Aetna 2014 Annual Report Download - page 24

Annual Report- Page 18
Other Liquidity Information
From time to time, we use short-term commercial paper borrowings and repurchase agreements to address timing
differences between cash receipts and disbursements. At December 31, 2014, we had approximately $500 million
of commercial paper outstanding with a weighted-average interest rate of .30%. At December 31, 2013, we did not
have any commercial paper outstanding. The maximum amount of commercial paper borrowings outstanding
during 2014 was approximately $766 million. Refer to Notes 2 and 10 of Notes to Consolidated Financial
Statements beginning on pages 80 and 102, respectively, for additional information about our repurchase
agreements.
Our debt to capital ratio (calculated as the sum of all short- and long-term debt outstanding (“total debt”) divided by
the sum of total Aetna shareholders’ equity plus total debt) was approximately 37% at both December 31, 2014 and
2013, respectively. Our existing ratings and outlooks from the nationally recognized statistical ratings organizations
that rate us include the consideration of our intention to lower our debt to capital ratio to approximately 35% during
the 2015 calendar year. We continually monitor existing and alternative financing sources to support our capital and
liquidity needs, including, but not limited to, debt issuance, preferred or common stock issuance, reinsurance and
pledging or selling of assets.
Interest expense was $329 million, $334 million and $269 million for 2014, 2013 and 2012, respectively. The
decrease in interest expense during 2014 compared to 2013 reflects interest expense savings from debt
refinancings, partially offset by the full-year impact of Coventry’s debt that we assumed. The increase in interest
expense during 2013 compared to 2012 reflects the inclusion of Coventry’s long-term debt on and after the
Acquisition Date as well as higher average long-term debt levels as a result of the Coventry-related senior notes
that were issued in November 2012.
We are a member of the Federal Home Loan Bank of Boston (“FHLBB”), and as a member we have the ability to
obtain cash advances, subject to certain minimum collateral requirements. Our maximum borrowing capacity
available from the FHLBB at December 31, 2014 was approximately $882 million. At December 31, 2014, we did
not have any outstanding borrowings from the FHLBB.
Our current funding strategy for our tax-qualified noncontributory defined benefit pension plan (the “Aetna Pension
Plan”) is to contribute an amount at least equal to the minimum funding requirement as determined under applicable
law with consideration of factors such as the maximum tax deductibility of such amounts. Refer to Note 11 of
Notes to Consolidated Financial Statements beginning on page 109 for additional information regarding our current
funding strategy for the Aetna Pension Plan.
We paid both our approximately $605 million portion of the ACA’s non tax-deductible health insurer fee and an
approximately $298 million portion of our estimated 2014 ACA reinsurance contribution in 2014. We project that
our share of the 2015 Health Care Reform fees, assessments and taxes will be approximately $1.1 billion, which
includes our share of the ACA’s health insurer fee, which we project will be approximately $900 million. Refer to
Note 2 beginning on page 80 for additional information on fees mandated by the ACA and “Overview-Health Care
Reform” beginning on page 3 for additional information.