Cardinal Health 2015 Annual Report Download - page 18

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MD&A Liquidity and Capital Resources
17 Cardinal Health | Fiscal 2015 Form 10-K
In December 2014, we used the net proceeds from the November
offering, together with cash on hand, to redeem all of our outstanding
4.0% Notes due 2015, 5.8% Notes due 2016, 5.85% Notes due 2017
and 6.0% Notes due 2017 at a redemption price equal to 100% of
the principal amount and accrued but unpaid interest, plus the make-
whole premium applicable to each series of notes. As a result of this
redemption, during the second quarter of fiscal 2015, we incurred a
loss on the extinguishment of debt of $60 million ($37 million, net of
tax).
Risk Management
We use interest rate swaps, foreign currency contracts and
commodity contracts to manage our exposure to cash flow variability.
We also use interest rate swaps to protect the value of our debt and
use foreign currency forward contracts to protect the value of our
existing and forecasted foreign currency assets and liabilities. See
the "Quantitative and Qualitative Disclosures About Market Risk"
section as well as Notes 1 and 12 of the “Notes to Consolidated
Financial Statements” for information regarding the use of financial
instruments and derivatives as well as foreign currency, interest rate
and commodity exposures.
Capital Deployment
Capital Expenditures
Capital expenditures during fiscal 2015, 2014 and 2013 were $300
million, $249 million and $195 million, respectively.
We expect capital expenditures in fiscal 2016 to be between $510
million and $540 million primarily for growth projects in our core
businesses, information technology projects and integration of the
Cordis acquisition.
Dividends
During fiscal 2015, we paid quarterly dividends totaling $1.37 per
share, an increase of 13 percent from fiscal 2014. On May 6, 2015
our Board of Directors approved a 13 percent increase in our quarterly
dividend to $0.3870 per share, or $1.55 per share on an annualized
basis, which was paid on July 15, 2015 to shareholders of record on
July 1, 2015.
On August 5, 2015, our Board of Directors approved a quarterly
dividend of $0.3870 per share, or $1.55 per share on an annualized
basis, payable on October 15, 2015 to shareholders of record on
October 1, 2015.
Share Repurchases
During fiscal 2015, we repurchased $1.0 billion of our common
shares.
On October 29, 2013, our Board of Directors approved a $1.0 billion
share repurchase program and on August 6, 2014, the Board of
Directors authorized an additional $1.0 billion under the program, for
a total of $2.0 billion. This program expires on December 31, 2016.
At June 30, 2015, we had $693 million remaining under this
repurchase authorization.
Acquisitions
In fiscal 2015, we acquired a number of businesses in both the
Pharmaceutical and Medical segments for an aggregate of $503
million, and as previously noted, entered into agreements to acquire
Harvard Drug and Cordis. We expect these acquired businesses to
enhance our core strategic areas of generics, health systems and
hospital solutions (including manufactured medical products),
specialty pharmaceutical products and services, international and
alternate sites of care.