Date of Report (Date of earliest event reported): | January 31, 2017 |
Pennsylvania | 1-16095 | 23-2229683 |
(State or other jurisdiction of | (Commission | (IRS Employer |
incorporation) | File Number) | Identification No.) |
151 Farmington Avenue, Hartford, CT | 06156 |
(Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: | (860) 273-0123 |
Former name or former address, if changed since last report: | N/A |
99.1 | Press release of Aetna Inc. dated January 31, 2017 announcing results for the fourth quarter and full-year ended December 31, 2016 |
Aetna Inc. |
Date: January 31, 2017 | By: | /s/ Sharon A. Virag |
Name: Sharon A. Virag | ||
Title: Vice President, Controller and Chief Accounting Officer |
Exhibit Number | Description |
Exhibit 99.1 | Press release of Aetna Inc. dated January 31, 2017 announcing results for the fourth quarter and full-year ended December 31, 2016 |
![]() | 151 Farmington Avenue Hartford, Conn. 06156 | Media Contact: T.J. Crawford 212-457-0583 crawfordt2@aetna.com |
Investor Contact: Joe Krocheski 860-273-0896 krocheskij@aetna.com | ||
Fourth-Quarter 2016 | Full-Year 2016 | Full-Year 2017 | |||||||||||||||||||||||
Revenue | Earnings | EPS | Revenue | Earnings | EPS | Projected EPS | |||||||||||||||||||
GAAP | $ | 15,727 | $ | 139 | $ | 0.39 | $ | 63,155 | $ | 2,271 | $ | 6.41 | At least $3.70 | ||||||||||||
Non-GAAP (Operating) | $ | 15,717 | $ | 578 | $ | 1.63 | $ | 63,046 | $ | 2,917 | $ | 8.23 | At least $8.55 | ||||||||||||
Medical Membership totaled 23.1 million at December 31, 2016 | |||||||||||||||||||||||||
Aetna presents both GAAP and Non-GAAP financial measures in this press release to provide investors with additional information. Refer to footnotes (1) through (6) for definitions of Non-GAAP financial measures used in this press release and pages 10 through 13 for reconciliations of the most directly comparable GAAP financial measures to Non-GAAP financial measures. | |||||||||||||||||||||||||
Fourth-Quarter and Full-Year Financial Results at a Glance | |||||||||||||||||||||
Fourth-Quarter | Full-Year | ||||||||||||||||||||
(Millions, except per share results) | 2016 | 2015 | Change | 2016 | 2015 | Change | |||||||||||||||
Total revenue | $ | 15,727 | $ | 15,049 | 5 | % | $ | 63,155 | $ | 60,337 | 5 | % | |||||||||
Operating revenue(3) | 15,717 | 15,090 | 4 | % | 63,046 | 60,292 | 5 | % | |||||||||||||
Net income(1) | 139 | 321 | (57 | )% | 2,271 | 2,390 | (5 | )% | |||||||||||||
Operating earnings(2) | 578 | 482 | 20 | % | 2,917 | 2,717 | 7 | % | |||||||||||||
Per share results: | |||||||||||||||||||||
Net income(1) | $ | 0.39 | $ | 0.91 | (57 | )% | $ | 6.41 | $ | 6.78 | (5 | )% | |||||||||
Operating earnings(2) | 1.63 | 1.37 | 19 | % | 8.23 | 7.71 | 7 | % | |||||||||||||
Weighted average common shares - diluted | 354.9 | 352.9 | 354.3 | 352.6 | |||||||||||||||||
• | Net income(1) was $139 million for fourth-quarter 2016 compared with $321 million for fourth-quarter 2015. Full-year 2016 net income was $2.3 billion compared with $2.4 billion for full-year 2015. The decrease in net income during fourth-quarter 2016 was primarily due to an increase in restructuring costs, which include a $215 million ($330 million pre-tax) expense recorded during fourth-quarter 2016 related to our previously announced voluntary early retirement program, partially offset by the increase in operating earnings described below. The decrease in net income during full-year 2016 was primarily due to the increase in restructuring costs described above, higher transaction and integration-related costs and the favorable impact of litigation-related proceeds recorded during 2015. The decrease was partially offset by the increase in operating earnings described below, net realized capital gains during 2016 compared with net realized capital losses during 2015 and the favorable impact of the 2016 reduction of Aetna's reserve for anticipated future losses on discontinued products. |
• | Operating earnings(2) were $578 million for fourth-quarter 2016 compared with $482 million for fourth-quarter 2015. Full-year 2016 operating earnings were $2.9 billion compared with $2.7 billion for full-year 2015. The increase in operating earnings during fourth-quarter 2016 was primarily due to higher underwriting margins and higher fees and other revenue in Aetna's Health Care segment. The increase for full-year 2016 was primarily due to higher fees and other revenue in Aetna's Health Care segment. |
• | Total revenue and operating revenue(3) were each $15.7 billion for fourth-quarter 2016 and $15.0 billion and $15.1 billion for fourth-quarter 2015, respectively. Full-year 2016 total revenue and operating revenue were $63.2 billion and $63.0 billion, respectively, compared with $60.3 billion each for full-year 2015. The increase in total revenue and operating revenue during fourth-quarter and full-year 2016 was primarily due to higher premiums in Aetna's Health Care segment. |
• | Total company expense ratio was 22.9 percent and 21.3 percent for the fourth quarters of 2016 and 2015, respectively. The increase for fourth-quarter 2016 was primarily due to higher restructuring costs, which outpaced the increase in total revenue described above. Aetna's total company expense ratio was 19.1 percent and 19.3 percent for full-years 2016 and 2015, respectively. The decrease for full-year 2016 was primarily due to the |
• | Adjusted operating expense ratio(5) was 19.8 percent and 20.5 percent for the fourth quarters of 2016 and 2015, respectively. Aetna's adjusted operating expense ratio was 18.1 percent and 18.9 percent for full-years 2016 and 2015, respectively. The improvement for both periods was primarily due to the increase in total revenue and operating revenue described above and the execution of Aetna's expense management initiatives. |
• | After-tax net income margin was 0.9 percent and 2.1 percent for the fourth quarters of 2016 and 2015, respectively. For full-years 2016 and 2015, the after-tax net income margin was 3.6 percent and 4.0 percent, respectively. The decrease in the after-tax net income margin for fourth-quarter and full-year 2016 was primarily due to an increase in restructuring costs and transaction and integration-related costs. |
• | Pretax operating margin(6) was 6.4 percent and 6.0 percent for the fourth quarters of 2016 and 2015, respectively. For full-years 2016 and 2015, the pre-tax operating margin was 8.3 percent and 8.4 percent, respectively. |
• | Total debt to consolidated capitalization ratio(7) was 53.6 percent at December 31, 2016 compared with 32.6 percent at December 31, 2015. The total debt to consolidated capitalization ratio at December 31, 2016 reflects the issuance during 2016 of $13 billion of senior notes to partially fund the proposed acquisition (the "Humana Acquisition") of Humana Inc. ("Humana"). |
• | Effective tax rate was 53.5 percent for fourth-quarter 2016 compared with 45.0 percent for fourth-quarter 2015. The increase in Aetna's effective tax rate for fourth-quarter 2016 was primarily due to the decrease in pretax earnings compared with fourth-quarter 2015, while the non-deductible health insurer fee remained relatively flat. The increase in the effective tax rate was partially offset by the favorable impact of the adoption of a new accounting standard in second-quarter 2016 that requires excess tax benefits for employee share based compensation to be recorded in earnings. The effective tax rate was 43.5 percent for both full-years 2016 and 2015. |
• | Net income(1) was $215 million for fourth-quarter 2016 compared with $361 million for fourth-quarter 2015. The decrease in net income primarily reflects an increase in restructuring costs partially offset by an increase in operating earnings described below. |
• | Operating earnings(2) were $582 million for fourth-quarter 2016 compared with $493 million for fourth-quarter 2015. Operating earnings increased primarily due to higher underwriting margins in Aetna's Government business and higher fees and other revenue primarily due to higher average fee yields. The increase was partially offset by lower underwriting margins in Aetna's Commercial business, primarily in Aetna's Individual Commercial products. |
• | Total revenue and operating revenue(3) were each $15.0 billion for fourth-quarter 2016 and $14.4 billion for fourth-quarter 2015. The increase in total revenue and operating revenue was primarily due to higher premium yields and membership growth in Aetna's Government business, partially offset by membership losses in Aetna's Commercial Insured products. |
• | Medical membership remained flat at December 31, 2016 compared with September 30, 2016, primarily reflecting declines in Aetna's Commercial Insured products, offset by growth in Aetna's Commercial ASC and Government Insured products. |
• | Medical benefit ratios ("MBRs") for fourth-quarter and full-year 2016 and 2015 were as follows: |
Fourth-Quarter | Full-Year | ||||||||||||||||||
2016 | 2015 | Change | 2016 | 2015 | Change | ||||||||||||||
Commercial | 83.0 | % | 81.3 | % | 1.7 | pts. | 82.0 | % | 80.3 | % | 1.7 | pts. | |||||||
Government | 81.2 | % | 82.6 | % | (1.4 | ) | pts. | 81.5 | % | 81.4 | % | 0.1 | pts. | ||||||
Total Health Care | 82.1 | % | 81.9 | % | 0.2 | pts. | 81.8 | % | 80.8 | % | 1.0 | pts. | |||||||
• | Aetna's fourth-quarter 2016 Commercial MBR increased over fourth-quarter 2015 primarily due to higher medical costs in Aetna's Individual Commercial products. |
• | Aetna's fourth-quarter 2016 Government MBR decreased compared to fourth-quarter 2015 primarily due to higher favorable development of prior-period health care cost estimates in 2016 in Aetna's Medicare products. |
• | In fourth-quarter 2016, Aetna experienced favorable development of prior-period health care cost estimates in its Commercial, Medicaid and Medicare products, primarily attributable to third-quarter 2016 performance. |
• | Prior years' health care costs payable estimates developed favorably by $764 million and $841 million during 2016 and 2015, respectively. This development is reported on a basis consistent with the prior years' development reported in the health care costs payable table in Aetna's annual audited financial statements, and does not directly correspond to an increase in 2016 operating results. |
• | Days claims payable(7) was 54 days at December 31, 2016, a slight decrease compared to December 31, 2015 and a sequential decrease of 3 days compared to September 30, 2016. The sequential decrease was primarily due to decreased claim processing times and the reduction of the 2016 premium deficiency reserve. |
• | Net income(1) was $32 million for fourth-quarter 2016 compared with $18 million for fourth-quarter 2015. Operating earnings(2) were $33 million for fourth-quarter 2016 compared with $22 million for fourth-quarter 2015. Net income and operating earnings increased primarily due to improved underwriting margins in Aetna's long-term care products, partially offset by lower underwriting margins in Aetna's life products. |
• | Total revenue was $620 million for fourth-quarter 2016 compared with $613 million for fourth-quarter 2015. Total revenue increased primarily due to lower net realized capital losses. Operating revenue(3) was $621 million for fourth-quarter 2016 compared with $619 million for fourth-quarter 2015. |
• | Net income(1) was $5 million for fourth-quarter 2016 compared with net loss of $1 million for fourth-quarter 2015. Operating earnings(2) were $5 million for fourth-quarter 2016 compared with $4 million for fourth-quarter 2015. |
• | Total revenue was $64 million and $60 million for the fourth-quarters of 2016 and 2015, respectively. Operating revenue(3) was $64 million and $67 million for the fourth-quarters of 2016 and 2015, respectively. |
Condensed Consolidated Balance Sheets | ||||||||||
(Millions) | At December 31, 2016 | At December 31, 2015 | ||||||||
(Unaudited) | ||||||||||
Assets: | ||||||||||
Cash and short-term investments | $ | 21,042 | $ | 5,539 | ||||||
Accounts receivable, net | 4,580 | 4,187 | ||||||||
Other current assets | 2,871 | 2,999 | ||||||||
Total current assets | 28,493 | 12,725 | ||||||||
Long-term investments | 21,833 | 21,665 | ||||||||
Other long-term assets | 18,864 | 19,119 | ||||||||
Total assets | $ | 69,190 | $ | 53,509 | ||||||
Liabilities and shareholders’ equity: | ||||||||||
Health care costs payable | $ | 6,558 | $ | 6,306 | ||||||
Current portion of long-term debt | 1,634 | — | ||||||||
Other current liabilities | 10,502 | 9,303 | ||||||||
Total current liabilities | 18,694 | 15,609 | ||||||||
Long-term debt, less current portion | 19,027 | 7,785 | ||||||||
Other long-term liabilities | 13,526 | 13,936 | ||||||||
Total Aetna shareholders' equity | 17,881 | 16,114 | ||||||||
Non-controlling interests | 62 | 65 | ||||||||
Total liabilities and equity | $ | 69,190 | $ | 53,509 | ||||||
Consolidated Statements of Income | ||||||||||||||||||
For the Three Months | For the Year | |||||||||||||||||
Ended December 31, | Ended December 31, | |||||||||||||||||
(Millions) | 2016 | 2015 | 2016 | 2015 | ||||||||||||||
(unaudited) | (unaudited) | |||||||||||||||||
Revenue: | ||||||||||||||||||
Health care premiums | $ | 13,493 | $ | 12,907 | $ | 54,116 | $ | 51,618 | ||||||||||
Other premiums | 546 | 543 | 2,182 | 2,171 | ||||||||||||||
Fees and other revenue | 1,465 | 1,417 | 5,861 | 5,696 | ||||||||||||||
Net investment income | 223 | 223 | 910 | 917 | ||||||||||||||
Net realized capital gains (losses) | — | (41 | ) | 86 | (65 | ) | ||||||||||||
Total revenue | 15,727 | 15,049 | 63,155 | 60,337 | ||||||||||||||
Benefits and expenses: | ||||||||||||||||||
Health care costs | 11,083 | 10,566 | 44,255 | 41,712 | ||||||||||||||
Current and future benefits | 512 | 525 | 2,101 | 2,121 | ||||||||||||||
Operating expenses: | ||||||||||||||||||
Selling expenses | 433 | 398 | 1,678 | 1,611 | ||||||||||||||
General and administrative expenses | 3,175 | 2,801 | 10,407 | 10,033 | ||||||||||||||
Total operating expenses | 3,608 | 3,199 | 12,085 | 11,644 | ||||||||||||||
Interest expense | 189 | 111 | 604 | 369 | ||||||||||||||
Amortization of other acquired intangible assets | 60 | 63 | 247 | 255 | ||||||||||||||
Reduction of reserve for anticipated future losses on discontinued products | — | — | (128 | ) | — | |||||||||||||
Total benefits and expenses | 15,452 | 14,464 | 59,164 | 56,101 | ||||||||||||||
Income before income taxes | 275 | 585 | 3,991 | 4,236 | ||||||||||||||
Income tax expense | 147 | 263 | 1,735 | 1,841 | ||||||||||||||
Net income including non-controlling interests | 128 | 322 | 2,256 | 2,395 | ||||||||||||||
Less: Net (loss) income attributable to non-controlling interests | (11 | ) | 1 | (15 | ) | 5 | ||||||||||||
Net income attributable to Aetna | $ | 139 | $ | 321 | $ | 2,271 | $ | 2,390 | ||||||||||
Consolidated Statements of Cash Flows | ||||||||||
The Year Ended | ||||||||||
December 31, | ||||||||||
(Millions) | 2016 | 2015 | ||||||||
(unaudited) | ||||||||||
Cash flows from operating activities: | ||||||||||
Net income including non-controlling interests | $ | 2,256 | $ | 2,395 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||
Net realized capital (gains) losses | (86 | ) | 65 | |||||||
Depreciation and amortization | 681 | 671 | ||||||||
Debt fair value amortization | (30 | ) | (30 | ) | ||||||
Amortization of interest rate hedges | 20 | 6 | ||||||||
Equity in earnings of affiliates, net | (6 | ) | (31 | ) | ||||||
Stock-based compensation expense | 191 | 181 | ||||||||
Reduction of reserve for anticipated future losses on discontinued products | (128 | ) | — | |||||||
Amortization of net investment premium | 79 | 84 | ||||||||
Changes in assets and liabilities: | ||||||||||
Accrued investment income | (4 | ) | (4 | ) | ||||||
Premiums due and other receivables | (153 | ) | (616 | ) | ||||||
Income taxes | 155 | 31 | ||||||||
Other assets and other liabilities | 653 | 644 | ||||||||
Health care and insurance liabilities | 91 | 470 | ||||||||
Net cash provided by operating activities | 3,719 | 3,866 | ||||||||
Cash flows from investing activities: | ||||||||||
Proceeds from sales and maturities of investments | 14,741 | 12,299 | ||||||||
Cost of investments | (14,852 | ) | (12,943 | ) | ||||||
Additions to property, equipment and software | (270 | ) | (363 | ) | ||||||
Cash used for acquisitions, net of cash acquired | — | (20 | ) | |||||||
Net cash used for investing activities | (381 | ) | (1,027 | ) | ||||||
Cash flows from financing activities: | ||||||||||
Issuance of long-term debt | 12,886 | — | ||||||||
Repayment of long-term debt | — | (229 | ) | |||||||
Net repayment of short-term debt | — | (500 | ) | |||||||
Deposits and interest credited to investment contracts net of (withdrawals) | 1 | (35 | ) | |||||||
Common shares issued under benefit plans, net | (139 | ) | (143 | ) | ||||||
Stock-based compensation tax benefits | — | 53 | ||||||||
Settlements from repurchase agreements | — | (202 | ) | |||||||
Common shares repurchased | — | (296 | ) | |||||||
Dividends paid to shareholders | (351 | ) | (349 | ) | ||||||
Net payment on interest rate derivatives | (274 | ) | (25 | ) | ||||||
Contributions (distributions), non-controlling interests | 11 | (9 | ) | |||||||
Net cash provided by (used for) financing activities | 12,134 | (1,735 | ) | |||||||
Net increase in cash and cash equivalents | 15,472 | 1,104 | ||||||||
Cash and cash equivalents, beginning of period | 2,524 | 1,420 | ||||||||
Cash and cash equivalents, end of period | $ | 17,996 | $ | 2,524 |
Reconciliation of the Most Directly Comparable GAAP Measure to Certain Reported Amounts | |||||||||||||||||||||||||||||||||||||||
For the Three Months Ended December 31, 2016 | For the Three Months Ended December 31, 2015 | ||||||||||||||||||||||||||||||||||||||
(millions) | Health Care | Group Insurance | Large Case Pensions | Corporate Financing(8) | Total Company | Health Care | Group Insurance | Large Case Pensions | Corporate Financing(8) | Total Company | |||||||||||||||||||||||||||||
Reconciliation of total revenue to operating revenue | |||||||||||||||||||||||||||||||||||||||
Total revenue (GAAP measure) | $ | 15,043 | $ | 620 | $ | 64 | $ | — | $ | 15,727 | $ | 14,376 | $ | 613 | $ | 60 | $ | — | $ | 15,049 | |||||||||||||||||||
Interest income on proceeds of transaction-related debt | (10 | ) | — | — | — | (10 | ) | — | — | — | — | — | |||||||||||||||||||||||||||
Net realized capital (gains) losses | (1 | ) | 1 | — | — | — | 28 | 6 | 7 | — | 41 | ||||||||||||||||||||||||||||
Operating revenue(3) (excludes net realized capital (gains) losses and other items) | $ | 15,032 | $ | 621 | $ | 64 | $ | — | $ | 15,717 | $ | 14,404 | $ | 619 | $ | 67 | $ | — | $ | 15,090 | |||||||||||||||||||
Reconciliation of net income to operating earnings | |||||||||||||||||||||||||||||||||||||||
Net income (loss)(1) (GAAP measure) | $ | 215 | $ | 32 | $ | 5 | $ | (113 | ) | $ | 139 | $ | 361 | $ | 18 | $ | (1 | ) | $ | (57 | ) | $ | 321 | ||||||||||||||||
Transaction and integration-related costs | 75 | — | — | 109 | 184 | 102 | — | — | 32 | 134 | |||||||||||||||||||||||||||||
Restructuring costs | 404 | — | — | — | 404 | 1 | — | — | — | 1 | |||||||||||||||||||||||||||||
Amortization of other acquired intangible assets | 60 | — | — | — | 60 | 63 | — | — | — | 63 | |||||||||||||||||||||||||||||
Net realized capital (gains) losses | (1 | ) | 1 | — | — | — | 28 | 6 | 7 | — | 41 | ||||||||||||||||||||||||||||
Income tax benefit | (171 | ) | — | — | (38 | ) | (209 | ) | (62 | ) | (2 | ) | (2 | ) | (12 | ) | (78 | ) | |||||||||||||||||||||
Operating earnings (loss)(2) | $ | 582 | $ | 33 | $ | 5 | $ | (42 | ) | $ | 578 | $ | 493 | $ | 22 | $ | 4 | $ | (37 | ) | $ | 482 | |||||||||||||||||
Weighted average common shares - basic | 351.7 | 349.5 | |||||||||||||||||||||||||||||||||||||
Weighted average common shares - diluted | 354.9 | 352.9 | |||||||||||||||||||||||||||||||||||||
Per common share | |||||||||||||||||||||||||||||||||||||||
Net income(1) (GAAP measure) | $ | 0.39 | $ | 0.91 | |||||||||||||||||||||||||||||||||||
Transaction and integration-related costs | 0.52 | 0.38 | |||||||||||||||||||||||||||||||||||||
Restructuring costs | 1.14 | — | |||||||||||||||||||||||||||||||||||||
Amortization of other acquired intangible assets | 0.17 | 0.18 | |||||||||||||||||||||||||||||||||||||
Net realized capital (gains) losses | — | 0.12 | |||||||||||||||||||||||||||||||||||||
Income tax benefit | (0.59 | ) | (0.22 | ) | |||||||||||||||||||||||||||||||||||
Operating earnings(2) | $ | 1.63 | $ | 1.37 |
Reconciliation of the Most Directly Comparable GAAP Measure to Certain Reported Amounts | |||||||||||||||||||||||||||||||||||||||
For the Year Ended December 31, 2016 | For the Year Ended December 31, 2015 | ||||||||||||||||||||||||||||||||||||||
(millions) | Health Care | Group Insurance | Large Case Pensions | Corporate Financing(8) | Total Company | Health Care | Group Insurance | Large Case Pensions | Corporate Financing(8) | Total Company | |||||||||||||||||||||||||||||
Reconciliation of total revenue to operating revenue | |||||||||||||||||||||||||||||||||||||||
Total revenue (GAAP measure) | $ | 60,370 | $ | 2,501 | $ | 284 | $ | — | $ | 63,155 | $ | 57,561 | $ | 2,478 | $ | 298 | $ | — | $ | 60,337 | |||||||||||||||||||
Interest income on proceeds of transaction-related debt | (23 | ) | — | — | — | (23 | ) | — | — | — | — | — | |||||||||||||||||||||||||||
Litigation-related proceeds | — | — | — | — | — | (110 | ) | — | — | — | (110 | ) | |||||||||||||||||||||||||||
Net realized capital (gains) losses | (52 | ) | (24 | ) | (10 | ) | — | (86 | ) | 50 | — | 15 | — | 65 | |||||||||||||||||||||||||
Operating revenue(3) (excludes net realized capital (gains) losses and other items) | $ | 60,295 | $ | 2,477 | $ | 274 | $ | — | $ | 63,046 | $ | 57,501 | $ | 2,478 | $ | 313 | $ | — | $ | 60,292 | |||||||||||||||||||
Reconciliation of net income to operating earnings | |||||||||||||||||||||||||||||||||||||||
Net income (loss)(1) (GAAP measure) | $ | 2,383 | $ | 139 | $ | 104 | $ | (355 | ) | $ | 2,271 | $ | 2,427 | $ | 136 | $ | 8 | $ | (181 | ) | $ | 2,390 | |||||||||||||||||
Transaction and integration-related costs | 230 | — | — | 287 | 517 | 208 | — | — | 50 | 258 | |||||||||||||||||||||||||||||
Restructuring costs | 404 | — | — | — | 404 | 15 | — | — | — | 15 | |||||||||||||||||||||||||||||
Reduction of reserve for anticipated future losses on discontinued products | — | — | (128 | ) | — | (128 | ) | — | — | — | — | — | |||||||||||||||||||||||||||
Litigation-related proceeds | — | — | — | — | — | (110 | ) | — | — | — | (110 | ) | |||||||||||||||||||||||||||
Amortization of other acquired intangible assets | 247 | — | — | — | 247 | 255 | — | — | — | 255 | |||||||||||||||||||||||||||||
Net realized capital (gains) losses | (52 | ) | (24 | ) | (10 | ) | — | (86 | ) | 50 | — | 15 | — | 65 | |||||||||||||||||||||||||
Income tax (benefit) expense | (264 | ) | 9 | 48 | (101 | ) | (308 | ) | (133 | ) | — | (6 | ) | (17 | ) | (156 | ) | ||||||||||||||||||||||
Operating earnings (loss)(2) | $ | 2,948 | $ | 124 | $ | 14 | $ | (169 | ) | $ | 2,917 | $ | 2,712 | $ | 136 | $ | 17 | $ | (148 | ) | $ | 2,717 | |||||||||||||||||
Weighted average common shares - basic | 351.3 | 349.3 | |||||||||||||||||||||||||||||||||||||
Weighted average common shares - diluted | 354.3 | 352.6 | |||||||||||||||||||||||||||||||||||||
Per common share | |||||||||||||||||||||||||||||||||||||||
Net income(1) (GAAP measure) | $ | 6.41 | $ | 6.78 | |||||||||||||||||||||||||||||||||||
Transaction and integration-related costs | 1.46 | 0.73 | |||||||||||||||||||||||||||||||||||||
Restructuring costs | 1.14 | 0.04 | |||||||||||||||||||||||||||||||||||||
Reduction of reserve for anticipated future losses on discontinued products | (0.36 | ) | — | ||||||||||||||||||||||||||||||||||||
Litigation-related proceeds | — | (0.31 | ) | ||||||||||||||||||||||||||||||||||||
Amortization of other acquired intangible assets | 0.70 | 0.72 | |||||||||||||||||||||||||||||||||||||
Net realized capital (gains) losses | (0.25 | ) | 0.19 | ||||||||||||||||||||||||||||||||||||
Income tax benefit | (0.87 | ) | (0.44 | ) | |||||||||||||||||||||||||||||||||||
Operating earnings(2) | $ | 8.23 | $ | 7.71 |
Operating Margins | |||||||||||||||
For the Three Months | For the Year | ||||||||||||||
Ended December 31, | Ended December 31, | ||||||||||||||
(Millions) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Reconciliation of income before income taxes to operating earnings before income taxes, excluding interest expense: | |||||||||||||||
Income before income taxes (GAAP measure) | $ | 275 | $ | 585 | $ | 3,991 | $ | 4,236 | |||||||
Interest expense(9) | 80 | 79 | 317 | 319 | |||||||||||
Transaction and integration-related costs | 184 | 134 | 517 | 258 | |||||||||||
Restructuring costs | 404 | 1 | 404 | 15 | |||||||||||
Reduction of reserve for anticipated future losses on discontinued products | — | — | (128 | ) | — | ||||||||||
Litigation-related proceeds | — | — | — | (110 | ) | ||||||||||
Amortization of other acquired intangible assets | 60 | 63 | 247 | 255 | |||||||||||
Net realized capital (gains) losses | — | 41 | (86 | ) | 65 | ||||||||||
Operating earnings(2) before income taxes, excluding interest expense (A) | $ | 1,003 | $ | 903 | $ | 5,262 | $ | 5,038 | |||||||
Reconciliation of net income to operating earnings excluding interest expense, net of tax: | |||||||||||||||
Net income (1) (GAAP measure) (B) | $ | 139 | $ | 321 | $ | 2,271 | $ | 2,390 | |||||||
Interest expense(9) | 80 | 79 | 317 | 319 | |||||||||||
Transaction and integration-related costs | 184 | 134 | 517 | 258 | |||||||||||
Restructuring costs | 404 | 1 | 404 | 15 | |||||||||||
Reduction of reserve for anticipated future losses on discontinued products | — | — | (128 | ) | — | ||||||||||
Litigation-related proceeds | — | — | — | (110 | ) | ||||||||||
Amortization of other acquired intangible assets | 60 | 63 | 247 | 255 | |||||||||||
Net realized capital (gains) losses | — | 41 | (86 | ) | 65 | ||||||||||
Income tax benefit | (237 | ) | (105 | ) | (419 | ) | (268 | ) | |||||||
Operating earnings(2) excluding interest expense, net of tax | $ | 630 | $ | 534 | $ | 3,123 | $ | 2,924 | |||||||
Reconciliation of total revenue to operating revenue: | |||||||||||||||
Total revenue (GAAP measure) (C) | $ | 15,727 | $ | 15,049 | $ | 63,155 | $ | 60,337 | |||||||
Interest income on proceeds of transaction-related debt | (10 | ) | — | (23 | ) | — | |||||||||
Litigation-related proceeds | — | — | — | (110 | ) | ||||||||||
Net realized capital (gains) losses | — | 41 | (86 | ) | 65 | ||||||||||
Operating revenue(3) (excludes net realized capital (gains) losses and other items) (D) | $ | 15,717 | $ | 15,090 | $ | 63,046 | $ | 60,292 | |||||||
Reconciliation of total operating expenses to adjusted operating expenses: | |||||||||||||||
Total operating expenses (GAAP measure) (E) | $ | 3,608 | $ | 3,199 | $ | 12,085 | $ | 11,644 | |||||||
Transaction and integration-related costs | (85 | ) | (102 | ) | (253 | ) | (208 | ) | |||||||
Restructuring costs | (404 | ) | (1 | ) | (404 | ) | (15 | ) | |||||||
Adjusted operating expenses (F) | $ | 3,119 | $ | 3,096 | $ | 11,428 | $ | 11,421 | |||||||
Net Income and Operating Margins: | |||||||||||||||
After-tax net income margin (B)/(C) (GAAP measure) | 0.9 | % | 2.1 | % | 3.6 | % | 4.0 | % | |||||||
Pretax operating margin(6) (A)/(D) | 6.4 | % | 6.0 | % | 8.3 | % | 8.4 | % | |||||||
Operating Expense Ratios: | |||||||||||||||
Total company expense ratio (E)/(C) (GAAP measure) | 22.9 | % | 21.3 | % | 19.1 | % | 19.3 | % | |||||||
Adjusted operating expense ratio(5) (F)/(D) | 19.8 | % | 20.5 | % | 18.1 | % | 18.9 | % |
Health Care, Group Insurance and Corporate Financing Operating Cash Flow as a Percentage of Net Income and Operating Earnings | ||||||||
For the Year | ||||||||
Ended December 31, | ||||||||
(Millions) | 2016 | 2015 | ||||||
Net cash provided by operating activities (GAAP measure) | $ | 3,719 | $ | 3,866 | ||||
Less: Net cash used for operating activities: Large Case Pensions | (269 | ) | (522 | ) | ||||
Net cash provided by operating activities: Health Care, Group Insurance and Corporate Financing | (A) | 3,988 | 4,388 | |||||
Net income: Health Care, Group Insurance and Corporate Financing(1) (GAAP Measure) | (B) | 2,167 | 2,382 | |||||
Transaction and integration-related costs | 517 | 258 | ||||||
Restructuring costs | 404 | 15 | ||||||
Litigation-related proceeds | — | (110 | ) | |||||
Amortization of other acquired intangible assets | 247 | 255 | ||||||
Net realized capital (gains) losses | (76 | ) | 50 | |||||
Income tax benefit | (356 | ) | (150 | ) | ||||
Operating earnings(2): Health Care, Group Insurance and Corporate Financing | (C) | $ | 2,903 | $ | 2,700 | |||
Operating Cash Flow as a Percentage of Income Ratios: | ||||||||
Operating cash flow as a percentage of net income(1) (GAAP Measure) | (A)/(B) | 184.0 | % | 184.2 | % | |||
Operating cash flow as a percentage of operating earnings(2) | (A)/(C) | 137.4 | % | 162.5 | % |
• | Amortization of other acquired intangible assets; |
• | Net realized capital gains or losses; and |
• | Other items, if any, that neither relate to the ordinary course of Aetna's business nor reflect Aetna's underlying business performance. |
• | Aetna incurred transaction and integration-related costs during the three months and year ended December 31, 2016 and 2015 related to the acquisitions of Coventry Health Care, Inc. (“Coventry”) and bswift LLC ("bswift") and the Humana Acquisition. Transaction costs include advisory, legal and other professional fees which are not deductible for tax purposes and are reflected in Aetna's GAAP Consolidated Statements of Income in general and administrative expenses, as well as the cost of the Bridge Credit Agreement and the Term Loan Agreement (each as defined in note (9)) executed in connection with the Humana Acquisition, which are reflected in Aetna's GAAP Consolidated Statements of Income in interest expense. Transaction costs also include the negative cost of carry associated with the debt financing that Aetna obtained in June 2016 for the Humana Acquisition. Prior to the closing of the Humana Acquisition, the negative cost of carry associated with the June 2016 debt financing is excluded from operating earnings. The components of the negative cost of carry are reflected in Aetna's GAAP Consolidated Statements of Income in interest expense and net investment income. On and after the closing of the Humana Acquisition, the interest expense and net investment income associated with the June 2016 debt financing no longer will be excluded from operating earnings. |
• | Restructuring costs for the three months and year ended December 31, 2016 include costs related to Aetna's voluntary early retirement program, severance and real estate consolidation costs associated with Aetna's expense management and cost control initiatives and an accrual for minimum volume commitments which require Aetna to make payments to suppliers if the level of medical membership subject to the agreements falls below specified levels. Aetna no longer expects to meet these minimum volume commitments as a result of Aetna's previously announced reduced participation on the ACA's individual public health insurance exchanges in 2017. Restructuring costs for the three months and year ended December 31, 2015 include severance costs associated with Aetna's expense management and cost control initiatives. The 2016 and 2015 restructuring costs are reflected in the GAAP Consolidated Statements of Income in general and administrative expenses. |
• | In 1993, Aetna discontinued the sale of fully guaranteed large case pensions products and established a reserve for anticipated future losses on these products, which Aetna reviews quarterly. During the year ended December 31, 2016, Aetna reduced the reserve for anticipated future losses on discontinued products. Aetna believes excluding any changes in the reserve for anticipated future losses on discontinued products from operating earnings provides more useful information as to Aetna's continuing products and is consistent with the treatment of the operating results of these discontinued products, which are credited or charged to the reserve and do not affect Aetna's operating results. |
• | In the year ended December 31, 2015, Aetna received proceeds, net of legal costs, in connection with a litigation settlement. These net proceeds were recorded in fees and other revenue in Aetna's GAAP Consolidated Statements of Income. |
• | Other acquired intangible assets relate to Aetna's acquisition activities and are amortized over their useful lives. However, this amortization does not directly relate to the underwriting or servicing of products for customers and is not directly related to the core performance of Aetna's business operations. |
• | Net realized capital gains and losses arise from various types of transactions, primarily in the course of managing a portfolio of assets that support the payment of liabilities. However, these transactions do not directly relate to the underwriting or servicing of products for customers and are not directly related to the core performance of Aetna's business operations. |
• | The corresponding tax benefit or expense related to the items excluded from operating earnings discussed above. The tax benefit or expense was calculated utilizing the appropriate tax rate for each individual item excluded from operating earnings. |
Reconciliation of Projected 2017 Net Income Per Share to Projected 2017 Operating Earnings Per Share | |||||
Projected net income per share (GAAP measure) | At least | $ | 3.70 | ||
Transaction and integration-related costs (including termination costs) | 5.39 | ||||
Penn Treaty-related guaranty fund assessment | .67 | ||||
Amortization of other acquired intangible assets | .68 | ||||
Income tax benefit | (1.89 | ) | |||
Projected operating earnings per share | At least | $ | 8.55 | ||
Membership | |||||||||||||||||||||||||||
December 31, 2016 | September 30, 2016 | December 31, 2015 | |||||||||||||||||||||||||
(Thousands) | Insured | ASC | Total | Insured | ASC | Total | Insured | ASC | Total | ||||||||||||||||||
Medical Membership: | |||||||||||||||||||||||||||
Commercial | 5,457 | 13,132 | 18,589 | 5,596 | 13,064 | 18,660 | 5,777 | 13,593 | 19,370 | ||||||||||||||||||
Medicare Advantage | 1,362 | — | 1,362 | 1,364 | — | 1,364 | 1,251 | — | 1,251 | ||||||||||||||||||
Medicare Supplement | 685 | — | 685 | 667 | — | 667 | 566 | — | 566 | ||||||||||||||||||
Medicaid | 1,668 | 806 | 2,474 | 1,629 | 801 | 2,430 | 1,529 | 771 | 2,300 | ||||||||||||||||||
Total Medical Membership | 9,172 | 13,938 | 23,110 | 9,256 | 13,865 | 23,121 | 9,123 | 14,364 | 23,487 | ||||||||||||||||||
Dental Membership: | |||||||||||||||||||||||||||
Total Dental Membership | 6,086 | 8,386 | 14,472 | 5,940 | 8,393 | 14,333 | 6,243 | 8,391 | 14,634 | ||||||||||||||||||
Pharmacy Benefit Management Services Membership: | |||||||||||||||||||||||||||
Commercial | 9,400 | 9,610 | 10,237 | ||||||||||||||||||||||||
Medicare Prescription Drug Plan (stand-alone) | 2,067 | 2,031 | 1,466 | ||||||||||||||||||||||||
Medicare Advantage Prescription Drug Plan | 953 | 952 | 863 | ||||||||||||||||||||||||
Medicaid | 2,783 | 2,719 | 2,587 | ||||||||||||||||||||||||
Total Pharmacy Benefit Management Services Membership | 15,203 | 15,312 | 15,153 | ||||||||||||||||||||||||
Health Care MBR Ratios | |||||||||||||||
For the Three Months | For the Year | ||||||||||||||
Ended December 31, | Ended December 31, | ||||||||||||||
(millions) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Premiums (GAAP measure) | |||||||||||||||
Commercial | $ | 6,949 | $ | 7,100 | $ | 27,916 | $ | 28,709 | |||||||
Government | 6,544 | 5,807 | 26,200 | 22,909 | |||||||||||
Health Care | $ | 13,493 | $ | 12,907 | $ | 54,116 | $ | 51,618 | |||||||
Health Care Costs (GAAP measure) | |||||||||||||||
Commercial | $ | 5,768 | $ | 5,770 | $ | 22,896 | $ | 23,057 | |||||||
Government | 5,315 | 4,796 | 21,359 | 18,655 | |||||||||||
Health Care | $ | 11,083 | $ | 10,566 | $ | 44,255 | $ | 41,712 | |||||||
Medical Benefit Ratios "MBR" | |||||||||||||||
Commercial | 83.0 | % | 81.3 | % | 82.0 | % | 80.3 | % | |||||||
Government | 81.2 | % | 82.6 | % | 81.5 | % | 81.4 | % | |||||||
Health Care | 82.1 | % | 81.9 | % | 81.8 | % | 80.8 | % |
Statements of Income by Segment (Unaudited) | ||||||||||||||||||||||
Health | Group | Large Case | Corporate | |||||||||||||||||||
(Millions) | Care | Insurance | Pensions | Financing | Total | |||||||||||||||||
For the three months ended December 31, 2016 | ||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||
Health care premiums | $ | 13,493 | $ | — | $ | — | $ | — | $ | 13,493 | ||||||||||||
Other premiums | — | 539 | 7 | — | 546 | |||||||||||||||||
Fees and other revenue | 1,435 | 28 | 2 | — | 1,465 | |||||||||||||||||
Net investment income | 114 | 54 | 55 | — | 223 | |||||||||||||||||
Net realized capital gains (losses) | 1 | (1 | ) | — | — | — | ||||||||||||||||
Total revenue | 15,043 | 620 | 64 | — | 15,727 | |||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||
Health care costs | 11,083 | — | — | — | 11,083 | |||||||||||||||||
Current and future benefits | — | 455 | 57 | — | 512 | |||||||||||||||||
Operating expenses: | ||||||||||||||||||||||
Selling expenses | 395 | 38 | — | — | 433 | |||||||||||||||||
General and administrative expenses | 3,096 | 91 | 3 | (15 | ) | 3,175 | ||||||||||||||||
Total operating expenses | 3,491 | 129 | 3 | (15 | ) | 3,608 | ||||||||||||||||
Interest expense | — | — | — | 189 | 189 | |||||||||||||||||
Amortization of other acquired intangible assets | 60 | — | — | — | 60 | |||||||||||||||||
Total benefits and expenses | 14,634 | 584 | 60 | 174 | 15,452 | |||||||||||||||||
Income (loss) before income taxes | 409 | 36 | 4 | (174 | ) | 275 | ||||||||||||||||
Income tax expense (benefit) | 206 | 4 | (2 | ) | (61 | ) | 147 | |||||||||||||||
Net income (loss) including non-controlling interests | 203 | 32 | 6 | (113 | ) | 128 | ||||||||||||||||
Less: Net loss attributable to non-controlling interests | (12 | ) | — | 1 | — | (11 | ) | |||||||||||||||
Net income (loss) attributable to Aetna | $ | 215 | $ | 32 | $ | 5 | $ | (113 | ) | $ | 139 | |||||||||||
For the three months ended December 31, 2015 | ||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||
Health care premiums | $ | 12,907 | $ | — | $ | — | $ | — | $ | 12,907 | ||||||||||||
Other premiums | — | 539 | 4 | — | 543 | |||||||||||||||||
Fees and other revenue | 1,391 | 24 | 2 | — | 1,417 | |||||||||||||||||
Net investment income | 106 | 56 | 61 | — | 223 | |||||||||||||||||
Net realized capital losses | (28 | ) | (6 | ) | (7 | ) | — | (41 | ) | |||||||||||||
Total revenue | 14,376 | 613 | 60 | — | 15,049 | |||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||
Health care costs | 10,566 | — | — | — | 10,566 | |||||||||||||||||
Current and future benefits | — | 464 | 61 | — | 525 | |||||||||||||||||
Operating expenses: | ||||||||||||||||||||||
Selling expenses | 366 | 32 | — | — | 398 | |||||||||||||||||
General and administrative expenses | 2,727 | 94 | 3 | (23 | ) | 2,801 | ||||||||||||||||
Total operating expenses | 3,093 | 126 | 3 | (23 | ) | 3,199 | ||||||||||||||||
Interest expense | — | — | — | 111 | 111 | |||||||||||||||||
Amortization of other acquired intangible assets | 63 | — | — | — | 63 | |||||||||||||||||
Total benefits and expenses | 13,722 | 590 | 64 | 88 | 14,464 | |||||||||||||||||
Income (loss) before income taxes | 654 | 23 | (4 | ) | (88 | ) | 585 | |||||||||||||||
Income tax expense (benefit) | 292 | 5 | (3 | ) | (31 | ) | 263 | |||||||||||||||
Net income (loss) including non-controlling interests | 362 | 18 | (1 | ) | (57 | ) | 322 | |||||||||||||||
Less: Net income attributable to non-controlling interests | 1 | — | — | — | 1 | |||||||||||||||||
Net income (loss) attributable to Aetna | $ | 361 | $ | 18 | $ | (1 | ) | $ | (57 | ) | $ | 321 |
Statements of Income by Segment (Unaudited) | ||||||||||||||||||||||
Health | Group | Large Case | Corporate | |||||||||||||||||||
(Millions) | Care | Insurance | Pensions | Financing | Total | |||||||||||||||||
For the year ended December 31, 2016 | ||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||
Health care premiums | $ | 54,116 | $ | — | $ | — | $ | — | $ | 54,116 | ||||||||||||
Other premiums | — | 2,143 | 39 | — | 2,182 | |||||||||||||||||
Fees and other revenue | 5,744 | 108 | 9 | — | 5,861 | |||||||||||||||||
Net investment income | 458 | 226 | 226 | — | 910 | |||||||||||||||||
Net realized capital gains | 52 | 24 | 10 | — | 86 | |||||||||||||||||
Total revenue | 60,370 | 2,501 | 284 | — | 63,155 | |||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||
Health care costs | 44,255 | — | — | — | 44,255 | |||||||||||||||||
Current and future benefits | — | 1,850 | 251 | — | 2,101 | |||||||||||||||||
Operating expenses: | ||||||||||||||||||||||
Selling expenses | 1,545 | 133 | — | — | 1,678 | |||||||||||||||||
General and administrative expenses | 10,099 | 353 | 13 | (58 | ) | 10,407 | ||||||||||||||||
Total operating expenses | 11,644 | 486 | 13 | (58 | ) | 12,085 | ||||||||||||||||
Interest expense | — | — | — | 604 | 604 | |||||||||||||||||
Amortization of other acquired intangible assets | 247 | — | — | — | 247 | |||||||||||||||||
Reduction of reserve for anticipated future losses on discontinued products | — | — | (128 | ) | — | (128 | ) | |||||||||||||||
Total benefits and expenses | 56,146 | 2,336 | 136 | 546 | 59,164 | |||||||||||||||||
Income (loss) before income taxes | 4,224 | 165 | 148 | (546 | ) | 3,991 | ||||||||||||||||
Income tax expense (benefit) | 1,856 | 26 | 44 | (191 | ) | 1,735 | ||||||||||||||||
Net income (loss) including non-controlling interests | 2,368 | 139 | 104 | (355 | ) | 2,256 | ||||||||||||||||
Less: Net loss attributable to non-controlling interests | (15 | ) | — | — | — | (15 | ) | |||||||||||||||
Net income (loss) attributable to Aetna | $ | 2,383 | $ | 139 | $ | 104 | $ | (355 | ) | $ | 2,271 | |||||||||||
For the year ended December 31, 2015 | ||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||
Health care premiums | $ | 51,618 | $ | — | $ | — | $ | — | $ | 51,618 | ||||||||||||
Other premiums | — | 2,139 | 32 | — | 2,171 | |||||||||||||||||
Fees and other revenue | 5,585 | 101 | 10 | — | 5,696 | |||||||||||||||||
Net investment income | 408 | 238 | 271 | — | 917 | |||||||||||||||||
Net realized capital losses | (50 | ) | — | (15 | ) | — | (65 | ) | ||||||||||||||
Total revenue | 57,561 | 2,478 | 298 | — | 60,337 | |||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||
Health care costs | 41,712 | — | — | — | 41,712 | |||||||||||||||||
Current and future benefits | — | 1,837 | 284 | — | 2,121 | |||||||||||||||||
Operating expenses: | ||||||||||||||||||||||
Selling expenses | 1,490 | 121 | — | — | 1,611 | |||||||||||||||||
General and administrative expenses | 9,766 | 346 | 13 | (92 | ) | 10,033 | ||||||||||||||||
Total operating expenses | 11,256 | 467 | 13 | (92 | ) | 11,644 | ||||||||||||||||
Interest expense | — | — | — | 369 | 369 | |||||||||||||||||
Amortization of other acquired intangible assets | 255 | — | — | — | 255 | |||||||||||||||||
Total benefits and expenses | 53,223 | 2,304 | 297 | 277 | 56,101 | |||||||||||||||||
Income (loss) before income taxes | 4,338 | 174 | 1 | (277 | ) | 4,236 | ||||||||||||||||
Income tax expense (benefit) | 1,908 | 38 | (9 | ) | (96 | ) | 1,841 | |||||||||||||||
Net income (loss) including non-controlling interests | 2,430 | 136 | 10 | (181 | ) | 2,395 | ||||||||||||||||
Less: Net income attributable to non-controlling interests | 3 | — | 2 | — | 5 | |||||||||||||||||
Net income (loss) attributable to Aetna | $ | 2,427 | $ | 136 | $ | 8 | $ | (181 | ) | $ | 2,390 | |||||||||||
Roll Forward of Health Care Costs Payable | |||||||
(Unaudited) | |||||||
For the Year Ended | |||||||
December 31, | |||||||
(Millions) | 2016 | 2015 | |||||
Health care costs payable, beginning of period | $ | 6,306 | $ | 5,621 | |||
Less: reinsurance recoverables | 4 | 6 | |||||
Health care costs payable, beginning of period, net | 6,302 | 5,615 | |||||
Add: Components of incurred health care costs: | |||||||
Current year | 45,019 | 42,553 | |||||
Prior years(a) | (764 | ) | (841 | ) | |||
Total incurred health care costs | 44,255 | 41,712 | |||||
Less: Claims paid | |||||||
Current year | 38,700 | 36,389 | |||||
Prior years | 5,304 | 4,636 | |||||
Total claims paid | 44,004 | 41,025 | |||||
Health care costs payable, end of period, net | 6,553 | 6,302 | |||||
Add: reinsurance recoverables | 5 | 4 | |||||
Health care costs payable, end of period | $ | 6,558 | $ | 6,306 | |||
Days Claims Payable | |||||||||||||||
(Unaudited) | |||||||||||||||
December 31, 2016 | September 30, 2016 | June 30, 2016 | March 31, 2016 | December 31, 2015 | |||||||||||
Days Claims Payable | 54 | 57 | 56 | 57 | 55 |
Health Care Reform's Reinsurance, Risk Adjustment and Risk Corridor (the “3Rs”)(a) | ||||||||||||||||||||||||
Net Receivable (Payable) | ||||||||||||||||||||||||
At December 31, 2016 | At December 31, 2015 | |||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
(Millions) | Reinsurance | Risk Adjustment | Risk Corridor(b) | Reinsurance | Risk Adjustment | Risk Corridor | ||||||||||||||||||
Total current net receivable (payable) | $ | 202 | $ | (690 | ) | $ | (10 | ) | $ | 395 | $ | (710 | ) | $ | (8 | ) | ||||||||
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