CVS 2014 Annual Report Download - page 74

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CVS Health
72
Notes to Consolidated Financial Statements
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 2014 Notes were used for
general corporate purposes and to repay certain corporate debt.
On August 7, 2014, the Company announced tender offers for any and all of the 6.25% Senior Notes due 2027,
and up to a maximum amount of the 6.125% Senior Notes due 2039, the 5.75% Senior Notes due 2041 and the
5.75% Senior Notes due 2017, for up to an aggregate principal amount of $1.5 billion. On August 21, 2014, the
Company increased the aggregate principal amount of the tender offers to $2.0 billion and completed the repurchase
for the maximum amount on September 4, 2014. The Company paid a premium of $490 million in excess of the debt
principal in connection with the tender offers, wrote off $26 million of unamortized deferred financing costs and
incurred $5 million in fees, for a total loss on the early extinguishment of debt of $521 million. The loss was
recorded in income from continuing operations on the consolidated statement of income for the year ended
December 31, 2014.
During the year ended December 31, 2014, the Company repurchased the remaining $41 million of outstanding
Enhanced Capital Advantage Preferred Securities (“ECAPS”) at par. The fees and write-off of deferred issuance
costs associated with the early extinguishment of the ECAPS were immaterial.
On December 2, 2013, the Company issued $750 million of 1.2% unsecured senior notes due December 5, 2016;
$1.25 billion of 2.25% unsecured senior notes due December 5, 2018; $1.25 billion of 4.0% unsecured senior notes
due December 5, 2023; and $750 million of 5.3% unsecured senior notes due December 5, 2043 (the “2013 Notes”)
for total proceeds of approximately $4.0 billion, net of discounts and underwriting fees. The 2013 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 2013
Notes were used to repay commercial paper outstanding at the time of issuance and to fund the acquisition of
Coram LLC in January 2014. The remainder was used for general corporate purposes.
On November 26, 2012, the Company issued $1.25 billion of 2.75% unsecured senior notes due December 1, 2022
(the “2012 Notes”) for total proceeds of approximately $1.24 billion, net of discounts and underwriting fees. The
2012 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 2012 Notes were used for general corporate purposes and to repay certain corporate debt.
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 for the year ended December 31, 2012.
The credit facilities, back-up credit facilities and unsecured senior notes 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, 2014 are
$575 million in 2015, $1.2 million in 2016, $1.1 billion in 2017, $1.3 billion in 2018 and $1.3 billion in 2019.