Aetna 2013 Annual Report Download - page 146

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Annual Report- Page 140
The liability expected at December 31, 1993 and actual liability balances at December 31, 2013, 2012 and 2011 for
the GIC and SPA liabilities were as follows:
Expected Actual
(Millions) GIC SPA GIC SPA
2011 $ 17.0 $ 2,780.5 $ 8.2 $ 3,005.8
2012 16.1 2,615.4 6.6 2,857.6
2013 15.7 2,448.9 — 2,804.8
The GIC balances were lower than expected in each period because several contract holders redeemed their
contracts prior to contract maturity. The SPA balances in each period were higher than expected because of
additional amounts received under existing contracts.
The distributions on our discontinued products consisted of scheduled contract maturities, settlements and benefit
payments of $391.5 million, $399.5 million and $412.0 million for the years ended December 31, 2013, 2012 and
2011, respectively. Participant-directed withdrawals from our discontinued products were not significant in the
years ended ended December 31, 2013, 2012 or 2011. Cash required to fund these distributions was provided by
earnings and scheduled payments on, and sales of, invested assets.
21. Subsequent Events
In January 2014, we entered into five-year reinsurance agreements with Vitality Re V Limited, an unrelated insurer.
The agreements allow us to reduce our required capital and provide $200 million of collateralized excess of loss
reinsurance coverage on a portion of Aetna's group Commercial Insured Health Care business. The Company's
similar reinsurance agreements with Vitality Re Limited and Vitality Re II Limited expired in January 2014.
In connection with the integration of the Coventry acquisition and to permit migration of membership from
acquired health plans to Aetna plans and systems, we amended a supplier agreement effective January 1, 2014 to
eliminate an exclusivity provision. During 2014, we expect to record in general and administrative expenses the
financial impact of certain payments to be made to the supplier as a result of this amendment of up to approximately
$65 million pretax.
On February 28, 2014, our Board declared a cash dividend of $.225 per share that will be paid on April 25, 2014 to
shareholders of record at the close of business on April 10, 2014.
Also on February 28, 2014, our Board approved a new share repurchase program that authorized us to repurchase
up to $1.0 billion of our common stock.
On February 7, 2014, we announced that we will redeem for cash the entire $750 million aggregate principal
amount outstanding of our 6.0% Senior Notes due 2016. The redemption will occur on March 14, 2014 (the
“Redemption Date”) at a redemption price that includes a make-whole premium, plus any interest accrued and
unpaid at the Redemption Date. We expect to finance the redemption with additional indebtedness. We estimate the
pretax loss on the early extinguishment of the debt to be approximately $90 million, which we expect will be
partially offset by approximately $20 million pretax of realized capital gains due primarily to the recognition of
hedge ineffectiveness arising from the early termination of interest rate swaps hedging interest rate exposure related
to the forecasted future issuance of fixed-rate debt to refinance the 6.0% Senior Notes due 2016.