Cardinal Health 2015 Annual Report Download - page 19

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MD&A Other
Cardinal Health | Fiscal 2015 Form 10-K 18
Contractual Obligations
At June 30, 2015, our contractual obligations, including estimated
payments due by period, are as follows:
(in millions) 2016 2017 to
2018 2019 to
2020 There-
after Total
Long-term debt and
short-term borrowings
(1) $ 280 $ 1,242 $ 450 $ 3,487 $ 5,459
Interest on long-term
debt 197 348 294 1,591 2,430
Capital lease
obligations (2) 1 24 4 4 33
Other liabilities (3) 3 — — — 3
Operating leases (4) 103 146 80 77 406
Purchase obligations
and other payments
(5) 324 308 248 426 1,306
Total contractual
obligations $ 908 $ 2,068 $ 1,076 $ 5,585 $ 9,637
(1) Represents maturities of our long-term debt obligations and other short-term
borrowings excluding capital lease obligations described below. See Note 7 of
the “Notes to Consolidated Financial Statements” for further information.
(2) Represents maturities of our capital lease obligations included within long-term
debt in our consolidated balance sheets.
(3) Represents cash outflows by period for certain of our liabilities in which cash
outflows could be reasonably estimated. Long-term liabilities, such as
unrecognized tax benefits 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 8 of the “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 9 of the “Notes to Consolidated Financial
Statements.”
(5) A purchase obligation is defined as an agreement to purchase goods or services
that is legally enforceable and specifies all significant terms, including 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 we are
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 canceled with no termination fee or with proper notice are excluded
from our 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. Purchase obligations and other payments also includes 39
quarterly payments of $25.6 million that we are required to pay CVS Health,
which commenced in October 2014 in connection with the establishment of Red
Oak Sourcing. Purchase obligations and other payments does not include
contingent payments under the sourcing venture that were not yet determined
as of June 30, 2015, including the quarterly $10 million increase that began in
fiscal 2016. See Note 9 of the “Notes to Consolidated Financial Statements” for
additional information.
Off-Balance Sheet Arrangements
We had no significant off-balance sheet arrangements at June 30,
2015.
Recent Financial Accounting
Standards
See Note 1 of the “Notes to Consolidated Financial Statements” for
a discussion of recent financial accounting standards.