CVS 2015 Annual Report Download - page 80

78 CVS Health
Notes to Consolidated Financial Statements
On August 7, 2014, the Company issued $850 million of 2.25% unsecured senior notes due August 12, 2019
and $650 million of 3.375% unsecured senior notes due August 12, 2024 (collectively, the “2014 Notes”) for total
proceeds of approximately $1.5 billion, net of discounts and underwriting fees. The 2014 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
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 in January 2014. The remainder was used for general corporate purposes.
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 following is a summary of the Company’s required principal debt repayments, excluding unamortized debt
discounts, deferred financing costs and debt premiums, due during each of the next five years and thereafter, as of
December 31, 2015:
Year Ending December 31:
IN MILLIONS
2016 $ 1,197
2017 1,113
2018 3,521
2019 1,266
2020 3,224
Thereafter 17,373
Total $ 27,694