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2006 Aetna Annual Report,
Financial Report to Shareholders
Unless the context otherwise requires, references to the terms “we,” “our” or “us” used throughout this 2006
Annual Report, Financial Report to Shareholders refer to Aetna Inc. (“Aetna”) and its subsidiaries.
For your reference, we provide the following index to our 2006 Annual Report, Financial Report to Shareholders:
Page Description
2 - 41 Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”)
- MD&A provides a review of our operating results for the years 2004 through 2006, as well as our
financial condition at December 31, 2006 and 2005. This MD&A should be read in conjunction with our
consolidated financial statements and notes thereto. MD&A is comprised of the following:
2 Overview – We begin our MD&A with an overview of earnings and cash flows for the years 2004
through 2006, as well as our outlook for 2007. In this section, we also discuss new accounting
standards and significant changes to our management and Board of Directors.
5 Health Care – We provide a quantitative and qualitative discussion about the factors affecting Health
Care revenues and operating earnings in this section.
10 Group Insurance - We provide a quantitative and qualitative discussion about the factors affecting
Group Insurance revenues and operating earnings in this section.
11 Large Case Pensions – We provide a quantitative and qualitative discussion about the factors affecting
Large Case Pensions operating earnings, including the results of discontinued products in this section.
14 Corporate Interest – We discuss changes in corporate interest expense in this section.
14 Investments – As an insurer, we have substantial investment portfolios that support our liabilities. In
this section, we provide a quantitative and qualitative discussion of our investments, realized capital
gains and losses and our evaluation of the risk of our market-sensitive instruments.
17 Liquidity and Capital Resources – In this section, we discuss our cash flows, financing resources,
contractual obligations and other key matters that may affect our liquidity and cash flow activities.
21 Critical Accounting Estimates – In this section we discuss the accounting estimates we consider critical
in preparing our financial statements, including why we consider them critical and the key assumptions
used in making these estimates.
3
28 Regulatory Environment – In this section, we provide a discussion of the regulatory environment in
which we operate.
34 Forward-Looking Information/Risk Factors – We conclude MD&A with a discussion of certain risks
and uncertainties that, if developed into actual events, could have a material adverse impact on our
business, financial condition or results of operations.
42 Selected Financial Data – We provide selected annual financial data for the most recent five years.
43
Consolidated Financial Statements – Includes our consolidated balance sheets at December 31, 2006 and
2005 and the related consolidated statements of income, shareholders’ equity and cash flow for each of the
years in the three-year period ended December 31, 2006. These financial statements should be read in
conjunction with the accompanying Notes to Consolidated Financial Statements.
47
Notes to Consolidated Financial Statements
89
Reports of Management and our Independent Registered Public Accounting Firm – We include a
report from management on its responsibilities for internal control over financial reporting and financial
statements, the oversight of our Audit Committee and KPMG LLP’ s opinions on our consolidated financial
statements and internal control over financial reporting.
93
Quarterly Data (unaudited) – We provide selected quarterly financial data for each of the quarters in
2006 and 2005.
94
Board of Directors, Executive Committee and Corporate Secretary
95
Shareholder Information