Express Scripts 2011 Annual Report Download - page 53

Express Scripts 2011 Annual Report 51
STOCK REPURCHASE PROGRAM
We have a stock repurchase program, originally announced on October 25, 1996. Treasury shares are carried at
first in, first out cost. There is no limit on the duration of the program. During the second quarter of 2011, our Board of
Directors approved an increase to our stock repurchase program in the amount of 50.0 million shares. During 2011, we
repurchased 13.0 million treasury shares for $765.7 million. An additional 33.4 million shares were acquired under an
Accelerated Share Repurchase (―ASR‖) agreement, discussed below. As of December 31, 2011, there are 18.7 million
shares remaining under our stock repurchase program. Additional share repurchases, if any, will be made in such amounts
and at such times as we deem appropriate based upon prevailing market and business conditions and other factors.
ACCELERATED SHARE REPURCHASE
On May 27, 2011, we entered into agreements to repurchase shares of our common stock for an aggregate
purchase price of $1,750.0 million under an ASR agreement. The ASR agreement consists of two agreements, providing for
the repurchase of shares of our common stock worth $1.0 billion and $750.0 million, respectively. Upon payment of the
purchase price on May 27, 2011, we received 29.4 million shares of our common stock at a price of $59.53 per share. We
received 1.9 million shares for the settlement of the $1.0 billion portion of the ASR agreement during the third quarter of
2011 and 2.1 million shares for the settlement of $725.0 million of the $750.0 million portion of the ASR agreement during
the fourth quarter of 2011. As of December 31, 2011, based on the daily volume-weighted average price of our common
stock since the effective date of the agreements, the investment banks would be required to deliver 0.1 million shares to us
for the remaining amount of the $750.0 million portion of the ASR agreement that has not yet been settled. See Note 9 –
Common stock for more information on the terms of the ASR agreement.
SENIOR NOTES
On November 14, 2011, we issued $4.1 billion of Senior Notes (the ―November 2011 Senior Notes‖) in a private
placement with registration rights, including:
$900 million aggregate principal amount of 2.750% Senior Notes due 2014
$1.25 billion aggregate principal amount of 3.500% Senior Notes due 2016
$1.25 billion aggregate principal amount of 4.750% Senior Notes due 2021
$700 million aggregate principal amount of 6.125% Senior Notes due 2041
These notes were issued through our subsidiary, Aristotle Holding, Inc., which was organized for the purpose of
effecting the transactions contemplated under the Merger Agreement with Medco. The net proceeds may be used to pay a
portion of the cash consideration to be paid in the Medco Transaction and to pay related fees and expenses (see Note 3 –
Changes in business). The net proceeds from the November 2011 Senior Notes reduced the commitments under the bridge
facility discussed below by $4.1 billion. In the event the merger with Medco is not consummated, we would be required to
redeem the November 2011 Senior Notes issued at a redemption price equal to 101% of the aggregate principal amount of
such notes, plus accrued and unpaid interest, prior to their original maturities.
On May 2, 2011, we issued $1.5 billion aggregate principal amount of 3.125% Senior Notes due 2016 (―May 2011
Senior Notes‖). We used the proceeds to repurchase treasury shares.
On June 9, 2009, we issued $2.5 billion of Senior Notes (―June 2009 Senior Notes‖), including:
$1.0 billion aggregate principal amount of 5.250% Senior Notes due 2012
$1.0 billion aggregate principal amount of 6.250% Senior Notes due 2014
$500 million aggregate principal amount of 7.250% Senior Notes due 2019
We used the net proceeds for the acquisition of WellPoint’s NextRx PBM Business (see Note 3 – Changes in
business).
See Note 7 – Financing for more information on our Senior Notes borrowings.