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
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| Date of Report (Date of earliest
event reported):
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August 18, 2006
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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 |
| (State or other jurisdiction of
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(Commission
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(I.R.S. Employer |
| incorporation)
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File Number)
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Identification No.) |
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151 Farmington Avenue, Hartford, CT
(Address of principal executive offices)
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06156
(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:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
TABLE OF CONTENTS
Section 7 – Regulation FD
Item 7.01 Regulation FD Disclosure.
Members of Aetna Inc.’s (“Aetna’s”) management will be meeting with investors and analysts during
the remainder of August 2006. Those discussions will focus on Aetna’s strategy, tactics and future
outlook.
During these meetings, Aetna intends to reaffirm its 2006 guidance, which includes, without
limitation, third quarter 2006 operating earnings of $0.72 per share1 and full-year 2006
operating earnings of $2.77 — $2.79 per share.1 A summary of the 2006 guidance is
contained in Aetna’s Guidance Summary, dated July 27, 2006, which is available at the Investor
Information section of Aetna’s website.
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Projected operating earnings per share exclude $4.1million after tax of net
realized capital gains, a $75.0 million after tax reduction in reserves for anticipated future
losses on discontinued products, a $47.1 million after tax charge in connection with the write off
of an insurance recoverable related to a prior-year physician class action settlement as a result
of a trial court summary judgment ruling, an $8.1 million after tax net charge from the write off
of debt issuance costs and the recognition of deferred gains on terminated interest rate swaps in
connection with Aetna’s 8.5% senior notes due 2041 and a $6.2 million after tax acquisition-related
software impairment charge reported by Aetna for the six months ended June 30, 2006. In addition,
projected operating earnings per share exclude favorable development of prior period health care
cost estimates of approximately $6 million after tax, which was reported by Aetna in the second
quarter of 2006. Aetna is not able to project the amount of future net realized capital gains or
losses and other items and cannot therefore reconcile projected 2006 operating earnings per share
in any period to projected income from continuing operations per share. Projected operating
earnings per share for third quarter and full-year 2006 assume approximately 580 million weighted
average diluted shares. |
ADDITIONAL INFORMATION; CAUTIONARY STATEMENT –The projections contained herein are forward
looking.
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,
such as the increasing competitiveness we are experiencing in certain markets which could cause our
membership to be lower than we expect and our medical cost ratios to be higher than we expect.
Important risk factors could cause actual future results and other future events to differ
materially from those currently estimated by management. Those risk factors include, but are not
limited to: unanticipated increases in medical costs (including increased medical utilization,
increased pharmacy costs, increases resulting from unfavorable changes in contracting or
re-contracting with providers, changes in membership mix to lower-premium or higher-cost products
or membership-adverse selection; as well as 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); decreases in membership or failure to
achieve desired membership growth due to significant competition, reputational issues or other
factors; increases in medical costs or Group Insurance claims resulting from any acts of terrorism,
epidemics or other extreme events; the ability to reduce administrative expenses while maintaining
targeted levels of service and operating performance, and to improve relations with providers while
taking actions to reduce medical costs; the ability to successfully implement Aetna’s operating
model to a projected growing membership base and to successfully implement multiple strategic and
operational initiatives simultaneously; lower levels of investment income from continued low
interest rates; adverse government regulation (including legislative proposals eliminating or
reducing ERISA pre-emption of state laws that would increase potential litigation exposure, and
other proposals, such as patients’ rights legislation, that would increase potential litigation
exposure or mandate coverage of certain health benefits); adverse pricing actions by government
payors; changes in size, product mix and medical cost experience of membership in key markets; our
ability to integrate, simplify, and enhance our existing information technology system and platform
to keep pace with changing customer and regulatory needs; and the outcome of various litigation and
regulatory matters, including litigation and ongoing reviews of business practices by various
regulatory authorities (including the current industry wide investigation into insurance brokerage
practices concerning broker compensation arrangements, bid quoting practices and potential
antitrust violations being conducted by the New York Attorney General, the Connecticut Attorney
General and others, and for which Aetna has received and may receive subpoenas, and related
litigation). For more discussion of important risk factors that may materially affect Aetna, please
see the risk factors contained in Aetna’s 2005 Annual Report on Form 10-K, on file with the
Securities and Exchange Commission. You also should read Aetna’s 2005 Annual Report on Form 10-K
and Aetna’s 2006 second quarter report on Form 10-Q for a discussion of Aetna’s historical results
of operations and financial condition.
None of the information furnished in this report shall be deemed to be “filed” for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended. None of the information furnished
in this report shall be incorporated by reference in any filing under the Securities Act of 1933,
as amended.