UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported): January 12,
2010
Aetna Inc.
(Exact name of registrant as specified
in its charter)
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Pennsylvania
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1-16095
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23-2229683
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(State or other jurisdiction
of
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(Commission
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(IRS
Employer
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incorporation)
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File
Number)
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Identification
No.)
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151 Farmington Avenue, Hartford, CT
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06156
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(Address of principal executive
offices)
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(Zip
Code)
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Registrant’s telephone number,
including area code:
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(860)
273-0123
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(Former name or former address, if
changed since last report.):
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Not
applicable
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Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of
the registrant under any of the following provisions:
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o
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Written communications pursuant to
Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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o
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Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Section 2 – Financial
Information
Item 2.02 Results of
Operations and Financial Condition
On
January 12, 2010, Joseph M. Zubretsky, Executive Vice President and Chief
Financial Officer of Aetna Inc. ("Aetna") will provide a presentation at the
2010 J.P. Morgan Healthcare Conference. Mr. Zubretsky also will meet
with investors and analysts after the presentation. During this
presentation and the subsequent meetings, Aetna intends to reaffirm its
previously disclosed full-year 2009 operating earnings guidance of $2.75 per
share1
and provide its current view that full-year 2010 operating earnings per
share is likely to be modestly lower than 2009.
Aetna’s
presentation is scheduled to begin at 1:00 p.m. Eastern time (10:00 a.m. Pacific
time). Investors, analysts and the general public are invited to listen to
this presentation over the Internet via Aetna’s Investor Information link at
www.aetna.com/investor. A webcast replay will be available on that web
site, beginning approximately two hours after the event, for 14 days.
A copy of
Aetna’s presentation is furnished herewith as Exhibit 99.1, and the information
in the presentation as to Aetna’s projected 2009 results of operations and
financial condition is hereby incorporated by reference in this Item
2.02.
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1
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Projected
operating earnings per share for the full year 2009 assumes approximately
450 million weighted average diluted shares. Projected
operating earnings per share exclude net realized capital gains of $26.4
million after tax, $24.9 million after tax of litigation-related insurance
proceeds reported by Aetna in the nine-months ended September 30, 2009 and
a previously announced severance and facility charge of $60 million to $65
million after tax expected to be recorded by Aetna in the fourth quarter
of 2009. Projected operating earnings per share also exclude
from net income any net realized capital gains or losses and other items
occurring after September 30, 2009. Aetna is not able to project the
amount of future net realized capital gains or losses and therefore cannot
reconcile projected operating earnings to projected net income or to a
projected change in net income in any period. Although the
excluded items may recur, management believes that operating earnings and
operating earnings per share provide a more useful comparison of Aetna’s
underlying business performance from period to period. Net
realized capital gains and losses arise from various types of
transactions, primarily in the course of managing a portfolio of assets
that support the payment of liabilities. Following a
Pennsylvania Supreme Court ruling in June 2009, Aetna received $24.9
million after tax from one of its liability insurers related to certain
litigation settled in 2003. In 2009, we expect to record a severance and
facility charge of $60 million to $65 million after tax related to actions
taken or committed to be taken by the end of the first quarter of
2010. Net realized capital gains and losses, the
litigation-related insurance proceeds and the severance and facility
charge do not directly relate to the underwriting or servicing of products
for customers and are not directly related to the core performance of
Aetna’s business operations. In addition, management uses
operating earnings to assess business performance and to make decisions
regarding Aetna’s operations and allocation of resources among Aetna’s
businesses.
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CAUTIONARY
STATEMENT; ADDITIONAL INFORMATION – Certain information in this Form 8-K and the
furnished presentation are forward-looking, including our current estimates,
projections and views as to 2009 excess capital generation; 2009 operating
earnings per share; 2010 operating earnings per share; weighted average diluted
shares; our challenges and opportunities for 2010; our ability to respond to
health care reform; our ability to hold assets to maturity; our ability to grow
our Medicaid business; pre-tax operating margin and fourth quarter 2009
severance and facility charge. Forward-looking information is based
on management's estimates, assumptions and projections, and is subject to
significant uncertainties and other factors, many of which are beyond Aetna’s
control. Important risk factors could cause actual future results and
other future events to differ materially from those currently estimated by
management, including unanticipated increases in medical costs (including
increased intensity or medical utilization as a result of the H1N1 flu,
increased COBRA participation rates or otherwise; changes in membership mix to
higher cost or lower-premium products or membership-adverse selection; changes
in medical cost estimates due to the necessary extensive judgment that is used
in the medical cost estimation process, the considerable variability inherent in
such estimates, and the sensitivity of such estimates to changes in medical
claims payment patterns and changes in medical cost trends; increases resulting
from unfavorable changes in contracting or re-contracting with providers; and
increased pharmacy costs); adverse and less predictable economic conditions in
the U.S. and abroad (including unanticipated levels of or rate of increase in
the unemployment rate) which can significantly and adversely affect Aetna’s
business and profitability; failure to achieve desired rate increases and/or
profitable membership growth due to the slowing economy and/or significant
competition, especially in key geographic markets where membership is
concentrated; adverse changes in federal or state government laws, policies or
regulations (including legislative proposals that would affect our business
model and/or limit our ability to price for the risk we assume and/or reflect
reasonable costs or profits in our pricing and other proposals, such as
initiatives to mandate minimum medical benefit ratios or eliminate or reduce
ERISA pre-emption of state laws, that would increase potential litigation
exposure or mandate coverage of certain health benefits); continued volatility
and further deterioration of the U.S. and global capital markets, including
fluctuations in interest rates, fixed income and equity prices and the value of
financial assets, along with the general deterioration in the commercial paper,
capital and credit markets, which can adversely impact the value of Aetna’s
investment portfolio, Aetna’s profitability by reducing net investment income
and/or Aetna’s financial position by causing us to realize additional
impairments on our investments; adverse pricing or funding actions by federal or
state government payors; the ability to improve relations with providers while
taking actions to reduce medical costs and/or expand the services we offer; and
changes
in Aetna’s actual tax rate, the number of severed employees, the amounts payable
to severed employees, expenditures associated with vacating leased properties,
our ability to sublease leased properties and the timing of future workforce
reductions, in each case compared to the amounts we assumed in estimating the
expected fourth quarter 2009 severance and facility charge. Other
important risk factors include, but are not limited to: adverse changes in size,
product mix or medical cost experience of membership; increases in medical costs
or Group Insurance claims resulting from any epidemics, acts of terrorism or
other extreme events; the ability to reduce administrative expenses while
maintaining targeted levels of service and operating performance; the ability to
successfully integrate our businesses (including acquired businesses) and
implement multiple strategic and operational initiatives simultaneously; our
ability to integrate, simplify, and enhance our existing information technology
systems and platforms to keep pace with changing customer and regulatory needs;
the outcome of various litigation and regulatory matters, including litigation
concerning, and ongoing reviews by various regulatory authorities of, certain of
our payment practices with respect to out-of-network providers; and reputational
issues arising from data security breaches or other means. For more
discussion of important risk factors that may materially affect Aetna, please
see the risk factors contained in Aetna's 2008 Annual Report on Form 10-K on
file with the Securities and Exchange Commission (“SEC”), and Aetna’s 2009
Quarterly Report on Form 10-Q for the quarter ended September 30, 2009 (Aetna’s
“Third Quarter 10-Q”) on file with the SEC. You also should read
Aetna’s Third Quarter 10-Q for a discussion of Aetna’s historical results of
operations and financial condition.
The information in this Item 2.02 shall
not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended, and shall not be or be deemed to be incorporated by reference in any Aetna
filing under the Securities Act of 1933, as amended.
Item 7.01 Regulation FD
Disclosure.
The
information above in Item 2.02 of this current report, other than the portion of
Aetna’s presentation thereby incorporated by reference in such Item 2.02, is
hereby incorporated by reference in this Item 7.01. A copy of Aetna’s
presentation is furnished herewith as Exhibit 99.1, and the information in that
presentation other than the information as to Aetna’s projected 2009 results of
operations and financial condition is hereby incorporated by reference in this
Item 7.01.
The
information in this Item 7.01 shall not be deemed “filed” for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be
or be deemed to be incorporated by reference in any Aetna filing under the
Securities Act of 1933, as amended.
Section 9 – Financial Statements and
Exhibits
Item 9.01 Financial
Statements and Exhibits.
(d) Exhibits.
99.1
Aetna Inc. Presentation slides for
the 2010 J.P. Morgan Healthcare Conference dated
January 12, 2010
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
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Aetna Inc.
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Date: January 12,
2010
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By:
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/s/ Rajan
Parmeswar
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Name: Rajan
Parmeswar
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Title: Vice
President, Controller and Chief Accounting Officer
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