CVS 2009 Annual Report Download - page 62

Notes to Consolidated Financial Statements
Note 5 Borrowing and Credit Agreements
The following table is a summary of the Company’s borrow-
ings as of December 31:
in millions 2009 2008
Commercial paper $ 315 $ 2,544
Bridge credit facility – 500
4.0% senior notes due 2009 – 650
Floating rate notes due 2010 (1) 350 350
Floating rate notes due 2010 (1) 1,750 1,750
5.75% senior notes due 2011 800 800
Floating rate note due 2011 (1) 300 –
4.875% senior notes due 2014 550 550
6.125% senior notes due 2016 700 700
5.75% senior notes due 2017 1,750 1,750
6.25% senior notes due 2027 1,000 1,000
6.60% senior notes due 2019 1,000 –
6.125% note due 2039 1,500 –
6.302% Enhanced Capital Advantage
Preferred Securities 1,000 1,000
Mortgage notes payable 6 7
Capital lease obligations 154 153
11,175 11,754
Less:
Short-term debt (315) (3,044)
Current portion of long-term debt (2,104) (653)
$ 8,756 $ 8,057
(1) As of December 31, 2009, the weighted average interest rate for the
Company’s floating rate notes due in 2010 was 0.87%.
In connection with its commercial paper program, the Com-
pany maintains a $675 million, five-year unsecured back-up
credit facility, which expires on June 2, 2010, a $1.4 billion,
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 depending on
the Company’s public debt ratings and require the Company to
pay a quarterly facility fee of 0.1%, regardless of usage. As of
December 31, 2009, the Company had no outstanding borrow-
ings against the back-up credit facilities. The weighted average
interest rate for short-term debt was 0.31% as of December 31,
2009 and 5.36% as of December 31, 2008.
On March 10, 2009, the Company issued $1.0 billion of 6.60%
unsecured senior notes due March 15, 2019 (the “March 2009
Notes”). The March 2009 Notes pay interest semi-annually and
may be redeemed, in whole or in part, at a defined redemp-
tion price plus accrued interest. The net proceeds were used
to repay the bridge credit facility, a portion of the Company’s
outstanding commercial paper borrowings and for general
corporate purposes.
Note 4 Share Repurchase Program
On November 4, 2009, the Company’s Board of Directors
authorized, effective immediately, a share repurchase program
for up to $2.0 billion of its outstanding common stock (the
“2009 Repurchase Program”). The share repurchase program
expires in December 2011 and permits the Company to effect
repurchases from time to time through a combination of open
market repurchases, privately negotiated transactions and/or
accelerated share repurchase programs. From November 4,
2009 through December 31, 2009, the Company repurchased
16.1 million shares of common stock for approximately
$500 million pursuant to the 2009 Repurchase Program. The
2009 Repurchase Program may be modified, extended or
terminated by the Company’s Board of Directors at any time.
On May 7, 2008, the Company’s Board of Directors authorized,
effective May 21, 2008, a share repurchase program for up to
$2.0 billion of its outstanding common stock (the “2008 Repur-
chase Program”). From May 21, 2008 through December 31,
2008, the Company repurchased approximately 0.6 million
shares of common stock for $23 million under the 2008
Repurchase Program. During the year-ended December 31,
2009, the Company repurchased approximately 57.0 million
shares of common stock for approximately $2.0 billion
completing the 2008 Repurchase Program.
On May 9, 2007, the Company’s Board of Directors authorized a
share repurchase program for up to $5.0 billion of its outstanding
common stock. The share repurchase program was completed
during 2007 through a $2.5 billion fixed dollar accelerated share
repurchase agreement (the “May ASR agreement”), under which
final settlement occurred in October 2007 and resulted in the
repurchase of approximately 67.5 million shares of common
stock; an open market repurchase program, which concluded
in November 2007 and resulted in approximately 5.3 million
shares of common stock being repurchased for approximately
$212 million; and a $2.3 billion dollar fixed accelerated share
repurchase agreement (the “November ASR agreement”),
which resulted in an initial 51.6 million shares of common
stock being purchased and placed into treasury stock as of
December 29, 2007. The final settlement under the November
ASR agreement occurred on March 28, 2008 and resulted in
the Company receiving an additional 5.7 million shares of
common stock, which were placed into treasury stock as of
March 29, 2008.
CVS Caremark
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