CVS 2014 Annual Report Download - page 39

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2014 Annual Report
Pursuant to the authorization under the 2013 Repurchase Programs, effective January 2, 2015, we entered into a
$2.0 billion fixed dollar ASR agreement with J.P. Morgan Chase Bank (“JP Morgan”). Upon payment of the $2.0 bil-
lion purchase price on January 5, 2015, we received a number of shares of our common stock equal to 80% of the
$2.0 billion notional amount of the ASR agreement or approximately 16.8 million shares at a price of $94.49 per
share. At the conclusion of the ASR program, the Company may receive additional shares equal to the remaining
20% of the $2.0 billion notional amount. The ultimate number of shares the Company may receive will fluctuate
based on changes in the daily volume-weighted average price of the Company’s stock over a period beginning
on January 2, 2015 and ending on or before April 26, 2015. If the mean daily volume-weighted average price of
the Company’s common stock, less a discount (the “forward price”), during the ASR program falls below $94.49
per share, the Company will receive a higher number of shares from JP Morgan. If the forward price rises above
$94.49 per share, the Company will either receive fewer shares from JP Morgan or, potentially have an obligation
to JP Morgan which, at the Company’s option, could be settled in additional cash or by issuing shares. Under the
terms of the ASR agreement, the maximum number of shares that could be received or delivered is 42.0 million.
The initial 16.8 million shares of common stock delivered to the Company by JP Morgan were placed into treasury
stock in January 2015.
Pursuant to the authorization under the 2012 Repurchase Program, effective October 1, 2013, we entered into
a $1.7 billion fixed dollar ASR agreement with Barclays Bank PLC (“Barclays”). Upon payment of the $1.7 billion
purchase price on October 1, 2013, we received a number of shares of our common stock equal to 50% of the
$1.7 billion notional amount of the ASR agreement or approximately 14.9 million shares at a price of $56.88 per
share. The Company received approximately 11.7 million shares of common stock on December 30, 2013 at an
average price of $63.83 per share, representing the remaining 50% of the $1.7 billion notional amount of the ASR
agreement and thereby concluding the agreement. The total of 26.6 million shares of common stock delivered to
the Company by Barclays over the term of the October 2013 ASR agreement were placed into treasury stock.
Pursuant to the authorizations under the 2011 and 2012 Repurchase Programs, on September 19, 2012, we entered
into a $1.2 billion fixed dollar ASR agreement with Barclays. Upon payment of the $1.2 billion purchase price on
September 20, 2012, we received a number of shares of our common stock equal to 50% of the $1.2 billion notional
amount of the ASR agreement or approximately 12.6 million shares at a price of $47.71 per share. We received
approximately 13.0 million shares of common stock on November 16, 2012 at an average price of $46.96 per share,
representing the remaining 50% of the $1.2 billion notional amount of the ASR agreement and thereby concluding
the agreement, and completing the 2011 Repurchase Program. The total of 25.6 million shares of common stock
delivered to us by Barclays over the term of the September 2012 ASR agreement were placed into treasury stock.
During the year ended December 31, 2014, we repurchased an aggregate of 51.4 million shares of common stock
for approximately $4.0 billion under the 2013 and 2012 Repurchase Programs. During the years ended December 31,
2013 and 2012, we repurchased an aggregate of 66.2 million and 95.0 million shares of common stock for approxi-
mately $4.0 and $4.3 billion, respectively, under the 2012 and 2011 Repurchase Programs. As of December 31,
2014, there remained an aggregate of approximately $12.7 billion available for future repurchases under the 2014
and 2013 Repurchase Programs, $2.0 billion of which was used for the ASR effective January 2, 2015 described
previously. As of December 31, 2014, the 2012 and 2011 Repurchase Programs were complete.
Short-term borrowings — We had $685 million of commercial paper outstanding at a weighted average interest
rate of 0.55% as of December 31, 2014. In connection with our commercial paper program, we maintain a $1.25
billion, five-year unsecured back-up credit facility, which expires on February 17, 2017, a $1.0 billion, five-year
unsecured back-up credit facility, which expires on May 23, 2018, and a $1.25 billion, five-year unsecured back-up
credit facility, which expires on July 24, 2019. The credit facilities allow for borrowings at various rates that are
dependent, in part, on the Company’s public debt ratings and require the Company to pay a weighted average
quarterly facility fee of approximately 0.03%, regardless of usage. As of December 31, 2014, there were no borrow-
ings outstanding under the back-up credit facilities.