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CVS CAREMARK 2012 ANNUAL REPORT
69
On฀November฀26,฀2012,฀the฀Company฀announced฀tender฀offers฀for฀any฀and฀all฀of฀the฀6.6%฀Senior฀Notes฀due฀2019,฀and฀up฀to฀
a฀maximum฀amount฀of฀the฀6.125%฀Senior฀Notes฀due฀2016฀and฀5.75%฀Senior฀Notes฀due฀2017,฀for฀up฀to฀an฀aggregate฀principal฀
amount of $1.0 billion. In December 2012, the Company increased the aggregate principal amount of the tender offers to
$1.325 billion and completed the repurchase for the maximum amount. The Company paid a premium of $332 million in
excess of the debt principal in connection with the tender offers, wrote off $13 million of unamortized deferred financing
costs and incurred $3 million in fees, for a total loss on the early extinguishment of debt of $348 million. The loss was
recorded in income from continuing operations on the consolidated statement of income.
In connection with the Company’s acquisition of the UAM Medicare Part D Business in April 2011, the Company assumed
$110 million of long-term debt in the form of Trust Preferred Securities that mature through 2037. During the years ended
December 31, 2012 and 2011, the Company repaid $50 million and $60 million, respectively, of the Trust Preferred
Securities at par.
On฀May฀12,฀2011,฀the฀Company฀issued฀$550฀million฀of฀4.125%฀unsecured฀senior฀notes฀due฀May฀15,฀2021฀and฀issued฀
$950฀million฀of฀5.75%฀unsecured฀senior฀notes฀due฀May฀15,฀2041฀(collectively,฀the฀“2011฀Notes”)฀for฀total฀proceeds฀of฀
approximately $1.5 billion, net of discounts and underwriting fees. The 2011 Notes pay interest semi-annually 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 2011 Notes were used to repay commercial
paper borrowings and certain other corporate debt, and were used for general corporate purposes.
In December 2011 and July 2012, the Company repurchased $958 million and $1 million of the principal amount of its ECAPS
at par. The fees and write-off of deferred issuance costs associated with the early extinguishment of the ECAPS were de
minimis. The remaining $41 million of outstanding ECAPS at December 31, 2012 are due in 2062. The ECAPS pay interest
semi-annually and may be redeemed at any time, in whole or in part at a defined redemption price plus accrued interest.
On฀May฀13,฀2010,฀the฀Company฀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 semi-annually 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 and certain other corporate debt, and were used for general
corporate purposes.
The credit facilities, back-up credit facilities, unsecured senior notes and ECAPS contain customary restrictive financial and
operating covenants. The covenants do not materially affect the Company’s financial or operating flexibility.
The aggregate maturities of long-term debt for each of the five years subsequent to December 31, 2012 are $5 million in
2013, $555 million in 2014, $556 million in 2015, $427 million in 2016, and $1.3 billion in 2017.