<PAGE> 1
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) April 2, 1996
___________________
Aetna Life and Casualty Company
_______________________________________________________________________
(Exact name of registrant as specified in its charter)
Connecticut
_______________________________________________________________________
(State or other jurisdiction of incorporation)
1-5704 06-0843808
_______________________________________________________________________
(Commission File Number) (I.R.S. Employer
Identification No.)
151 Farmington Avenue, Hartford, Connecticut 06156
_______________________________________________________________________
(Address of principal executive offices) (ZIP Code)
Registrant's telephone number, including area code (860) 273-0123
__________________
Not Applicable
_______________________________________________________________________
(Former Name or Former Address, if Changed Since Last Report)
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TABLE OF CONTENTS
_________________
Page
____
Item 2. Acquisition or Disposition of Assets. 3
Item 7(b). Pro Forma Financial Information. 3
Item 7(c). Exhibits. 3
Signatures 8
<PAGE> 3
Item 2. Acquisition or Disposition of Assets.
On April 2, 1996, Aetna Life and Casualty Company (the "company")
completed the previously announced sale of its property-casualty
operations to Travelers/Aetna Property Casualty Corp. (Travelers)
(a company newly formed by The Travelers Insurance Group Inc.) for
total consideration of approximately $4.1 billion in cash. The
purchase price was determined through arms-length negotiations
between the parties.
Item 7(b). Pro Forma Financial Information.
The following unaudited pro forma condensed consolidated statement
of income of Aetna Life and Casualty Company for the year ended
December 31, 1995, presents results for the company as if its sale
of The Aetna Casualty and Surety Company and The Standard Fire
Insurance Company and their subsidiaries (the "Companies") to
Travelers had occurred as of January 1, 1995. The accompanying
unaudited pro forma condensed consolidated balance sheet as of
December 31, 1995 gives effect to the sale as if it had occurred
as of December 31, 1995. The unaudited pro forma data does not
purport to represent what the company's financial position or
results of operations actually would have been had the sale in
fact occurred on the dates indicated, or to project the company's
financial position or results of operations for any future date or
period. The pro forma adjustments are based on available
information and certain assumptions that the company currently
believes are reasonable in the circumstances. Further, the pro
forma adjustments related to the pro forma condensed consolidated
statement of income do not give effect to any nonrecurring/unusual
restructuring charges resulting from the sale. The unaudited pro
forma condensed consolidated financial information should be read
in conjunction with the accompanying notes thereto, and the
separate historical financial statements of the company as of and
for the year ended December 31, 1995 which are contained in the
company's annual report on Form 10-K for the fiscal year ended
December 31, 1995.
The pro forma adjustments and pro forma amounts are provided for
informational purposes only, and the company's financial
statements will reflect the effects of the sale from April 2,
1996, the date of such sale.
Item 7(c). Exhibits.
Stock Purchase Agreement dated as of November 28, 1995 between
The Travelers Insurance Group Inc. and Aetna Life and Casualty
Company relating to the purchase and sale of 100% of the Common
Stock of The Aetna Casualty and Surety Company and The Standard
Fire Insurance Company, incorporated herein by reference to the
company's 1995 Form 10-K filed on February 26, 1996.
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Aetna Life and Casualty Company
Unaudited Pro Forma Condensed Consolidated Statement Of Income
For the Year Ended December 31, 1995
(in millions, except share and per share data)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments As Adjusted
__________ ___________ ___________
<S> <C> <C> <C>
Revenue:
Premiums $ 7,431.4 $ - $ 7,431.4
Net investment income, including
net realized capital gains 3,622.3 214.1 (a) 3,836.4
Fees and other income 1,924.3 - 1,924.3
_____________________________________________
Total revenue 12,978.0 214.1 13,192.1
_______________________________________________________________________________________________
Benefits and Expenses:
Current and future benefits 9,027.2 - 9,027.2
Operating expenses 3,087.5 17.0 (b) 3,104.5
Amortization of deferred policy
acquisition costs 137.1 - 137.1
Restructuring costs - - (c) -
_____________________________________________
Total benefits and expenses 12,251.8 17.0 12,268.8
_______________________________________________________________________________________________
Income from continuing operations
before income taxes (benefits) 726.2 197.1 923.3
Income taxes (benefits) 252.3 (5.9)(b) 321.3
74.9 (a)
_____________________________________________
Income from continuing operations 473.9 128.1 602.0
Loss from Discontinued Operations, net of tax (222.2) 222.2 (d) -
_____________________________________________
Net Income $ 251.7 $ 350.3 $ 602.0
_______________________________________________________________________________________________
_______________________________________________________________________________________________
Results Per Common Share:
Income from continuing operations $ 4.16 $ 5.28
Loss from Discontinued Operations, net of tax (1.95) -
__________ __________
Net Income $ 2.21 $ 5.28
____________________________________________________________ __________
____________________________________________________________ __________
Weighted average common shares outstanding 113,897,633 113,897,633
____________________________________________________________ ___________
</TABLE>
See Notes to Unaudited Pro Forma Condensed Consolidated Statement of Income.
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Aetna Life and Casualty Company
Notes To Unaudited Pro Forma
Condensed Consolidated Statement Of Income
a. Pro forma adjustment to reflect a full year of interest
income at 5.49% (1995 average 3 month Treasury bill
rate), and related income taxes, on net sale proceeds
(after giving effect to the payment of transaction
costs and payments of liabilities associated with the
sale) of approximately $3.9 billion.
b. Pro forma adjustment to reflect a full year of interest
expense (an additional 11.2 months) at 6.01% (1995
average commercial paper rate), and related income tax
benefits, on the capital contribution of $303 million
which was actually contributed on December 6, 1995.
c. No adjustment has been made to give effect to the
charge related to CityPlace (see adjustment C. to the
Condensed Consolidated Balance Sheet) and any other
nonrecurring/unusual restructuring charges resulting
from the sale of the Companies to Travelers. Such
restructuring charges will be recorded by the company
in the second quarter of 1996.
d. Pro forma adjustment to eliminate the historical
earnings of the property-casualty operations.
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Aetna Life and Casualty Company
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As Of December 31, 1995
(in millions)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments As Adjusted
__________ ___________ ___________
<S> <C> <C> <C>
Assets:
Investments:
Marketable securities $ 33,127.8 $ - $ 33,127.8
Other investments 10,922.5 - 10,922.5
_______________________________________________
Total investments 44,050.3 - 44,050.3
_____________________________________________________________________________________________________
Cash and cash equivalents 1,712.7 4,079.0 (A) 5,791.7
Deferred federal and foreign income taxes 271.5 64.0 (B) 437.8
102.3 (C)
Separate Accounts assets 29,699.7 - 29,699.7
Net assets of Discontinued Operations 3,932.8 (3,932.8)(A) -
Other assets 4,656.7 - 4,656.7
_______________________________________________
Total assets $ 84,323.7 $ 312.5 $ 84,636.2
_____________________________________________________________________________________________________
_____________________________________________________________________________________________________
Liabilities:
Future policy benefits $ 18,372.9 $ - $ 18,372.9
Other policy liabilities 1,705.5 - 1,705.5
Policyholders' funds left with the company 22,898.7 - 22,898.7
_______________________________________________
Total insurance liabilities 42,977.1 - 42,977.1
Debt 1,378.7 - 1,378.7
Accounts payable and other liabilities 2,782.2 211.8 (B) 3,286.3
292.3 (C)
Separate Accounts liabilities 29,637.9 - 29,637.9
_______________________________________________
Total liabilities 76,775.9 504.1 77,280.0
_____________________________________________________________________________________________________
Minority interest in preferred securities
_
of subsidiary 275.0 - 275.0
_____________________________________________________________________________________________________
Shareholders' Equity:
Common Capital Stock 1,448.2 - 1,448.2
Net unrealized capital gains (losses) 641.1 (393.1)(A) 248.0
Retained earnings 5,195.6 146.2 (A) 5,397.1
(147.8)(B)
(190.0)(C)
393.1 (A)
Treasury stock, at cost (12.1) - (12.1)
_______________________________________________
Total shareholders' equity 7,272.8 (191.6) 7,081.2
_____________________________________________________________________________________________________
Total liabilities, minority interest and
shareholders' equity $ 84,323.7 $ 312.5 $ 84,636.2
______________________________________________________________________________________________________
______________________________________________________________________________________________________
</TABLE>
See Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet.
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Aetna Life and Casualty Company
Notes To Unaudited Pro Forma
Condensed Consolidated Balance Sheet
A. Pro forma adjustments to reflect the sale and resulting
excess of proceeds over net assets of the Companies and the
realization of the net unrealized capital gain as though the
sale had occurred on December 31, 1995 (based on the assumed
selling price at that date).:
<TABLE>
(in millions)
____________________________________________________________________
<S> <C>
Proceeds from the sale of the
Companies $ 4,079.0
Net assets of the Companies (3,932.8)
_________
Excess of proceeds over net assets of the Companies $ 146.2
_________
_________
Realization of net unrealized capital gain $ 393.1
_________
_________
</TABLE>
B. Pro forma adjustment to reflect transaction costs and certain
employee benefit and similar liabilities, and the related
deferred tax asset, of the Companies which are being
retained by Aetna Life and Casualty Company.
<TABLE>
(in millions)
____________________________________________________________________
<S> <C>
Establishment of certain liabilities $ 211.8
Less: related tax benefits (64.0)
_________
$ 147.8
_________
_________
</TABLE>
C. Pro forma adjustment to reflect the restructuring charge, and the
related deferred tax asset, associated with the CityPlace office
facility which was leased to Travelers in conjunction with the
sale.
<TABLE>
(in millions)
____________________________________________________________________
<S> <C>
Establishment of restructuring charge $ 292.3
Less: related tax benefits (102.3)
_________
$ 190.0
_________
_________
</TABLE>
The company anticipates taking other restructuring charges, however no
adjustment has been made to give effect to such charges as they can not
be quantified at this time.
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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 thereunto duly
authorized.
Aetna Life and Casualty Company
_______________________________
(Registrant)
Date April 15, 1996 By /s/ Robert J. Price
____________________________
(Signature)
Robert J. Price
Vice President and
Corporate Controller
(Chief Accounting Officer)
