Cautionary Statement
CAUTIONARY STATEMENT; ADDITIONAL INFORMATION -- Certain information in this
presentation is 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.
2010 J.P. Morgan Healthcare Conference | January 12, 2010
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