Aetna 2011 Annual Report Download - page 24

Annual Report- Page 18
Contractual Obligations
The following table summarizes certain estimated future obligations by period under our various contractual
obligations at December 31, 2011. The table below does not include future payments of claims to health care
providers or pharmacies because certain terms of these payments are not determinable at December 31, 2011 (for
example, the timing and volume of future services provided under fee-for-service arrangements and future
membership levels for capitated arrangements). We believe that funds from future operating cash flows, together
with cash, investments and other funds available under the Facility or from public or private financing sources, will
be sufficient to meet our existing commitments as well as our liquidity needs associated with future operations,
including strategic transactions.
(Millions)
Long-term debt obligations, including interest
Operating lease obligations
Purchase obligations
Other liabilities reflected on our balance sheet: (1)
Future policy benefits (2)
Unpaid claims (2)
Policyholders' funds (2) (3)
Other liabilities (4)
Total
2012
$ 228.0
131.4
202.3
668.0
581.2
1,281.6
2,388.8
$ 5,481.3
2013 - 2014
$ 456.0
185.4
170.3
1,256.1
463.9
89.0
171.3
$ 2,792.0
2015 - 2016
$ 1,181.6
82.5
52.5
979.0
316.1
57.5
103.3
$ 2,772.5
Thereafter
$ 5,426.6
58.1
3.0
3,857.7
725.8
714.9
243.7
$ 11,029.8
Total
$ 7,292.2
457.4
428.1
6,760.8
2,087.0
2,143.0
2,907.1
$ 22,075.6
(1) Payments of other long-term liabilities exclude Separate Account liabilities of approximately $5.2 billion because these liabilities are
supported by assets that are legally segregated and are not subject to claims that arise out of our business.
(2) Total payments of future policy benefits, unpaid claims and policyholders' funds include approximately $721.4 million, $46.7 million and
$175.1 million, respectively, of reserves for contracts subject to reinsurance. We expect the assuming reinsurance carrier to fund these
obligations and have reflected these amounts as reinsurance recoverable assets on our consolidated balance sheet.
(3) Customer funds associated with group life and health contracts of approximately $334.2 million have been excluded from the table above
because such funds may be used primarily at the customer's discretion to offset future premiums and/or refunds, and the timing of the
related cash flows cannot be determined. Additionally, net unrealized capital gains on debt and equity securities supporting experience-
rated products of $156.0 million, before tax, have been excluded from the table above.
(4) Other liabilities in the table above include general expense accruals and other related payables and exclude the following:
• Employee-related benefit obligations of $1.2 billion including our pension, other postretirement and post-employment benefit
obligations and certain deferred compensation arrangements. These liabilities do not necessarily represent future cash payments
we will be required to make, or such payment patterns cannot be determined. However, other long-term liabilities include
expected benefit payments of approximately $431.6 million over the next ten years for our nonqualified pension plan and our
postretirement benefit plans, which we primarily fund when paid by the plans.
• Deferred gains of $43.5 million which will be recognized in our earnings in the future in accordance with GAAP.
• Net unrealized capital gains of $345.9 million, before tax, supporting discontinued products.
• Minority interests of $71.1 million consisting of subsidiaries that we own less than 100%. This amount does not represent future
cash payments we will be required to make.
• Income taxes payable of $49.0 million related to uncertain tax positions.
Restrictions on Certain Payments
In addition to general state law restrictions on payments of dividends and other distributions to shareholders
applicable to all corporations, HMOs and insurance companies are subject to further regulations that, among other
things, may require those companies to maintain certain levels of equity (referred to as surplus) and restrict the
amount of dividends and other distributions that may be paid to their equity holders. These regulations are not
directly applicable to Aetna as a holding company, since Aetna is not an HMO or an insurance company. The
additional regulations applicable to our HMO and insurance company subsidiaries are not expected to affect our
ability to service our debt, meet our other financing obligations or pay dividends, or the ability of any of our
subsidiaries to service other financing obligations, if any. Under regulatory requirements, at December 31, 2011,
the amount of dividends that our insurance and HMO subsidiaries could pay to Aetna without prior approval by
regulatory authorities was approximately $1.6 billion in the aggregate.
We maintain capital levels in our operating subsidiaries at or above targeted and/or required capital levels and
dividend amounts in excess of these levels to meet our liquidity requirements, including the payment of interest on