General (Tables)

9 Months Ended

Sep. 30, 2013

Schedule of customers generating in excess of ten percent of net revenues for respective segment

In addition to the Maricopa Contract previously discussed, the following customers generated in excess of ten percent of net revenues for the respective segment for the nine months ended September 30, 2012 and 2013 (in thousands):

Segment	Term Date	2012		2013

Commercial
Customer A	Mid-2014(1)	$	144,499	$	156,269
Customer B	December 31, 2019		101,249		106,433
Customer C	December 31, 2012 to December 14, 2013(2)(3)		89,592		58,246
Public Sector
Customer D	June 30, 2014(4)		175,440		209,266
Radiology Benefits Management
Customer E	December 31, 2015		83,158		96,402
Customer F	June 30, 2014		44,959		43,490
Customer G	July 31, 2015		42,458		47,161
Customer H	January 31, 2014		27,824		34,338
Pharmacy Solutions
Customer I	November 30, 2013 to December 31, 2013(2)		98,128		99,599
Customer J	December 31, 2013(5)		45,018		43,315	*
Customer K	December 31, 2013(5)		53,640		68,166
Customer L	September 30, 2013(6)		53,259		48,527

*: Revenue amount did not exceed ten percent of net revenues for the respective segment for the period presented. Amount is shown for comparative purposes only.
(1): The customer has informed the Company that, after a competitive evaluation process, it has decided not to renew its contract after the contract expires on December 31, 2013. The Company anticipates the contract will extend through mid-2014 to allow for transition to new vendor.
(2): The customer has more than one contract. The individual contracts are scheduled to terminate at various points during the time period indicated above.

(3): Revenues for the nine months ended September 30, 2012 of $38.0 million relate to a contract that terminated as of December 31, 2012. The customer has informed the Company that is has decided not to renew the remaining contract after the contract expires on December 14, 2013.
(4): Contract has options for the customer to extend the term for two additional one-year periods.
(5): The Company has received notification that the customer will not renew its contracts for specialty pharmacy and related services. The Company has multiple contracts that are currently scheduled to terminate on December 31, 2013.
(6): This customer represents a subcontract with a Public Sector customer and is eliminated in consolidation.

Schedule of fair value of financial assets and liabilities

In accordance with the fair value hierarchy described above, the following table shows the fair value of the Company's financial assets and liabilities that are required to be measured at fair value as of December 31, 2012 and September 30, 2013 (in thousands):

	December 31, 2012

	Level 1		Level 2		Level 3		Total
Cash and cash equivalents(1)	$	—	$	102,137	$	—	$	102,137
Restricted cash(2)		—		82,839		—		82,839
Investments:
U.S. government and agency securities		1,065		—		—		1,065
Obligations of government-sponsored enterprises(3)		—		6,128		—		6,128
Corporate debt securities		—		214,547		—		214,547
Taxable municipal bonds		—		11,800		—		11,800
Certificates of deposit		—		150		—		150

December 31, 2012	$	1,065	$	417,601	$	—	$	418,666

	September 30, 2013
`
	Level 1		Level 2		Level 3		Total
Cash and cash equivalents(4)	$	—	$	75,861	$	—	$	75,861
Restricted cash(5)		—		117,611		—		117,611
Investments:
U.S. government and agency securities		1,130		—		—		1,130
Obligations of government-sponsored enterprises(3)		—		8,410		—		8,410
Corporate debt securities		—		218,288		—		218,288
Taxable municipal bonds		—		600		—		600
Certificates of deposit		—		150		—		150

September 30, 2013	$	1,130	$	420,920	$	—	$	422,050

(1): Excludes $87.3 million of cash held in bank accounts by the Company.
(2): Excludes $143.7 million of restricted cash held in bank accounts by the Company.
(3): Includes investments in notes issued by the Federal Home Loan Bank.
(4): Excludes $205.9 million of cash held in bank accounts by the Company.

(5): Excludes $91.0 million of restricted cash held in bank accounts by the Company.

Summary of short-term and long-term "available-for-sale" investments

The following is a summary of short-term and long-term investments at December 31, 2012 and September 30, 2013 (in thousands):

	December 31, 2012

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. government and agency securities	$	1,065	$	—	$	—		$	1,065
Obligations of government-sponsored enterprises(1)		6,126		4		(2	)		6,128
Corporate debt securities		214,603		66		(122	)		214,547
Taxable municipal bonds		11,805		—		(5	)		11,800
Certificates of deposit		150		—		—			150

Total investments at December 31, 2012	$	233,749	$	70	$	(129	)	$	233,690

	September 30, 2013

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. government and agency securities	$	1,130	$	—	$	—		$	1,130
Obligations of government-sponsored enterprises(1)		8,408		3		(1	)		8,410
Corporate debt securities		218,411		28		(151	)		218,288
Taxable municipal bonds		600		—		—			600
Certificates of deposit		150		—		—			150

Total investments at September 30, 2013	$	228,699	$	31	$	(152	)	$	228,578

(1): Includes investments in notes issued by the Federal Home Loan Bank.

Summary of maturity dates of investments

The maturity dates of the Company's investments as of September 30, 2013 are summarized below (in thousands):

	Amortized Cost		Estimated Fair Value

2013	$	99,253	$	99,211
2014		121,593		121,522
2015		7,853		7,845

Total investments at September 30, 2013	$	228,699	$	228,578

Schedule of stock option activity

Summarized information related to the Company's stock options for the nine months ended September 30, 2013 is as follows:

			Weighted Average Exercise Price

Outstanding, beginning of period	4,268,240		$	44.35
Granted	981,133			52.65
Forfeited	(101,476	)		49.02
Exercised	(562,554	)		43.22

Outstanding, end of period	4,585,343		$	46.16

Vested and expected to vest at end of period	4,538,122		$	46.11

Exercisable, end of period	2,519,497		$	42.84

Schedule of nonvested restricted stock award activity

Summarized information related to the Company's nonvested restricted stock awards for the nine months ended September 30, 2013 is as follows:

			Weighted Average Grant Date Fair Value

Outstanding, beginning of period	23,672		$	42.25
Awarded	16,569			52.82
Vested	(23,672	)		42.25
Forfeited	—			—

Outstanding, ending of period	16,569		$	52.82

Schedule of nonvested restricted stock units

Summarized information related to the Company's nonvested restricted stock units for the nine months ended September 30, 2013 is as follows:

			Weighted Average Grant Date Fair Value

Outstanding, beginning of period	202,690		$	47.38
Awarded	98,580			52.62
Vested	(95,138	)		46.72
Forfeited	(5,935	)		49.39

Outstanding, ending of period	200,197		$	50.21

- Definition

Tabular disclosure of assets, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, by class that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).

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