Aetna 2009 Annual Report - creating value, shaping the future Chairman's Message Title
(Millions, except per common share data)
FOR THE YEAR 2009 2008 CHANGE
Revenue $34,764.1 $30,950.7 12.3%
Operating Earnings1 1,237.9 1,920.9 (35.6)%
Net Income 1,276.5 1,384.1 (7.8)%
Operating Expense Ratio2 18.2% 17.8% 2.2%
After-tax Net Income Margin 3.7%
4.5% (17.8)%
AT YEAR END
Assets $38,550.4 $35,852.5 7.5%
Shareholders' Equity 9,503.8 8,186.4 16.1%
Market Capitalization 13,656.0 13,003.2 5.0%
Common Shares Outstanding 430.8 456.3 (5.6)%
PER COMMON SHARE
Operating Earnings1 $2.75
$3.93 (30.0)%
Net Income $2.84 $2.83 0.4%

(1) Operating earnings excludes from net income: net realized capital gains (losses) of $55 million ($55 million pretax) in 2009 and $(482) million ($(656) million pretax) in 2008; a severance and facilities charge of $61 million ($94 million pretax) in 2009 and $36 million ($55 million pretax) in 2008; a $20 million ($30 million pretax) settlement with Express Scripts, Inc. and one of its subsidiaries (collectively, "ESI") related to certain litigation in 2009; litigation-related insurance proceeds of $25 million ($38 million pretax) in 2009; an allowance on a reinsurance recoverable of $27 million ($42 million pretax) in 2008; a contribution for the establishment of an out-of-network pricing database of $20 million ($20 million pretax) in 2008; and a reduction of the reserve for anticipated future losses on discontinued products of $29 million ($44 million pretax) in 2008.

(2) The operating expense ratio (GAAP basis) was 18.4% and 18.6% in 2009 and 2008, respectively. The operating expense ratio excludes pretax net realized capital gains (losses) from total revenue in both years and the pretax ESI settlement from total revenue in 2009 as discussed in (1) above. The operating expense ratio also excludes severance and facility charges from both years and litigation-related insurance proceeds from 2009, and excludes an allowance on a reinsurance recoverable and the contribution for the establishment of an out-of-network pricing database in 2008 as discussed in (1) above each on a pretax basis.

The foregoing financial information should be read in conjunction with the financial statement and related notes as presented in Aetna Inc.’s 2009 Annual Report, Financial Report to Shareholders.

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