Aetna 2015 Annual Report Download - page 25

Annual Report- Page 19
Contractual Obligations
The following table summarizes certain estimated future obligations by period under our various contractual
obligations at December 31, 2015. 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, 2015 (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, the Bridge Credit Agreement, the Term Loan
Agreement; from the FHLBB; and 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 our strategic growth
initiatives.
(Millions) 2016 2017-2018 2019-2020 Thereafter Total
Long-term debt obligations, including interest $ 327.6 $ 1,732.2 $ 1,686.2 $ 8,452.0 $ 12,198.0
Operating lease obligations 142.1 206.2 100.1 86.8 535.2
Purchase obligations 262.5 240.1 117.8 2.0 622.4
Other liabilities reflected on our balance sheet: (1)
Future policy benefits (2) 671.8 1,270.2 1,000.0 3,998.0 6,940.0
Unpaid claims (2) 772.3 533.0 356.5 766.1 2,427.9
Policyholders’ funds (2) (3) 715.5 71.4 86.9 457.3 1,331.1
Other liabilities (4) 4,853.2 168.0 84.4 205.9 5,311.5
Total $ 7,745.0 $ 4,221.1 $ 3,431.9 $ 13,968.1 $ 29,366.1
(1) Payments of other long-term liabilities exclude Separate Accounts liabilities of approximately $4.0 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 $524.1 million, $35.3 million and $148.2
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 $1.8 billion 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 for 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 $35.1 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 $589.6 million, including our pension and 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 $341.7 million over the next ten years for our non-qualified supplemental pension plan and
our postretirement benefit plans, which we primarily fund when paid by the plans.
• Deferred gains of $51.0 million which will be recognized in our earnings in the future in accordance with GAAP.
• Net unrealized capital gains of $158.3 million, before tax, supporting discontinued products.
• Non-controlling interests supporting our discontinued products of $70.4 million consisting of third party interests in our
investment holdings. This amount does not represent future cash payments we will be required to make.
• Other payables of $50.4 million.
Restrictions on Certain Payments
In addition to general state law restrictions on payments of dividends and other distributions to shareholders
applicable to all corporations, health maintenance organizations (“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. Under applicable regulatory requirements,
at December 31, 2015, the amount of dividends that may be paid by our insurance and HMO subsidiaries without
prior approval by regulatory authorities was approximately $1.9 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