Aetna 2013 Annual Report Download - page 25

Annual Report- Page 19
Cash flows used for financing activities in 2013 primarily reflected share repurchases and dividend payments. Cash
flows provided by financing activities in 2012 primarily reflect an aggregate $2.7 billion of cash provided by our
November 2012 long-term debt financing for the acquisition of Coventry as well as our May 2012 long-term debt
financing, partially offset by share repurchases, repayments of long-term and short-term debt and dividend
payments. Refer to Note 14 of Notes to Consolidated Financial Statements on page 126 for additional information
about debt issuance and repayments.
During the last three years, we repurchased our common stock under various repurchase programs authorized by
our Board. In 2013, 2012 and 2011, we repurchased approximately 23 million, 32 million and 45 million shares of
common stock, respectively, at a cost of approximately $1.4 billion in both 2013 and 2012 and $1.8 billion in 2011.
At December 31, 2013, the capacity remaining under our Board-approved share repurchase program was
approximately $597 million. Refer to Note 15 of the Notes to Consolidated Financial Statements on page 128 for
more information on our share repurchases.
Long-Term Debt
As discussed in Note 3 beginning on page 91, our total long-term debt outstanding increased by $1.8 billion as a
result of the acquisition of Coventry, which includes a $216.6 million increase to adjust the Coventry long-term
debt to its estimated fair value at the Effective Date. In addition, on February 7, 2014, we issued a notice of
redemption for $750 million aggregate principal amount of our 6.0% Senior Notes due 2016, which we expect to
refinance with additional indebtedness.
In November 2012, we issued $500 million of 1.50% senior notes due 2017, $1.0 billion of 2.75% senior notes due
2022 and $500 million of 4.125% senior notes due 2042 (collectively, the “2012 Coventry-related senior notes”) to
partially fund the Coventry acquisition. In the period from August 2012 through October 2012, prior to issuing the
2012 Coventry-related senior notes, we entered into 16 interest rate swaps with an aggregate notional value of $2.0
billion and designated these swaps as cash flow hedges against interest rate exposure related to the forecasted future
issuance of fixed-rate debt. We terminated the swaps prior to issuing the 2012 Coventry-related senior notes and
paid an aggregate of $4.8 million to the swap counterparties upon termination of the swaps. The related $4.8
million pretax loss is recorded in accumulated other comprehensive loss net of tax and is being amortized as an
increase to interest expense over the first 10, 20 and 60 semi-annual interest payments associated with the
respective 2012 Coventry-related senior notes.
In May 2012, we issued $250 million of 1.75% senior notes due in 2017 and $500 million of 4.5% senior notes due
in 2042 (collectively, the “2012 Senior Notes”), which provided us with cash proceeds of $720.4 million after
underwriting fees and other offering expenses and being issued at a discount. Prior to issuing the 2012 Senior
Notes, we terminated two interest rate swaps related to the forecasted future issuance of fixed-rate debt and paid an
aggregate of $7.5 million to the swap counterparties upon that termination, which is being amortized as an increase
to interest expense over the first 20 semi-annual interest payments of the $500 million of 4.5% senior notes due in
2042.
In 2012, we repurchased approximately $200 million of our outstanding senior notes and recorded a loss on that
extinguishment of long-term debt of $55.2 million ($84.9 million pretax) during 2012.
During 2011, we repaid the $450 million aggregate principal amount of our 7.875% senior notes due March 2011.
We also issued $500 million of 4.125% senior notes due 2021 and used the majority of the proceeds to repay the
entire $450 million aggregate principal amount of our 5.75% senior notes due June 2011.