Humana 2013 Annual Report Download - page 126

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Humana Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The revolving credit portion bears interest at either LIBOR plus a spread or the base rate plus a spread. The
LIBOR spread, currently 110 basis points, varies depending on our credit ratings ranging from 90.0 to 150.0
basis points. We also pay an annual facility fee regardless of utilization. This facility fee, currently 15.0 basis
points, may fluctuate between 10.0 and 25.0 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 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 credit agreement contains customary restrictive and financial covenants as well as customary events of
default, including financial covenants regarding the maintenance of a minimum level of net worth of $7.3 billion
at December 31, 2013 and a maximum leverage ratio of 3.0:1. We are in compliance with the financial
covenants, with actual net worth of $9.3 billion and actual leverage ratio of 1.0:1, as measured in accordance
with the credit agreement as of December 31, 2013. In addition, the credit agreement includes an uncommitted
$250 million incremental loan facility.
At December 31, 2013, we had no borrowings outstanding under the credit agreement. We have outstanding
letters of credit of $5 million issued under the credit agreement at December 31, 2013. No amounts have been
drawn on these letters of credit. Accordingly, as of December 31, 2013, we had $995 million of remaining
borrowing capacity under the credit agreement, none of which would be restricted by our financial covenant
compliance requirement. We have other customary, arms-length relationships, including financial advisory and
banking, with some parties to the credit agreement.
12. EMPLOYEE BENEFIT PLANS
Employee Savings Plan
We have defined contribution retirement savings plans covering eligible employees which include matching
contributions based on the amount of our employees’ contributions to the plans. The cost of these plans
amounted to approximately $155 million in 2013, $138 million in 2012, and $126 million in 2011, all of which
was funded currently to the extent it was deductible for federal income tax purposes. The Company’s cash match
is invested pursuant to the participant’s contribution direction. Based on the closing price of our common stock
of $103.22 on December 31, 2013, approximately 11% of the retirement and savings plan’s assets were invested
in our common stock, or approximately 3.0 million shares, representing 2% of the shares outstanding as of
December 31, 2013. At December 31, 2013, approximately 4.5 million shares of our common stock were
reserved for issuance under our defined contribution retirement savings plans.
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