Aetna 2013 Annual Report Download - page 24

Annual Report- Page 18
LIQUIDITY AND CAPITAL RESOURCES
Cash Flows
We meet our operating cash requirements by maintaining liquidity in our investment portfolio, using overall cash
flows from premiums, fees and other revenue, deposits and income received on investments, and issuing
commercial paper from time to time. We monitor the duration of our investment portfolio of highly marketable
debt securities and mortgage loans, and execute purchases and sales of these investments with the objective of
having adequate funds available to satisfy our maturing liabilities. Overall cash flows are used primarily for claim
and benefit payments, operating expenses, share and debt repurchases, acquisitions, contract withdrawals and
shareholder dividends. We have committed short-term borrowing capacity of $2.0 billion through a revolving credit
facility agreement that expires in March 2018.
Presented below is a condensed statement of cash flows for each of the last three years. On May 7, 2013, we
completed the acquisition of Coventry, which is reflected in our cash flows for 2013. We present net cash flows
used for operating activities and net cash flows provided by investing activities separately for our Large Case
Pensions segment because changes in the insurance reserves for the Large Case Pensions segment (which are
reported as cash used for operating activities) are funded from the sale of investments (which are reported as cash
provided by investing activities). Refer to the Consolidated Statements of Cash Flows on page 81 for additional
information.
(Millions) 2013 2012 2011
Cash flows from operating activities
Health Care and Group Insurance $ 2,625.0 $ 2,054.7 $ 2,750.2
Large Case Pensions (346.3) (229.8) (239.1)
Net cash provided by operating activities 2,278.7 1,824.9 2,511.1
Cash flows from investing activities
Health Care and Group Insurance (2,261.4) (477.7) (2,222.3)
Large Case Pensions 341.6 246.4 342.1
Net cash used for investing activities (1,919.8) (231.3) (1,880.2)
Net cash (used for) provided by financing activities (1,525.8) 305.9 (1,818.8)
Net (decrease) increase in cash and cash equivalents $ (1,166.9) $ 1,899.5 $ (1,187.9)
Cash Flow Analysis
Cash flows provided by operating activities for Health Care and Group Insurance were approximately $2.6 billion
in 2013, $2.1 billion in 2012 and $2.8 billion in 2011. The increase during 2013 compared to 2012 is primarily
attributable to the inclusion of results from the Coventry acquisition, proceeds from the termination of a reinsurance
arrangement with Lehman Re and sale of the related claim, as well as lower benefit payments under our 2011
voluntary early retirement program, offset somewhat by transaction, integration-related and restructuring costs
associated with the Coventry acquisition (refer to Note 17 of the Notes to Consolidated Financial Statements on
page 129 for more information on the Lehman Re reinsurance arrangement). The decrease in 2012 compared to
2011 is primarily attributable to lower net income attributable to Aetna in 2012 as well as benefit payments in 2012
for our voluntary early retirement program that we implemented in 2011 and minimum MLR rebate payments in
2012 related to 2011 experience.
Cash flows used for investing activities were approximately $1.9 billion, $231.3 million and $1.9 billion for 2013,
2012 and 2011, respectively. The increase in cash used for 2013 compared to 2012 is primarily attributable to cash
used to fund the Coventry acquisition, net of the cash acquired in connection with the acquisition, partially offset by
an increase in net proceeds from sales and maturities of investments. Cash flows used for investing activities
decreased in 2012 compared to 2011 reflecting reduced cash used for acquisitions. Refer to Note 3 and 7 of Notes to
Consolidated Financial Statements beginning on pages 91 and 99, respectively, for additional information.