Segment Information

9 Months Ended

Sep. 30, 2015

Segment Information [Abstract]

Segment Information [Text Block]

Note 16 ― Segment Information

The financial results of the Company's businesses are reported in the following segments:

Global Health Care aggregates the Commercial and Government operating segments due to their similar economic characteristics, products and services and regulatory environment:

• The Commercial operating segment encompasses both the U.S. commercial and certain international health care businesses serving employers and their employees, other groups, and individuals. Products and services include medical, dental, behavioral health, vision, and prescription drug benefit plans, health advocacy programs and other products and services to insured and self-insured customers.

• The Government operating segment offers Medicare Advantage and Medicare Part D plans to seniors and Medicaid plans.

Global Supplemental Benefits includes supplemental health, life and accident insurance products offered in selected international markets and in the U.S.

Group Disability and Life provides group long-term and short-term disability, group life, accident and specialty insurance products and related services.

Other Operations consist of:

• corporate-owned life insurance (“COLI”);
• run-off reinsurance business that is predominantly comprised of GMDB and GMIB business effectively exited through reinsurance with Berkshire in 2013;

• deferred gains recognized from the 1998 sale of the individual life insurance and annuity business and the 2004 sale of the retirement benefits business; and
• run-off settlement annuity business.

Corporate reflects amounts not allocated to operating segments, such as net interest expense (defined as interest on corporate debt less net investment income on investments not supporting segment operations), interest on uncertain tax positions, certain litigation matters, intersegment eliminations, compensation cost for stock options, expense associated with frozen pension plans andcertain costs for corporate projects, including overhead.

Beginning on January 1, 2015, the Company measures the financial results of its segments using “adjusted income from operations”, defined as shareholders' net income (loss) excluding after-tax realized investment gains and losses, amortization of other acquired intangible assets and special items, if any, that neither relate to the ordinary course of our business nor reflect our underlying business performance.The Company previously reported “segment earnings” as its measure of segment profitability, defined as shareholders' net income excluding realized investment results. Prior period segment information has been restated to reflect this new performance metric. The Company changed toadjusted income (loss) from operations as its principal measure of segment performance because we believe it better presents the underlying results of operations of our businesses and permits analysis of trends in underlying revenue, expenses and profitability. Amortization of other intangible assets relates to our acquisition activities, such asHealthSpring, and includes amortization of internal-use software acquired through acquisitions. The amortization associated with these transactions is excluded from adjusted income from operations because it does not relate to the core performance of our business operations. We exclude special items from adjusted income from operations because management does not believe they are representative of our underlying results of operations.

For the three months and nine months ended September 30, 2015, we reported a special item charge consisting of $##D<BFITMergerCostsQTR> million of pre-tax costs ($##D<AFITMergerCostsYTD> million after-tax) related to our proposed merger with Anthem. See Note 3 to the Consolidated Financial Statements for additional details. For the nine months ended September 30, 2015, we also reported a special item charge consisting of a $100 million pre-tax loss ($65 million after-tax) on the early extinguishment of debt. See Note 13 to the Consolidated Financial Statements for additional details. There were no special items for the three months and nine months endedSeptember 30, 2014.

Summarized segment financial information was as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions)	2015		2014		2015		2014
Premiums, Fees and other revenues and Mail order pharmacy revenues
Global Health Care	$	7,323	$	6,757	$	22,110	$	20,029
Global Supplemental Benefits		767		747		2,266		2,166
Group Disability and Life		980		910		2,934		2,716
Other Operations		28		35		90		95
Corporate		(4)		(7)		(14)		(13)
Total	$	9,094	$	8,442	$	27,386	$	24,993
Shareholders' net income
Adjusted income from operations:
Global Health Care	$	482	$	460	$	1,454	$	1,355
Global Supplemental Benefits		62		86		208		207
Group Disability and Life		84		55		241		232
Other Operations		17		19		55		49
Segment results		645		620		1,958		1,843
Corporate		(52)		(72)		(188)		(203)
Realized investment gains, net of taxes		7		15		68		85
Amortization of other acquired intangible assets, net of taxes		(24)		(29)		(76)		(90)
Special Items, net of taxes (see above discussion):
Debt extinguishment costs		-		-		(65)		-
Merger-related transaction costs		(29)		-		(29)		-
Total special items		(29)		-		(94)		-
Shareholders' net income	$	547	$	534	$	1,668	$	1,635

The Company had net receivables from the Centers for Medicare and Medicaid Services (“CMS”) of $1.4 billion as of September 30, 2015and $0.8 billion as of December 31, 2014. These amounts were included in the Consolidated Balance Sheet in premiums, accounts and notes receivable and reinsurance recoverables. Receivables from CMS included $0.4 billion and $0.3 billion related to government risk mitigation programs in our Commercial business at September 30, 2015 and December 31, 2014. Premiums from CMS were 21% of consolidated revenues for the nine months ended September 30, 2015and 2014.