CVS 2010 Annual Report Download - page 37

On May 7, 2008, our Board of Directors authorized, effective May 21, 2008, a share repurchase program for up to $2.0 billion
of our outstanding common stock (the “2008 Repurchase Program”). From May 21, 2008 through December 31, 2008, we
repurchased approximately 0.6 million shares of common stock for $23 million under the 2008 Repurchase Program. During
the year ended December 31, 2009, we repurchased approximately 57.0 million shares of common stock for approximately
$2.0 billion completing the 2008 Repurchase Program.
On May 9, 2007, our Board of Directors authorized a share repurchase program for up to $5.0 billion of our outstanding common
stock (the “2007 Repurchase Program”). The 2007 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 us
receiving an additional 5.7 million shares of common stock, which were placed into treasury stock as of March 29, 2008.
Recently announced business combination – In December 2010, the Company announced it had entered into an agreement to
acquire the Medicare Part D business of UAC for approximately $1.25 billion. The transaction is subject to customary closing con-
ditions, including necessary regulatory approvals, as well as approval by UAC shareholders. The Company currently expects that
the transaction will close by the end of the second quarter of 2011. We believe our cash flows from operations, commercial
paper program and other available credit will be sufficient to fund this acquisition.
Short-term borrowings – We had $300 million of commercial paper outstanding at a weighted average interest rate of 0.40%
as of December 31, 2010. In connection with our commercial paper program, we maintain a $1.4 billion, five-year unsecured
back-up credit facility, which expires on May 12, 2011, a $1.3 billion, five-year unsecured back-up credit facility, which expires on
March 12, 2012, and a $1.0 billion three-year unsecured back-up credit facility, which expires on May 27, 2013. The credit facilities
allow for borrowings at various rates that are dependent, in part, on our public debt rating. There were no borrowings outstand-
ing under the back-up credit facilities. We intend to renew our back-up credit facility which expires in May 2011.
Long-term borrowings – On May 13, 2010, we issued $550 million of 3.25% unsecured senior notes due May 18, 2015 and issued
$450 million of 4.75% unsecured senior notes due May 18, 2020 (collectively, the “2010 Notes”) for total proceeds of $991 million,
which was net of discounts and underwriting fees. The 2010 Notes pay interest semiannually and may be redeemed, in whole at
any time, or in part from time to time, at the Company’s option at a defined redemption price plus accrued and unpaid interest
to the redemption date. The net proceeds of the 2010 Notes were used to repay a portion of the Company’s outstanding
commercial paper borrowings, certain other corporate debt and for general corporate purposes.
On September 8, 2009, we issued $1.5 billion of 6.125% unsecured senior notes due September 15, 2039 (the “September 2009
Notes”). The September 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 a portion of our outstanding commercial paper
borrowings, $650 million of unsecured senior notes and for general corporate purposes.
On March 10, 2009, we 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 redemption price plus
accrued interest. The net proceeds were used to repay the bridge credit facility, a portion of our outstanding commercial paper
borrowings and for general corporate purposes.
On July 1, 2009, we issued a $300 million unsecured floating rate senior note due January 30, 2011 (the “2009 Floating Rate
Note”). The 2009 Floating Rate Note pays interest quarterly. The net proceeds from the 2009 Floating Rate Note were used for
general corporate purposes.
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