Cigna 2015 Annual Report Download - page 128

PART II
ITEM 8. Financial Statements and Supplementary Data
being redeemed, discounted at a rate equal to the 10-year Treasury adjustment attributable to pension that is included in accumulated
Rate plus a fixed spread of 50 basis points. The Company paid other comprehensive loss on the Company’s consolidated balance
$329 million including accrued interest and expenses, resulting in a sheet.
pre-tax loss on early debt extinguishment of $79 million The Company had $7.9 billion of borrowing capacity within the
($51 million after-tax) that was recognized in the second quarter of maximum debt coverage covenant in the letter of credit agreement, in
2015. addition to the $5.2 billion of debt outstanding as of December 31,
The Company has a five-year revolving credit and letter of credit 2015. This additional borrowing capacity includes the $1.5 billion
agreement for $1.5 billion that permits up to $500 million to be used available under the credit agreement. Letters of credit outstanding as
for letters of credit. This agreement extends through December 2019 of December 31, 2015 totaled $19 million.
and is diversified among 16 banks with three banks each having 12% The Company was in compliance with its debt covenants as of
of the commitment and the remainder spread among 13 banks. The December 31, 2015.
credit agreement includes options to increase the commitment
amount to $2 billion and to extend the term past December 2019, Maturities of long-term debt, excluding capital leases, are as follows
subject to consent by the administrative agent and the committing (in millions): none in 2016, $250 in 2017, $131 in 2018, none in
banks. The credit agreement is available for general corporate 2019, $550 in 2020 and the remainder in years after 2020. Maturities
purposes including for the issuance of letters of credit. The credit of debt under capital lease arrangements are as follows (in millions):
agreement contains customary covenants and restrictions, including a $23 in 2016, $12 in 2017, $7 in 2018, $6 in 2019, none in 2020 and
financial covenant that the Company may not permit its leverage ratio the remainder in years after 2020. Interest expense on long-term and
to be greater than 0.50. The leverage ratio is total consolidated debt to short-term debt was $252 million in 2015, $265 million in 2014, and
total consolidated capitalization (each as defined in the credit $270 million in 2013. The 2015 expense excludes losses on the early
agreement) and excludes net unrealized appreciation in fixed extinguishment of debt.
maturities and the portion of the post-retirement benefits liability
Common and Preferred Stock
As of December 31, the Company had issued the following shares:
(Shares in thousands) 2015 2014 2013
Common: Par value $0.25; 600,000 shares authorized
Outstanding – January 1, 259,276 275,526 285,829
Issued for stock option and other benefit plans 2,751 2,284 3,319
Repurchased common stock (5,483) (18,534) (13,622)
Outstanding – December 31, 256,544 259,276 275,526
Treasury stock 39,601 36,869 90,619
ISSUED – DECEMBER 31, 296,145 296,145 366,145
The Company maintains a share repurchase program authorized by its In 2014, the Company retired 70 million shares of treasury stock.
Board of Directors. Under this program, we may repurchase shares This transaction had no effect on total shareholders’ equity.
from time to time, depending on market conditions and alternate uses The Company has authorized a total of 25 million shares of $1 par
of capital. We may suspend activity under our share repurchase value preferred stock. No shares of preferred stock were outstanding at
program from time to time and may also remove such suspensions December 31, 2015, 2014 or 2013.
without public announcement. We may also repurchase shares at
times when we otherwise might be precluded from doing so under
insider trading laws or because of self-imposed trading black-out
periods by using a Rule 10b5-1 trading plan.
98 CIGNA CORPORATION - 2015 Form 10-K
NOTE 16