Express Scripts 2014 Annual Report Download - page 50

Express Scripts 2014 Annual Report
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intheborrowingrequestbutshallnotbemorethanthreemonthsfromthedateofsuchloanandshallbeonorpriortothe
terminationdate.ThecreditfacilitiesrequireinteresttobepaidatLIBORplusanagreeduponrateatthetimeofborrowing.
InAugust2011,weenteredintoacreditagreement(the“creditagreement”)withacommercialbanksyndicate
providingforafive-year$4,000.0milliontermloanfacility(the“termfacility”)anda$1,500.0millionrevolvingloanfacility
(the“revolvingfacility”).TheCompanymakesquarterlyprincipalpaymentsonthetermfacility.AsofDecember31,2014,
$1,315.8millionwasoutstandingunderthetermfacilitywithanaverageinterestrateof1.90%,ofwhich$1,052.6millionis
consideredcurrentmaturitiesoflong-termdebt.
Ourbankfinancingarrangementsandseniornotescontaincertaincustomarycovenantsthatrestrictourabilityto
incuradditionalindebtedness,createorpermitliensonassetsandengageinmergersorconsolidations.Thecovenantsrelatedto
bankfinancingarrangementsalsoinclude,amongotherthings,minimuminterestcoverageratiosandmaximumleverageratios.
AtDecember31,2014,wewereincompliancewithallcovenantsassociatedwithourdebtinstruments,includingthecredit
agreementandourseniornotes.
SeeNote7-Financingformoreinformation.
CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS
Followingisascheduleofthecurrentmaturitiesofourlong-termdebtasofDecember31,2014,futureminimum
leasepaymentsandpurchasecommitments(inmillions):
Payments Due by Period as of December 31, 2014
Total 2015 2016-2017 2018-2019 Thereafter
Long-termdebt(1) $16,581.6 $3,030.1 $4,539.1 $3,224.7 $5,787.7
Futureminimumoperatingleasepayments 341.0 60.7 106.7 73.3 100.3
Futureminimumcapitalleasepayments 29.0 14.4 14.6 — —
Purchasecommitments(2) 219.7 120.8 94.3 3.1 1.5
Totalcontractualcashobligations $17,171.3 $3,226.0 $4,754.7 $3,301.1 $5,889.5
(1) Thesepaymentsexcludetheinterestexpenseonourrevolvingcreditfacility,whichrequiresustopayintereston
LIBORplusamargin.OurinterestpaymentsfluctuatewithchangesinLIBORandinthemarginoverLIBORweare
requiredtopay(seeNote7-Financing),aswellasthebalanceoutstandingonourrevolvingcreditfacility.Interest
paymentsonourSeniorNotesarefixed,andhavebeenincludedintheseamounts.
(2) Theseamountsconsistofrequiredfuturepurchasecommitmentsformaterials,supplies,servicesandfixedassetsinthe
normalcourseofbusiness.Wedonotexpectpotentialpaymentsundertheseprovisionstomateriallyaffectresultsof
operationsorfinancialcondition.Thisconclusionisbaseduponreasonablylikelyoutcomesderivedbyreferenceto
experienceandcurrentbusinessplans.
Thegrossliabilityforuncertaintaxpositionswhichcouldresultinfuturepaymentsis$585.7millionand$516.6
millionasofDecember31,2014and2013,respectively.Wearenotabletoprovideareasonablyreliableestimateofthetiming
offuturepaymentsrelatingtothenoncurrentobligations.Ournetlong-termdeferredtaxliabilityis$4,923.2millionand
$5,440.6millionasofDecember31,2014and2013,respectively.Schedulingpaymentsfordeferredtaxliabilitiescouldbe
misleadingsincefuturesettlementsoftheseamountsarenotthesoledeterminingfactorofcashtaxestobepaidinfuture
periods.
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IMPACT OF INFLATION
Changesinpriceschargedbymanufacturersandwholesalersforpharmaceuticalsaffectourrevenuesandcostof
revenues.Mostofourcontractsprovidewebillclientsbasedonagenerallyrecognizedpriceindexforpharmaceuticals.