Humana 2011 Annual Report Download - page 74

Future Sources and Uses of Liquidity
Dividends
In April 2011, our Board of Directors approved the initiation of a quarterly cash dividend policy.
Declaration and payment of future quarterly dividends is at the discretion of the Board and may be adjusted as
business needs or market conditions change.
The following table provides details of dividends declared in 2011:
Record Payment Amount Total
Date Date per Share Amount
(in millions)
6/30/2011 7/28/2011 $0.25 $41
9/30/2011 10/28/2011 $0.25 $41
12/30/2011 1/31/2012 $0.25 $41
Stock Repurchase Authorization
In April 2011, the Board of Directors replaced its previously approved share repurchase authorization of up
to $250 million with a new authorization for repurchases of up to $1 billion of our common shares exclusive of
shares repurchased in connection with employee stock plans. The new authorization will expire June 30, 2013.
Under the new share repurchase authorization, shares could be purchased from time to time at prevailing prices
in the open market, by block purchases, or in privately-negotiated transactions, subject to certain regulatory
restrictions on volume, pricing, and timing. As of February 6, 2012, the remaining authorized amount under the
new authorization totaled $561 million.
Senior Notes
We previously issued $500 million of 6.45% senior notes due June 1, 2016, $500 million of 7.20% senior
notes due June 15, 2018, $300 million of 6.30% senior notes due August 1, 2018, and $250 million of 8.15%
senior notes due June 15, 2038. The 7.20% and 8.15% senior notes are subject to an interest rate adjustment if the
debt ratings assigned to the notes are downgraded (or subsequently upgraded) and contain a change of control
provision that may require us to purchase the notes under certain circumstances. All four series of our senior
notes, which are unsecured, may be redeemed at our option at any time at 100% of the principal amount plus
accrued interest and a specified make-whole amount. Our senior notes are more fully discussed in Note 11 to the
consolidated financial statements included in Item 8. – Financial Statements and Supplementary Data.
Credit Agreement
In November 2011, we amended and restated our 3-year $1.0 billion unsecured revolving credit agreement
which was set to expire in December 2013 and replaced it with a 5-year $1.0 billion unsecured revolving
agreement expiring November 2016. Under the new credit agreement, at our option, we can borrow on either a
competitive advance basis or a revolving credit basis. The revolving credit portion bears interest at either LIBOR
plus a spread or the base rate plus a spread. The LIBOR spread, currently 120 basis points, varies depending on
our credit ratings ranging from 87.5 to 147.5 basis points. We also pay an annual facility fee regardless of
utilization. This facility fee, currently 17.5 basis points, may fluctuate between 12.5 and 27.5 basis points,
depending upon our credit ratings. The competitive advance portion of any borrowings will bear interest at
market rates prevailing at the time of borrowing on either a fixed rate or a floating rate based on LIBOR, at our
option.
The terms of the new credit agreement include standard provisions related to conditions of borrowing,
including a customary material adverse effect clause which could limit our ability to borrow additional funds. In
addition, the new credit agreement contains customary restrictive and financial covenants as well as customary
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