Aetna 2015 Annual Report Download - page 24

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Annual Report- Page 18
respectively. At the completion of the Proposed Acquisition, we currently project our debt to capital ratio will be
approximately 46% as we expect to issue approximately $16.2 billion of new debt, including senior notes, term
loans and commercial paper, to partially finance the cash portion of the purchase price. Following the
announcement of the Proposed Acquisition in July 2015, each of Standard & Poor’s Ratings Services (“Standard &
Poor’s”), A.M. Best, Fitch Ratings (“Fitch”) and Moody’s Investors Service (“Moody’s”) placed certain of our debt,
financial strength and other credit ratings under review for a possible downgrade. We currently project that our debt
to capital ratio will decrease below 40% over the 24 months following the completion of the Proposed Acquisition.
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 $364 million, $329 million and $334 million for 2015, 2014 and 2013, respectively. The
increase in interest expense during 2015 compared to 2014 reflects the impact of the Bridge Credit Agreement and
Term Loan Credit Agreement. 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.
We are a member of the FHLBB, and as a member we have the ability to obtain cash advances, subject to certain
minimum collateral requirements. Refer to Note 15 of Condensed Notes to Consolidated Financial Statements on
page 131 for information on our FHLBB membership and, cash advances and cash advance capacity at year end.
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 12 of
Notes to Consolidated Financial Statements beginning on page 118 for additional information regarding our current
funding strategy for the Aetna Pension Plan.
Refer to Note 2 beginning on page 88 for additional information on fees mandated by the ACA and “Overview-
Health Care Reform” beginning on page 4 for additional information.