Aetna 2009 Annual Report Download - page 22

Contractual Obligations
The following table summarizes certain estimated future obligations by period at December 31, 2009, under our
various contractual obligations. 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, 2009 (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 our credit agreements or 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 strategic
transactions.
(Millions) 2010 2011 - 2012 2013 - 2014 Thereafter Total
Long-term debt obligations, including interest 239.1$ 1,273.3$ 355.5$ 5,158.2$ 7,026.1$
Operating lease obligations 165.2 178.4 78.2 79.9 501.7
Purchase obligations 137.8 129.6 45.3 .8 313.5
Other liabilities reflected on our balance sheet:
(1)
Future policy benefits
(2)
739.6 1,396.4 1,092.5 3,981.2 7,209.7
Unpaid claims
(2)
559.5 438.1 302.9 712.0 2,012.5
Policyholders' funds
(2) (3)
788.3 117.6 109.3 646.1 1,661.3
Other liabilities
(4)
2,284.1 159.5 112.6 251.1 2,807.3
Total 4,913.6$ 3,692.9$ 2,096.3$ 10,829.3$ 21,532.1$
(1) Payments of other long-term liabilities exclude Separate Account liabilities of approximately $6.3 billion because these liabilities are
supported by assets that are legally segregated (i.e., Separate Account assets) and are not subject to claims that arise out of our
business.
(2) Payments of future policy benefits, unpaid claims and policyholders’ funds include approximately $774.8 million, $48.1 million and
$186.1 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 $350.6 million 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 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 $70.5 million 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 $1.37 billion including our pension, 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 anticipated voluntary pension contributions to our tax-qualified defined pension plan of $45.0 million in 2010 and
expected benefit payments of approximately $481.2 million over the next ten years for our nonqualified pension plan and our
postretirement benefit plans, which we primarily fund when paid by the plans.
 Deferred gains of $72.7 million related to prior cash payments which will be recognized in our earnings in the future in
accordance with GAAP.
 Net unrealized capital gains of $104.3 million supporting discontinued products.
 Minority interests of $77.1 million consisting of subsidiaries less than 100% owned by us. This amount does not represent
future cash payments we will be required to make.
 Income taxes payable of $22.2 million related to uncertain tax positions.
CRITICAL ACCOUNTING ESTIMATES
We prepare our consolidated financial statements in accordance with GAAP. The application of GAAP requires
management to make estimates and assumptions that affect our consolidated financial statements and related notes.
The accounting estimates described below are those we consider critical in preparing our consolidated financial
statements. We use information available to us at the time the estimates are made; however, as described below, these
estimates could change materially if different information or assumptions were used. Also, these estimates may not
ultimately reflect the actual amounts of the final transactions that occur.
Health Care Costs Payable
Health care costs payable include estimates of the ultimate cost of claims that have been incurred but not yet reported
to us and of those which have been reported to us but not yet paid (collectively “IBNR”). At December 31, 2009 and
2008, our IBNR reserves represented approximately 88% and 86%, respectively, of total health care 0costs payable.
The remainder of health care costs payable is primarily comprised of pharmacy and capitation payables and accruals
for state assessments. We develop our IBNR estimates using actuarial principles and assumptions that consider
Annual Report – Page 16