PART IV ITEM 15 Exhibits and Financial Statement Schedules Holdings and ultimately used to fund the HealthSpring acquisition in 2012. The Company may redeem these Notes, at any time, in whole or in part, at a redemption price equal to the greater of: was accrued at an average monthly rate of 0.71% for 2012 and 0.63% for 2011. Note 4 – As of December 31, 2012, the Company had guarantees and similar agreements in place to secure payment obligations or solvency requirements of certain wholly owned subsidiaries as follows: In March 2011, the Company issued $300 million of 10-Year Notes due March 15, 2021 at a stated interest rate of 4.5% ($298 million, net of discount, with an effective interest rate of 4.683% per year) and $300 million of 30-Year Notes due March 15, 2041 at a stated interest rate of 5.875% ($298 million, net of discount, with an effective interest rate of 6.008% per year). Interest is payable on March 15 and September 15 of each year beginning September 15, 2011. The proceeds of this debt were used for general corporate purposes, including the repayment of debt maturing in 2011. The Company may redeem these Notes, at any time, in whole or in part, at a redemption price equal to the greater of: Maturities of debt are as follows (in millions): none in 2013, 2014, 2015, $600 in 2016, $250 in 2017 and the remainder in years after 2017. Interest expense on long-term and short-term debt was $262 million in 2012, $195 million in 2011, and $176 million in 2010. Interest paid on long-term and short-term debt was $242 million in 2012, $179 million in 2011, and $175 million in 2010. In 2012, no payments have been made on these guarantees and none are pending. The Company provided other guarantees to subsidiaries that, in the aggregate, do not represent a material risk to the Company’s results of operations, liquidity or financial condition. Note 5 – On November 16, 2011, the Company issued 15.2 million shares of its common stock at $42.75 per share. Proceeds were $650 million ($629 million net of underwriting discount and fees) and used to reduce the intercompany loan payable balance with Cigna Holdings and ultimately used to fund the HealthSpring acquisition in January 2012. Note 3 – Intercompany liabilities consist primarily of loans payable to Cigna Holdings, Inc. of $ 289 million as of December 31, 2012 and $489 million as of December 31, 2011. The proceeds of the debt issuance in November 2011 of $2.1 billion (see Note 2) and the equity issuance of $629 million (see Note 5) were used to reduce the intercompany loan payable balance with Cigna Holdings and ultimately used to fund the HealthSpring acquisition in 2012. Interest 100% of the principal amount of the Notes to be redeemed; or GLYPH<127> the present value of the remaining principal and interest payments on the Notes being redeemed discounted at the applicable Treasury Rate plus 20 basis points (10-Year 4.5% Notes due 2021) or 25 basis points (30-Year 5.875% Notes due 2041). GLYPH<127> The Company has agreed to indemnify payment of losses included in Cigna Europe Insurance Company’s reserves on the assumed reinsurance business transferred from ACE. As of December 31, 2012, the reserve was $43 million. GLYPH<127> The Company has arranged a $50 million letter of credit in support of Cigna Europe Insurance Company, an indirect wholly-owned subsidiary. The Company has agreed to indemnify the banks providing the letters of credit in the event of any draw. Cigna Europe Insurance Company is the holder of the letters of credit. GLYPH<127> The Company also provides solvency guarantees aggregating $34 million under state and federal regulations in support of its indirect wholly-owned medical HMOs in several states. GLYPH<127> The Company is obligated under a $12 million letter of credit required by the insurer of its high-deductible self-insurance programs to indemnify the insurer for claim liabilities that fall within deductible amounts for policy years dating back to 1994. GLYPH<127> Various indirect, wholly-owned subsidiaries have obtained surety bonds in the normal course of business. If there is a claim on a surety bond and the subsidiary is unable to pay, the Company guarantees payment to the company issuing the surety bond. The aggregate amount of such surety bonds as of December 31, 2012 was $28 million. GLYPH<127> The Company has arranged for bank letters of credit in the amount of $3 million to provide collateral in support of its indirect wholly owned subsidiaries. GLYPH<127> 100% of the principal amount of the Notes to be redeemed; or GLYPH<127> the present value of the remaining principal and interest payments on the Notes being redeemed discounted at the applicable Treasury Rate plus 30 basis points (5-Year 2.75% Notes due 2016), 35 basis points (10-Year 4% Notes due 2022), or 40 basis points (30-Year 5.375% Notes due 2042). GLYPH<127> FS-8 CIGNA CORPORATION -  2012 Form  10-K