Cigna 2008 Annual Report Download - page 143

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On March 14, 2008, the Company entered into a new commercial paper program (“the Program”). Under the Program, the Company
is authorized to sell from time to time short-term unsecured commercial paper notes up to a maximum of $500 million. The proceeds
are used for general corporate purposes, including working capital, capital expenditures, acquisitions and share repurchases. The
Company uses the credit facility entered into in June 2007, as back-up liquidity to support the outstanding commercial paper. If at any
time funds are not available on favorable terms under the Program, the Company may use its credit agreement for funding. In October
2008, the Company added an additional dealer to its Program. As of December 31, 2008, the Company had $299 million in
commercial paper outstanding, at a weighted average interest rate of 6.31%, used to finance the Great-West Healthcare acquisition and
for other corporate purposes.
In June 2007, the Company amended and restated its five-year revolving credit and letter of credit agreement for $1.75 billion, which
permits up to $1.25 billion to be used for letters of credit. The credit agreement includes options, which are subject to consent by the
administrative agent and the committing bank, to increase the commitment amount up to $2.0 billion and to extend the term of the
agreement. The Company entered into the agreement for general corporate purposes, including support for the issuance of
commercial paper and to obtain statutory reserve credit for certain reinsurance arrangements. There was a $25 million letter of credit
issued as of December 31, 2008. As of December 31, 2008, the Company had an additional $750 million of borrowing capacity
within the maximum debt leverage covenant in the line of credit agreement in addition to the $2.4 billion of debt outstanding.
Note 15 — Common and Preferred Stock
As of December 31, the Company had issued the following shares:
(Shares in thousands) 2008 2007
Common: Par value $0.25
600,000 shares authorized
Outstanding - January 1 279,588 98,654
Issuance of shares in split - 190,917
Issued for stock option and other benefit
plans 1,458 3,244
Repurchase of common stock (10,010) (13,227)
Outstanding - December 31 271,036 279,588
Treasury stock 79,910 71,358
Issued - December 31 350,946 350,946
The Company maintains a share repurchase program, which was authorized by its Board of Directors. Decisions to repurchase shares
depend on market conditions and alternative uses of capital. The Company has, and may continue from time to time, to repurchase
shares on the open market through a Rule 10b5-1 plan which permits a company to repurchase its shares at times when it otherwise
might be precluded from doing so under insider trading laws or because of self-imposed trading blackout periods.
The Company has authorized a total of 25 million shares of $1 par value preferred stock. No shares of preferred stock were
outstanding at December 31, 2008 or 2007.