Segment Information

6 Months Ended

Jun. 30, 2014

Segment Reporting Information, Additional Information [Abstract]

Segment Information

SEGMENT INFORMATION

Our reportable segments are comprised of Western Region Operations and Government Contracts. Our Western Region Operations reportable segment includes the operations of our commercial, Medicare, Medicaid and dual eligibles health plans, our health and life insurance companies, our pharmaceutical services subsidiaries and certain operations of our behavioral health subsidiaries. These operations are conducted primarily in California, Arizona, Oregon and Washington. Our Government Contracts reportable segment includes government-sponsored managed care and administrative services contracts through the TRICARE program, the Department of Defense Military and Family Life Counseling ("MFLC") program and certain other health care-related government contracts.

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 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 the reportable segments are the same as those described in the summary of significant accounting policies (see Note 2), 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 six months ended June 30, 2014 and 2013 is as follows:

	Western Region Operations		Government Contracts		Corporate/Other/ Eliminations			Total
	(Dollars in millions)
Three months ended June 30, 2014
Revenues from external sources	$	3,267.3	$	154.1	$	—		$	3,421.4
Intersegment revenues	3.1		—		(3.1		)	—
Segment pretax income (loss)	80.7		21.4		(3.3		)	98.8
Three months ended June 30, 2013
Revenues from external sources	$	2,598.5	$	139.9	$	—		$	2,738.4
Intersegment revenues	2.8		—		(2.8		)	—
Segment pretax income (loss)	46.8		18.1		(12.9		)	52.0
Six months ended June 30, 2014
Revenues from external sources	$	6,162.1	$	298.2	$	—		$	6,460.3
Intersegment revenues	6.1		—		(6.1		)	—
Segment pretax income (loss)	133.7		34.5		(7.4		)	160.8
Six months ended June 30, 2013
Revenues from external sources	$	5,261.0	$	274.5	$	—		$	5,535.5
Intersegment revenues	5.7		—		(5.7		)	—
Segment pretax income (loss)	119.1		27.1		(12.9		)	133.3

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

	Three months ended June 30,				Six months ended June 30,
	2014		2013		2014		2013
	(Dollars in millions)
Commercial premium revenue	$	1,377.5	$	1,298.6	$	2,641.6	$	2,624.0
Medicare premium revenue	757.2		688.6		1,512.4		1,395.0
Medicaid premium revenue	1,121.9		591.7		1,983.9		1,191.9
Dual Eligibles premium revenue	5.3		—		5.3		—
Total health plan services premiums	$	3,261.9	$	2,578.9	$	6,143.2	$	5,210.9