XML 34 R16.htm IDEA: XBRL DOCUMENT
v3.19.3.a.u2

Borrowings and Credit Arrangements | 12 Months Ended
--- | ---
Dec. 31, 2019
Debt Disclosure [Abstract] |
Borrowings and Credit Arrangements | Borrowings and Credit Agreements The following table is a summary of the Company’s borrowings as of December 31, 2019 and 2018:
In millions | 2019 |  | 2018
Short-term debt |  |  |
Commercial paper | $ | — |  |  | $ | 720 |
Long-term debt |  |  |
2.2% senior notes due March 2019 | — |  |  | 375 |
2.25% senior notes due August 2019 | — |  |  | 850 |
3.125% senior notes due March 2020 | 723 |  |  | 2,000 |
Floating rate notes due March 2020 (2.515% and 3.397% at December 31, 2019 and 2018) | 277 |  |  | 1,000 |
2.8% senior notes due July 2020 | 2,750 |  |  | 2,750 |
3.35% senior notes due March 2021 | 2,038 |  |  | 3,000 |
Floating rate notes due March 2021 (2.605% and 3.487% at December 31, 2019 and 2018) | 1,000 |  |  | 1,000 |
4.125% senior notes due May 2021 | 222 |  |  | 550 |
2.125% senior notes due June 2021 | 1,750 |  |  | 1,750 |
4.125% senior notes due June 2021 | 203 |  |  | 500 |
5.45% senior notes due June 2021 | 187 |  |  | 600 |
3-year tranche term loan due November 2021 | — |  |  | 3,000 |
3.5% senior notes due July 2022 | 1,500 |  |  | 1,500 |
2.75% senior notes due November 2022 | 1,000 |  |  | 1,000 |
2.75% senior notes due December 2022 | 1,250 |  |  | 1,250 |
4.75% senior notes due December 2022 | 399 |  |  | 399 |
3.7% senior notes due March 2023 | 6,000 |  |  | 6,000 |
2.8% senior notes due June 2023 | 1,300 |  |  | 1,300 |
4% senior notes due December 2023 | 1,250 |  |  | 1,250 |
2.625% senior notes due August 2024 | 1,000 |  |  | — |
3.375% senior notes due August 2024 | 650 |  |  | 650 |
3.5% senior notes due November 2024 | 750 |  |  | 750 |
5% senior notes due December 2024 | 299 |  |  | 299 |
4.1% senior notes due March 2025 | 5,000 |  |  | 5,000 |
3.875% senior notes due July 2025 | 2,828 |  |  | 2,828 |
2.875% senior notes due June 2026 | 1,750 |  |  | 1,750 |
3% senior notes due August 2026 | 750 |  |  | — |
6.25% senior notes due June 2027 | 372 |  |  | 372 |
4.3% senior notes due March 2028 | 9,000 |  |  | 9,000 |
3.25% senior notes due August 2029 | 1,750 |  |  | — |
4.875% senior notes due July 2035 | 652 |  |  | 652 |
6.625% senior notes due June 2036 | 771 |  |  | 771 |
6.75% senior notes due December 2037 | 533 |  |  | 533 |
4.78% senior notes due March 2038 | 5,000 |  |  | 5,000 |
6.125% senior notes due September 2039 | 447 |  |  | 447 |
5.75% senior notes due May 2041 | 133 |  |  | 133 |
4.5% senior notes due May 2042 | 500 |  |  | 500 |
4.125% senior notes due November 2042 | 500 |  |  | 500 |
5.3% senior notes due December 2043 | 750 |  |  | 750 |
4.75% senior notes due March 2044 | 375 |  |  | 375 |
5.125% senior notes due July 2045 | 3,500 |  |  | 3,500 |
3.875% senior notes due August 2047 | 1,000 |  |  | 1,000 |
5.05% senior notes due March 2048 | 8,000 |  |  | 8,000 |
Finance lease liabilities | 808 |  |  | 642 |
Other | 279 |  |  | 19 |
Total debt principal | 69,246 |  |  | 74,265 |
Debt premiums | 262 |  |  | 302 |
Debt discounts and deferred financing costs | (1,028 | ) |  | (1,138 | )
| 68,480 |  |  | 73,429 |
Less: |  |  |
Short-term debt (commercial paper) | — |  |  | (720 | )
Current portion of long-term debt | (3,781 | ) |  | (1,265 | )
Long-term debt | $ | 64,699 |  |  | $ | 71,444 |
The following is a summary of the Company’s required repayments of debt principal due during each of the next five years and thereafter, as of December 31, 2019:
In millions |
2020 | $ | 3,754 |
2021 | 5,404 |
2022 | 4,153 |
2023 | 8,554 |
2024 | 2,704 |
Thereafter | 43,869 |
Total | 68,438 |
Finance lease liabilities (1) | 808 |
Total debt principal | $ | 69,246 |
_____________________________________________
(1) | See Note 6 ‘‘Leases’’ for a summary of maturities of the Company’s finance lease liabilities.
Short-term Borrowings Commercial Paper and Back-up Credit Facilities The Company did no t have any commercial paper outstanding as of December 31, 2019. The Company had $720 million of commercial paper outstanding at a weighted average interest rate of 2.8% as of December 31, 2018. In connection with its commercial paper program, the Company maintains a $1.0 billion 364-day unsecured back-up revolving credit facility, which expires on May 14, 2020, a $1.0 billion, five-year unsecured back-up revolving credit facility, which expires on May 18, 2022, a $2.0 billion, five-year unsecured back-up revolving credit facility, which expires on May 17, 2023 and a $2.0 billion, five-year unsecured back-up revolving credit facility, which expires on May 16, 2024. The credit facilities allow for borrowings at various rates that are dependent, in part, on the Company’s public debt ratings and require the Company to pay a weighted average quarterly facility fee of approximately .03%, regardless of usage. As of December 31, 2019 and 2018, there were no borrowings outstanding under any of the Company’s back-up credit facilities. Bridge Loan Facility On December 3, 2017, in connection with the Aetna Acquisition, the Company entered into a $49.0 billion unsecured bridge loan facility commitment. The Company paid $221 million in fees upon entering into the agreement. The fees were capitalized in other current assets and were amortized as interest expense over the period the bridge loan facility commitment was outstanding. The bridge loan facility commitment was reduced to $44.0 billion on December 15, 2017 upon the Company entering into a $5.0 billion term loan agreement. The Company recorded $56 million of amortization of the bridge loan facility fees during the year ended December 31, 2017, which was recorded in interest expense in the consolidated statement of operations. On March 9, 2018, the Company issued an aggregate of $40.0 billion principal amount of unsecured floating rate notes and unsecured fixed rate senior notes, collectively the “2018 Notes.” At that time, the bridge loan facility commitment was reduced to $4.0 billion, and the Company paid $8 million in fees to retain the bridge loan facility commitment through the Aetna Acquisition Date. Those fees were capitalized in other current assets and were amortized as interest expense over the period the bridge loan facility commitment was outstanding. The Company recorded $173 million of amortization of the bridge loan facility commitment fees during the year ended December 31, 2018, which was recorded in interest expense in the consolidated statement of operations. On October 26, 2018, the Company entered into a $4.0 billion unsecured 364-day bridge term loan agreement to formalize the bridge loan facility discussed above. On November 28, 2018, in connection with the Aetna Acquisition, the $4.0 billion unsecured 364-day bridge term loan agreement terminated. Federal Home Loan Bank of Boston Since the Aetna Acquisition Date, a subsidiary of the Company is a member of the FHLBB. As a member, the subsidiary has the ability to obtain cash advances, subject to certain minimum collateral requirements. The maximum borrowing capacity available from the FHLBB as of December 31, 2019 was approximately $850 million. At both December 31, 2019 and 2018, there were no outstanding advances from the FHLBB. Long-term Borrowings 2019 Notes On August 15, 2019, the Company issued $1.0 billion aggregate principal amount of 2.625% unsecured senior notes due August 15, 2024, $750 million aggregate principal amount of 3% unsecured senior notes due August 15, 2026 and $1.75 billion aggregate principal amount of 3.25% unsecured senior notes due August 15, 2029 (collectively, the “2019 Notes”) for total proceeds of approximately $3.5 billion, net of discounts and underwriting fees. The net proceeds of the 2019 Notes were used to repay certain of the Company’s outstanding debt. Beginning in July 2019, the Company entered into several interest rate swap and treasury lock transactions to manage interest rate risk. These agreements were designated as cash flow hedges and were used to hedge the exposure to variability in future cash flows resulting from changes in interest rates related to the anticipated issuance of the 2019 Notes. In connection with the issuance of the 2019 Notes, the Company terminated all outstanding cash flow hedges. The Company paid a net amount of $25 million to the hedge counterparties upon termination, which was recorded as a loss, net of tax, of $18 million in accumulated other comprehensive income and will be reclassified as interest expense over the life of the 2019 Notes. See Note 13 ‘‘Other Comprehensive Income’’ for additional information. Early Extinguishment of Debt In August 2019, the Company purchased $4.0 billion of its outstanding senior notes through cash tender offers. The senior notes purchased included the following: $1.3 billion of its 3.125% senior notes due 2020, $723 million of its floating rate notes due 2020, $328 million of its 4.125% senior notes due 2021, $297 million of 4.125% senior notes due 2021 issued by Aetna, $413 million of 5.45% senior notes due 2021 issued by Coventry Health Care, Inc., a wholly-owned subsidiary of Aetna, and $962 million of its 3.35% senior notes due 2021. In connection with the purchase of such senior notes, the Company paid a premium of $76 million in excess of the aggregate principal amount of the senior notes that were purchased, incurred $8 million in fees and recognized a net gain of $5 million on the write-off of net unamortized deferred financing premiums, for a net loss on early extinguishment of debt of $79 million. 2018 Notes On March 9, 2018, the Company issued an aggregate of $40.0 billion in principal amount of the 2018 Notes for total proceeds of approximately $39.4 billion, net of discounts and underwriting fees. The net proceeds of the 2018 Notes were used to fund a portion of the Aetna Acquisition. The 2018 Notes consisted of the following at the time of issuance:
In millions |
3.125% senior notes due March 2020 | $ | 2,000 |
Floating rate notes due March 2020 | 1,000 |
3.35% senior notes due March 2021 | 3,000 |
Floating rate notes due March 2021 | 1,000 |
3.7% senior notes due March 2023 | 6,000 |
4.1% senior notes due March 2025 | 5,000 |
4.3% senior notes due March 2028 | 9,000 |
4.78% senior notes due March 2038 | 5,000 |
5.05% senior notes due March 2048 | 8,000 |
Total debt principal | $ | 40,000 |
From December 2017 through March 2018, the Company entered into several interest rate swap and treasury lock transactions to manage interest rate risk. These agreements were designated as cash flow hedges and were used to hedge the exposure to variability in future cash flows resulting from changes in interest rates related to the anticipated issuance of long-term debt to fund the Aetna Acquisition. In connection with the issuance of the 2018 Notes, the Company terminated all outstanding cash flow hedges. In connection with the hedge transactions, the Company received a net amount of $446 million from the hedge counterparties upon termination, which was recorded as a gain, net of tax, of $331 million in accumulated other comprehensive income and will be reclassified as a reduction of interest expense over the life of the 2018 Notes. See Note 13 ‘‘Other Comprehensive Income’’ for additional information. Term Loan Agreement On December 15, 2017, in connection with the Aetna Acquisition, the Company entered into a $5.0 billion term loan agreement. The term loan agreement allowed for borrowings at various rates that were dependent, in part, on the Company’s debt ratings. In connection with the Aetna Acquisition, the Company borrowed $5.0 billion (a $3.0 billion three-year tranche and a $2.0 billion five-year tranche) under the term loan agreement in November 2018. The Company terminated the $2.0 billion five-year tranche in December 2018 with the repayment of the borrowing. The Company made principal payments of $500 million in March 2019, $1.0 billion in May 2019 and $1.5 billion in July 2019 on the three-year tranche, and terminated the three-year tranche and the term loan agreement with the final repayment of the borrowing in July 2019, at which time the Company had repaid all term loans. Aetna Related Debt Upon the closing of the Aetna Acquisition, the Company assumed long-term debt with a fair value of $8.1 billion, with stated interest rates ranging from 2.2% to 6.75%. The long-term debt assumed is included in the summary of the Company’s borrowings table above. Debt Covenants The Company’s back-up revolving credit facilities, unsecured senior notes and unsecured floating rate notes contain customary restrictive financial and operating covenants. These covenants do not include an acceleration of the Company’s debt maturities in the event of a downgrade in the Company’s credit ratings. The Company does not believe the restrictions contained in these covenants materially affect its financial or operating flexibility. As of December 31, 2019, the Company was in compliance with all of its debt covenants.

X
- References No definition available. + Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
Name: | us-gaap_DebtDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration