Express Scripts 2014 Annual Report Download - page 54

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Express Scripts 2014 Annual Report
52
SPECIALTYDRUGREVENUES
Weoperatespecialtypharmaciesthatdispensemedicationsforthetreatmentofcomplexandpotentiallylife
threateningdiseases.Manyoftheproductsarecoveredunderamedicalbenefitwhichresultsinamorecomplicated
adjudicationprocessandcoveragereview,ofteninvolvingaprimary,secondaryortertiarycoverage.Asaresult,certain
revenuesareestimatedbasedonhistoricalcollectionrates.Amountsreceivedfromourclientsmaybegreaterthanorlessthan
originallyestimated.Differencesmayaffecttheamountandtimingofrevenuesforanyperiodifactualpricingvariesfrom
estimates.Allowancesforreturnsareestimatedbasedonhistoricalreturntrends.Thediscounts,contractualallowances,
allowancesforreturnsandanydifferencesbetweenestimatesandactualamountsdonothaveamaterialeffectonour
consolidatedfinancialstatements.
48
Item 7A — Quantitative and Qualitative Disclosures About Market Risk
Weareexposedtomarketriskfromchangesininterestratesrelatedtodebtoutstandingunderourcredit
agreement.Ourearningsaresubjecttochangeasaresultofmovementsinmarketinterestrates.AtDecember31,2014,wehad
$1,315.8millionofgrossobligationswhichweresubjecttovariableratesofinterestunderourcreditagreement.Ahypothetical
increaseininterestratesof1%wouldresultinanincreaseinannualinterestexpenseofapproximately$13.2million(pre-tax),
assumingobligationssubjecttovariableinterestratesremainedconstant.