CVS 2007 Annual Report Download - page 33

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29 I 2007 Annual Report
Following is a summary of our store development activity for the
respective years:
2007 2006 2005
Total stores
(beginning of year) 6,205 5,474 5,378
New and acquired stores 140 848 166
Closed stores (44) (117) (70)
Total stores (end of year) 6,301 6,205 5,474
Relocated stores(1) 137 118 131
(1) Relocated stores are not included in new or closed store totals.
Net cash provided by financing activities was $0.4 billion in
2007, compared to net cash provided by financing activities of
$2.9 billion in 2006 and net cash used in financing activities of
$0.6 billion in 2005. Net cash provided by financing activities
during 2007 was primarily due to increased long-term borrowings
to fund the special cash dividend paid to Caremark shareholders
and was offset, in part, by the repayment of short-term borrow-
ings and the repurchase of common shares. Net cash provided by
financing activities during 2006 was primarily due to the financ-
ing of the acquisition of the Standalone Drug Business, including
issuance of the 2006 Notes (defined below), during the third
quarter of 2006. This increase was offset, in part, by the repay-
ment of the $300 million, 5.625% unsecured senior notes, which
matured during the first quarter of 2006. Fiscal 2005 reflected
a reduction in short-term borrowings. During 2007, we paid
common stock dividends totaling $308.8 million, or $0.22875
per common share.
We believe that our current cash on hand and cash provided by
operations, together with our ability to obtain additional short-
term and long-term financing, will be sufficient to cover our
working capital needs, capital expenditures, debt service require-
ments and dividend requirements for at least the next twelve
months and the foreseeable future.
We had $2.1 billion of commercial paper outstanding at a
weighted average interest rate of 5.1% as of December 29, 2007.
In connection with our commercial paper program, we maintain
a $675 million, five-year unsecured back-up credit facility, which
expires on June 11, 2009, a $675 million, five-year unsecured
back-up credit facility, which expires on June 2, 2010, a $1.4 bil-
lion, five-year unsecured back-up credit facility, which expires
on May 12, 2011 and a $1.3 billion, five-year unsecured back-up
credit facility, which expires on March 12, 2012. The credit
facilities allow for borrowings at various rates that are dependent
in part on our public debt rating. As of December 29, 2007, we
had no outstanding borrowings against the credit facilities.
In connection with the Caremark Merger, on March 28, 2007,
we commenced a tender offer to purchase up to 150 million
common shares, or about 10%, of our outstanding common
stock at a price of $35.00 per share. The offer to purchase
shares expired on April 24, 2007 and resulted in approximately
10.3 million shares being tendered. The shares were placed into
our treasury account.
On May 9, 2007, our Board of Directors authorized a share
repurchase program for up to $5.0 billion of our outstanding
common stock.
On May 13, 2007, we entered into a $2.5 billion fixed dollar
accelerated share repurchase agreement (the “May ASR agree-
ment”) with Lehman Brothers, Inc. (“Lehman”). The May ASR
agreement contained provisions that established the minimum
and maximum number of shares to be repurchased during the
term of the May ASR agreement. Pursuant to the terms of the
May ASR agreement, on May 14, 2007, we paid $2.5 billion to
Lehman in exchange for Lehman delivering 45.6 million shares
of common stock to us, which were placed into our treasury
account upon delivery. On June 7, 2007, upon establishment
of the minimum number of shares to be repurchased, Lehman
delivered an additional 16.1 million shares of common stock to
us. The final settlement under the May ASR agreement occurred
on October 5, 2007 and resulted in us receiving an additional
5.8 million shares of common stock during the fourth quarter
of 2007. As of December 29, 2007, the aggregate 67.5 million
shares of common stock received pursuant to the $2.5 billion
May ASR agreement had been placed into our treasury account.
On October 8, 2007, we commenced an open market repurchase
program. The program concluded on November 2, 2007 and
resulted in 5.3 million shares of common stock being repurchased
for $211.9 million. The shares were placed into our treasury
account upon delivery.
On November 6, 2007, we entered into a $2.3 billion fixed
dollar accelerated share repurchase agreement (the “November
ASR agreement”) with Lehman. The November ASR agreement
contained provisions that established the minimum and maxi-
mum number of shares to be repurchased during the term of