Long-Term Obligations and Other Short-Term Borrowings

9 Months Ended

Mar. 31, 2022

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

Long-Term Obligations and Other Short-Term Borrowings

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

Long-Term Debt and Other Short-Term Borrowings

We had total long-term obligations, including the current portion and other short-term borrowings, of $5.6 billion and $6.2 billion at March 31, 2022 and June 30, 2021, 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 notes are effectively subordinated to the liabilities of our subsidiaries, including trade payables of $24.8 billion and $23.7 billion at March 31, 2022 and June 30, 2021, respectively.

During the nine months ended March 31, 2022, we redeemed all outstanding $572 million principal amount of 2.616% Notes due June 2022 at a redemption price equal to 100% of the principal amount and accrued but unpaid interest, plus the make-whole premium applicable to the notes. In connection with this redemption, we recorded a $10 million loss on early extinguishment of debt. The early redemption was funded with available cash.

During the nine months ended March 31, 2021, we early repurchased a total of $40 million of the Floating Rate Notes due 2022 and $2 million of the 2.616% Notes due June 2022. The repurchases were funded with available cash. In connection with the early debt repurchases, we recorded a $1 million loss on early extinguishment of debt during the nine months ended March 31, 2021.

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. At March 31, 2022, we had no amounts outstanding under our commercial paper program, revolving credit facility, or our committed receivables sales facility. During the nine months ended March 31, 2022, we had a daily maximum amount outstanding under our commercial paper and committed receivables programs of $1.2 billion and an average daily amount outstanding of $25 million.

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 a consolidated net leverage ratio of no more than 3.75-to-1. As of March 31, 2022, we were in compliance with this financial covenant.