þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Ohio | 31-0958666 |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
7000 Cardinal Place, Dublin, Ohio | 43017 |
(Address of principal executive offices) | (Zip Code) |
(614) 757-5000 | |
(Registrant’s telephone number, including area code) | |
Securities registered pursuant to Section 12(b) of the Act: | |
Title of class | Name of each exchange on which registered |
Common shares (without par value) | New York Stock Exchange |
Securities registered pursuant to Section 12(g) of the Act: None |
Large accelerated filer þ | Accelerated filer o |
Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
Cardinal Health, Inc. and Subsidiaries | ||
Table of Contents |
Item | Page | |
1 | ||
1A | ||
1B | ||
2 | ||
3 | ||
4 | ||
5 | ||
6 | ||
7 | ||
7A | ||
8 | ||
9 | ||
9A | ||
9B | ||
10 | ||
11 | ||
12 | ||
13 | ||
14 | ||
15 | ||
Cardinal Health, Inc. and Subsidiaries | ||
Cardinal Health, Inc. and Subsidiaries | ||
Part I |
• | distributes branded and generic pharmaceutical, over-the-counter healthcare and consumer products through its Pharmaceutical Distribution division to retailers (including chain and independent drug stores and pharmacy departments of supermarkets and mass merchandisers), hospitals and other healthcare providers. This division: |
• | maintains prime vendor relationships that streamline the purchasing process resulting in greater efficiency and lower costs for our customers; |
• | renders services to pharmaceutical manufacturers including distribution, inventory management, data reporting, new product launch support, and contract pricing and chargeback administration; |
• | franchises retail pharmacies under the Medicine Shoppe® and Medicap® brands; and |
• | provides pharmacy services to hospitals and other healthcare facilities; |
• | operates nuclear pharmacies and cyclotron facilities through its Nuclear Pharmacy Services division that manufacture, prepare and deliver radiopharmaceuticals for use in nuclear imaging and other procedures in hospitals and physician offices; and |
• | distributes specialty pharmaceutical products, provides services to pharmaceutical manufacturers, third-party payors and healthcare providers supporting the marketing, distribution and payment for specialty pharmaceutical products, and operates a specialty pharmacy through its Specialty Solutions division. |
(in millions) | 2013 | 2012 | 2011 | ||||||||
Non-bulk sales: | |||||||||||
Revenue from non-bulk sales | $ | 61,309 | $ | 57,738 | $ | 51,816 | |||||
Segment expenses allocated to non-bulk sales (1) | 59,693 | 56,334 | 50,622 | ||||||||
Segment profit from non-bulk sales (1) | $ | 1,616 | $ | 1,404 | $ | 1,194 | |||||
Segment profit from non-bulk sales as a percentage of revenue from non-bulk sales (1) | 2.64 | % | 2.43 | % | 2.31 | % | |||||
Bulk sales: | |||||||||||
Revenue from bulk sales | $ | 29,788 | $ | 40,187 | $ | 41,928 | |||||
Segment expenses allocated to bulk sales (1) | 29,670 | 40,033 | 41,793 | ||||||||
Segment profit from bulk sales (1) | $ | 118 | $ | 154 | $ | 135 | |||||
Segment profit from bulk sales as a percentage of revenue from bulk sales (1) | 0.40 | % | 0.38 | % | 0.32 | % |
(1) | Segment expenses and profit required complex and subjective estimates and allocations based upon assumptions, past experience and judgment that we believe were reasonable. |
Cardinal Health, Inc. and Subsidiaries | ||
Date | Company | Location | Line of Business | Acquisition Price (in millions) | |||||||
Mar 18, 2013 | AssuraMed, Inc. ("AssuraMed") | Twinsburg, Ohio | Medical products distribution | $ | 2,070 | ||||||
Dec 21, 2010 | Kinray, Inc. | Whitestone, New York | Pharmaceutical, generic, health and beauty, and home health care products distribution | $ | 1,336 | ||||||
Nov 29, 2010 | Cardinal Health China | Shanghai, China | Pharmaceutical and medical products distribution | $ | 458 | (1) | |||||
Jul 15, 2010 | Healthcare Solutions Holding, LLC ("P4 Healthcare") | Ellicott City, Maryland | Specialty pharmaceutical services | $ | 520 | (2) |
(1) | Includes the assumption of approximately $57 million in debt. |
(2) | Includes $506 million in cash paid on the acquisition date and $14 million paid in fiscal 2012 and 2013 in connection with the contingent consideration obligation. The contingent consideration obligation had an acquisition date fair value of $92 million. |
Cardinal Health, Inc. and Subsidiaries | ||
• | the U.S. Food and Drug Administration (the “FDA”); |
• | the U.S. Drug Enforcement Administration (the “DEA”); |
• | the U.S. Nuclear Regulatory Commission (the “NRC”); |
• | the U.S. Department of Health and Human Services; |
• | the U.S. Federal Trade Commission; |
• | U.S. Customs and Border Protection; |
• | state boards of pharmacy; |
• | state controlled substance agencies; |
• | state health departments, insurance departments or other comparable state agencies; and |
• | foreign agencies that are comparable to those listed above. |
Cardinal Health, Inc. and Subsidiaries | ||
Cardinal Health, Inc. and Subsidiaries | ||
Cardinal Health, Inc. and Subsidiaries | ||
• | facilitate the purchase and distribution of inventory items from numerous distribution centers; |
• | receive, process and ship orders on a timely basis; |
• | manage the accurate billing and collections for thousands of customers; |
• | process payments to suppliers; |
• | facilitate the manufacturing and assembly of medical products; and |
• | generate financial information. |
Cardinal Health, Inc. and Subsidiaries | ||
Cardinal Health, Inc. and Subsidiaries | ||
Name | Age | Position |
George S. Barrett | 58 | Chairman and Chief Executive Officer |
Jeffrey W. Henderson | 48 | Chief Financial Officer |
Michael C. Kaufmann | 50 | Chief Executive Officer, Pharmaceutical segment |
Donald M. Casey, Jr. | 53 | Chief Executive Officer, Medical segment |
Craig S. Morford | 54 | Chief Legal and Compliance Officer |
Carole S. Watkins | 53 | Chief Human Resources Officer |
Mark R. Blake | 42 | Executive Vice President, Strategy and Corporate Development |
Stephen T. Falk | 48 | Executive Vice President, General Counsel and Corporate Secretary |
Cardinal Health, Inc. and Subsidiaries | ||
Part II |
High | Low | Dividends | |||||||||
Fiscal 2012 | |||||||||||
Quarter Ended: | |||||||||||
September 30, 2011 | $ | 46.83 | $ | 37.99 | $ | 0.215 | |||||
December 31, 2011 | 45.49 | 39.88 | 0.215 | ||||||||
March 31, 2012 | 43.31 | 40.82 | 0.215 | ||||||||
June 30, 2012 | 43.33 | 40.33 | 0.2375 | ||||||||
Fiscal 2013 | |||||||||||
Quarter Ended: | |||||||||||
September 30, 2012 | $ | 43.50 | $ | 37.75 | $ | 0.2375 | |||||
December 31, 2012 | 42.65 | 39.29 | 0.275 | ||||||||
March 31, 2013 | 47.09 | 41.62 | 0.275 | ||||||||
June 30, 2013 | 48.76 | 41.85 | 0.3025 | ||||||||
Fiscal 2014 | |||||||||||
Through August 9, 2013 | $ | 51.57 | $ | 47.02 | $ | 0.3025 |
Issuer Purchases of Equity Securities | |||||||||||||
Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Program (2) | Approximate Dollar Value of Shares That May Yet be Purchased Under the Program (2) (in millions) | |||||||||
April 1 – 30, 2013 | 394 | $ | 42.93 | — | $ | 650 | |||||||
May 1 – 31, 2013 | 2,194,527 | 47.46 | 2,194,160 | 546 | |||||||||
June 1 – 30, 2013 | 3,563,986 | 47.42 | 3,084,186 | 400 | |||||||||
Total | 5,758,907 | $ | 47.43 | 5,278,346 | $ | 400 |
(1) | Includes 394, 207 and 265 common shares purchased in April, May and June 2013, respectively, through a rabbi trust as investments of participants in our Deferred Compensation Plan; 160 and 1,072 restricted shares surrendered in May and June 2013, respectively, by equity compensation plan participants upon vesting to meet tax withholding; and 478,463 common shares owned and tendered in June 2013 by an equity compensation plan participant to meet the exercise price and tax withholding for stock option exercises. |
(2) | On August 8, 2012, our Board of Directors approved a $750 million share repurchase program (the "August 2012 program"), which expires on August 31, 2015. During fiscal 2013, we repurchased 10.2 million common shares having an aggregate cost of $450 million, including $350 million under the August 2012 program. |
Cardinal Health, Inc. and Subsidiaries | ||
June 30 | |||||||||||||||||||||||
2008 | 2009 | 2010 | 2011 | 2012 | 2013 | ||||||||||||||||||
Cardinal Health, Inc. | $ | 100.00 | $ | 60.26 | $ | 94.41 | $ | 130.20 | $ | 122.98 | $ | 141.79 | |||||||||||
S&P 500 Index | 100.00 | 73.81 | 84.46 | 110.46 | 116.47 | 140.57 | |||||||||||||||||
S&P 500 Healthcare Index | 100.00 | 88.53 | 96.48 | 124.02 | 136.12 | 173.89 |
August 31 2009 | June 30 2010 | June 30 2011 | June 30 2012 | June 30 2013 | |||||||||||||||
Cardinal Health, Inc. | $ | 100.00 | $ | 138.45 | $ | 190.95 | $ | 180.33 | $ | 207.88 | |||||||||
S&P 500 Index | 100.00 | 102.68 | 134.20 | 141.48 | 170.92 | ||||||||||||||
S&P 500 Healthcare Index | 100.00 | 100.55 | 129.25 | 141.86 | 181.22 |
Cardinal Health, Inc. and Subsidiaries | ||
(in millions, except per common share amounts) | 2013 (1) | 2012 | 2011 | 2010 | 2009 | ||||||||||||||
Earnings Data: | |||||||||||||||||||
Revenue | $ | 101,093 | $ | 107,552 | $ | 102,644 | $ | 98,503 | $ | 95,992 | |||||||||
Earnings from continuing operations | $ | 335 | $ | 1,070 | $ | 966 | $ | 587 | $ | 758 | |||||||||
Earnings/(loss) from discontinued operations (2) | (1 | ) | (1 | ) | (7 | ) | 55 | 394 | |||||||||||
Net earnings | $ | 334 | $ | 1,069 | $ | 959 | $ | 642 | $ | 1,152 | |||||||||
Basic earnings/(loss) per common share: | |||||||||||||||||||
Continuing operations | $ | 0.98 | $ | 3.10 | $ | 2.77 | $ | 1.64 | $ | 2.12 | |||||||||
Discontinued operations (2) | — | — | (0.02 | ) | 0.15 | 1.10 | |||||||||||||
Net basic earnings per common share | $ | 0.98 | $ | 3.10 | $ | 2.75 | $ | 1.79 | $ | 3.22 | |||||||||
Diluted earnings/(loss) per common share: | |||||||||||||||||||
Continuing operations | $ | 0.97 | $ | 3.06 | $ | 2.74 | $ | 1.62 | $ | 2.10 | |||||||||
Discontinued operations (2) | — | — | (0.02 | ) | 0.15 | 1.08 | |||||||||||||
Net diluted earnings per common share | $ | 0.97 | $ | 3.06 | $ | 2.72 | $ | 1.77 | $ | 3.18 | |||||||||
Cash dividends declared per common share | $ | 1.0900 | $ | 0.8825 | $ | 0.8000 | $ | 0.7200 | $ | 0.5950 | |||||||||
Balance Sheet Data: | |||||||||||||||||||
Total assets | $ | 25,819 | $ | 24,260 | $ | 22,846 | $ | 19,990 | $ | 25,119 | |||||||||
Long-term obligations, less current portion | 3,686 | 2,418 | 2,175 | 1,896 | 3,272 | ||||||||||||||
Shareholders’ equity (3) | 5,975 | 6,244 | 5,849 | 5,276 | 8,725 |
(1) | During the fourth quarter of fiscal 2013, we recognized a non-cash goodwill impairment charge of $829 million ($799 million, net of tax) related to our Nuclear Pharmacy Services division. |
(2) | On August 31, 2009, we separated the clinical and medical products businesses from our other businesses through a pro rata distribution to shareholders of 81 percent of the then outstanding common stock of CareFusion and met the criteria for classification of these businesses as discontinued operations. During the fourth quarter of fiscal 2009, we committed to plans to sell our United Kingdom-based Martindale injectable manufacturing business within our Pharmaceutical segment, and met the criteria for classification of this business as discontinued operations. |
(3) | As noted above, on August 31, 2009, we completed the distribution to our shareholders of 81 percent of the then outstanding common stock of CareFusion. The distribution of CareFusion common stock to our shareholders resulted in the recognition of a $3.7 billion non-cash dividend. |
Cardinal Health, Inc. and Subsidiaries | ||
Financial Review |
Cardinal Health, Inc. and Subsidiaries | ||
Financial Review (continued) |
Revenue | Change | ||||||||||||||||
(in millions) | 2013 | 2012 | 2011 | 2013 | 2012 | ||||||||||||
Pharmaceutical | $ | 91,097 | $ | 97,925 | $ | 93,744 | (7 | )% | 4 | % | |||||||
Medical | 10,060 | 9,642 | 8,922 | 4 | % | 8 | % | ||||||||||
Total segment revenue | 101,157 | 107,567 | 102,666 | (6 | )% | 5 | % | ||||||||||
Corporate | (64 | ) | (15 | ) | (22 | ) | N.M. | N.M. | |||||||||
Total revenue | $ | 101,093 | $ | 107,552 | $ | 102,644 | (6 | )% | 5 | % |
Gross Margin | Change | ||||||||||||||||
(in millions) | 2013 | 2012 | 2011 | 2013 | 2012 | ||||||||||||
Gross margin | $ | 4,921 | $ | 4,541 | $ | 4,162 | 8 | % | 9 | % |
Cardinal Health, Inc. and Subsidiaries | ||
Financial Review (continued) |
SG&A Expenses | Change | ||||||||||||||||
(in millions) | 2013 | 2012 | 2011 | 2013 | 2012 | ||||||||||||
SG&A expenses | $ | 2,875 | $ | 2,677 | $ | 2,528 | 7 | % | 6 | % |
Segment Profit and Operating Earnings | Change | ||||||||||||||||
(in millions) | 2013 | 2012 | 2011 | 2013 | 2012 | ||||||||||||
Pharmaceutical | $ | 1,734 | $ | 1,558 | $ | 1,329 | 11 | % | 17 | % | |||||||
Medical | 372 | 332 | 373 | 12 | % | (11 | )% | ||||||||||
Total segment profit | 2,106 | 1,890 | 1,702 | 11 | % | 11 | % | ||||||||||
Corporate | (1,110 | ) | (98 | ) | (188 | ) | N.M. | N.M. | |||||||||
Total operating earnings | $ | 996 | $ | 1,792 | $ | 1,514 | (44 | )% | 18 | % |
(in millions) | 2013 | 2012 | 2011 | ||||||||
Restructuring and employee severance | $ | 71 | $ | 21 | $ | 15 | |||||
Acquisition-related costs | 158 | 33 | 90 | ||||||||
Impairments and loss on disposal of assets | 859 | 21 | 9 | ||||||||
Litigation (recoveries)/charges, net | (38 | ) | (3 | ) | 6 |
Cardinal Health, Inc. and Subsidiaries | ||
Financial Review (continued) |
Earnings Before Income Taxes and Discontinued Operations | Change | ||||||||||||||||
(in millions) | 2013 | 2012 | 2011 | 2013 | 2012 | ||||||||||||
Other income, net | $ | (15 | ) | $ | (1 | ) | $ | (22 | ) | N.M. | N.M. | ||||||
Interest expense, net | 123 | 95 | 93 | 29 | % | 2 | % | ||||||||||
Gain on sale of investment in CareFusion | — | — | (75 | ) | N.M. | N.M. |
2013 | 2012 | 2011 | ||||||
Provision at Federal statutory rate | 35.0 | % | 35.0 | % | 35.0 | % | ||
State and local income taxes, net of federal benefit | 2.5 | 2.3 | 2.6 | |||||
Foreign tax rate differential | (4.0 | ) | (2.2 | ) | (3.1 | ) | ||
Nondeductible/nontaxable items | (0.5 | ) | — | 0.6 | ||||
Nondeductible goodwill impairment | 33.2 | — | — | |||||
Change in measurement of an uncertain tax position and impact of IRS settlements | (5.7 | ) | 0.9 | 2.4 | ||||
Other | 1.8 | 1.0 | (1.1 | ) | ||||
Effective income tax rate | 62.3 | % | 37.0 | % | 36.4 | % |
Cardinal Health, Inc. and Subsidiaries | ||
Financial Review (continued) |
2013 | 2012 | 2011 | |||
Days sales outstanding | 22.3 | 21.4 | 20.7 | ||
Days inventory on hand | 26.5 | 23.9 | 22.5 | ||
Days payable outstanding | 38.9 | 35.6 | 34.8 |
Cardinal Health, Inc. and Subsidiaries | ||
Financial Review (continued) |
(in millions) | 2014 | 2015 to 2016 | 2017 to 2018 | There-after | Total | ||||||||||||||
Long-term debt and short-term borrowings (1) | $ | 167 | $ | 525 | $ | 1,344 | $ | 1,796 | $ | 3,832 | |||||||||
Interest on long-term debt | 153 | 273 | 182 | 627 | 1,235 | ||||||||||||||
Capital lease obligations (2) | 1 | 21 | — | — | 22 | ||||||||||||||
Other liabilities (3) | 3 | 2 | — | — | 5 | ||||||||||||||
Operating leases (4) | 89 | 131 | 80 | 65 | 365 | ||||||||||||||
Purchase obligations (5) | 137 | 54 | 24 | 25 | 240 | ||||||||||||||
Total contractual obligations | $ | 550 | $ | 1,006 | $ | 1,630 | $ | 2,513 | $ | 5,699 |
(1) | Represents maturities of our long-term debt obligations and other short-term borrowings excluding capital lease obligations described below. See Note 6 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. Certain long-term liabilities, such as unrecognized tax benefits and deferred taxes, including those related to the audits of fiscal 2003 through 2010, 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 7 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 8 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. |
Cardinal Health, Inc. and Subsidiaries | ||
Financial Review (continued) |
(in millions, except percentages) | 2013 | 2012 | 2011 | ||||||||
Allowance for doubtful accounts | $ | 152 | $ | 143 | $ | 150 | |||||
Reduction to allowance for customer deductions and write-offs | 34 | 30 | 22 | ||||||||
Charged to costs and expenses | 41 | 22 | 27 | ||||||||
Allowance as a percentage of customer receivables | 2.3 | % | 2.2 | % | 2.4 | % | |||||
Allowance as a percentage of revenue | 0.15 | % | 0.13 | % | 0.15 | % |
Cardinal Health, Inc. and Subsidiaries | ||
Financial Review (continued) |
Cardinal Health, Inc. and Subsidiaries | ||
Financial Review (continued) |
(in millions) | 2013 | 2012 | |||||
Net deferred income tax assets | $ | 510 | $ | 480 | |||
Net deferred income tax liabilities | 1,638 | 1,462 | |||||
Net loss and credit carryforwards included in net deferred income tax assets | 158 | 120 | |||||
Net valuation allowance against deferred income tax assets (1) | 88 | 86 |
(1) | This valuation allowance primarily relates to federal, state and international loss carryforwards for which the ultimate realization of future benefits is uncertain. |
Cardinal Health, Inc. and Subsidiaries | ||
(in millions) | 2013 | 2012 | |||||
Net estimated transactional exposure | $ | 368 | $ | 357 | |||
Sensitivity gain/loss | $ | 37 | $ | 36 | |||
Estimated offsetting impact of hedges | (17 | ) | (16 | ) | |||
Estimated net gain/loss | $ | 20 | $ | 20 |
(in millions) | 2013 | 2012 | |||||
Net estimated translational exposure | $ | 53 | $ | 53 | |||
Sensitivity gain/loss | 5 | 5 |
(in millions) | 2013 | 2012 | |||||
Estimated commodity exposure | $ | 369 | $ | 403 | |||
Sensitivity gain/loss | $ | 37 | $ | 40 | |||
Estimated offsetting impact of hedges | (1 | ) | (1 | ) | |||
Estimated net gain/loss | $ | 36 | $ | 39 |
Cardinal Health, Inc. and Subsidiaries | ||
Page | |
Consolidated Financial Statements and Schedule: | |
Cardinal Health, Inc. and Subsidiaries | ||
/s/ Ernst & Young LLP |
Columbus, Ohio |
August 20, 2013 |
Cardinal Health, Inc. and Subsidiaries | ||
(in millions, except per common share amounts) | 2013 | 2012 | 2011 | ||||||||
Revenue | $ | 101,093 | $ | 107,552 | $ | 102,644 | |||||
Cost of products sold | 96,172 | 103,011 | 98,482 | ||||||||
Gross margin | 4,921 | 4,541 | 4,162 | ||||||||
Operating expenses: | |||||||||||
Distribution, selling, general and administrative expenses | 2,875 | 2,677 | 2,528 | ||||||||
Restructuring and employee severance | 71 | 21 | 15 | ||||||||
Acquisition-related costs | 158 | 33 | 90 | ||||||||
Impairments and loss on disposal of assets | 859 | 21 | 9 | ||||||||
Litigation (recoveries)/charges, net | (38 | ) | (3 | ) | 6 | ||||||
Operating earnings | 996 | 1,792 | 1,514 | ||||||||
Other income, net | (15 | ) | (1 | ) | (22 | ) | |||||
Interest expense, net | 123 | 95 | 93 | ||||||||
Gain on sale of investment in CareFusion | — | — | (75 | ) | |||||||
Earnings before income taxes and discontinued operations | 888 | 1,698 | 1,518 | ||||||||
Provision for income taxes | 553 | 628 | 552 | ||||||||
Earnings from continuing operations | 335 | 1,070 | 966 | ||||||||
Loss from discontinued operations, net of tax | (1 | ) | (1 | ) | (7 | ) | |||||
Net earnings | $ | 334 | $ | 1,069 | $ | 959 | |||||
Basic earnings/(loss) per common share: | |||||||||||
Continuing operations | $ | 0.98 | $ | 3.10 | $ | 2.77 | |||||
Discontinued operations | — | — | (0.02 | ) | |||||||
Net basic earnings per common share | $ | 0.98 | $ | 3.10 | $ | 2.75 | |||||
Diluted earnings/(loss) per common share: | |||||||||||
Continuing operations | $ | 0.97 | $ | 3.06 | $ | 2.74 | |||||
Discontinued operations | — | — | (0.02 | ) | |||||||
Net diluted earnings per common share | $ | 0.97 | $ | 3.06 | $ | 2.72 | |||||
Weighted-average number of common shares outstanding: | |||||||||||
Basic | 341 | 345 | 349 | ||||||||
Diluted | 344 | 349 | 353 |
Cardinal Health, Inc. and Subsidiaries | ||
(in millions) | 2013 | 2012 | 2011 | ||||||||
Net earnings | $ | 334 | $ | 1,069 | $ | 959 | |||||
Other comprehensive income/(loss): | |||||||||||
Net change in foreign currency translation adjustments | 18 | (34 | ) | 72 | |||||||
Net unrealized gain/(loss) on derivative instruments, net of tax | 13 | (6 | ) | (4 | ) | ||||||
Reclassification of unrealized gain upon realization from sale of remaining investment in CareFusion, net of tax | — | — | (61 | ) | |||||||
Total other comprehensive income/(loss), net of tax | 31 | (40 | ) | 7 | |||||||
Total comprehensive income | $ | 365 | $ | 1,029 | $ | 966 |
Cardinal Health, Inc. and Subsidiaries | ||
June 30 | |||||||
(in millions) | 2013 | 2012 | |||||
Assets | |||||||
Current assets: | |||||||
Cash and equivalents | $ | 1,901 | $ | 2,274 | |||
Trade receivables, net | 6,304 | 6,355 | |||||
Inventories, net | 8,373 | 7,864 | |||||
Prepaid expenses and other | 1,192 | 1,017 | |||||
Total current assets | 17,770 | 17,510 | |||||
Property and equipment, net | 1,489 | 1,551 | |||||
Goodwill and other intangibles, net | 5,574 | 4,392 | |||||
Other assets | 986 | 807 | |||||
Total assets | $ | 25,819 | $ | 24,260 | |||
Liabilities and Shareholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 12,295 | $ | 11,726 | |||
Current portion of long-term obligations and other short-term borrowings | 168 | 476 | |||||
Other accrued liabilities | 2,127 | 1,972 | |||||
Total current liabilities | 14,590 | 14,174 | |||||
Long-term obligations, less current portion | 3,686 | 2,418 | |||||
Deferred income taxes and other liabilities | 1,568 | 1,424 | |||||
Shareholders’ equity: | |||||||
Preferred shares, without par value: | |||||||
Authorized—500 thousand shares, Issued—none | — | — | |||||
Common shares, without par value: | |||||||
Authorized—755 million shares, Issued—364 million shares at June 30, 2013 and 2012 | 2,953 | 2,930 | |||||
Retained earnings | 4,038 | 4,093 | |||||
Common shares in treasury, at cost: 25 million shares and 21 million shares at June 30, 2013 and 2012, respectively | (1,084 | ) | (816 | ) | |||
Accumulated other comprehensive income | 68 | 37 | |||||
Total shareholders’ equity | 5,975 | 6,244 | |||||
Total liabilities and shareholders’ equity | $ | 25,819 | $ | 24,260 |
Cardinal Health, Inc. and Subsidiaries | ||
Common Shares | Treasury Shares | Accumulated Other Comprehensive Income/(Loss) | Total Shareholders’ Equity | ||||||||||||||||||||||
(in millions) | Shares Issued | Amount | Retained Earnings | Shares | Amount | ||||||||||||||||||||
Balance at June 30, 2010 | 364 | $ | 2,890 | $ | 2,647 | (7 | ) | $ | (331 | ) | $ | 70 | $ | 5,276 | |||||||||||
Net earnings | 959 | 959 | |||||||||||||||||||||||
Other comprehensive income | 7 | 7 | |||||||||||||||||||||||
Employee stock plans activity, including tax impact of $14 million | — | 8 | 3 | 124 | 132 | ||||||||||||||||||||
Treasury shares acquired | (8 | ) | (250 | ) | (250 | ) | |||||||||||||||||||
Dividends declared | (281 | ) | (281 | ) | |||||||||||||||||||||
Other | 6 | 6 | |||||||||||||||||||||||
Balance at June 30, 2011 | 364 | 2,898 | 3,331 | (12 | ) | (457 | ) | 77 | 5,849 | ||||||||||||||||
Net earnings | 1,069 | 1,069 | |||||||||||||||||||||||
Other comprehensive loss | (40 | ) | (40 | ) | |||||||||||||||||||||
Employee stock plans activity, including tax impact of $4 million | — | 32 | 1 | 91 | 123 | ||||||||||||||||||||
Treasury shares acquired | (10 | ) | (450 | ) | (450 | ) | |||||||||||||||||||
Dividends declared | (307 | ) | (307 | ) | |||||||||||||||||||||
Balance at June 30, 2012 | 364 | 2,930 | 4,093 | (21 | ) | (816 | ) | 37 | 6,244 | ||||||||||||||||
Net earnings | 334 | 334 | |||||||||||||||||||||||
Other comprehensive income | 31 | 31 | |||||||||||||||||||||||
Employee stock plans activity, including tax impact of $19 million | — | 23 | 6 | 182 | 205 | ||||||||||||||||||||
Treasury shares acquired | (10 | ) | (450 | ) | (450 | ) | |||||||||||||||||||
Dividends declared | (374 | ) | (374 | ) | |||||||||||||||||||||
Other | (15 | ) | (15 | ) | |||||||||||||||||||||
Balance at June 30, 2013 | 364 | $ | 2,953 | $ | 4,038 | (25 | ) | $ | (1,084 | ) | $ | 68 | $ | 5,975 |
Cardinal Health, Inc. and Subsidiaries | ||
(in millions) | 2013 | 2012 | 2011 | ||||||||
Cash flows from operating activities: | |||||||||||
Net earnings | $ | 334 | $ | 1,069 | $ | 959 | |||||
Loss from discontinued operations, net of tax | 1 | 1 | 7 | ||||||||
Earnings from continuing operations | 335 | 1,070 | 966 | ||||||||
Adjustments to reconcile earnings from continuing operations to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 397 | 325 | 313 | ||||||||
Gain on sale of investment in CareFusion | — | — | (75 | ) | |||||||
Impairments and loss on disposal of assets | 859 | 21 | 9 | ||||||||
Share-based compensation | 93 | 85 | 80 | ||||||||
Provision for deferred income taxes | 21 | 158 | 128 | ||||||||
Provision for bad debts | 31 | 22 | 27 | ||||||||
Change in fair value of contingent consideration obligation | — | (71 | ) | (7 | ) | ||||||
Change in operating assets and liabilities, net of effects from acquisitions: | |||||||||||
Decrease/(increase) in trade receivables | 216 | (129 | ) | (457 | ) | ||||||
Increase in inventories | (370 | ) | (495 | ) | (665 | ) | |||||
Increase in accounts payable | 426 | 319 | 1,356 | ||||||||
Other accrued liabilities and operating items, net | (281 | ) | (129 | ) | (280 | ) | |||||
Net cash provided by operating activities | 1,727 | 1,176 | 1,395 | ||||||||
Cash flows from investing activities: | |||||||||||
Acquisition of subsidiaries, net of cash acquired | (2,239 | ) | (174 | ) | (2,300 | ) | |||||
Additions to property and equipment | (195 | ) | (263 | ) | (291 | ) | |||||
Purchase of held-to-maturity securities and other investments | (12 | ) | (35 | ) | (156 | ) | |||||
Proceeds from sale of property and equipment | — | 3 | 3 | ||||||||
Proceeds from maturities of held-to-maturity securities | 71 | 92 | 10 | ||||||||
Proceeds from sale of CareFusion common stock | — | — | 706 | ||||||||
Net cash used in investing activities | (2,375 | ) | (377 | ) | (2,028 | ) | |||||
Cash flows from financing activities: | |||||||||||
Payment of contingent consideration obligation | (4 | ) | — | (10 | ) | ||||||
Net change in short-term borrowings | (1 | ) | 13 | 46 | |||||||
Reduction of long-term obligations | (305 | ) | (251 | ) | (229 | ) | |||||
Proceeds from long-term obligations, net of issuance costs | 1,286 | 496 | 495 | ||||||||
Net proceeds from issuance of common shares | 121 | 42 | 63 | ||||||||
Tax disbursements from share-based compensation | (19 | ) | (4 | ) | (14 | ) | |||||
Dividends on common shares | (353 | ) | (300 | ) | (274 | ) | |||||
Purchase of treasury shares | (450 | ) | (450 | ) | (270 | ) | |||||
Net cash provided by/(used in) financing activities | 275 | (454 | ) | (193 | ) | ||||||
Net increase/(decrease) in cash and equivalents | (373 | ) | 345 | (826 | ) | ||||||
Cash and equivalents at beginning of period | 2,274 | 1,929 | 2,755 | ||||||||
Cash and equivalents at end of period | $ | 1,901 | $ | 2,274 | $ | 1,929 | |||||
Supplemental information: | |||||||||||
Cash payments for interest | $ | 128 | $ | 118 | $ | 116 | |||||
Cash payments for income taxes | 899 | 513 | 588 |
Cardinal Health, Inc. and Subsidiaries | ||
Notes to Consolidated Financial Statements |
Cardinal Health, Inc. and Subsidiaries | ||
Notes to Consolidated Financial Statements (continued) |
Percent of Revenue | Percent of Gross Trade Receivables at June 30 | |||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | ||||||||||
CVS Caremark Corporation | 23 | % | 22 | % | 22 | % | 19 | % | 19 | % | ||||
Walgreen Co. | 20 | % | 21 | % | 23 | % | 24 | % | 25 | % |
(in millions) | 2013 | 2012 | |||||
Land, building and improvements | $ | 1,398 | $ | 1,126 | |||
Machinery and equipment | 2,149 | 2,291 | |||||
Furniture and fixtures | 122 | 120 | |||||
Total property and equipment, at cost | 3,669 | 3,537 | |||||
Accumulated depreciation and amortization | (2,180 | ) | (1,986 | ) | |||
Property and equipment, net | $ | 1,489 | $ | 1,551 |
Cardinal Health, Inc. and Subsidiaries | ||
Notes to Consolidated Financial Statements (continued) |
Cardinal Health, Inc. and Subsidiaries | ||
Notes to Consolidated Financial Statements (continued) |
Cardinal Health, Inc. and Subsidiaries | ||
Notes to Consolidated Financial Statements (continued) |
Cardinal Health, Inc. and Subsidiaries | ||
Notes to Consolidated Financial Statements (continued) |
(in millions) | Amount | Weighted-Average Useful Lives of Identifiable Intangible Assets | |||
Identifiable intangible assets: | |||||
Customer relationships | $ | 460 | 9 | ||
Trade names | 160 | 11 | |||
Other | 7 | 3 | |||
Total identifiable intangible assets acquired | 627 | 9 | |||
Cash and equivalents | 25 | ||||
Trade receivables | 117 | ||||
Inventories | 70 | ||||
Prepaid expenses and other | 88 | ||||
Property and equipment | 40 | ||||
Accounts payable | (71 | ) | |||
Other accrued liabilities | (23 | ) | |||
Deferred income taxes and other liabilities | (180 | ) | |||
Total identifiable net assets acquired | 693 | ||||
Goodwill | 1,402 | ||||
Total net assets acquired | $ | 2,095 |
Cardinal Health, Inc. and Subsidiaries | ||
Notes to Consolidated Financial Statements (continued) |
(in millions) | 2013 (3) | 2012 | 2011 | ||||||||
Employee-related costs (1) | $ | 59 | $ | 20 | $ | 7 | |||||
Facility exit and other costs (2) | 12 | 1 | 8 | ||||||||
Total | $ | 71 | $ | 21 | $ | 15 |
(1) | Employee-related costs primarily consist of termination benefits provided to employees who have been involuntarily terminated and duplicate payroll costs during transition periods. |
(2) | Facility exit and other costs primarily consist of lease termination costs, accelerated depreciation, equipment relocation costs, project consulting fees and costs associated with restructuring our delivery of information technology infrastructure services. |
(3) | Includes $30 million of employee-related costs and $10 million of facility exit and other costs related to the restructuring within our Medical segment described further below. |
(in millions) | Employee- Related Costs | Facility Exit and Other Costs | Total | ||||||||
Balance at June 30, 2010 | $ | 9 | $ | 7 | $ | 16 | |||||
Additions | 7 | 8 | 15 | ||||||||
Payments and other adjustments | (10 | ) | (11 | ) | (21 | ) | |||||
Balance at June 30, 2011 | $ | 6 | $ | 4 | $ | 10 | |||||
Additions | 22 | 1 | 23 | ||||||||
Payments and other adjustments | (12 | ) | (3 | ) | (15 | ) | |||||
Balance at June 30, 2012 | $ | 16 | $ | 2 | $ | 18 | |||||
Additions | 63 | 2 | 65 | ||||||||
Payments and other adjustments | (24 | ) | (2 | ) | (26 | ) | |||||
Balance at June 30, 2013 | $ | 55 | $ | 2 | $ | 57 |
(in millions) | Pharmaceutical | Medical | Total | ||||||||
Balance at June 30, 2011 | $ | 2,853 | $ | 993 | $ | 3,846 | |||||
Goodwill acquired, net of purchase price adjustments | 16 | 114 | 130 | ||||||||
Foreign currency translation adjustments and other | 7 | (5 | ) | 2 | |||||||
Balance at June 30, 2012 | $ | 2,876 | $ | 1,102 | $ | 3,978 | |||||
Goodwill acquired, net of purchase price adjustments | 40 | 1,409 | 1,449 | ||||||||
Foreign currency translation adjustments and other | 7 | (4 | ) | 3 | |||||||
Impairment | (829 | ) | — | (829 | ) | ||||||
Balance at June 30, 2013 | $ | 2,094 | $ | 2,507 | $ | 4,601 |
Cardinal Health, Inc. and Subsidiaries | ||
Notes to Consolidated Financial Statements (continued) |
2013 | |||||||||||
(in millions) | Gross Intangible | Accumulated Amortization | Net Intangible | ||||||||
Indefinite-life intangibles: | |||||||||||
Trademarks and other | $ | 11 | $ | — | $ | 11 | |||||
Total indefinite-life intangibles | 11 | — | 11 | ||||||||
Definite-life intangibles: | |||||||||||
Customer relationships | 982 | 230 | 752 | ||||||||
Trademarks, trade names and patents | 209 | 49 | 160 | ||||||||
Non-compete agreements | 15 | 10 | 5 | ||||||||
Other | 101 | 56 | 45 | ||||||||
Total definite-life intangibles | 1,307 | 345 | 962 | ||||||||
Total other intangible assets | $ | 1,318 | $ | 345 | $ | 973 |
2012 | |||||||||||
(in millions) | Gross Intangible | Accumulated Amortization | Net Intangible | ||||||||
Indefinite-life intangibles: | |||||||||||
Trademarks and other | $ | 17 | $ | — | $ | 17 | |||||
Total indefinite-life intangibles | 17 | — | 17 | ||||||||
Definite-life intangibles: | |||||||||||
Customer relationships | 473 | 141 | 332 | ||||||||
Trademarks, trade names and patents | 45 | 36 | 9 | ||||||||
Non-compete agreements | 14 | 8 | 6 | ||||||||
Other | 93 | 43 | 50 | ||||||||
Total definite-life intangibles | 625 | 228 | 397 | ||||||||
Total other intangible assets | $ | 642 | $ | 228 | $ | 414 |
(in millions) | 2013 | 2012 | |||||
1.7% Notes due 2018 | $ | 399 | $ | — | |||
1.9% Notes due 2017 | 250 | 250 | |||||
3.2% Notes due 2022 | 247 | 250 | |||||
3.2% Notes due 2023 | 549 | — | |||||
4.0% Notes due 2015 | 524 | 536 | |||||
4.6% Notes due 2043 | 349 | — | |||||
4.625% Notes due 2020 | 527 | 538 | |||||
5.5% Notes due 2013 | — | 304 | |||||
5.8% Notes due 2016 | 301 | 305 | |||||
5.85% Notes due 2017 | 157 | 160 | |||||
6.0% Notes due 2017 | 200 | 206 | |||||
7.0% Debentures due 2026 | 124 | 125 | |||||
7.8% Debentures due 2016 | 37 | 37 | |||||
Other obligations | 190 | 183 | |||||
Total | $ | 3,854 | $ | 2,894 | |||
Less: current portion of long-term obligations and other short-term borrowings | 168 | 476 | |||||
Long-term obligations, less current portion | $ | 3,686 | $ | 2,418 |
Cardinal Health, Inc. and Subsidiaries | ||
Notes to Consolidated Financial Statements (continued) |
(in millions) | 2013 | 2012 | 2011 | ||||||||
U.S. Operations | $ | 651 | $ | 1,514 | $ | 1,299 | |||||
Non-U.S. Operations | 237 | 184 | 219 | ||||||||
Earnings before income taxes and discontinued operations | $ | 888 | $ | 1,698 | $ | 1,518 |
(in millions) | 2013 | 2012 | 2011 | ||||||||
Current: | |||||||||||
Federal | $ | 451 | $ | 430 | $ | 387 | |||||
State and local | 62 | 27 | 20 | ||||||||
Non-U.S. | 19 | 13 | 17 | ||||||||
Total current | $ | 532 | $ | 470 | $ | 424 | |||||
Deferred: | |||||||||||
Federal | $ | 28 | $ | 124 | $ | 92 | |||||
State and local | (5 | ) | 28 | 29 | |||||||
Non-U.S. | (2 | ) | 6 | 7 | |||||||
Total deferred | 21 | 158 | 128 | ||||||||
Provision for income taxes | $ | 553 | $ | 628 | $ | 552 |
2013 | 2012 | 2011 | ||||||
Provision at Federal statutory rate | 35.0 | % | 35.0 | % | 35.0 | % | ||
State and local income taxes, net of federal benefit | 2.5 | 2.3 | 2.6 | |||||
Foreign tax rate differential | (4.0 | ) | (2.2 | ) | (3.1 | ) | ||
Nondeductible/nontaxable items | (0.5 | ) | — | 0.6 | ||||
Nondeductible goodwill impairment | 33.2 | — | — | |||||
Change in measurement of an uncertain tax position and impact of IRS settlements | (5.7 | ) | 0.9 | 2.4 | ||||
Other | 1.8 | 1.0 | (1.1 | ) | ||||
Effective income tax rate | 62.3 | % | 37.0 | % | 36.4 | % |
Cardinal Health, Inc. and Subsidiaries | ||
Notes to Consolidated Financial Statements (continued) |
(in millions) | 2013 | 2012 | |||||
Deferred income tax assets: | |||||||
Receivable basis difference | $ | 50 | $ | 46 | |||
Accrued liabilities | 115 | 107 | |||||
Share-based compensation | 66 | 90 | |||||
Loss and tax credit carryforwards | 158 | 120 | |||||
Deferred tax assets related to uncertain tax positions | 127 | 118 | |||||
Other | 82 | 85 | |||||
Total deferred income tax assets | 598 | 566 | |||||
Valuation allowance for deferred income tax assets | (88 | ) | (86 | ) | |||
Net deferred income tax assets | $ | 510 | $ | 480 | |||
Deferred income tax liabilities: | |||||||
Inventory basis differences | $ | (1,160 | ) | $ | (1,067 | ) | |
Property-related | (173 | ) | (180 | ) | |||
Goodwill and other intangibles | (299 | ) | (146 | ) | |||
Unremitted foreign earnings | — | (64 | ) | ||||
Other | (6 | ) | (5 | ) | |||
Total deferred income tax liabilities | (1,638 | ) | (1,462 | ) | |||
Net deferred income tax liability | $ | (1,128 | ) | $ | (982 | ) |
(in millions) | 2013 | 2012 | |||||
Current deferred income tax asset (1) | $ | 15 | $ | 27 | |||
Noncurrent deferred income tax asset (2) | 17 | 6 | |||||
Current deferred income tax liability (3) | (908 | ) | (858 | ) | |||
Noncurrent deferred income tax liability (4) | (252 | ) | (157 | ) | |||
Net deferred income tax liability | $ | (1,128 | ) | $ | (982 | ) |
(1) | Included in prepaid expenses and other in the consolidated balance sheets. |
(2) | Included in other assets in the consolidated balance sheets. |
(3) | Included in other accrued liabilities in the consolidated balance sheets. |
(4) | Included in deferred income taxes and other liabilities in the consolidated balance sheets. |
(in millions) | 2013 | 2012 | 2011 | ||||||||
Balance at beginning of fiscal year | $ | 654 | $ | 747 | $ | 731 | |||||
Additions for tax positions of the current year | 22 | 16 | 16 | ||||||||
Additions for tax positions of prior years | 97 | 68 | 58 | ||||||||
Reductions for tax positions of prior years | (30 | ) | (3 | ) | (20 | ) | |||||
Settlements with tax authorities | (93 | ) | (172 | ) | (36 | ) | |||||
Expiration of the statute of limitations | — | (2 | ) | (2 | ) | ||||||
Balance at end of fiscal year | $ | 650 | $ | 654 | $ | 747 |
Cardinal Health, Inc. and Subsidiaries | ||
Notes to Consolidated Financial Statements (continued) |
Cardinal Health, Inc. and Subsidiaries | ||
Notes to Consolidated Financial Statements (continued) |
Level 1 - | Observable prices in active markets for identical assets and liabilities. |
Level 2 - | Observable inputs other than quoted prices in active markets for identical assets and liabilities. |
Level 3 - | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. |
2013 | |||||||||||||||
(in millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||
Cash equivalents (1) | $ | 348 | $ | — | $ | — | $ | 348 | |||||||
Forward contracts (2) | — | 12 | — | 12 | |||||||||||
Other investments (3) | 89 | — | — | 89 | |||||||||||
Total | $ | 437 | $ | 12 | $ | — | $ | 449 |
2012 | |||||||||||||||
(in millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||
Cash equivalents (1) | $ | 997 | $ | — | $ | — | $ | 997 | |||||||
Forward contracts (2) | — | 49 | — | 49 | |||||||||||
Other investments (3) | 78 | — | — | 78 | |||||||||||
Contingent consideration obligation (4) | — | — | (4 | ) | (4 | ) | |||||||||
Total | $ | 1,075 | $ | 49 | $ | (4 | ) | $ | 1,120 |
(1) | Cash equivalents are comprised of highly liquid investments purchased with a maturity of three months or less. The carrying value of these cash equivalents approximates fair value due to their short-term maturities. |
(2) | The fair value of interest rate swaps, foreign currency contracts and commodity contracts is determined based on the present value of expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Observable Level 2 inputs are used to determine the present value of expected future cash flows. |
(3) | The other investments balance includes investments in mutual funds, which are used to offset fluctuations in deferred compensation liabilities. These mutual funds primarily invest in the equity securities of companies with large market capitalization and high quality fixed income debt securities. The fair value of these investments is determined using quoted market prices. |
(4) | The contingent consideration obligation was incurred in connection with the acquisition of P4 Healthcare. The former owners of P4 Healthcare had the right to receive certain contingent payments based on targeted EBITDA. The fair value of the contingent consideration obligation was determined based on a probability-weighted income approach derived from EBITDA estimates and probability assessments with respect to the likelihood of achieving the various EBITDA targets. The fair value measurement was based on significant inputs unobservable in the market and thus represented a Level 3 measurement. At each reporting date, we revalued the contingent consideration obligation to estimated fair value. Changes in the fair value of the contingent consideration obligation resulted from changes in the terms of the contingent payments, changes in discount periods and rates, changes in the timing and amount of EBITDA estimates and changes in probability assumptions with respect to the timing and likelihood of achieving the EBITDA targets. As a result of changes in our estimate of performance in future periods, coupled with the progress of discussions with the former owners regarding an early termination and settlement, we recorded a $71 million decrease in fair value of the obligation to $4 million at June 30, 2012. We terminated and settled the remaining contingent consideration obligation in July 2012 for $4 million. |
Cardinal Health, Inc. and Subsidiaries | ||
Notes to Consolidated Financial Statements (continued) |
(in millions) | 2013 | 2012 | |||||
Assets: | |||||||
Foreign currency contracts (1) | $ | 4 | $ | 2 | |||
Forward interest rate swaps (2) | 20 | — | |||||
Pay-floating interest rate swaps (2) | — | 49 | |||||
Total assets | $ | 24 | $ | 51 | |||
Liabilities: | |||||||
Foreign currency contracts (3) | $ | 1 | $ | 1 | |||
Commodity contracts (3) | — | 1 | |||||
Pay-floating interest rate swaps (4) | 11 | — | |||||
Total liabilities | $ | 12 | $ | 2 |
(1) | Included in prepaid expenses and other in the consolidated balance sheets. |
(2) | Included in other assets in the consolidated balance sheets. |
(3) | Included in other accrued liabilities in the consolidated balance sheets. |
(4) | Included in deferred income taxes and other liabilities in the consolidated balance sheets. |
2013 | |||||||
(in millions) | Notional Amount | Maturity Date | |||||
Pay-floating interest rate swaps | $ | 1,138 | Jun 2015 | - | Jun 2022 |
2012 | |||||||
(in millions) | Notional Amount | Maturity Date | |||||
Pay-floating interest rate swaps | $ | 773 | Jun 2013 | - | Jun 2022 |
(in millions) | 2013 | 2012 | 2011 | ||||||||
Pay-floating interest rate swaps (1) | $ | 28 | $ | 38 | $ | 36 | |||||
Fixed-rate debt (1) | (28 | ) | (38 | ) | (36 | ) |
(1) | Included in interest expense, net in the consolidated statements of earnings. |
Cardinal Health, Inc. and Subsidiaries | ||
Notes to Consolidated Financial Statements (continued) |
2013 | |||||||
(in millions) | Notional Amount | Maturity Date | |||||
Forward interest rate swaps | $ | 250 | Jun 2025 | ||||
Foreign currency contracts | 164 | Jul 2013 | - | Jun 2014 | |||
Commodity contracts | 24 | Jul 2013 | - | Mar 2016 |
2012 | |||||||
(in millions) | Notional Amount | Maturity Date | |||||
Foreign currency contracts | $ | 158 | Jul 2012 | - | Jun 2013 | ||
Commodity contracts | 23 | Jul 2012 | - | Mar 2015 |
(in millions) | 2013 | 2012 | |||||
Forward interest rate swaps | $ | 20 | $ | — | |||
Foreign currency contracts | 3 | — | |||||
Commodity contracts | — | (1 | ) |
(in millions) | 2013 | 2012 | 2011 | ||||||||
Foreign currency contracts (1) | $ | 1 | $ | 1 | $ | — | |||||
Foreign currency contracts (2) | 1 | (1 | ) | (3 | ) | ||||||
Foreign currency contracts (3) | 1 | (1 | ) | 3 | |||||||
Commodity contracts (3) | 1 | 2 | 2 | ||||||||
Forward interest rate swaps (4) | 1 | — | — |
(1) | Included in revenue in the consolidated statements of earnings. |
(2) | Included in cost of products sold in the consolidated statements of earnings. |
(3) | Included in SG&A expenses in the consolidated statements of earnings. |
(4) | Included in interest expense, net in the consolidated statements of earnings. |
2013 | |||||||
(in millions) | Notional Amount | Maturity Date | |||||
Foreign currency contracts | $ | 479 | Jul 2013 | - | Sep 2013 |
2012 | |||||||
(in millions) | Notional Amount | Maturity Date | |||||
Foreign currency contracts | $ | 500 | Jul 2012 | - | Sep 2012 |
(in millions) | 2013 | 2012 | 2011 | ||||||||
Foreign currency contracts (1) | $ | 6 | $ | (39 | ) | $ | 36 | ||||
Commodity contracts (1) | — | (1 | ) | (1 | ) |
(1) | Included in other income, net in the consolidated statements of earnings. |
Cardinal Health, Inc. and Subsidiaries | ||
Notes to Consolidated Financial Statements (continued) |
(in millions) | 2013 | 2012 | |||||
Estimated fair value | $ | 3,899 | $ | 3,075 | |||
Carrying amount | 3,854 | 2,894 |
2013 | 2012 | ||||||||||||||
(in millions) | Notional Amount | Fair Value Gain/(Loss) | Notional Amount | Fair Value Gain/(Loss) | |||||||||||
Pay-floating interest rate swaps | $ | 1,138 | $ | (11 | ) | $ | 773 | $ | 49 | ||||||
Foreign currency contracts | 643 | 3 | 658 | 1 | |||||||||||
Forward interest rate swaps | 250 | 20 | — | — | |||||||||||
Commodity contracts | 24 | — | 23 | (1 | ) |
(in millions) | 2013 | 2012 | 2011 | ||||||||
Foreign currency translation adjustments | $ | 54 | $ | 37 | $ | 71 | |||||
Unrealized gain on derivatives, net of tax | 14 | — | 6 | ||||||||
Total | $ | 68 | $ | 37 | $ | 77 |
(in millions) | 2013 | 2012 | 2011 | |||||
Weighted-average common shares–basic | 341 | 345 | 349 | |||||
Effect of dilutive securities: | ||||||||
Employee stock options, restricted shares, restricted share units and performance share units | 3 | 4 | 4 | |||||
Weighted-average common shares–diluted | 344 | 349 | 353 |
Cardinal Health, Inc. and Subsidiaries | ||
Notes to Consolidated Financial Statements (continued) |
(in millions) | 2013 | 2012 | 2011 | ||||||||
Pharmaceutical | $ | 91,097 | $ | 97,925 | $ | 93,744 | |||||
Medical | 10,060 | 9,642 | 8,922 | ||||||||
Total segment revenue | 101,157 | 107,567 | 102,666 | ||||||||
Corporate (1) | (64 | ) | (15 | ) | (22 | ) | |||||
Total revenue | $ | 101,093 | $ | 107,552 | $ | 102,644 |
(1) | Corporate revenue consists of the elimination of inter-segment revenue. |
(in millions) | 2013 | 2012 | 2011 | ||||||||
Pharmaceutical | $ | 1,734 | $ | 1,558 | $ | 1,329 | |||||
Medical | 372 | 332 | 373 | ||||||||
Total segment profit | 2,106 | 1,890 | 1,702 | ||||||||
Corporate | (1,110 | ) | (98 | ) | (188 | ) | |||||
Total operating earnings | $ | 996 | $ | 1,792 | $ | 1,514 |
(in millions) | 2013 | 2012 | 2011 | ||||||||
Pharmaceutical (1) | $ | 125 | $ | 114 | $ | 107 | |||||
Medical (1) | 137 | 119 | 108 | ||||||||
Corporate | 135 | 92 | 98 | ||||||||
Total depreciation and amortization | $ | 397 | $ | 325 | $ | 313 |
(1) | Depreciation incurred at Corporate for shared information technology is allocated to the segments. Prior-year amounts have been reclassified to reflect this presentation, which resulted in no impact to segment profit or consolidated operating earnings. |
(in millions) | 2013 | 2012 | 2011 | ||||||||
Pharmaceutical | $ | 46 | $ | 44 | $ | 55 | |||||
Medical | 48 | 100 | 123 | ||||||||
Corporate | 101 | 119 | 113 | ||||||||
Total additions to property and equipment | $ | 195 | $ | 263 | $ | 291 |
(in millions) | 2013 | 2012 | 2011 | ||||||||
Pharmaceutical | $ | 16,258 | $ | 16,642 | $ | 16,126 | |||||
Medical | 6,521 | 4,399 | 3,895 | ||||||||
Corporate | 3,040 | 3,219 | 2,825 | ||||||||
Total assets | $ | 25,819 | $ | 24,260 | $ | 22,846 |
Revenue | Property and Equipment, net | ||||||||||||||||||||||
(in millions) | 2013 | 2012 | 2011 | 2013 | 2012 | 2011 | |||||||||||||||||
United States | $ | 97,994 | $ | 105,205 | $ | 101,080 | $ | 1,355 | $ | 1,425 | $ | 1,398 | |||||||||||
International | 3,099 | 2,347 | 1,564 | 134 | 126 | 114 | |||||||||||||||||
Total | $ | 101,093 | $ | 107,552 | $ | 102,644 | $ | 1,489 | $ | 1,551 | $ | 1,512 |
Cardinal Health, Inc. and Subsidiaries | ||
Notes to Consolidated Financial Statements (continued) |
(in millions) | 2013 | 2012 | 2011 | ||||||||
Restricted share and share unit expense | $ | 60 | $ | 55 | $ | 52 | |||||
Employee stock option expense | 23 | 25 | 26 | ||||||||
Performance share unit expense | 10 | 6 | — | ||||||||
Stock appreciation right (income)/expense | — | (1 | ) | 2 | |||||||
Total | $ | 93 | $ | 85 | $ | 80 |
(in millions, except per share amounts) | Stock Options | Weighted-Average Exercise Price per Common Share | ||||
Outstanding at June 30, 2011 | 23 | $ | 37.02 | |||
Granted | 2 | 41.58 | ||||
Exercised | (2 | ) | 30.26 | |||
Canceled and forfeited | (2 | ) | 47.19 | |||
Outstanding at June 30, 2012 | 21 | $ | 37.29 | |||
Granted | 3 | 39.81 | ||||
Exercised | (6 | ) | 33.19 | |||
Canceled and forfeited | (3 | ) | 46.91 | |||
Outstanding at June 30, 2013 | 15 | $ | 36.97 | |||
Exercisable at June 30, 2013 | 10 | $ | 36.20 |
(in millions, except per share amounts) | 2013 | 2012 | 2011 | ||||||||
Aggregate intrinsic value of outstanding options at period end | $ | 156 | $ | 137 | $ | 217 | |||||
Aggregate intrinsic value of exercisable options at period end | 113 | 84 | 94 | ||||||||
Aggregate intrinsic value of exercised options | 64 | 27 | 26 | ||||||||
Cash received upon exercise | 121 | 42 | 63 | ||||||||
Cash tax disbursements realized related to exercise | (19 | ) | (4 | ) | (14 | ) | |||||
Total compensation cost, net of estimated forfeitures, related to unvested stock options not yet recognized, pre-tax | 22 | 25 | 29 | ||||||||
Total fair value of shares vested during the year | 28 | 26 | 24 | ||||||||
Weighted-average grant date fair value per stock option | 8.15 | 9.26 | 6.40 |
(in years) | 2013 | 2012 | 2011 | ||
Weighted-average remaining contractual life of outstanding options | 4 | 3 | 4 | ||
Weighted-average remaining contractual life of exercisable options | 3 | 2 | 3 | ||
Weighted-average period over which stock option compensation cost is expected to be recognized | 2 | 2 | 2 |
2013 | 2012 | 2011 | |||||||||
Risk-free interest rate | 1.1% | - | 1.3% | 1.2% | - | 1.3% | 1.2% | - | 1.7% | ||
Expected volatility | 29% | 29% | 27% | - | 32% | ||||||
Dividend yield | 2.1% | - | 2.5% | 2.0% | - | 2.1% | 2.2% | - | 2.5% | ||
Expected life in years | 6 | 6 | 5 |
(in millions, except per share amounts) | Shares | Weighted-Average Grant Date Fair Value per Share | ||||
Nonvested at June 30, 2011 | 4 | $ | 31.31 | |||
Granted | 2 | 41.67 | ||||
Vested | (2 | ) | 32.50 | |||
Canceled and forfeited | — | — | ||||
Nonvested at June 30, 2012 | 4 | $ | 35.46 | |||
Granted | 2 | 40.02 | ||||
Vested | (2 | ) | 33.41 | |||
Canceled and forfeited | (1 | ) | 38.84 | |||
Nonvested at June 30, 2013 | 3 | $ | 38.74 |
Cardinal Health, Inc. and Subsidiaries | ||
Notes to Consolidated Financial Statements (continued) |
(in millions) | 2013 | 2012 | 2011 | ||||||||
Total compensation cost, net of estimated forfeitures, related to nonvested restricted share and share unit awards not yet recognized, pre-tax | $ | 67 | $ | 67 | $ | 56 | |||||
Weighted-average period over which restricted share and share unit cost is expected to be recognized (in years) | 2 | 2 | 2 | ||||||||
Total fair value of shares vested during the year | $ | 60 | $ | 54 | $ | 54 |
(in millions, except per share amounts) | Performance Share Units | Weighted-Average Grant Date Fair Value per Share | ||||
Nonvested at June 30, 2011 | — | $ | — | |||
Granted | 1 | 42.60 | ||||
Vested | — | — | ||||
Canceled and forfeited | — | — | ||||
Nonvested at June 30, 2012 | 1 | $ | 42.60 | |||
Granted (1) | — | — | ||||
Vested | — | — | ||||
Canceled and forfeited | — | — | ||||
Nonvested at June 30, 2013 | 1 | $ | 41.37 |
(1) | During fiscal 2013, 350 thousand performance share units were granted at target at a weighted-average fair value of $39.81. |
(in millions) | 2013 | 2012 | |||||
Total compensation cost, net of estimated forfeitures, related to nonvested performance share units not yet recognized, pre-tax | $ | 12 | $ | 12 | |||
Weighted-average period over which performance share unit cost is expected to be recognized (in years) | 2 | 2 |
(in millions, except per common share amounts) | First Quarter | Second Quarter | Third Quarter | Fourth Quarter (1) | |||||||||||
Fiscal 2013 | |||||||||||||||
Revenue | $ | 25,889 | $ | 25,232 | $ | 24,552 | $ | 25,420 | |||||||
Gross margin | 1,159 | 1,224 | 1,291 | 1,247 | |||||||||||
Distribution, selling, general and administrative expenses | 690 | 699 | 712 | 775 | |||||||||||
Earnings/(loss) from continuing operations | 272 | 303 | 346 | (586 | ) | ||||||||||
Loss from discontinued operations, net of tax | (1 | ) | — | (1 | ) | — | |||||||||
Net earnings/(loss) | 271 | 303 | 345 | (586 | ) | ||||||||||
Earnings/(loss) from continuing operations per common share: | |||||||||||||||
Basic | $ | 0.80 | $ | 0.89 | $ | 1.01 | $ | (1.72 | ) | ||||||
Diluted (2) | 0.79 | 0.88 | 1.00 | (1.72 | ) |
(in millions, except per common share amounts) | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||
Fiscal 2012 | |||||||||||||||
Revenue | $ | 26,792 | $ | 27,078 | $ | 26,918 | $ | 26,764 | |||||||
Gross margin | 1,084 | 1,114 | 1,207 | 1,136 | |||||||||||
Distribution, selling, general and administrative expenses | 644 | 640 | 683 | 712 | |||||||||||
Earnings from continuing operations | 237 | 264 | 332 | 236 | |||||||||||
Earnings/(loss) from discontinued operations, net of tax | — | (2 | ) | 1 | — | ||||||||||
Net earnings | 237 | 262 | 333 | 236 | |||||||||||
Earnings from continuing operations per common share: | |||||||||||||||
Basic | $ | 0.69 | $ | 0.77 | $ | 0.96 | $ | 0.68 | |||||||
Diluted | 0.68 | 0.76 | 0.95 | 0.68 |
(1) | During the fourth quarter of fiscal 2013, we recorded an out-of-period increase in income tax expense of $14 million related to uncertain tax benefits, of which generally less than $1 million pertained to the each of the first three quarters of fiscal 2013 and each of the quarters in fiscal 2012. The amounts were not material individually or in the aggregate to current or prior periods. |
(2) | Due to the loss from continuing operations incurred during the fourth quarter of fiscal 2013, potential dilutive common shares have not been included in the denominator of the diluted per share computation for this period due to their antidilutive effect. |
Cardinal Health, Inc. and Subsidiaries | ||
Cardinal Health, Inc. and Subsidiaries | ||
/s/ Ernst & Young, LLP |
Columbus, Ohio |
August 20, 2013 |
Cardinal Health, Inc. and Subsidiaries | ||
Cardinal Health, Inc. and Subsidiaries | ||
Part III |
Equity Compensation Plan Information | |||||||||||
Plan Category | Common Shares to be Issued Upon Exercise of Outstanding Options and Rights | Weighted Average Exercise Price of Outstanding Options | Common Shares Remaining Available for Future Issuance Under Equity Compensation Plans(excluding securities reflected in column (a)) | ||||||||
(a) | (b) | (c) | |||||||||
Equity compensation plans approved by shareholders | 17,812,122 | (1) | $ | 36.91 | (1) | 30,599,789 | (2)(3) | ||||
Equity compensation plans not approved by shareholders (4) | 1,608,297 | (5) | $ | 37.61 | (5) | — | |||||
Total at June 30, 2013 | 19,420,419 | $ | 36.97 | 30,599,789 |
(1) | In addition to stock options outstanding under the Cardinal Health, Inc. 2011 Long-Term Incentive Plan (the “2011 LTIP”), the Cardinal Health, Inc. 2005 Long Term Incentive Plan (the “2005 LTIP”), the Cardinal Health, Inc. Amended and Restated Equity Incentive Plan (the “EIP”), and the Director EIP, also includes 2,322,920 stock rights outstanding under the 2011 LTIP, 2,216,653 stock rights outstanding under the 2005 LTIP, 8,605 stock rights outstanding under the EIP, and 150,468 stock rights outstanding under the Director EIP that are payable solely in common shares. Stock rights do not have an exercise price, and therefore were not included for purposes of computing the weighted-average exercise price. |
(2) | Includes 29,837,290 common shares available under the 2011 LTIP in the form of stock options and other stock-based awards. The number of shares authorized for issuance under the 2011 LTIP will increase by shares that are not issued under outstanding equity awards. Under the 2011 LTIP's fungible share counting provisions, stock options are counted against the plan as one share for every common share issued; awards other than stock options are counted against the plan as two and one-half shares for every common share issued. This means that only 11,934,916 shares could be issued under awards other than stock options while 29,837,290 shares could be issued under stock options. |
(3) | In addition to common shares remaining available under the 2011 LTIP, this also includes 762,499 common shares remaining available for future issuance under the Director EIP in the form of stock options and other stock-based awards. |
(4) | Does not include stock options to purchase 29,519 common shares at a weighted-average exercise price of $29.83 that we assumed in connection with acquisition transactions. |
(5) | In addition to stock options outstanding under the BEIP and ODEIP, also includes 8,469 stock rights outstanding under the ODEIP that are payable solely in common shares. Stock rights do not have an exercise price, and therefore were not included for purposes of computing the weighted-average exercise price. |
Cardinal Health, Inc. and Subsidiaries | ||
Cardinal Health, Inc. and Subsidiaries | ||
Part IV |
Page | |
Consolidated Financial Statements and Schedule: | |
Exhibit Number | Exhibit Description |
2.1 | Agreement and Plan of Merger, dated February 13, 2013, by and among Cardinal Health, Inc., AssuraMed, Inc., Mesa Merger Corp. and Clayton, Dubilier & Rice, LLC, as Representative of AssuraMed, Inc.’s stockholders (incorporated by reference to Exhibit 2.1 to Cardinal Health’s Current Report on Form 8-K filed on February 14, 2013, File No. 1-11373) |
3.1 | Amended and Restated Articles of Incorporation of Cardinal Health, Inc., as amended (incorporated by reference to Exhibit 3.1 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, File No. 1-11373) |
3.2 | Cardinal Health, Inc. Restated Code of Regulations (incorporated by reference to Exhibit 3.2 to Cardinal Health’s Current Report on Form 8-K filed on August 10, 2012, File No. 1-11373) |
4.1 | Specimen Certificate for Common Shares of Cardinal Health, Inc. (incorporated by reference to Exhibit 4.01 to Cardinal Health’s Annual Report on Form 10-K for the fiscal year ended June 30, 2001, File No. 1-11373) |
4.2.1 | Indenture, dated as of April 18, 1997, between Cardinal Health, Inc. and Bank One, Columbus, NA, Trustee (incorporated by reference to Exhibit 1 to Cardinal Health’s Current Report on Form 8-K filed on April 21, 1997, File No. 1-11373) |
4.2.2 | Supplemental Indenture, dated October 3, 2006, between Cardinal Health, Inc. and The Bank of New York Trust Company, N.A., as trustee (successor to J.P. Morgan Trust Company, National Association, successor to Bank One, N.A., formerly known as Bank One, Columbus, N.A.) (incorporated by reference to Exhibit 4.3 to Cardinal Health’s Current Report on Form 8-K filed on October 4, 2006, File No. 1-11373) |
4.2.3 | Second Supplemental Indenture, dated June 8, 2007, between Cardinal Health, Inc. and The Bank of New York Trust Company, N.A., (successor to J.P. Morgan Trust Company, National Association, successor to Bank One, N.A., formerly known as Bank One, Columbus, N.A.), as trustee (incorporated by reference to Exhibit 4.01 to Cardinal Health’s Current Report on Form 8-K filed on June 8, 2007, File No. 1-11373) |
4.2.4 | 4.00% Notes due 2015 (incorporated by reference to Exhibit 4.2.8 to Cardinal Health’s Annual Report on Form 10-K for the fiscal year ended June 30, 2008, File No. 1-11373) |
4.2.5 | 5.85% Notes due 2017 (incorporated by reference to Exhibit 4.2.9 to Cardinal Health’s Annual Report on Form 10-K for the fiscal year ended June 30, 2008, File No. 1-11373) |
4.2.6 | 5.80% Notes due 2016 (incorporated by reference to Exhibit 4.2.11 to Cardinal Health’s Annual Report on Form 10-K for the fiscal year ended June 30, 2008, File No. 1-11373) |
4.2.7 | 6.00% Notes due 2017 (incorporated by reference to Exhibit 4.2.12 to Cardinal Health’s Annual Report on Form 10-K for the fiscal year ended June 30, 2008, File No. 1-11373) |
4.3.1 | Indenture, dated as of June 2, 2008, between Cardinal Health, Inc. and The Bank of New York Trust Company, N.A. (incorporated by reference to Exhibit 4.1 to Cardinal Health’s Current Report on Form 8-K filed on June 2, 2008, File No. 1-11373) |
4.3.2 | 5.50% Notes due 2013 (incorporated by reference to Exhibit 4.2 to Cardinal Health’s Current Report on Form 8-K filed on June 2, 2008, File No. 1-11373) |
4.3.3 | 4.625% Notes due 2020 (incorporated by reference to Exhibit 4.1 to Cardinal Health’s Current Report on Form 8-K filed on December 14, 2010, File No. 1-11373) |
4.3.4 | 1.900% Notes due 2017 (incorporated by reference to Exhibit 4.1 to Cardinal Health's Current Report on Form 8-K filed on May 21, 2012, File No. 1-11373) |
4.3.5 | 3.200% Notes due 2022 (incorporated by reference to Exhibit 4.2 to Cardinal Health's Current Report on Form 8-K filed on May 21, 2012, File No. 1-11373) |
4.3.6 | 1.700% Notes due 2018 (incorporated by reference to Exhibit 4.1 to Cardinal Health's Current Report on Form 8-K filed on February 22, 2013, File No. 1-11373) |
4.3.7 | 3.200% Notes due 2023 (incorporated by reference to Exhibit 4.2 to Cardinal Health's Current Report on Form 8-K filed on February 22, 2013, File No. 1-11373) |
4.3.8 | 4.600% Notes due 2043 (incorporated by reference to Exhibit 4.3 to Cardinal Health's Current Report on Form 8-K filed on February 22, 2013, File No. 1-11373) |
4.4 | Agreement to furnish to the Securities and Exchange Commission upon request a copy of instruments defining the rights of holders of certain long-term debt of Cardinal Health, Inc. and consolidated subsidiaries (incorporated by reference to Exhibit 4.07 to Cardinal Health’s Annual Report on Form 10-K for the fiscal year ended June 30, 2005, File No. 1-11373) |
10.1.1 | Cardinal Health, Inc. 2011 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to Cardinal Health’s Current Report on Form 8-K/A filed on November 4, 2011, File No. 1-11373)* |
Cardinal Health, Inc. and Subsidiaries | ||
Exhibit Number | Exhibit Description |
10.1.2 | Form of Nonqualified Stock Option Agreement under the Cardinal Health, Inc. 2011 Long-Term Incentive Plan (grant made to executive officer in April 2012) (incorporated by reference to Exhibit 10.2 to Cardinal Health’s Current Report on Form 8-K/A filed on November 4, 2011, File No. 1-11373)* |
10.1.3 | Form of Nonqualified Stock Option Agreement under the Cardinal Health, Inc. 2011 Long-Term Incentive Plan (grants made to executive officers in August 2012) (incorporated by reference to Exhibit 10.1.3 to Cardinal Health’s Annual Report on Form 10-K for the fiscal year ended June 30, 2012, File No. 1-11373)* |
10.1.4 | Form of Nonqualified Stock Option Agreement under the Cardinal Health, Inc. 2011 Long-Term Incentive Plan (grants made to executive officers in August 2013 and thereafter)* |
10.1.6 | Form of Restricted Share Units Agreement under the Cardinal Health, Inc. 2011 Long-Term Incentive Plan (grants made to executive officers in April and August 2012) (incorporated by reference to Exhibit 10.3 to Cardinal Health's Current Report on Form 8-K/A filed on November 4, 2011, File No. 1-11373)* |
10.1.7 | Form of Restricted Share Units Agreement under the Cardinal Health, Inc. 2011 Long-Term Incentive Plan (grants made to executive officers in August 2013 and thereafter)* |
10.1.8 | Form of Performance Share Units Agreement under the Cardinal Health, Inc. 2011 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.4 to Cardinal Health's Current Report on Form 8-K/A filed on November 4, 2011, File No. 1-11373)* |
10.1.9 | Form of Amendment to Stock Option and Restricted Share Unit Agreements under the Cardinal Health, Inc. 2011 Long-Term Incentive Plan, the Cardinal Health, Inc. 2005 Long-Term Incentive Plan, the Cardinal Health, Inc. 2007 Nonemployee Directors Equity Incentive Plan and the Cardinal Health, Inc. Amended and Restated Outside Directors Equity Incentive Plan* |
10.1.10 | Form of Amendment to Performance Share Unit Agreements under the Cardinal Health, Inc. 2011 Long-Term Incentive Plan and the Cardinal Health, Inc. 2005 Long-Term Incentive Plan* |
10.2.1 | Cardinal Health, Inc. 2005 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, File No. 1-11373)* |
10.2.2 | First Amendment to Cardinal Health, Inc. 2005 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1.1 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2009, File No. 1-11373)* |
10.2.3 | Second Amendment to Cardinal Health, Inc. 2005 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1.2 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2009, File No. 1-11373)* |
10.2.4 | Form of Nonqualified Stock Option Agreement under the Cardinal Health, Inc. 2005 Long-Term Incentive Plan (grants made to executive officers in August 2006) (incorporated by reference to Exhibit 10.03 to Cardinal Health’s Current Report on Form 8-K filed on August 7, 2006, File No. 1-11373)* |
10.2.5 | Form of Nonqualified Stock Option Agreement under the Cardinal Health, Inc. 2005 Long-Term Incentive Plan (grants made to executive officers in August 2007) (incorporated by reference to Exhibit 10.2 to Cardinal Health’s Current Report on Form 8-K/A filed on August 13, 2007, File No. 1-11373)* |
10.2.6 | Form of Nonqualified Stock Option Agreement under the Cardinal Health, Inc. 2005 Long-Term Incentive Plan (grants made to executive officers in February and August 2008) (incorporated by reference to Exhibit 10.1 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2007, File No. 1-11373)* |
10.2.7 | Form of Nonqualified Stock Option Agreement under the Cardinal Health, Inc. 2005 Long-Term Incentive Plan (grants made to executive officers in September 2009) (incorporated by reference to Exhibit 10.1.3 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2009, File No. 1-11373)* |
10.2.8 | Form of Nonqualified Stock Option Agreement under the Cardinal Health, Inc. 2005 Long-Term Incentive Plan (grants made to executive officers in August 2010 and August 2011) (incorporated by reference to Exhibit 10.1.11 to Cardinal Health’s Annual Report on Form 10-K for the fiscal year ended June 30, 2010, File No. 1-11373)* |
10.2.9 | Form of Restricted Share Units Agreement under the Cardinal Health, Inc. 2005 Long-Term Incentive Plan (grants made to executive officers in September 2009) (incorporated by reference to Exhibit 10.1.4 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2009, File No. 1-11373)* |
10.2.10 | Form of Restricted Share Units Agreement under the Cardinal Health, Inc. 2005 Long-Term Incentive Plan (grants made to executive officers in August 2010 (incorporated by reference to Exhibit 10.1.17 to Cardinal Health’s Annual Report on Form 10-K for the fiscal year ended June 30, 2010, File No. 1-11373)* |
10.2.11 | Form of Restricted Share Units Agreement under the Cardinal Health, Inc. 2005 Long-Term Incentive Plan (grants made to executive officers in August 2011) (incorporated by reference to Exhibit 10.1.12 to Cardinal Health's Annual Report on Form 10-K for the fiscal year ended June 30, 2011, File No. 1-11373)* |
10.2.12 | Form of Performance Share Units Agreement under the Cardinal Health, Inc. 2005 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to Cardinal Health’s Current Report on Form 8-K filed on August 4, 2011, File No. 1-11373)* |
10.2.13 | Copy of resolutions adopted by the Human Resources and Compensation Committee of the Board of Directors on August 7, 2007 amending outstanding Nonqualified Stock Option Agreements under the Cardinal Health, Inc. 2005 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1.10 to Cardinal Health’s Annual Report on Form 10-K for the fiscal year ended June 30, 2007, File No. 1-11373)* |
10.2.14 | Copy of resolutions adopted by the Human Resources and Compensation Committee of the Board of Directors on November 6, 2007 amending outstanding Nonqualified Stock Option Agreements under the Cardinal Health, Inc. 2005 Long-Term Incentive Plan, the Cardinal Health, Inc. Amended and Restated Equity Incentive Plan and the Cardinal Health, Inc. Broadly-based Equity Incentive Plan (incorporated by reference to Exhibit 10.3 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2007, File No. 1-11373)* |
10.2.15 | Copy of resolutions adopted by the Human Resources and Compensation Committee of the Board of Directors on September 26, 2008 amending outstanding Nonqualified Stock Option Agreements under the Cardinal Health, Inc. 2005 Long-Term Incentive Plan, the Cardinal Health, Inc. Amended and Restated Equity Incentive Plan and the Cardinal Health, Inc. Broadly-based Equity Incentive Plan (incorporated by reference to Exhibit 10.2 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, File No. 1-11373)* |
10.3.1 | Cardinal Health, Inc. Amended and Restated Equity Incentive Plan (incorporated by reference to Exhibit 10.02 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2005, File No. 1-11373)* |
10.3.2 | Copy of resolutions adopted by the Human Resources and Compensation Committee of the Board of Directors on May 7, 2002 amending the Cardinal Health, Inc. Amended and Restated Equity Incentive Plan and the Cardinal Health, Inc. Broadly-based Equity Incentive Plan (incorporated by reference to Exhibit 10.2.3 to Cardinal Health’s Annual Report on Form 10-K for the fiscal year ended June 30, 2007, File No. 1-11373)* |
10.3.3 | Third Amendment to the Cardinal Health, Inc. Amended and Restated Equity Incentive Plan (incorporated by reference to Exhibit 10.2.4 to Cardinal Health’s Annual Report on Form 10-K for the fiscal year ended June 30, 2007, File No. 1-11373)* |
10.3.4 | Fourth Amendment to Cardinal Health, Inc. Amended and Restated Equity Incentive Plan (incorporated by reference to Exhibit 10.6 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2009, File No. 1-11373)* |
10.3.5 | Form of Directors’ Stock Option Agreement under the Cardinal Health, Inc. Amended and Restated Equity Incentive Plan (grants made in November 2002) (incorporated by reference to Exhibit 10.02 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2001, File No. 1-11373)* |
10.3.6 | Form of Directors’ Stock Option Agreement under the Cardinal Health, Inc. Amended and Restated Equity Incentive Plan (grants made in November 2003 and December 2004) (incorporated by reference to Exhibit 10.03 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2003, File No. 1-11373)* |
Cardinal Health, Inc. and Subsidiaries | ||
Exhibit Number | Exhibit Description |
10.3.7 | Form of Directors’ Stock Option Agreement under the Cardinal Health, Inc. Amended and Restated Equity Incentive Plan (grants made in November 2005) (incorporated by reference to Exhibit 10.07 to Cardinal Health’s Current Report on Form 8-K filed on November 7, 2005, File No. 1-11373)* |
10.4.1 | Cardinal Health, Inc. Amended and Restated Outside Directors Equity Incentive Plan (incorporated by reference to Exhibit 10.23 to Cardinal Health’s Annual Report on Form 10-K for the fiscal year ended June 30, 2005, File No. 1-11373)* |
10.4.2 | First Amendment to Cardinal Health, Inc. Amended and Restated Outside Directors Equity Incentive Plan (incorporated by reference to Exhibit 10.02 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2006, File No. 1-11373)* |
10.4.3 | Form of Directors’ Stock Option Agreement under the Cardinal Health, Inc. Outside Directors Equity Incentive Plan (grants made in November 2002) (incorporated by reference to Exhibit 10.03 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2001, File No. 1-11373)* |
10.4.4 | Form of Directors’ Stock Option Agreement under the Cardinal Health, Inc. Outside Directors Equity Incentive Plan (grants made in November 2003 and December 2004) (incorporated by reference to Exhibit 10.04 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2003, File No. 1-11373)* |
10.4.5 | Form of Directors’ Stock Option Agreement under the Cardinal Health, Inc. Amended and Restated Outside Directors Equity Incentive Plan (grants made in November 2005 and December 2006) (incorporated by reference to Exhibit 10.08 to Cardinal Health’s Current Report on Form 8-K filed on November 7, 2005, File No. 1-11373)* |
10.4.6 | Form of Directors’ Stock Option Agreement under the Cardinal Health, Inc. Amended and Restated Outside Directors Equity Incentive Plan (grants made in November and December 2006 and August and November 2007) (incorporated by reference to Exhibit 10.03 to Cardinal Health’s Current Report on Form 8-K filed on November 13, 2006, File No. 1-11373)* |
10.5.1 | Cardinal Health, Inc. 2007 Nonemployee Directors Equity Incentive Plan (incorporated by reference to Exhibit 10.4 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2007, File No. 1-11373)* |
10.5.2 | First Amendment to Cardinal Health, Inc. 2007 Nonemployee Directors Equity Incentive Plan (incorporated by reference to Exhibit 10.2.1 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2009, File No. 1-11373)* |
10.5.3 | Second Amendment to the Cardinal Health, Inc. 2007 Nonemployee Directors Equity Incentive Plan (incorporated by reference to Exhibit 10.5 to Cardinal Health's Quarterly Report on Form 10-Q for the Quarter ended December 31, 2011, File No. 1-11373)* |
10.5.4 | Form of Directors’ Stock Option Agreement under the Cardinal Health, Inc. 2007 Nonemployee Directors Equity Incentive Plan (grants made in November 2008) (incorporated by reference to Exhibit 10.5 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2007, File No. 1-11373)* |
10.5.6 | Form of Directors’ Restricted Share Units Agreement under the Cardinal Health, Inc. 2007 Nonemployee Directors Equity Incentive Plan (for grants made in November 2011 and 2012) (incorporated by reference to Exhibit 10.6 to Cardinal Health's Quarterly Report on Form 10-Q for the quarter ended December 31, 2011, File No. 1-11373)* |
10.5.7 | Form of Directors’ Restricted Share Units Agreement under the Cardinal Health, Inc. 2007 Nonemployee Directors Equity Incentive Plan* |
10.6.1 | Term Sheet for Adjustments to Cardinal Health Stock Options and Terms of CareFusion Stock Options (For current and former U.S. Cardinal Health employees) (incorporated by reference to Exhibit 10.2 to Cardinal Health’s Current Report on Form 8-K filed on September 1, 2009, File No. 1-11373)* |
10.6.2 | Term Sheet for Adjustments to Cardinal Health Stock Options and Terms of CareFusion Stock Options (For Directors) (incorporated by reference to Exhibit 10.5.4 to Cardinal Health’s Annual Report on Form 10-K for the fiscal year ended June 30, 2010, File No. 1-11373)* |
10.7.1 | Cardinal Health, Inc. Broadly-based Equity Incentive Plan (incorporated by reference to Exhibit 10.52 to Cardinal Health’s Annual Report on Form 10-K for the fiscal year ended June 30, 2002, File No. 1-11373)* |
10.7.2 | Second Amendment to the Cardinal Health, Inc. Broadly-based Equity Incentive Plan (incorporated by reference to Exhibit 10.4.2 to Cardinal Health’s Annual Report on Form 10-K for the fiscal year ended June 30, 2007, File No. 1-11373)* |
10.7.3 | Third Amendment to the Cardinal Health, Inc. Broadly-based Equity Incentive Plan (incorporated by reference to Exhibit 10.5 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2009, File No. 1-11373)* |
10.8.1 | Cardinal Health Deferred Compensation Plan, amended and restated effective January 1, 2009 (incorporated by reference to Exhibit 10.6.5 to Cardinal Health’s Annual Report on Form 10-K for the fiscal year ended June 30, 2008, File No. 1-11373)* |
10.8.2 | First Amendment to Cardinal Health Deferred Compensation Plan (incorporated by reference to Exhibit 10.4 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, File No. 1-11373)* |
10.8.3 | Second Amendment to Cardinal Health Deferred Compensation Plan (incorporated by reference to Exhibit 10.1 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010, File No. 1-11373)* |
10.8.4 | Third Amendment to Cardinal Health Deferred Compensation Plan (incorporated by reference to Exhibit 10.1 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2010, File No. 1-11373)* |
10.8.5 | Fourth Amendment to the Cardinal Health Deferred Compensation Plan (incorporated by reference to Exhibit 10.1 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011, File No. 1-11373)* |
10.8.6 | Fifth Amendment to the Cardinal Health Deferred Compensation Plan (incorporated by reference to Exhibit 10.1 to Cardinal Health's Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, File No. 1-11373)* |
10.9.1 | Cardinal Health, Inc. Amended and Restated Management Incentive Plan (incorporated by reference to Exhibit 10.02 to Cardinal Health’s Current Report on Form 8-K filed on November 13, 2006, File No. 1-11373)* |
10.9.2 | First Amendment to the Cardinal Health, Inc. Amended and Restated Management Incentive (incorporated by reference to Exhibit 10.7.2 to Cardinal Health’s Annual Report on Form 10-K for the fiscal year ended June 30, 2007, File No. 1-11373)* |
10.10 | Cardinal Health, Inc. Policy Regarding Shareholder Approval of Severance Agreements (incorporated by reference to Exhibit 10.09 to Cardinal Health’s Current Report on Form 8-K filed on August 7, 2006, File No. 1-11373)* |
10.11.1 | Employment Agreement, dated August 5, 2009, between Cardinal Health, Inc. and George S. Barrett (incorporated by reference to Exhibit 10.1 to Cardinal Health’s Current Report on Form 8-K/A filed on August 10, 2009, File No. 1-11373)* |
10.11.2 | Employment Agreement, dated September 4, 2012, between Cardinal Health, Inc. and George S. Barrett (incorporated by reference to Exhibit 10.1 to Cardinal Health’s Current Report on Form 8-K filed on September 6, 2012, File No. 1-11373) * |
10.11.3 | Form of amended and restated Aircraft Time Sharing Agreement between Cardinal Health, Inc. and George S. Barrett (incorporated by reference to Exhibit 10.4.2 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2009, File No. 1-11373)* |
10.11.4 | Form of Aircraft Time Sharing Agreement, effective as of January 1, 2013, between Cardinal Health, Inc. and George S. Barrett (incorporated by reference to Exhibit 10.1 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2012, File No. 1-11373)* |
Cardinal Health, Inc. and Subsidiaries | ||
Exhibit Number | Exhibit Description |
10.12 | Confidentiality and Business Protection Agreement, effective as of February 15, 2010, between Cardinal Health, Inc. and Michael C. Kaufmann (incorporated by reference to Exhibit 10.15 to Cardinal Health’s Annual Report on Form 10-K for the fiscal year ended June 30, 2010, File No. 1-11373)* |
10.13.1 | Confidentiality and Business Protection Agreement, effective as of April 9, 2012, between Cardinal Health, Inc. and Donald M. Casey Jr. (incorporated by reference to Exhibit 10.14.1 to Cardinal Health’s Annual Report on Form 10-K for the fiscal year ended June 30, 2012, File No. 1-11373)* |
10.13.2 | Offer Letter to Donald M. Casey Jr. dated April 9, 2012 (incorporated by reference to Exhibit 10.14.2 to Cardinal Health’s Annual Report on Form 10-K for the fiscal year ended June 30, 2012, File No. 1-11373)* |
10.14.1 | Description of Nonemployee Directors Compensation effective November 2, 2011 (incorporated by reference to Exhibit 10.14.2 to Cardinal Health's Annual Report on Form 10-K for the fiscal year ended June 30, 2011, File No. 1-11373)* |
10.14.2 | Description of Nonemployee Directors Compensation effective November 6, 2013* |
10.15.1 | Form of Indemnification Agreement between Cardinal Health, Inc. and certain individual directors (incorporated by reference to Exhibit 10.38 to Cardinal Health’s Annual Report on Form 10-K for the fiscal year ended June 30, 2004, File No. 1-11373) |
10.15.2 | Form of Indemnification Agreement between Cardinal Health, Inc. and certain individual executive officers (incorporated by reference to Exhibit 10.39 to Cardinal Health’s Annual Report on Form 10-K for the fiscal year ended June 30, 2004, File No. 1-11373) |
10.16.1 | Issuing and Paying Agency Agreement, dated August 9, 2006, between Cardinal Health, Inc. and The Bank of New York (incorporated by reference to Exhibit 10.01 to Cardinal Health’s Annual Report on Form 10-K for the fiscal year ended June 30, 2006, File No. 1-11373) |
10.16.2 | First Amendment to Issuing and Paying Agency Agreement, dated February 28, 2007, between Cardinal Health, Inc. and The Bank of New York (incorporated by reference to Exhibit 10.01 to Cardinal Health’s Current Report on Form 8-K filed on March 6, 2007, File No. 1-11373) |
10.16.3 | Commercial Paper Dealer Agreement, dated August 9, 2006, between Cardinal Health, Inc. and J.P. Morgan Securities Inc. (incorporated by reference to Exhibit 10.02 to Cardinal Health’s Annual Report on Form 10-K for the fiscal year ended June 30, 2006, File No. 1-11373) |
10.16.4 | First Amendment to Commercial Paper Dealer Agreement, dated February 28, 2007, between Cardinal Health, Inc. and J.P. Morgan Securities Inc. (incorporated by reference to Exhibit 10.02 to Cardinal Health’s Current Report on Form 8-K filed on March 6, 2007, File No. 1-11373) |
10.16.5 | Second Amendment to Commercial Paper Dealer Agreement, effective as of December 31, 2012, between Cardinal Health, Inc. and J.P. Morgan Securities LLC (formerly known as J.P. Morgan Securities Inc.) (incorporated by reference to Exhibit 10.4 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2012, File No. 1-11373) |
10.16.6 | Commercial Paper Dealer Agreement, dated August 9, 2006, between Cardinal Health, Inc. and Banc of America Securities LLC (incorporated by reference to Exhibit 10.03 to Cardinal Health’s Annual Report on Form 10-K for the fiscal year ended June 30, 2006, File No. 1-11373) |
10.16.7 | First Amendment to Commercial Paper Dealer Agreement, dated February 28, 2007, between Cardinal Health, Inc. and Banc of America Securities LLC (incorporated by reference to Exhibit 10.03 to Cardinal Health’s Current Report on Form 8-K filed on March 6, 2007, File No. 1-11373) |
10.16.8 | Second Amendment to Commercial Paper Dealer Agreement, effective as of December 31, 2012, between Cardinal Health, Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, f/k/a Banc of America Securities LLC (incorporated by reference to Exhibit 10.5 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2012, File No. 1-11373) |
10.16.9 | Commercial Paper Dealer Agreement, dated August 9, 2006, between Cardinal Health, Inc. and Wachovia Capital Markets, LLC (incorporated by reference to Exhibit 10.04 to Cardinal Health’s Annual Report on Form 10-K for the fiscal year ended June 30, 2006, File No. 1-11373) |
10.16.10 | First Amendment to Commercial Paper Dealer Agreement, dated February 28, 2007, between Cardinal Health, Inc. and Wachovia Capital Markets, LLC (incorporated by reference to Exhibit 10.04 to Cardinal Health’s Current Report on Form 8-K filed on March 6, 2007, File No. 1-11373) |
10.16.11 | Second Amendment to Commercial Paper Dealer Agreement, effective as of December 31, 2012, between Cardinal Health, Inc. and Wells Fargo Securities, LLC, as successor in interest to Wachovia Capital Markets, LLC (incorporated by reference to Exhibit 10.6 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2012, File No. 1-11373) |
10.16.12 | Commercial Paper Dealer Agreement, dated August 9, 2006, between Cardinal Health, Inc. and Goldman, Sachs & Co. (incorporated by reference to Exhibit 10.05 to Cardinal Health’s Annual Report on Form 10-K for the fiscal year ended June 30, 2006, File No. 1-11373) |
10.16.13 | First Amendment to Commercial Paper Dealer Agreement, dated February 28, 2007, between Cardinal Health, Inc. and Goldman, Sachs & Co. (incorporated by reference to Exhibit 10.05 to Cardinal Health’s Current Report on Form 8-K filed on March 6, 2007, File No. 1-11373) |
10.16.14 | Second Amendment to Commercial Paper Dealer Agreement, effective as of December 31, 2012, between Cardinal Health, Inc. and Goldman, Sachs & Co. (incorporated by reference to Exhibit 10.7 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2012, File No. 1-11373) |
10.16.15 | Form of Commercial Paper Dealer Agreement between Cardinal Health, Inc. and SunTrust Robinson Humphrey, Inc. (incorporated by reference to Exhibit 10.2 to Cardinal Health’s Current Report on Form 8-K filed on April 21, 2009, File No. 1-11373) |
10.16.16 | Form of First Amendment to Commercial Paper Dealer Agreement between Cardinal Health, Inc. and SunTrust Robinson Humphrey, Inc. (incorporated by reference to Exhibit 10.8 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2012, File No. 1-11373) |
10.17.1 | Five-Year Credit Agreement, dated as of May 12, 2011, among the Company, certain lenders, JPMorgan Chase Bank, N.A. as Administrative Agent, Bank of America, N.A. and Morgan Stanley Senior Funding, Inc. as Syndication Agents, Barclays Bank PLC and Deutsche Bank Securities Inc. as Documentation Agents, and J.P. Morgan Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley Senior Funding, Inc. as Joint Lead Arrangers and Book Managers (incorporated by reference to Exhibit 10.1 to Cardinal Health’s Current Report on Form 8-K filed on May 13, 2011, File No. 1-11373) |
10.17.2 | Amendment No. 1 to Five-Year Credit Agreement (incorporated by reference to Exhibit 10.1 to Cardinal Health’s Current Report on Form 8-K filed on June 5, 2013, File No. 1-11373) |
10.18.1 | Third Amended and Restated Receivables Purchase Agreement, dated as of November 19, 2007, among Cardinal Health Funding, LLC, Griffin Capital, LLC, each entity signatory thereto as a Conduit, each entity signatory thereto as a Financial Institution, each entity signatory thereto as a Managing Agent and Wachovia Capital Markets, LLC, as the Agent (incorporated by reference to Exhibit 10.1 to Cardinal Health’s Current Report on Form 8-K filed on November 26, 2007, File No. 1-11373) |
10.18.2 | First Amendment, dated as of November 13, 2008, to the Third Amended and Restated Receivables Purchase Agreement, dated as of November 19, 2007, among Cardinal Health Funding, LLC, Griffin Capital, LLC, each entity signatory thereto as a Conduit, each entity signatory thereto as a Financial Institution, each entity signatory thereto as a Managing Agent and Wachovia Capital Markets, LLC, as the Agent (incorporated by reference to Exhibit 10.1 to Cardinal Health’s Current Report on Form 8-K filed on November 18, 2008, File No. 1-11373) |
10.18.3 | Second Amendment and Joinder to the Third Amended and Restated Receivables Purchase Agreement and Amendment to the Performance Guaranty, dated as of May 1, 2009 (incorporated by reference to Exhibit 10.1 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009, File No. 1-11373) |
10.18.4 | Third Amendment, dated as of November 10, 2009, to the Third Amended and Restated Receivables Purchase Agreement, dated as of November 19, 2007 (incorporated by reference to exhibit 10.1 to Cardinal Health’s Current Report on Form 8-K filed on November 16, 2009, File No. 1-11373) |
Cardinal Health, Inc. and Subsidiaries | ||
Exhibit Number | Exhibit Description |
10.18.5 | Fourth Amendment, dated as of March 25, 2010, to the Third Amended and Restated Receivables Purchase Agreement and Waiver, dated as of November 19, 2007 (incorporated by reference to Exhibit 10.2 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010, File No. 1-11373) |
10.18.6 | Fifth Amendment, dated as of August 30, 2010, to the Third Amended and Restated Receivables Purchase Agreement, dated as of November 19, 2007 (incorporated by reference to Exhibit 10.2 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2010, File No. 1-11373) |
10.18.7 | Sixth Amendment, dated as of November 9, 2010, to the Third Amended and Restated Receivables Purchase Agreement, dated as of November 19, 2007 (incorporated by reference to Exhibit 10.1 to Cardinal Health’s Current Report on Form 8-K filed on November 12, 2010, File No. 1-11373) |
10.18.8 | Seventh Amendment and Joinder, dated as of November 6, 2012, to the Third Amended and Restated Receivables Purchase Agreement, dated as of November 19, 2007 (incorporated by reference to Exhibit 10.2 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2012, File No. 1-11373) |
10.18.9 | Omnibus Amendment and Waiver, dated as of December 15, 2009, to the Third Amended and Restated Receivables Purchase Agreement, dated as of November 19, 2007 (incorporated by reference to Exhibit 10.23.8 to Cardinal Health’s Annual Report on Form 10-K for the fiscal year ended June 30, 2010, File No. 1-11373) |
10.18.10 | Third Amended and Restated Performance Guaranty, dated as of March 25, 2010, executed by Cardinal Health, Inc. in favor of Cardinal Health Funding, LLC (incorporated by reference to Exhibit 10.3 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010, File No. 1-11373) |
10.18.11 | Fourth Amended and Restated Performance Guaranty, dated as of November 6, 2012, executed by Cardinal Health, Inc. in favor of Cardinal Health Funding, LLC (incorporated by reference to Exhibit 10.3 to Cardinal Health’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2012, File No. 1-11373) |
10.19.1 | Tax Matters Agreement, dated as of August 31, 2009, by and between Cardinal Health, Inc. and CareFusion Corporation (incorporated by reference to Exhibit 10.3 to Cardinal Health’s Current Report on Form 8-K filed on September 4, 2009, File No. 1-11373) |
10.19.2 | First Amendment to Tax Matters Agreement, dated as of May 28, 2012, by and between Cardinal Health, Inc. and CareFusion Corporation (incorporated by reference to Exhibit 10.20.2 to Cardinal Health’s Annual Report on Form 10-K for the fiscal year ended June 30, 2012, File No. 1-11373) |
10.19.3 | Separation Agreement, dated July 22, 2009, by and between Cardinal Health, Inc. and CareFusion Corporation (incorporated by reference to Exhibit 2.1 to Cardinal Health’s Current Report on Form 8-K filed on July 22, 2009, File No. 1-11373) |
10.19.4 | CareFusion Corporation 2009 Long-Term Incentive Plan (incorporated by reference to Exhibit 99.1 to CareFusion’s Registration Statement on Form S-8 (File No. 333-161615) filed with the Securities and Exchange Commission on August 28, 2009)* |
12.1 | Computation of Ratio of Earnings to Fixed Charges |
21.1 | List of Subsidiaries of Cardinal Health, Inc. |
23.1 | Consent of Independent Registered Public Accounting Firm |
31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
99.1 | Statement Regarding Forward-Looking Information |
101.INS | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension Schema Document |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF | XBRL Taxonomy Definition Linkbase Document |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
Cardinal Health, Inc. | ||
By: | /s/ GEORGE S. BARRETT | |
George S. Barrett | ||
Chairman and Chief Executive Officer |
Name | Title | |
/s/ GEORGE S. BARRETT | Chairman and Chief Executive Officer and Director (principal executive officer) | |
George S. Barrett | ||
/s/ JEFFREY W. HENDERSON | Chief Financial Officer (principal financial officer) | |
Jeffrey W. Henderson | ||
/s/ STUART G. LAWS | Senior Vice President and Chief Accounting Officer (principal accounting officer) | |
Stuart G. Laws | ||
/s/ COLLEEN F. ARNOLD | Director | |
Colleen F. Arnold | ||
/s/ GLENN A. BRITT | Director | |
Glenn A. Britt | ||
/s/ CARRIE S. COX | Director | |
Carrie S. Cox | ||
/s/ CALVIN DARDEN | Director | |
Calvin Darden | ||
/s/ BRUCE L. DOWNEY | Director | |
Bruce L. Downey | ||
/s/ JOHN F. FINN | Director | |
John F. Finn | ||
/s/ CLAYTON M. JONES | Director | |
Clayton M. Jones | ||
/s/ GREGORY B. KENNY | Director | |
Gregory B. Kenny | ||
/s/ DAVID P. KING | Director | |
David P. King | ||
/s/ RICHARD C. NOTEBAERT | Director | |
Richard C. Notebaert | ||
/s/ JEAN G. SPAULDING, M.D. | Director | |
Jean G. Spaulding, M.D. |
(in millions) | Balance at Beginning of Period | Charged to Costs and Expenses (2) | Charged to Other Accounts (3) | Deductions (4) | Balance at End of Period | ||||||||||||||
Fiscal 2013 | |||||||||||||||||||
Accounts receivable | $ | 126 | $ | 40 | $ | 2 | $ | (34 | ) | $ | 134 | ||||||||
Finance notes receivable | 16 | 1 | — | — | 17 | ||||||||||||||
Other | 1 | — | — | — | 1 | ||||||||||||||
$ | 143 | $ | 41 | $ | 2 | $ | (34 | ) | $ | 152 | |||||||||
Fiscal 2012 | |||||||||||||||||||
Accounts receivable | $ | 134 | $ | 22 | $ | 1 | $ | (31 | ) | $ | 126 | ||||||||
Finance notes receivable | 15 | — | — | 1 | 16 | ||||||||||||||
Other | 1 | — | — | — | 1 | ||||||||||||||
$ | 150 | $ | 22 | $ | 1 | $ | (30 | ) | $ | 143 | |||||||||
Fiscal 2011 | |||||||||||||||||||
Accounts receivable | $ | 123 | $ | 23 | $ | 5 | $ | (17 | ) | $ | 134 | ||||||||
Finance notes receivable | 16 | 4 | — | (5 | ) | 15 | |||||||||||||
Other | 1 | — | — | — | 1 | ||||||||||||||
$ | 140 | $ | 27 | $ | 5 | $ | (22 | ) | $ | 150 |
(1) | Amounts included herein pertain to the continuing operations of the Company. |
(2) | Fiscal 2013 includes $10 million for reserves related to customer pricing disputes, excluded from provision for bad debts on the consolidated statements of cash flows and classified as a reduction in gross margin in the consolidated statements of earnings. |
(3) | Recoveries of amounts provided for or written off in prior years were $1 million for both fiscal 2013 and 2012, respectively. |
(4) | Write-off of uncollectible accounts. |
CARDINAL HEALTH, INC. | ||||
By:________________________________________ | ||||
Its:________________________________________ |
[________________________________________ | ||||
Awardee's Signature | ||||
________________________________________ | ||||
Date] |
CARDINAL HEALTH, INC. | ||||
By:________________________________________ | ||||
Its:________________________________________ |
[________________________________________ | ||||
Awardee's Signature | ||||
________________________________________ | ||||
Date] |
CARDINAL HEALTH, INC. | ||||
By:________________________________________ | ||||
Its:________________________________________ |
a. | earnings from continuing operations as shown on the consolidated statement of earnings of the Company for the fiscal year excluding (1) restructuring and employee severance, (2) acquisition-related costs and credits, (3) impairment charges and (gain)/loss on sale of assets, (4) litigation (credits)/charges, net, (5) costs and tax charges incurred in connection with the Company’s spin-off of CareFusion Corporation that are not included in restructuring and employee severance, acquisition related costs, impairments and loss on sale of assets and litigation (credits)/charges, net, including, among other things, the loss on extinguishment of debt and the income tax charge related to the anticipated repatriation of a portion of cash loaned to the Company’s entities within the United States, (6) gains on the sale of CareFusion Corporation common stock, each net of tax, (7) amortization of acquisition-related intangible assets, (8) tax benefits and expenses associated with items (1) through (7), and (9) such other adjustments that the Administrator may approve to reflect (i) a change by the Company to the definition of non-GAAP diluted EPS from continuing operations presented to its investors, (ii) exceptional acquisitions or divestitures, (iii) changes in accounting principles, or (iv) other exceptional items that are not reflective of the Company’s operating performance; |
b. | the diluted weighted average shares outstanding for the year as shown on the consolidated statement of earnings of the Company. |
a. | earnings from continuing operations as shown on the consolidated statement of earnings of the Company for the fiscal year excluding: (1) restructuring and employee severance; (2) acquisition-related costs and credits; (3) impairment charges and (gain)/loss on sale of assets; (4) litigation (recoveries)/charges, net; (5) costs incurred in connection with the Company’s spin-off of CareFusion Corporation that are not included in restructuring and employee severance, acquisition-related costs, impairments and (gain)/loss on sale of assets and litigation (recoveries)/charges, net; (6) tax benefits and expenses associated with items (1) through (5); and (7) such other adjustments that the Administrator may approve to reflect (i) a change by the Company to the definition of non-GAAP diluted EPS from continuing operations presented to its investors, (ii) exceptional acquisitions or divestitures, (iii) changes in accounting principles, or (iv) other exceptional items that are not reflective of the Company’s operating performance; |
b. | the diluted weighted average Common Shares outstanding for the year as shown on the consolidated statement of earnings of the Company. |
CARDINAL HEALTH, INC. | ||||
By:________________________________________ | ||||
Its:________________________________________ |
CARDINAL HEALTH, INC. | ||||
By:________________________________________ | ||||
Its:________________________________________ |
________________________________________ | ||||
Awardee's Signature | ||||
________________________________________ | ||||
Date |
Annual retainer | $22,500 per quarter, payable in cash or as otherwise elected by a nonemployee director pursuant to the Deferred Compensation Plan (“Deferred Plan”). |
Annual RSU grant1 | An annual restricted share unit (“RSU”) grant of the number of RSUs equal to $160,000 divided by the closing price of the Company’s common shares on the date of grant; one year cliff vest. |
Presiding Director | Additional retainer is $5,000 per quarter, payable in cash or as elected under Deferred Plan. Annual RSU grant value increased by $20,000. |
Audit Committee Chair | Additional retainer is $5,000 per quarter, payable in cash or as elected under Deferred Plan. |
Human Resources and Compensation Committee Chair | Additional retainer is $3,750 per quarter, payable in cash or as elected under Deferred Plan. |
Nominating and Governance Committee Chair | Additional retainer is $2,500 per quarter, payable in cash or as elected under Deferred Plan. |
Exhibit 12.1 | ||
Cardinal Health, Inc. and Subsidiaries |
June 30, | |||||||||||||||||||
(in millions, except for ratios) | 2009 | 2010 | 2011 | 2012 | 2013 | ||||||||||||||
Earnings before income taxes and discontinued operations | $ | 1,159.8 | $ | 1,211.6 | $ | 1,518.3 | $ | 1,698.1 | $ | 888.3 | |||||||||
Plus fixed charges: | |||||||||||||||||||
Interest expense | 118.4 | 125.5 | 95.2 | 92.3 | 119.2 | ||||||||||||||
Capitalized interest | 5.1 | 2.9 | 5.7 | 6.0 | 1.7 | ||||||||||||||
Amortization of debt offering costs | 3.8 | 9.9 | 1.8 | 2.8 | 3.5 | ||||||||||||||
Interest portion of rent expense | 11.1 | 6.0 | 7.1 | 7.8 | 8.3 | ||||||||||||||
Fixed charges | 138.4 | 144.3 | 109.8 | 108.9 | 132.7 | ||||||||||||||
Plus: amortization of capitalized interest | 2.5 | 6.5 | 5.3 | 3.2 | 3.4 | ||||||||||||||
Less: capitalized interest | (5.1 | ) | (2.9 | ) | (5.7 | ) | (6.0 | ) | (1.7 | ) | |||||||||
Earnings | $ | 1,295.6 | $ | 1,359.5 | $ | 1,627.7 | $ | 1,804.2 | $ | 1,022.7 | |||||||||
Ratio of earnings to fixed charges (1) | 9.4 | 9.4 | 14.8 | 16.6 | 7.7 |
(1) | The ratio of earnings to fixed charges is computed by dividing fixed charges into earnings before income taxes and discontinued operations plus fixed charges and capitalized interest. Fixed charges include interest expense, amortization of debt offering costs and the portion of rent expense that is deemed to be representative of the interest factor. Interest expense recorded on tax exposures has been recorded in income tax expense and has therefore been excluded from the calculation. |
Exhibit 21.1 |
Subsidiary Name | State/Jurisdiction of Incorporation | |
Allegiance Corporation | Delaware | |
AssuraMed, Inc. | Delaware | |
Beckloff Associates, Inc. | Kansas | |
Cardinal Health (H.K.) Co. Limited | Hong Kong | |
Cardinal Health (L) Co., Ltd. | Malaysia | |
Cardinal Health 100, Inc. | Indiana | |
Cardinal Health 104 LP | Ohio | |
Cardinal Health 105, Inc. | Ohio | |
Cardinal Health 107, LLC | Ohio | |
Cardinal Health 108, Inc. | Tennessee | |
Cardinal Health 110, Inc. | Delaware | |
Cardinal Health 112, LLC | Delaware | |
Cardinal Health 114, Inc. | Delaware | |
Cardinal Health 115, LLC | Ohio | |
Cardinal Health 116, LLC | Delaware | |
Cardinal Health 118, LLC | Delaware | |
Cardinal Health 119, LLC | Delaware | |
Cardinal Health 2, LLC | Nevada | |
Cardinal Health 200, LLC | Delaware | |
Cardinal Health 201 Canada L.P. | Alberta | |
Cardinal Health 201, Inc. | Delaware | |
Cardinal Health 222 (Thailand) Ltd. | Thailand | |
Cardinal Health 3, LLC | Delaware | |
Cardinal Health 411, Inc. | Ohio | |
Cardinal Health 414, LLC | Delaware | |
Cardinal Health 5, LLC | Delaware | |
Cardinal Health 6, Inc. | Nevada | |
Cardinal Health 7, LLC | Delaware | |
Cardinal Health Canada 437, Inc. | Canada | |
Cardinal Health Canada Inc. | Canada | |
Cardinal Health Cayman Islands Holding Co. Ltd | Cayman Islands | |
Cardinal Health Cayman Islands Ltd. | Cayman Islands | |
Cardinal Health D.R. 203 II Ltd. | Bermuda | |
Cardinal Health Finance | England & Wales | |
Cardinal Health Foundation | Ohio | |
Cardinal Health Funding, LLC | Nevada | |
Cardinal Health IPS, LLC | Delaware | |
Cardinal Health Ireland 419 Limited | Ireland |
Subsidiary Name | State/Jurisdiction of Incorporation | |
Cardinal Health Luxembourg 420 S.a.r.l. | Luxembourg | |
Cardinal Health Malaysia 211 Sdn. Bhd. | Malaysia | |
Cardinal Health Malta 212 Limited | Malta | |
Cardinal Health Managed Care Services, LLC | Delaware | |
Cardinal Health P.R. 120, Inc. | Puerto Rico | |
Cardinal Health P.R. 218, Inc. | Puerto Rico | |
Cardinal Health Pharmaceutical Contracting, LLC | Delaware | |
Cardinal Health Pharmacy Services, LLC | Delaware | |
Cardinal Health Singapore 225 Pte. Ltd. | Singapore | |
Cardinal Health Systems, Inc. | Ohio | |
Cardinal Health Technologies Switzerland GmbH | Switzerland | |
Cardinal Health Technologies, LLC | Nevada | |
Cardinal Health U.K. International Holding LLP | England & Wales | |
Cirpro de Delicias S.A. de C.V. | Mexico | |
Clinical Data Matrix, LLC | Delaware | |
Convertors de Mexico S.A. de C.V. | Mexico | |
Dik Drug Company, LLC | Delaware | |
Dik Medical Supplies, LLC | Illinois | |
Dutch American Manufacturers II (D.A.M. II) B.V. | Netherlands | |
EPIC Insurance Company | Vermont | |
Griffin Capital, LLC | Nevada | |
Healthcare Solutions Holding, LLC | Delaware | |
Kinray, Inc. | New York | |
Lake Charles Pharmaceutical Supply Company, L.L.C. | Louisiana | |
Leader Drugstores, Inc. | Delaware | |
Medicine Shoppe International, Inc. | Delaware | |
OncoSource Rx, LLC | Delaware | |
One Cloverleaf, LLC | Delaware | |
P4 Healthcare, LLC | Delaware | |
P4 Pathways, LLC | Delaware | |
P4 Solutions, LLC | Delaware | |
Parmed Pharmaceuticals, Inc. | Delaware | |
Pinnacle Intellectual Property Services, Inc. | Nevada | |
Pinnacle Intellectual Property Services-International, Inc. | Nevada | |
Quiroproductos de Cuauhtmoc S. de R.L. de C.V. | Mexico | |
Ransdell Surgical, Inc. | Kentucky | |
RGH Enterprises, Inc. | Ohio | |
Rxealtime, Inc. | Nevada |
Exhibit 23.1 |
(1) | Registration Statement on Form S-3 No. 333-169073 of Cardinal Health, Inc., |
(2) | Registration Statements on Form S-4 No. 333-62938 and No. 333-74761 of Cardinal Health, Inc., and |
(3) | Registration Statements on Form S-8 No. 33-42357, No. 33-64337, No. 333-71727, No. 333-91849, No. 333-72727, No. 333-68819, No. 333-90417, No. 333-90423, No. 333-92841, No. 333-38198, No. 333-38190, No. 333-38192, No. 333-56010, No. 333-53394, No. 333-102369, No. 333-100564, No. 333-120006, No. 333-129725, No. 333-144368, No. 333-149107, No. 333-155156, No. 333-155158, No. 333-163128, No. 333-164736, No. 333-177728, No. 333-183471 of Cardinal Health, Inc.; |
/s/ Ernst & Young LLP | |
Columbus, Ohio | |
August 20, 2013 |
Exhibit 31.1 |
1. | I have reviewed this Form 10-K of Cardinal Health, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ GEORGE S. BARRETT | |
George S. Barrett | |
Chairman and Chief Executive Officer |
Exhibit 31.2 |
1. | I have reviewed this Form 10-K of Cardinal Health, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ JEFFREY W. HENDERSON | |
Jeffrey W. Henderson | |
Chief Financial Officer |
Exhibit 32.1 |
(1) | the Annual Report on Form 10-K for the fiscal year ended June 30, 2013 containing the financial statements of the Company (the “Periodic Report”), which this statement accompanies, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and |
(2) | the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ GEORGE S. BARRETT | |
George S. Barrett | |
Chairman and Chief Executive Officer |
Exhibit 32.2 |
(1) | the Annual Report on Form 10-K for the fiscal year ended June 30, 2013 containing the financial statements of the Company (the “Periodic Report”), which this statement accompanies, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and |
(2) | the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ JEFFREY W. HENDERSON | |
Jeffrey W. Henderson | |
Chief Financial Officer |
Exhibit 99.1 |
• | competitive pressures in the markets in which we operate, including pricing pressures; |
• | increasing consolidation in the healthcare industry, which could give the resulting enterprises greater bargaining power and may increase pressure on prices for our products and services; |
• | uncertainties due to government healthcare reform; |
• | changes to the prescription drug reimbursement formula and related reporting requirements for generic pharmaceuticals under Medicaid; |
• | material reductions in purchases, non-renewal or early termination of contracts, or a default, by key customers; |
• | our ability to successfully mitigate the impact of the expiration of the pharmaceutical distribution contract with Walgreen Co. at the end of August 2013; |
• | actions of regulatory bodies and other governmental authorities, including the U.S. Drug Enforcement Administration (“DEA”), the U.S. Food and Drug Administration, the U.S. Nuclear Regulatory Commission, the U.S. Department of Health and Human Services, the U.S. Federal Trade Commission, various state boards of pharmacy, state health departments, state insurance departments or comparable agencies or foreign equivalents that could delay, limit or suspend product development, manufacturing, distribution, importation or sales or result in warning letters, recalls, seizures, injunctions and monetary sanctions; |
• | compliance with the settlement agreement that we entered into in connection with the DEA's suspension of our Lakeland, Florida distribution center's registration to distribute controlled substances, our ability to begin to distribute controlled substances from our Lakeland, Florida distribution center in May 2014, and the possibility of civil fines against us by the U.S. Department of Justice for conduct covered by the settlement agreement; |
• | the loss of, or default by, one or more key suppliers for which alternative suppliers may not be readily available; |
• | unfavorable changes to the terms of key customer or supplier relationships, or changes in customer mix; |
• | changes in manufacturers' pricing, selling, inventory, distribution or supply policies or practices; |
• | changes in hospital buying groups or hospital buying practices; |
• | changes in the frequency or magnitude of brand pharmaceutical price appreciation or generic pharmaceutical price deflation, restrictions in the amount of inventory available to us, or changes in the timing or frequency of generic launches or the introduction of brand pharmaceuticals; |
• | uncertainties relating to market conditions for pharmaceuticals; |
• | uncertainties relating to demand for our products and services; |
• | changes in the distribution or outsourcing pattern for pharmaceutical and medical/surgical products and services, including an increase in direct and limited distribution; |
• | the costs, difficulties and uncertainties related to the integration of acquired businesses, including liabilities related to the operations or activities of such businesses prior to their acquisition; |
• | uncertainties related to our ability to achieve the expected benefits from the acquisition of AssuraMed, Inc. ("AssuraMed"), including the expected positive impact on operating earnings (excluding the impact of amortization of acquisition-related intangible assets) and the impact on AssuraMed's business of competitive bidding by Medicare; |
• | risks arising from AssuraMed being a Medicare-certified supplier, which requires meeting defined Medicare quality standards and maintaining accreditation to receive reimbursement from Medicare as well as compliance with applicable billing, payment and record-keeping requirements; |
• | uncertainties relating to our ability to grow our specialty pharmaceutical services and distribution business; |
• | uncertainties relating to growth of the pharmaceutical market in China; |
• | risks arising from possible violations of (1) the U.S. Foreign Corrupt Practices Act, Chinese anti-corruption laws and other similar anti-bribery laws in other jurisdictions and (2) U.S. and foreign export control, trade embargo and customs laws; |
• | risks arising from possible violations of healthcare fraud and abuse laws, including the current Department of Justice investigation regarding the structure of discounts offered or provided to our customers; |
• | our ability to introduce and market new products and our ability to keep pace with advances in technology; |
• | changes in laws or in the interpretation or application of laws or regulations, as well as possible failures to comply with applicable laws or regulations as a result of possible misinterpretations or misapplications; |
• | the continued financial viability and success of our customers, suppliers and franchisees; |
• | costs or claims resulting from potential errors or defects in our manufacturing, compounding, repackaging, information systems or pharmacy management services that may injure persons or damage property or operations, including costs from remediation efforts or recalls; |
• | the results, costs, effects or timing of any commercial disputes, government contract compliance matters, patent infringement claims, qui tam actions or other legal proceedings; |
• | the costs, effects, timing or success of restructuring programs or plans, including the restructuring plan within the Medical segment that we announced in January 2013; |
• | significant charges to earnings if goodwill or intangible assets become impaired; |
• | increased costs for commodities used in the Medical segment including various components, compounds, raw materials or energy such as oil-based resins, cotton, latex and other commodities; |
• | shortages in commodities, components, compounds, raw materials or energy used by our businesses, including supply disruptions of radioisotopes; |
• | the risks of counterfeit products in the supply chain; |
• | risks associated with global operations, including the effect of local economic environments, inflation, recession, currency volatility and global competition, in addition to risks associated with compliance with U.S and international laws relating to global operations; |
• | difficulties or delays in the development, production, manufacturing, sourcing and marketing of new or existing products and services, including difficulties or delays associated with obtaining requisite regulatory consents or approvals associated with those activities; |
• | disruption or damage to or failure of our information or controls systems or a data security breach; |
• | disruptions to the proper functioning of our critical facilities, including our national logistics center; |
• | uncertainties relating to general political, business, industry, regulatory and market conditions; |
• | adverse changes in U.S. or foreign tax laws, unfavorable challenges to our tax positions and payments to settle these challenges; |
• | risks associated with the spin-off of CareFusion Corporation, including risks relating to adverse tax consequences to us and our shareholders; and |
• | other factors described in “Item 1A-Risk Factors” of the 2013 Form 10-K. |
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