Cigna 2014 Annual Report Download - page 73

PART II
ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
contractholder liabilities exclude future interest crediting, charges swap contracts, and certain tax and reinsurance liabilities. These
and fees. We manage our investment portfolios to generate cash items are presented in accounts payable, accrued expenses and other
flows needed to satisfy contractual obligations. Any shortfall from liabilities in our Consolidated Balance Sheets.
expected investment yields could result in increases to recorded Estimated payments of $76 million for deferred compensation,
reserves and adversely impact results of operations. The amounts non-qualified and international pension plans and other
associated with the sold retirement benefits and individual life postretirement and postemployment benefit plans are expected to
insurance and annuity businesses, as well as the reinsured workers’ be paid in less than one year. Our best estimate is that contributions
compensation, personal accident and supplemental benefits to the qualified domestic pension plans during 2015 will be
businesses, are excluded from the table above as net cash flows approximately $5 million. We expect to make payments subsequent
associated with them are not expected to impact us. The total to 2015 for these obligations, however subsequent payments have
amount of these reinsured reserves excluded is approximately been excluded from the table as their timing is based on plan
$5 billion. assumptions that may materially differ from actual activities. See
Short-term debt represents commercial paper, current maturities of Note 9 to the Consolidated Financial Statements for further
long-term debt, and current obligations under capital leases. information on pension and other postretirement benefit
obligations.
Long-term debt includes scheduled interest payments. Capital
leases are included in long-term debt and represent obligations for The above table also does not contain $26 million of liabilities for
IT network storage, servers and equipment. uncertain tax positions because we cannot reasonably estimate the
timing of their resolution with the respective taxing authorities. See
•Other long-term liabilities. This table includes estimated Note 19 to the Consolidated Financial Statements for the year
payments for GMIB contracts, pension and other postretirement ended December 31, 2014 for further information.
and postemployment benefit obligations, supplemental and
deferred compensation plans, interest rate and foreign currency
Off-Balance Sheet:
Purchase obligations. As of December 31, 2014, purchase obligations consisted of estimated payments required under contractual
arrangements for future services and investment commitments as follows:
(In millions)
Fixed maturities $74
Commercial mortgage loans 65
Real estate –
Limited liability entities (other long-term investments) 682
Total investment commitments 821
Future service commitments 124
TOTAL PURCHASE OBLIGATIONS $ 945
We had commitments to invest in limited liability entities that hold Operating leases. For additional information, see Note 21 to the
real estate, loans to real estate entities or securities. See Note 11(C) to Consolidated Financial Statements.
the Consolidated Financial Statements for additional information.
Our estimated future service commitments primarily represent
Guarantees
contracts for certain outsourced business processes and IT We are contingently liable for various financial and other guarantees
maintenance and support. We generally have the ability to terminate provided in the ordinary course of business. See Note 23 to the
these agreements, but do not anticipate doing so at this time. Purchase Consolidated Financial Statements for additional information on
obligations exclude contracts that are cancelable without penalty and guarantees.
those that do not specify minimum levels of goods or services to be
purchased.
CIGNA CORPORATION - 2014 Form 10-K 41
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