Segment Information

9 Months Ended

Sep. 30, 2013

Segment Reporting Information, Additional Information [Abstract]

Segment Information

SEGMENT INFORMATION

We operate within three reportable segments, Western Region Operations, Government Contracts and Divested Operations and Services. Our Western Region Operations reportable segment includes the operations of our commercial, Medicare and Medicaid health plans, our health and life insurance companies, and our behavioral health and pharmaceutical services subsidiaries. These operations are conducted primarily in California, Arizona, Oregon and Washington. As a result of the classification of our Medicare PDP business as discontinued operations, our Western Region Operations reportable segment excludes the operating results of our Medicare PDP business for the three and nine months ended September 30, 2012. Our Government Contracts reportable segment includes government-sponsored managed care and administrative services contracts through the TRICARE program, the Department of Defense sponsored Military and Family Life Counseling, formerly Military and Family Life Consultant, program, and certain other health care-related government contracts. Our Divested Operations and Services reportable segment includes the operations of our businesses that provided administrative services to United in connection with the Northeast Sale and transition-related revenues and expenses related to the Medicare PDP business that was sold on April 1, 2012. As of December 31, 2012, we had substantially completed the administration and run-out of our divested businesses.

The financial results of our reportable segments are reviewed on a monthly basis by our chief operating decision maker ("CODM"). We continuously monitor our reportable segments to ensure that they reflect how our CODM manages our company.

We evaluate performance and allocate resources based on segment pretax income. Our assets are managed centrally and viewed by our CODM on a consolidated basis; therefore, they are not allocated to our segments and our segments are not evaluated for performance based on assets. The accounting policies of our reportable segments are the same as those described in Note 2 to the consolidated financial statements included in our Form 10-K, except that intersegment transactions are not eliminated.

We also have a Corporate/Other segment that is not a business operating segment. It is added to our reportable segments to provide a reconciliation to our consolidated results. The Corporate/Other segment includes costs that are excluded from the calculation of segment pretax income because they are not managed within the segments and are not directly identified with a particular operating segment. Accordingly, these costs are not included in the performance evaluation of our reportable segments by our CODM. In addition, certain charges, including but not limited to those related to our continuing efforts to address scale issues, as well as asset impairments, are reported as part of Corporate/Other.

Our segment information for the three and nine months ended September 30, 2013 and 2012 is as follows:

	Western Region Operations		Government Contracts		Divested Operationsand Services			Corporate/Other/ Eliminations			Total
	(Dollars in millions)
Three months ended September 30, 2013
Revenues from external sources	$	2,625.7	$	149.3	$	—		$	—		$	2,775.0
Intersegment revenues	2.7		—		—			(2.7		)	—
Segment pretax income (loss)	85.2		23.5		—			(0.1		)	108.6
Three months ended September 30, 2012
Revenues from external sources	$	2,596.9	$	169.8	$	12.9		$	—		$	2,779.6
Intersegment revenues	2.7		—		—			(2.7		)	—
Segment pretax income (loss)	20.2		21.1		(4.7		)	(7.2		)	29.4
Nine months ended September 30, 2013
Revenues from external sources	$	7,886.7	$	423.8	$	—		$	—		$	8,310.5
Intersegment revenues	8.4		—		—			(8.4		)	—
Segment pretax income (loss)	204.3		50.6		—			(13.0		)	241.9
Nine months ended September 30, 2012
Revenues from external sources	$	7,898.2	$	527.4	$	25.7		$	—		$	8,451.3
Intersegment revenues	8.3		—		—			(8.3		)	—
Segment pretax income (loss)	12.6		66.6		(34.4		)	(21.6		)	23.2

Our health plan services premium revenue by line of business is as follows:

	Three months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012
	(Dollars in millions)
Commercial premium revenue	$	1,279.8	$	1,420.4	$	3,903.8	$	4,310.0
Medicare premium revenue	685.4		682.9		2,080.3		2,089.4
Medicaid premium revenue	641.6		475.4		1,833.6		1,419.2
Total health plan services premiums	$	2,606.8	$	2,578.7	$	7,817.7	$	7,818.6