Express Scripts 2012 Annual Report Download - page 50

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Express Scripts 2012 Annual Report48
47
STOCK REPURCHASE PROGRAM
ESI had a stock repurchase program originally announced on October 25, 1996. Treasury shares were carried at
first in, first out cost. In addition to the shares repurchased through the ASR (defined below), ESI repurchased 13.0 million
shares under its existing stock repurchase program during the second quarter of 2011 for $765.7 million.
Upon consummation of the Merger on April 2, 2012, all ESI shares held in treasury were no longer outstanding
and were cancelled and retired and ceased to exist. The Board of Directors of Express Scripts has not yet adopted a stock
repurchase program to allow for the repurchase of shares of Express Scripts. See Note 9 – Common stock.
ACCELERATED SHARE REPURCHASE
On May 27, 2011, ESI entered into agreements to repurchase shares of its common stock for an aggregate
purchase price of $1,750.0 million under an Accelerated Share Repurchase (“ASR”) agreement. The ASR agreement
consisted of two agreements providing for the repurchase of shares of ESI’s common stock worth $1.0 billion and $750.0
million, respectively. Upon payment of the purchase price on May 27, 2011, ESI received 29.4 million shares of ESI’s
common stock at a price of $59.53 per share. During the third quarter of 2011, we settled the $1.0 billion portion of the
ASR agreement and received 1.9 million shares at a final forward price of $53.51 per share. During the fourth quarter of
2011, we settled $725.0 million of the $750.0 million portion of the ASR agreement and received 2.1 million shares at a
weighted-average final forward price of $50.69.
On April 27, 2012, we settled the remaining portion of the ASR agreement and received 0.1 million additional
shares, resulting in a total of 33.5 million shares received under the agreement. See Note 9 – Common stock for more
information on the terms of the ASR agreement.
SENIOR NOTES
Following the consummation of the Merger on April 2, 2012, several series of senior notes issued by Medco are
reported as debt obligations of Express Scripts on a consolidated basis.
On February 6, 2012, we issued $3.5 billion of Senior Notes. See above for further details.
On November 14, 2011, we issued $4.1 billion of Senior Notes (the “November 2011 Senior Notes”), 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
The net proceeds were used to pay a portion of the cash consideration paid in the Merger and to pay related fees
and expenses (see Note 3 – Changes in business).
On May 2, 2011, ESI issued $1.5 billion aggregate principal amount of 3.125% Senior Notes due 2016 (“May
2011 Senior Notes”). ESI used the proceeds to repurchase treasury shares.
On September 10, 2010, Medco issued $1.0 billion of Senior Notes (the “September 2010 Senior Notes”),
including:
$500.0 million aggregate principal amount of 2.750% senior notes due 2015 (the “September 2015 Senior Notes”)
$500.0 million aggregate principal amount of 4.125% senior notes due 2020 (the “September 2020 Senior Notes”)
Medco used the net proceeds for general corporate purposes, which included funding the UBC acquisition.
On June 9, 2009, ESI 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
$500.0 million aggregate principal amount of 7.250% Senior Notes due 2019