, we were in compliance with these financial
covenants.
We also maintain other short-term credit facilities and an
unsecured line of credit that allowed for borrowings up to $369
million and $304 million at June 30, 2014 and 2013, respectively.
The $319 million and $190 million balance of other obligations
at June 30, 2014 and 2013, respectively, consisted of short-term
borrowings and capital leases.