Long-Term Obligations and Other Short-Term Borrowings

9 Months Ended

Mar. 31, 2020

Long-Term Obligations and Other Short-Term Borrowings [Abstract]

Long-Term Obligations and Other Short-Term Borrowings

6. Long-Term Obligations and Other Short-Term Borrowings

Long-Term Debt and Other Short-Term Borrowings

At March 31, 2020 and June 30, 2019, we had total long-term obligations, including the current portion and other short-term borrowings, of $7.3 billion and $8.0 billion, respectively. All the notes represent unsecured obligations of Cardinal Health, Inc. and rank equally in right of payment with all of our existing and future unsecured and unsubordinated indebtedness. Interest is paid pursuant to the terms of the obligations. These obligations are effectively subordinated to the liabilities of our subsidiaries, including trade payables of $22.0 billion and $21.5 billion at March 31, 2020 and June 30, 2019, respectively.

In November 2019, we repaid the full principal of the 2.4% Notes due 2019 at maturity for $450 million. During the nine months ended March 31, 2020, we early repurchased $247 million of the 2.616% Notes due 2022, $11 million of the 3.2% Notes due 2022, $20 million of the Floating Rate Notes due 2022, $104 million of the 3.41% Notes due 2027, $6 million of the 4.6% Notes due 2043, $5 million of the 4.9% Notes due 2045, and $35 million of the 4.368% Notes due 2047. The repurchases were paid for with available cash and other short-term borrowings. In connection with the early debt repurchases, we recorded a $9 million loss on extinguishment of debt.

The following table summarizes long-term obligations and other short-term borrowings at:

(in millions) (1)	March 31, 2020		June 30, 2019
2.4% Notes due 2019	$	—	$	450
4.625% Notes due 2020	504		508
2.616% Notes due 2022	834		1,079
3.2% Notes due 2022	236		247
Floating Rate Notes due 2022	321		340
3.2% Notes due 2023	573		551
3.079% Notes due 2024	815		781
3.5% Notes due 2024	413		402
3.75% Notes due 2025	530		494
3.41% Notes due 2027	1,215		1,318
4.6% Notes due 2043	340		346
4.5% Notes due 2044	342		342
4.9% Notes due 2045	441		445
4.368% Notes due 2047	560		594
7.0% Debentures due 2026	124		124
Other Obligations	14		10
Total	7,262		8,031
Less: current portion of long-term obligations and other short-term borrowings	508		452
Long-term obligations, less current portion	$	6,754	$	7,579

(1) Maturities are presented on a calendar year basis.

Other Financing Arrangements

In addition to cash and equivalents and operating cash flow, other sources of liquidity include a $2.0 billion commercial paper program backed by a $2.0 billion revolving credit facility. We also have a $1.0 billion committed receivables sales facility.

In September 2019, we renewed our committed receivables sales facility program through Cardinal Health Funding, LLC (“CHF”) through September 30, 2022. CHF was organized for the sole purpose of buying receivables and selling undivided interests in those receivables to third-party purchasers. Although consolidated with Cardinal Health, Inc. in accordance with GAAP, CHF is a separate legal entity from Cardinal Health, Inc. and from our subsidiary that sells 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.

Our revolving credit and committed receivables sales facilities require us to maintain, as of the end of every fiscal quarter through December 2020, a consolidated net leverage ratio of no more than 4.00-to-1. The maximum permitted ratio will reduce to 3.75-to-1 in March 2021 and as of the end of every quarter thereafter. As of March 31, 2020, we were in compliance with this financial covenant.