x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
INDIANA | 35-2145715 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |
120 MONUMENT CIRCLE INDIANAPOLIS, INDIANA (Address of principal executive offices) | 46204-4903 (Zip Code) |
Large accelerated filer | x | Accelerated filer | ¨ | ||
Non-accelerated filer | ¨ | (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
Title of Each Class | Outstanding at July 14, 2016 | |
Common Stock, $0.01 par value | 263,171,006 shares | |
Page | ||
PART I. FINANCIAL INFORMATION | ||
ITEM 1. | ||
ITEM 2. | ||
ITEM 3. | ||
ITEM 4. | ||
PART II. OTHER INFORMATION | ||
ITEM 1. | ||
ITEM 1A. | ||
ITEM 2. | ||
ITEM 3. | ||
ITEM 4. | ||
ITEM 5. | ||
ITEM 6. | ||
ITEM 1. | FINANCIAL STATEMENTS |
June 30, 2016 | December 31, 2015 | ||||||
(In millions, except share data) | (Unaudited) | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 1,582.7 | $ | 2,113.5 | |||
Investments available-for-sale, at fair value: | |||||||
Fixed maturity securities (amortized cost of $17,957.7 and $16,950.0) | 18,563.2 | 16,920.0 | |||||
Equity securities (cost of $1,304.0 and $1,055.8) | 1,633.5 | 1,441.8 | |||||
Other invested assets, current | 18.8 | 19.1 | |||||
Accrued investment income | 168.7 | 170.8 | |||||
Premium and self-funded receivables | 5,260.9 | 4,602.8 | |||||
Other receivables | 2,125.2 | 2,421.4 | |||||
Income taxes receivable | 9.0 | 316.6 | |||||
Securities lending collateral | 1,512.4 | 1,300.4 | |||||
Other current assets | 2,083.3 | 1,555.7 | |||||
Total current assets | 32,957.7 | 30,862.1 | |||||
Long-term investments available-for-sale, at fair value: | |||||||
Fixed maturity securities (amortized cost of $493.2 and $550.4) | 512.0 | 558.2 | |||||
Equity securities (cost of $27.1 and $27.3) | 30.9 | 31.0 | |||||
Other invested assets, long-term | 2,088.1 | 2,041.1 | |||||
Property and equipment, net | 1,989.8 | 2,019.8 | |||||
Goodwill | 17,562.2 | 17,562.2 | |||||
Other intangible assets | 8,059.7 | 8,158.0 | |||||
Other noncurrent assets | 862.2 | 485.4 | |||||
Total assets | $ | 64,062.6 | $ | 61,717.8 | |||
Liabilities and shareholders’ equity | |||||||
Liabilities | |||||||
Current liabilities: | |||||||
Policy liabilities: | |||||||
Medical claims payable | $ | 7,498.6 | $ | 7,569.8 | |||
Reserves for future policy benefits | 69.5 | 71.9 | |||||
Other policyholder liabilities | 2,390.8 | 2,256.5 | |||||
Total policy liabilities | 9,958.9 | 9,898.2 | |||||
Unearned income | 832.8 | 1,145.5 | |||||
Accounts payable and accrued expenses | 4,272.2 | 3,318.8 | |||||
Security trades pending payable | 110.9 | 73.1 | |||||
Securities lending payable | 1,512.0 | 1,300.9 | |||||
Short-term borrowings | 440.0 | 540.0 | |||||
Current portion of long-term debt | 927.9 | — | |||||
Other current liabilities | 2,762.1 | 2,816.1 | |||||
Total current liabilities | 20,816.8 | 19,092.6 | |||||
Long-term debt, less current portion | 14,202.4 | 15,324.5 | |||||
Reserves for future policy benefits, noncurrent | 625.1 | 631.7 | |||||
Deferred tax liabilities, net | 2,704.9 | 2,630.6 | |||||
Other noncurrent liabilities | 1,479.8 | 994.3 | |||||
Total liabilities | 39,829.0 | 38,673.7 | |||||
Commitment and contingencies – Note 10 | |||||||
Shareholders’ equity | |||||||
Preferred stock, without par value, shares authorized – 100,000,000; shares issued and outstanding – none | — | — | |||||
Common stock, par value $0.01, shares authorized – 900,000,000; shares issued and outstanding – 263,153,816 and 261,238,188 | 2.6 | 2.6 | |||||
Additional paid-in capital | 8,677.5 | 8,555.6 | |||||
Retained earnings | 15,918.4 | 14,778.5 | |||||
Accumulated other comprehensive loss | (364.9 | ) | (292.6 | ) | |||
Total shareholders’ equity | 24,233.6 | 23,044.1 | |||||
Total liabilities and shareholders’ equity | $ | 64,062.6 | $ | 61,717.8 |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||
(In millions, except per share data) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Revenues | |||||||||||||||
Premiums | $ | 19,948.0 | $ | 18,516.3 | $ | 38,936.9 | $ | 36,126.8 | |||||||
Administrative fees | 1,315.8 | 1,229.5 | 2,626.8 | 2,456.6 | |||||||||||
Other revenue | 10.7 | 12.5 | 20.2 | 26.3 | |||||||||||
Total operating revenue | 21,274.5 | 19,758.3 | 41,583.9 | 38,609.7 | |||||||||||
Net investment income | 194.9 | 186.7 | 366.0 | 354.3 | |||||||||||
Net realized gains (losses) on financial instruments | 12.5 | 92.3 | (112.6 | ) | 138.8 | ||||||||||
Other-than-temporary impairment losses on investments: | |||||||||||||||
Total other-than-temporary impairment losses on investments | (33.8 | ) | (26.2 | ) | (119.0 | ) | (41.6 | ) | |||||||
Portion of other-than-temporary impairment losses recognized in other comprehensive income | 8.1 | 4.4 | 26.4 | 5.8 | |||||||||||
Other-than-temporary impairment losses recognized in income | (25.7 | ) | (21.8 | ) | (92.6 | ) | (35.8 | ) | |||||||
Total revenues | 21,456.2 | 20,015.5 | 41,744.7 | 39,067.0 | |||||||||||
Expenses | |||||||||||||||
Benefit expense | 16,805.2 | 15,205.4 | 32,344.0 | 29,332.3 | |||||||||||
Selling, general and administrative expense: | |||||||||||||||
Selling expense | 351.5 | 363.8 | 701.4 | 732.0 | |||||||||||
General and administrative expense | 2,617.6 | 2,677.0 | 5,467.9 | 5,454.0 | |||||||||||
Total selling, general and administrative expense | 2,969.1 | 3,040.8 | 6,169.3 | 6,186.0 | |||||||||||
Interest expense | 185.7 | 154.1 | 372.8 | 308.5 | |||||||||||
Amortization of other intangible assets | 47.9 | 60.1 | 98.3 | 112.6 | |||||||||||
(Gain) loss on extinguishment of debt | — | (2.9 | ) | — | 0.5 | ||||||||||
Total expenses | 20,007.9 | 18,457.5 | 38,984.4 | 35,939.9 | |||||||||||
Income before income tax expense | 1,448.3 | 1,558.0 | 2,760.3 | 3,127.1 | |||||||||||
Income tax expense | 667.7 | 698.9 | 1,276.7 | 1,402.8 | |||||||||||
Net income | $ | 780.6 | $ | 859.1 | $ | 1,483.6 | $ | 1,724.3 | |||||||
Net income per share | |||||||||||||||
Basic | $ | 2.97 | $ | 3.27 | $ | 5.65 | $ | 6.51 | |||||||
Diluted | $ | 2.91 | $ | 3.13 | $ | 5.54 | $ | 6.22 | |||||||
Dividends per share | $ | 0.650 | $ | 0.625 | $ | 1.300 | $ | 1.250 |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||
(In millions) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Net income | $ | 780.6 | $ | 859.1 | $ | 1,483.6 | $ | 1,724.3 | |||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||
Change in net unrealized gains/losses on investments | 209.8 | (241.2 | ) | 382.1 | (180.8 | ) | |||||||||
Change in non-credit component of other-than-temporary impairment losses on investments | (5.4 | ) | (2.8 | ) | (7.1 | ) | 0.7 | ||||||||
Change in net unrealized losses on cash flow hedges | (190.0 | ) | 0.9 | (455.5 | ) | 1.8 | |||||||||
Change in net periodic pension and postretirement costs | 3.8 | 4.9 | 7.6 | 9.6 | |||||||||||
Foreign currency translation adjustments | (0.7 | ) | 0.7 | 0.6 | (2.8 | ) | |||||||||
Other comprehensive income (loss) | 17.5 | (237.5 | ) | (72.3 | ) | (171.5 | ) | ||||||||
Total comprehensive income | $ | 798.1 | $ | 621.6 | $ | 1,411.3 | $ | 1,552.8 |
Six Months Ended June 30 | |||||||
(In millions) | 2016 | 2015 | |||||
Operating activities | |||||||
Net income | $ | 1,483.6 | $ | 1,724.3 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Net realized losses (gains) on financial instruments | 112.6 | (138.8 | ) | ||||
Other-than-temporary impairment losses recognized in income | 92.6 | 35.8 | |||||
Loss on extinguishment of debt | — | 0.5 | |||||
Loss on disposal of assets | 0.6 | 1.2 | |||||
Deferred income taxes | 99.7 | 47.5 | |||||
Amortization, net of accretion | 399.4 | 655.5 | |||||
Depreciation expense | 51.7 | 50.3 | |||||
Share-based compensation | 82.4 | 68.6 | |||||
Excess tax benefits from share-based compensation | (46.0 | ) | (89.0 | ) | |||
Changes in operating assets and liabilities: | |||||||
Receivables, net | (332.8 | ) | (318.5 | ) | |||
Other invested assets | (13.2 | ) | (4.0 | ) | |||
Other assets | (284.5 | ) | (388.9 | ) | |||
Policy liabilities | 54.1 | 278.8 | |||||
Unearned income | (312.7 | ) | (161.1 | ) | |||
Accounts payable and accrued expenses | 280.0 | 231.1 | |||||
Other liabilities | (17.1 | ) | 488.1 | ||||
Income taxes | 338.2 | 347.9 | |||||
Other, net | (22.3 | ) | (5.8 | ) | |||
Net cash provided by operating activities | 1,966.3 | 2,823.5 | |||||
Investing activities | |||||||
Purchases of fixed maturity securities | (5,509.3 | ) | (5,530.6 | ) | |||
Proceeds from fixed maturity securities: | |||||||
Sales | 4,246.3 | 4,371.6 | |||||
Maturities, calls and redemptions | 590.5 | 664.9 | |||||
Purchases of equity securities | (1,032.3 | ) | (1,389.5 | ) | |||
Proceeds from sales of equity securities | 486.4 | 1,085.9 | |||||
Purchases of other invested assets | (261.1 | ) | (161.1 | ) | |||
Proceeds from sales of other invested assets | 219.4 | 38.3 | |||||
Change in collateral and settlements of non-hedging derivatives | 14.7 | (32.0 | ) | ||||
Changes in securities lending collateral | (211.2 | ) | (202.9 | ) | |||
Purchase of subsidiary, net of cash acquired | — | (641.6 | ) | ||||
Purchases of property and equipment | (251.2 | ) | (229.7 | ) | |||
Net cash used in investing activities | (1,707.8 | ) | (2,026.7 | ) | |||
Financing activities | |||||||
Net (repayments of) proceeds from commercial paper borrowings | (225.2 | ) | 697.4 | ||||
Proceeds from long-term borrowings | — | 1,228.7 | |||||
Repayments of long-term borrowings | — | (1,930.0 | ) | ||||
Proceeds from short-term borrowings | 1,420.0 | 2,120.0 | |||||
Repayments of short-term borrowings | (1,520.0 | ) | (1,980.0 | ) | |||
Changes in securities lending payable | 211.1 | 202.9 | |||||
Changes in bank overdrafts | 15.2 | (233.1 | ) | ||||
Premiums paid on equity call options | — | (16.6 | ) | ||||
Proceeds from sale of put options | — | 16.5 | |||||
Repurchase and retirement of common stock | — | (1,410.6 | ) | ||||
Change in collateral and settlements of debt-related derivatives | (467.5 | ) | — | ||||
Cash dividends | (341.6 | ) | (330.5 | ) | |||
Proceeds from issuance of common stock under employee stock plans | 71.7 | 155.2 | |||||
Excess tax benefits from share-based compensation | 46.0 | 89.0 | |||||
Net cash used in financing activities | (790.3 | ) | (1,391.1 | ) | |||
Effect of foreign exchange rates on cash and cash equivalents | 1.0 | (4.4 | ) | ||||
Change in cash and cash equivalents | (530.8 | ) | (598.7 | ) | |||
Cash and cash equivalents at beginning of period | 2,113.5 | 2,151.7 | |||||
Cash and cash equivalents at end of period | $ | 1,582.7 | $ | 1,553.0 |
Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Total Shareholders’ Equity | ||||||||||||||||||
(In millions) | Number of Shares | Par Value | ||||||||||||||||||||
January 1, 2016 | 261.2 | $ | 2.6 | $ | 8,555.6 | $ | 14,778.5 | $ | (292.6 | ) | $ | 23,044.1 | ||||||||||
Net income | — | — | — | 1,483.6 | — | 1,483.6 | ||||||||||||||||
Other comprehensive loss | — | — | — | — | (72.3 | ) | (72.3 | ) | ||||||||||||||
Dividends and dividend equivalents | — | — | — | (343.7 | ) | — | (343.7 | ) | ||||||||||||||
Issuance of common stock under employee stock plans, net of related tax benefits | 2.0 | — | 121.6 | — | — | 121.6 | ||||||||||||||||
Equity Units issuance costs adjustment | — | — | 0.3 | — | — | 0.3 | ||||||||||||||||
June 30, 2016 | 263.2 | $ | 2.6 | $ | 8,677.5 | $ | 15,918.4 | $ | (364.9 | ) | $ | 24,233.6 | ||||||||||
January 1, 2015 | 268.1 | $ | 2.7 | $ | 10,062.3 | $ | 14,014.4 | $ | 171.9 | $ | 24,251.3 | |||||||||||
Net income | — | — | — | 1,724.3 | — | 1,724.3 | ||||||||||||||||
Other comprehensive loss | — | — | — | — | (171.5 | ) | (171.5 | ) | ||||||||||||||
Premiums paid on equity options | — | — | (16.6 | ) | — | — | (16.6 | ) | ||||||||||||||
Repurchase and retirement of common stock | (9.7 | ) | (0.1 | ) | (357.7 | ) | (1,052.8 | ) | — | (1,410.6 | ) | |||||||||||
Dividends and dividend equivalents | — | — | — | (333.7 | ) | — | (333.7 | ) | ||||||||||||||
Issuance of common stock under employee stock plans, net of related tax benefits | 3.2 | — | 193.9 | — | — | 193.9 | ||||||||||||||||
Convertible debenture repurchases and conversions | — | — | (1,043.6 | ) | — | — | (1,043.6 | ) | ||||||||||||||
Equity Units contract payments and issuance costs | — | — | (130.9 | ) | — | — | (130.9 | ) | ||||||||||||||
June 30, 2015 | 261.6 | $ | 2.6 | $ | 8,707.4 | $ | 14,352.2 | $ | 0.4 | $ | 23,062.6 |
1. | Organization |
2. | Basis of Presentation and Significant Accounting Policies |
3. | Business Acquisitions |
4. | Investments |
Non-Credit Component of Other-Than- Temporary Impairments Recognized in AOCI | |||||||||||||||||||||||
Cost or Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||||||||||
Less than 12 Months | 12 Months or Greater | ||||||||||||||||||||||
June 30, 2016 | |||||||||||||||||||||||
Fixed maturity securities: | |||||||||||||||||||||||
United States Government securities | $ | 414.4 | $ | 14.0 | $ | — | $ | — | $ | 428.4 | $ | — | |||||||||||
Government sponsored securities | 49.8 | 1.2 | — | — | 51.0 | — | |||||||||||||||||
States, municipalities and political subdivisions, tax-exempt | 5,924.6 | 410.0 | (0.4 | ) | (4.5 | ) | 6,329.7 | — | |||||||||||||||
Corporate securities | 9,152.2 | 256.3 | (29.8 | ) | (68.8 | ) | 9,309.9 | (26.4 | ) | ||||||||||||||
Residential mortgage-backed securities | 1,835.4 | 57.3 | (1.8 | ) | (4.8 | ) | 1,886.1 | — | |||||||||||||||
Commercial mortgage-backed securities | 330.5 | 3.8 | (0.6 | ) | (3.1 | ) | 330.6 | — | |||||||||||||||
Other debt securities | 744.0 | 4.2 | (3.5 | ) | (5.2 | ) | 739.5 | — | |||||||||||||||
Total fixed maturity securities | 18,450.9 | 746.8 | (36.1 | ) | (86.4 | ) | 19,075.2 | $ | (26.4 | ) | |||||||||||||
Equity securities | 1,331.1 | 352.2 | (18.9 | ) | — | 1,664.4 | |||||||||||||||||
Total investments, available-for-sale | $ | 19,782.0 | $ | 1,099.0 | $ | (55.0 | ) | $ | (86.4 | ) | $ | 20,739.6 | |||||||||||
December 31, 2015 | |||||||||||||||||||||||
Fixed maturity securities: | |||||||||||||||||||||||
United States Government securities | $ | 349.5 | $ | 2.0 | $ | (1.6 | ) | $ | — | $ | 349.9 | $ | — | ||||||||||
Government sponsored securities | 75.6 | 0.5 | (0.1 | ) | (0.1 | ) | 75.9 | — | |||||||||||||||
States, municipalities and political subdivisions, tax-exempt | 5,976.7 | 284.1 | (4.0 | ) | (5.2 | ) | 6,251.6 | — | |||||||||||||||
Corporate securities | 8,209.7 | 61.1 | (267.2 | ) | (110.5 | ) | 7,893.1 | (15.4 | ) | ||||||||||||||
Residential mortgage-backed securities | 1,724.5 | 41.2 | (7.6 | ) | (7.2 | ) | 1,750.9 | — | |||||||||||||||
Commercial mortgage-backed securities | 407.6 | 1.4 | (4.3 | ) | (0.4 | ) | 404.3 | — | |||||||||||||||
Other debt securities | 756.8 | 4.1 | (5.8 | ) | (2.6 | ) | 752.5 | — | |||||||||||||||
Total fixed maturity securities | 17,500.4 | 394.4 | (290.6 | ) | (126.0 | ) | 17,478.2 | $ | (15.4 | ) | |||||||||||||
Equity securities | 1,083.1 | 420.6 | (30.9 | ) | — | 1,472.8 | |||||||||||||||||
Total investments, available-for-sale | $ | 18,583.5 | $ | 815.0 | $ | (321.5 | ) | $ | (126.0 | ) | $ | 18,951.0 |
Less than 12 Months | 12 Months or Greater | ||||||||||||||||||||
(Securities are whole amounts) | Number of Securities | Estimated Fair Value | Gross Unrealized Loss | Number of Securities | Estimated Fair Value | Gross Unrealized Loss | |||||||||||||||
June 30, 2016 | |||||||||||||||||||||
Fixed maturity securities: | |||||||||||||||||||||
United States Government securities | 7 | $ | 18.8 | $ | — | — | $ | — | $ | — | |||||||||||
Government sponsored securities | — | — | — | 1 | 1.1 | — | |||||||||||||||
States, municipalities and political subdivisions, tax-exempt | 38 | 69.6 | (0.4 | ) | 55 | 115.0 | (4.5 | ) | |||||||||||||
Corporate securities | 726 | 927.2 | (29.8 | ) | 450 | 985.2 | (68.8 | ) | |||||||||||||
Residential mortgage-backed securities | 81 | 107.2 | (1.8 | ) | 122 | 191.7 | (4.8 | ) | |||||||||||||
Commercial mortgage-backed securities | 24 | 89.1 | (0.6 | ) | 26 | 61.5 | (3.1 | ) | |||||||||||||
Other debt securities | 82 | 221.5 | (3.5 | ) | 72 | 227.5 | (5.2 | ) | |||||||||||||
Total fixed maturity securities | 958 | 1,433.4 | (36.1 | ) | 726 | 1,582.0 | (86.4 | ) | |||||||||||||
Equity securities | 771 | 172.6 | (18.9 | ) | 2 | — | — | ||||||||||||||
Total fixed maturity and equity securities | 1,729 | $ | 1,606.0 | $ | (55.0 | ) | 728 | $ | 1,582.0 | $ | (86.4 | ) | |||||||||
December 31, 2015 | |||||||||||||||||||||
Fixed maturity securities: | |||||||||||||||||||||
United States Government securities | 48 | $ | 248.4 | $ | (1.6 | ) | 2 | $ | 0.9 | $ | — | ||||||||||
Government sponsored securities | 13 | 18.3 | (0.1 | ) | 6 | 8.2 | (0.1 | ) | |||||||||||||
States, municipalities and political subdivisions, tax-exempt | 198 | 467.8 | (4.0 | ) | 43 | 83.0 | (5.2 | ) | |||||||||||||
Corporate securities | 2,492 | 4,912.3 | (267.2 | ) | 372 | 447.0 | (110.5 | ) | |||||||||||||
Residential mortgage-backed securities | 298 | 668.3 | (7.6 | ) | 119 | 186.3 | (7.2 | ) | |||||||||||||
Commercial mortgage-backed securities | 66 | 263.0 | (4.3 | ) | 17 | 38.5 | (0.4 | ) | |||||||||||||
Other debt securities | 153 | 488.2 | (5.8 | ) | 28 | 77.0 | (2.6 | ) | |||||||||||||
Total fixed maturity securities | 3,268 | 7,066.3 | (290.6 | ) | 587 | 840.9 | (126.0 | ) | |||||||||||||
Equity securities | 792 | 261.1 | (30.9 | ) | — | — | — | ||||||||||||||
Total fixed maturity and equity securities | 4,060 | $ | 7,327.4 | $ | (321.5 | ) | 587 | $ | 840.9 | $ | (126.0 | ) |
Amortized Cost | Estimated Fair Value | ||||||
Due in one year or less | $ | 340.8 | $ | 342.6 | |||
Due after one year through five years | 4,789.5 | 4,862.3 | |||||
Due after five years through ten years | 5,482.4 | 5,714.2 | |||||
Due after ten years | 5,672.3 | 5,939.4 | |||||
Mortgage-backed securities | 2,165.9 | 2,216.7 | |||||
Total available-for-sale fixed maturity securities | $ | 18,450.9 | $ | 19,075.2 |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Proceeds | $ | 2,480.5 | $ | 3,234.8 | $ | 5,542.6 | $ | 6,160.7 | |||||||
Gross realized gains | 108.4 | 148.4 | 229.8 | 282.1 | |||||||||||
Gross realized losses | (31.0 | ) | (56.1 | ) | (123.7 | ) | (143.3 | ) |
Overnight and Continuous | Less than 30 days | 30-90 days | Greater Than 90 days | Total | |||||||||||||||
Securities lending transactions | |||||||||||||||||||
United States Government securities | $ | 26.7 | $ | 17.7 | $ | 12.6 | $ | 83.1 | $ | 140.1 | |||||||||
Corporate securities | 861.8 | — | — | — | 861.8 | ||||||||||||||
Equity securities | 307.4 | — | 1.5 | 0.1 | 309.0 | ||||||||||||||
Other debt securities | 201.1 | — | — | — | 201.1 | ||||||||||||||
Total | $ | 1,397.0 | $ | 17.7 | $ | 14.1 | $ | 83.2 | $ | 1,512.0 |
5. | Derivative Financial Instruments |
Contractual/ Notional Amount | Balance Sheet Location | Estimated Fair Value | |||||||||||
Asset | (Liability) | ||||||||||||
June 30, 2016 | |||||||||||||
Hedging instruments | |||||||||||||
Interest rate swaps - fixed to floating | $ | 1,385.0 | Other assets/other liabilities | $ | 27.8 | $ | — | ||||||
Interest rate swaps - forward starting pay fixed | 5,350.0 | Other assets/other liabilities | — | (778.8 | ) | ||||||||
Subtotal hedging | 6,735.0 | Subtotal hedging | 27.8 | (778.8 | ) | ||||||||
Non-hedging instruments | |||||||||||||
Interest rate swaps | 299.5 | Equity securities | — | (25.4 | ) | ||||||||
Options | 17,632.5 | Other assets/other liabilities | 203.7 | (298.4 | ) | ||||||||
Futures | 127.9 | Equity securities | 1.7 | (3.4 | ) | ||||||||
Subtotal non-hedging | 18,059.9 | Subtotal non-hedging | 205.4 | (327.2 | ) | ||||||||
Total derivatives | $ | 24,794.9 | Total derivatives | 233.2 | (1,106.0 | ) | |||||||
Amounts netted | (104.1 | ) | 104.1 | ||||||||||
Net derivatives | $ | 129.1 | $ | (1,001.9 | ) | ||||||||
December 31, 2015 | |||||||||||||
Hedging instruments | |||||||||||||
Interest rate swaps - fixed to floating | $ | 1,385.0 | Other assets/other liabilities | $ | 7.0 | $ | (0.8 | ) | |||||
Interest rate swaps - forward starting pay fixed | 4,650.0 | Other assets/other liabilities | 15.7 | (90.9 | ) | ||||||||
Subtotal hedging | 6,035.0 | Subtotal hedging | 22.7 | (91.7 | ) | ||||||||
Non-hedging instruments | |||||||||||||
Interest rate swaps | 271.7 | Equity securities | 1.2 | (6.0 | ) | ||||||||
Options | 16,917.4 | Other assets/other liabilities | 305.7 | (332.1 | ) | ||||||||
Futures | 152.0 | Equity securities | 0.1 | (0.2 | ) | ||||||||
Subtotal non-hedging | 17,341.1 | Subtotal non-hedging | 307.0 | (338.3 | ) | ||||||||
Total derivatives | $ | 23,376.1 | Total derivatives | 329.7 | (430.0 | ) | |||||||
Amounts netted | (170.6 | ) | 170.6 | ||||||||||
Net derivatives | $ | 159.1 | $ | (259.4 | ) |
Type of Fair Value Hedges | Year Entered Into | Outstanding Notional Amount | Interest Rate Received | Expiration Date | |||||||||||
June 30, 2016 | December 31, 2015 | ||||||||||||||
Interest rate swap | 2015 | $ | 200.0 | $ | 200.0 | 4.350 | % | August 15, 2020 | |||||||
Interest rate swap | 2014 | 150.0 | 150.0 | 4.350 | August 15, 2020 | ||||||||||
Interest rate swap | 2013 | 10.0 | 10.0 | 4.350 | August 15, 2020 | ||||||||||
Interest rate swap | 2012 | 200.0 | 200.0 | 4.350 | August 15, 2020 | ||||||||||
Interest rate swap | 2012 | 625.0 | 625.0 | 1.875 | January 15, 2018 | ||||||||||
Interest rate swap | 2012 | 200.0 | 200.0 | 2.375 | February 15, 2017 | ||||||||||
Total notional amount outstanding | $ | 1,385.0 | $ | 1,385.0 |
Type of Fair Value Hedges | Income Statement Location of Hedge Gain | Hedge Gain Recognized | Hedged Item | Income Statement Location of Hedged Item Loss | Hedged Item Loss Recognized | |||||||||
Three months ended June 30, 2016 | ||||||||||||||
Interest rate swaps | Interest expense | $ | 2.2 | Fixed rate debt | Interest expense | $ | (2.2 | ) | ||||||
Three months ended June 30, 2015 | ||||||||||||||
Interest rate swaps | Interest expense | $ | 3.0 | Fixed rate debt | Interest expense | $ | (3.0 | ) | ||||||
Six months ended June 30, 2016 | ||||||||||||||
Interest rate swaps | Interest expense | $ | 4.6 | Fixed rate debt | Interest expense | $ | (4.6 | ) | ||||||
Six months ended June 30, 2015 | ||||||||||||||
Interest rate swaps | Interest expense | $ | 5.8 | Fixed rate debt | Interest expense | $ | (5.8 | ) |
Effective Portion | ||||||||||||||||
Pretax Hedge Loss Recognized in Other Comprehensive (Loss) Income | Income Statement Location of Loss Reclassification from Accumulated Other Comprehensive Loss | Hedge Loss Reclassified from Accumulated Other Comprehensive Loss | Ineffective Portion | |||||||||||||
Type of Cash Flow Hedge | Income Statement Location of Loss Recognized | Hedge Loss Recognized | ||||||||||||||
Three months ended June 30, 2016 | ||||||||||||||||
Forward starting pay fixed swaps | $ | (293.8 | ) | Interest expense | $ | (1.5 | ) | None | $ | — | ||||||
Three months ended June 30, 2015 | ||||||||||||||||
Forward starting pay fixed swaps | $ | — | Interest expense | $ | (1.3 | ) | None | $ | — | |||||||
Six months ended June 30, 2016 | ||||||||||||||||
Forward starting pay fixed swaps | $ | (703.6 | ) | Interest expense | $ | (2.9 | ) | None | $ | — | ||||||
Six months ended June 30, 2015 | ||||||||||||||||
Forward starting pay fixed swaps | $ | — | Interest expense | $ | (2.7 | ) | None | $ | — |
Type of Non-hedging Derivatives | Income Statement Location of Gain (Loss) Recognized | Derivative Gain (Loss) Recognized | ||||
Three months ended June 30, 2016 | ||||||
Interest rate swaps | Net realized (losses) gains on financial instruments | $ | (9.4 | ) | ||
Options | Net realized (losses) gains on financial instruments | (53.7 | ) | |||
Futures | Net realized (losses) gains on financial instruments | (1.8 | ) | |||
Total | $ | (64.9 | ) | |||
Three months ended June 30, 2015 | ||||||
Derivatives embedded in convertible fixed maturity securities | Net realized (losses) gains on financial instruments | $ | 0.7 | |||
Interest rate swaps | Net realized (losses) gains on financial instruments | 7.7 | ||||
Options | Net realized (losses) gains on financial instruments | 9.2 | ||||
Futures | Net realized (losses) gains on financial instruments | 4.5 | ||||
Total | $ | 22.1 | ||||
Six months ended June 30, 2016 | ||||||
Interest rate swaps | Net realized (losses) gains on financial instruments | $ | (26.3 | ) | ||
Options | Net realized (losses) gains on financial instruments | (190.1 | ) | |||
Futures | Net realized (losses) gains on financial instruments | (2.3 | ) | |||
Total | $ | (218.7 | ) | |||
Six months ended June 30, 2015 | ||||||
Derivatives embedded in convertible fixed maturity securities | Net realized (losses) gains on financial instruments | $ | (22.3 | ) | ||
Interest rate swaps | Net realized (losses) gains on financial instruments | 3.1 | ||||
Options | Net realized (losses) gains on financial instruments | 16.4 | ||||
Futures | Net realized (losses) gains on financial instruments | 2.9 | ||||
Total | $ | 0.1 |
6. | Fair Value |
Level Input | Input Definition | |
Level I | Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date. | |
Level II | Inputs other than quoted prices included in Level I that are observable for the asset or liability through corroboration with market data at the measurement date. | |
Level III | Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. |
Level I | Level II | Level III | Total | ||||||||||||
June 30, 2016 | |||||||||||||||
Assets: | |||||||||||||||
Cash equivalents | $ | 598.2 | $ | — | $ | — | $ | 598.2 | |||||||
Investments available-for-sale: | |||||||||||||||
Fixed maturity securities: | |||||||||||||||
United States Government securities | 428.4 | — | — | 428.4 | |||||||||||
Government sponsored securities | — | 51.0 | — | 51.0 | |||||||||||
States, municipalities and political subdivisions, tax-exempt | — | 6,329.7 | — | 6,329.7 | |||||||||||
Corporate securities | 244.0 | 8,857.8 | 208.1 | 9,309.9 | |||||||||||
Residential mortgage-backed securities | — | 1,884.5 | 1.6 | 1,886.1 | |||||||||||
Commercial mortgage-backed securities | — | 330.6 | — | 330.6 | |||||||||||
Other debt securities | 53.5 | 653.7 | 32.3 | 739.5 | |||||||||||
Total fixed maturity securities | 725.9 | 18,107.3 | 242.0 | 19,075.2 | |||||||||||
Equity securities | 1,401.3 | 97.4 | 165.7 | 1,664.4 | |||||||||||
Other invested assets, current | 18.8 | — | — | 18.8 | |||||||||||
Securities lending collateral | 821.2 | 691.2 | — | 1,512.4 | |||||||||||
Derivatives (reported with other assets) | — | 233.2 | — | 233.2 | |||||||||||
Total assets | $ | 3,565.4 | $ | 19,129.1 | $ | 407.7 | $ | 23,102.2 | |||||||
Liabilities: | |||||||||||||||
Derivatives (reported with other liabilities) | $ | — | $ | (1,106.0 | ) | $ | — | $ | (1,106.0 | ) | |||||
Total liabilities | $ | — | $ | (1,106.0 | ) | $ | — | $ | (1,106.0 | ) | |||||
December 31, 2015 | |||||||||||||||
Assets: | |||||||||||||||
Cash equivalents | $ | 701.0 | $ | — | $ | — | $ | 701.0 | |||||||
Investments available-for-sale: | |||||||||||||||
Fixed maturity securities: | |||||||||||||||
United States Government securities | 349.9 | — | — | 349.9 | |||||||||||
Government sponsored securities | — | 75.9 | — | 75.9 | |||||||||||
States, municipalities and political subdivisions, tax-exempt | — | 6,251.6 | — | 6,251.6 | |||||||||||
Corporate securities | 77.6 | 7,629.3 | 186.2 | 7,893.1 | |||||||||||
Residential mortgage-backed securities | — | 1,750.9 | — | 1,750.9 | |||||||||||
Commercial mortgage-backed securities | — | 402.4 | 1.9 | 404.3 | |||||||||||
Other debt securities | 55.7 | 671.2 | 25.6 | 752.5 | |||||||||||
Total fixed maturity securities | 483.2 | 16,781.3 | 213.7 | 17,478.2 | |||||||||||
Equity securities | 1,253.8 | 116.9 | 102.1 | 1,472.8 | |||||||||||
Other invested assets, current | 19.1 | — | — | 19.1 | |||||||||||
Securities lending collateral | 708.1 | 592.3 | — | 1,300.4 | |||||||||||
Derivatives (reported with other assets) | — | 329.7 | — | 329.7 | |||||||||||
Total assets | $ | 3,165.2 | $ | 17,820.2 | $ | 315.8 | $ | 21,301.2 | |||||||
Liabilities: | |||||||||||||||
Derivatives (reported with other liabilities) | $ | — | $ | (430.0 | ) | $ | — | $ | (430.0 | ) | |||||
Total liabilities | $ | — | $ | (430.0 | ) | $ | — | $ | (430.0 | ) |
Corporate Securities | Residential Mortgage- backed Securities | Commercial Mortgage- backed Securities | Other Debt Securities | Equity Securities | Total | ||||||||||||||||||
Three months ended June 30, 2016 | |||||||||||||||||||||||
Beginning balance at April 1, 2016 | $ | 232.2 | $ | — | $ | — | $ | 34.8 | $ | 144.5 | $ | 411.5 | |||||||||||
Total gains (losses): | |||||||||||||||||||||||
Recognized in net income | (0.7 | ) | — | — | — | — | (0.7 | ) | |||||||||||||||
Recognized in accumulated other comprehensive income | 0.2 | — | — | 0.1 | 1.2 | 1.5 | |||||||||||||||||
Purchases | 33.9 | — | — | — | 28.1 | 62.0 | |||||||||||||||||
Sales | (0.8 | ) | — | — | — | (8.1 | ) | (8.9 | ) | ||||||||||||||
Settlements | (10.3 | ) | — | — | — | — | (10.3 | ) | |||||||||||||||
Transfers into Level III | 0.6 | 1.6 | — | 7.6 | — | 9.8 | |||||||||||||||||
Transfers out of Level III | (47.0 | ) | — | — | (10.2 | ) | — | (57.2 | ) | ||||||||||||||
Ending balance at June 30, 2016 | $ | 208.1 | $ | 1.6 | $ | — | $ | 32.3 | $ | 165.7 | $ | 407.7 | |||||||||||
Change in unrealized losses included in net income related to assets still held for the three months ended June 30, 2016 | $ | (0.1 | ) | $ | — | $ | — | $ | — | $ | — | $ | (0.1 | ) | |||||||||
Three months ended June 30, 2015 | |||||||||||||||||||||||
Beginning balance at April 1, 2015 | $ | 165.5 | $ | — | $ | 3.2 | $ | 2.6 | $ | 51.8 | $ | 223.1 | |||||||||||
Total gains (losses): | |||||||||||||||||||||||
Recognized in net income | (0.8 | ) | — | — | — | (0.4 | ) | (1.2 | ) | ||||||||||||||
Recognized in accumulated other comprehensive income | 1.4 | — | — | — | (0.4 | ) | 1.0 | ||||||||||||||||
Purchases | 57.2 | — | — | 3.7 | 4.3 | 65.2 | |||||||||||||||||
Sales | (4.1 | ) | — | — | — | (1.2 | ) | (5.3 | ) | ||||||||||||||
Settlements | (11.3 | ) | — | (0.4 | ) | — | — | (11.7 | ) | ||||||||||||||
Transfers into Level III | 4.2 | — | — | — | — | 4.2 | |||||||||||||||||
Transfers out of Level III | (19.7 | ) | — | — | — | — | (19.7 | ) | |||||||||||||||
Ending balance at June 30, 2015 | $ | 192.4 | $ | — | $ | 2.8 | $ | 6.3 | $ | 54.1 | $ | 255.6 | |||||||||||
Change in unrealized losses included in net income related to assets still held for the three months ended June 30, 2015 | $ | — | $ | — | $ | — | $ | — | $ | (0.2 | ) | $ | (0.2 | ) |
Corporate Securities | Residential Mortgage- backed Securities | Commercial Mortgage- backed Securities | Other Debt Securities | Equity Securities | Total | ||||||||||||||||||
Six Months Ended June 30, 2016 | |||||||||||||||||||||||
Beginning balance at January 1, 2016 | $ | 186.2 | $ | — | $ | 1.9 | $ | 25.6 | $ | 102.1 | $ | 315.8 | |||||||||||
Total (losses) gains: | |||||||||||||||||||||||
Recognized in net income | (1.6 | ) | — | — | — | 2.2 | 0.6 | ||||||||||||||||
Recognized in accumulated other comprehensive income | (1.3 | ) | — | — | (0.3 | ) | (0.4 | ) | (2.0 | ) | |||||||||||||
Purchases | 91.9 | — | — | — | 72.3 | 164.2 | |||||||||||||||||
Sales | (1.8 | ) | — | — | — | (10.5 | ) | (12.3 | ) | ||||||||||||||
Settlements | (21.2 | ) | — | — | — | — | (21.2 | ) | |||||||||||||||
Transfers into Level III | 2.9 | 1.6 | — | 17.2 | — | 21.7 | |||||||||||||||||
Transfers out of Level III | (47.0 | ) | — | (1.9 | ) | (10.2 | ) | — | (59.1 | ) | |||||||||||||
Ending balance at June 30, 2016 | $ | 208.1 | $ | 1.6 | $ | — | $ | 32.3 | $ | 165.7 | $ | 407.7 | |||||||||||
Change in unrealized losses included in net income related to assets still held for the six months ended June 30, 2016 | $ | (1.8 | ) | $ | — | $ | — | $ | — | $ | — | $ | (1.8 | ) | |||||||||
Six Months Ended June 30, 2015 | |||||||||||||||||||||||
Beginning balance at January 1, 2015 | $ | 144.6 | $ | — | $ | 3.3 | $ | 6.6 | $ | 48.3 | $ | 202.8 | |||||||||||
Total gains (losses): | |||||||||||||||||||||||
Recognized in net income | (1.0 | ) | — | — | 0.2 | (1.2 | ) | (2.0 | ) | ||||||||||||||
Recognized in accumulated other comprehensive income | 3.0 | — | — | (0.2 | ) | 0.9 | 3.7 | ||||||||||||||||
Purchases | 89.6 | — | — | 3.7 | 11.8 | 105.1 | |||||||||||||||||
Sales | (4.1 | ) | — | — | (0.9 | ) | (5.7 | ) | (10.7 | ) | |||||||||||||
Settlements | (24.9 | ) | — | (0.5 | ) | (0.1 | ) | — | (25.5 | ) | |||||||||||||
Transfers into Level III | 4.9 | — | — | — | — | 4.9 | |||||||||||||||||
Transfers out of Level III | (19.7 | ) | — | — | (3.0 | ) | — | (22.7 | ) | ||||||||||||||
Ending balance at June 30, 2015 | $ | 192.4 | $ | — | $ | 2.8 | $ | 6.3 | $ | 54.1 | $ | 255.6 | |||||||||||
Change in unrealized losses included in net income related to assets still held for the six months ended June 30, 2015 | $ | (0.6 | ) | $ | — | $ | — | $ | — | $ | (1.0 | ) | $ | (1.6 | ) |
Carrying Value | Estimated Fair Value | ||||||||||||||||||
Level I | Level II | Level III | Total | ||||||||||||||||
June 30, 2016 | |||||||||||||||||||
Assets: | |||||||||||||||||||
Other invested assets, long-term | $ | 2,088.1 | $ | — | $ | — | $ | 2,088.1 | $ | 2,088.1 | |||||||||
Liabilities: | |||||||||||||||||||
Debt: | |||||||||||||||||||
Short-term borrowings | 440.0 | — | 440.0 | — | 440.0 | ||||||||||||||
Commercial paper | 457.0 | — | 457.0 | — | 457.0 | ||||||||||||||
Notes | 14,340.9 | — | 15,295.6 | — | 15,295.6 | ||||||||||||||
Convertible debentures | 332.4 | — | 934.8 | — | 934.8 | ||||||||||||||
December 31, 2015 | |||||||||||||||||||
Assets: | |||||||||||||||||||
Other invested assets, long-term | $ | 2,041.1 | $ | — | $ | — | $ | 2,041.1 | $ | 2,041.1 | |||||||||
Liabilities: | |||||||||||||||||||
Debt: | |||||||||||||||||||
Short-term borrowings | 540.0 | — | 540.0 | — | 540.0 | ||||||||||||||
Commercial paper | 682.2 | — | 682.2 | — | 682.2 | ||||||||||||||
Notes | 14,311.6 | — | 14,523.2 | — | 14,523.2 | ||||||||||||||
Convertible debentures | 330.7 | — | 980.1 | — | 980.1 |
7. | Income Taxes |
8. | Retirement Benefits |
Pension Benefits | Other Benefits | ||||||||||||||
Three Months Ended June 30 | Three Months Ended June 30 | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Service cost | $ | 2.9 | $ | 3.3 | $ | 0.4 | $ | 0.6 | |||||||
Interest cost | 17.3 | 17.1 | 5.6 | 5.8 | |||||||||||
Expected return on assets | (36.7 | ) | (35.9 | ) | (5.6 | ) | (5.9 | ) | |||||||
Recognized actuarial loss | 4.3 | 6.5 | 3.1 | 3.8 | |||||||||||
Settlement loss | 3.2 | 1.7 | — | — | |||||||||||
Amortization of prior service credit | (0.1 | ) | (0.2 | ) | (3.4 | ) | (3.6 | ) | |||||||
Net periodic (benefit credit) benefit cost | $ | (9.1 | ) | $ | (7.5 | ) | $ | 0.1 | $ | 0.7 |
Pension Benefits | Other Benefits | ||||||||||||||
Six Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Service cost | $ | 5.7 | $ | 6.6 | $ | 0.8 | $ | 1.1 | |||||||
Interest cost | 34.6 | 34.1 | 11.2 | 11.7 | |||||||||||
Expected return on assets | (73.4 | ) | (71.6 | ) | (11.2 | ) | (11.8 | ) | |||||||
Recognized actuarial loss | 8.7 | 12.9 | 6.2 | 7.6 | |||||||||||
Settlement loss | 5.6 | 3.0 | — | — | |||||||||||
Amortization of prior service credit | (0.2 | ) | (0.4 | ) | (6.9 | ) | (7.2 | ) | |||||||
Net periodic (benefit credit) benefit cost | $ | (19.0 | ) | $ | (15.4 | ) | $ | 0.1 | $ | 1.4 |
9. | Debt |
Outstanding principal amount | $ | 513.4 | |
Unamortized debt discount | $ | 175.2 | |
Net debt carrying amount | $ | 332.4 | |
Equity component carrying amount | $ | 186.1 | |
Conversion rate (shares of common stock per $1,000 of principal amount) | 13.5624 | ||
Effective conversion price (per $1,000 of principal amount) | $ | 73.7326 |
10. | Commitments and Contingencies |
11. | Capital Stock |
Declaration Date | Record Date | Payment Date | Cash Dividend per Share | Total | ||||
Six Months Ended June 30, 2016 | ||||||||
February 18, 2016 | March 10, 2016 | March 25, 2016 | $0.650 | $170.7 | ||||
April 26, 2016 | June 10, 2016 | June 24, 2016 | $0.650 | $170.9 | ||||
Six Months Ended June 30, 2015 | ||||||||
January 27, 2015 | March 10, 2015 | March 25, 2015 | $0.625 | $166.6 | ||||
April 28, 2015 | June 10, 2015 | June 25, 2015 | $0.625 | $163.9 |
Six Months Ended June 30 | ||||
2015 | ||||
Shares repurchased | 9.7 | |||
Average price per share | $ | 145.63 | ||
Aggregate cost | $ | 1,410.6 | ||
Authorization remaining at the end of the period | $ | 4,281.0 |
Number of Shares | Weighted- Average Option Price per Share | Weighted- Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value | |||||||||
Outstanding at January 1, 2016 | 6.0 | $ | 87.23 | |||||||||
Granted | 1.4 | 131.90 | ||||||||||
Exercised | (1.0 | ) | 58.69 | |||||||||
Forfeited or expired | (0.2 | ) | 112.39 | |||||||||
Outstanding at June 30, 2016 | 6.2 | 101.20 | 5.48 | $ | 205.9 | |||||||
Exercisable at June 30, 2016 | 3.6 | 80.74 | 3.30 | $ | 185.8 |
Restricted Stock Shares and Units | Weighted- Average Grant Date Fair Value per Share | |||||
Nonvested at January 1, 2016 | 2.7 | $ | 101.66 | |||
Granted | 1.0 | 131.90 | ||||
Vested | (1.3 | ) | 82.17 | |||
Forfeited | (0.2 | ) | 116.41 | |||
Nonvested at June 30, 2016 | 2.2 | 126.38 |
Six Months Ended June 30 | |||||
2016 | 2015 | ||||
Risk-free interest rate | 1.76 | % | 1.96 | % | |
Volatility factor | 32.00 | % | 31.00 | % | |
Quarterly dividend yield | 0.491 | % | 0.425 | % | |
Weighted-average expected life (years) | 4.10 | 4.00 |
Six Months Ended June 30 | |||||||
2016 | 2015 | ||||||
Options granted during the period | $ | 30.57 | $ | 34.01 | |||
Restricted stock awards granted during the period | 131.90 | 147.10 |
12. | Accumulated Other Comprehensive (Loss) Income |
June 30 | |||||||
2016 | 2015 | ||||||
Investments, excluding non-credit component of other-than-temporary impairments: | |||||||
Gross unrealized gains | $ | 1,099.0 | $ | 895.1 | |||
Gross unrealized losses | (115.0 | ) | (207.0 | ) | |||
Net pre-tax unrealized gains | 984.0 | 688.1 | |||||
Deferred tax liability | (358.6 | ) | (241.3 | ) | |||
Net unrealized gains on investments | 625.4 | 446.8 | |||||
Non-credit components of other-than-temporary impairments on investments: | |||||||
Unrealized losses | (26.4 | ) | (5.7 | ) | |||
Deferred tax asset | 9.3 | 2.0 | |||||
Net unrealized non-credit component of other-than-temporary impairments on investments | (17.1 | ) | (3.7 | ) | |||
Cash flow hedges: | |||||||
Gross unrealized losses | (825.6 | ) | (52.4 | ) | |||
Deferred tax asset | 289.0 | 18.3 | |||||
Net unrealized losses on cash flow hedges | (536.6 | ) | (34.1 | ) | |||
Defined benefit pension plans: | |||||||
Deferred net actuarial loss | (621.5 | ) | (547.8 | ) | |||
Deferred prior service credits | (0.1 | ) | 1.8 | ||||
Deferred tax asset | 245.1 | 217.1 | |||||
Net unrecognized periodic benefit costs for defined benefit pension plans | (376.5 | ) | (328.9 | ) | |||
Postretirement benefit plans: | |||||||
Deferred net actuarial loss | (156.5 | ) | (203.6 | ) | |||
Deferred prior service credits | 66.6 | 80.8 | |||||
Deferred tax asset | 35.4 | 48.7 | |||||
Net unrecognized periodic benefit costs for postretirement benefit plans | (54.5 | ) | (74.1 | ) | |||
Foreign currency translation adjustments: | |||||||
Gross unrealized losses | (8.7 | ) | (8.6 | ) | |||
Deferred tax asset | 3.1 | 3.0 | |||||
Net unrealized losses on foreign currency translation adjustments | (5.6 | ) | (5.6 | ) | |||
Accumulated other comprehensive (loss) income | $ | (364.9 | ) | $ | 0.4 |
Three Months Ended June 30 | |||||||
2016 | 2015 | ||||||
Investments: | |||||||
Net holding gain (loss) on investment securities arising during the period, net of tax (expense) benefit of ($153.5) and $109.3, respectively | $ | 243.4 | $ | (195.4 | ) | ||
Reclassification adjustment for net realized gain on investment securities, net of tax expense of $18.1 and $24.7, respectively | (33.6 | ) | (45.8 | ) | |||
Total reclassification adjustment on investments | 209.8 | (241.2 | ) | ||||
Non-credit component of other-than-temporary impairments on investments: | |||||||
Non-credit component of other-than-temporary impairments on investments, net of tax benefit of $2.7 and $1.5, respectively | (5.4 | ) | (2.8 | ) | |||
Cash flow hedges: | |||||||
Holding (loss) gain, net of tax benefit (expense) of $102.4 and ($0.5), respectively | (190.0 | ) | 0.9 | ||||
Other: | |||||||
Net change in unrecognized periodic benefit costs for defined benefit pension and postretirement benefit plans, net of tax expense of ($2.6) and ($3.3), respectively | 3.8 | 4.9 | |||||
Foreign currency translation adjustment, net of tax benefit (expense) of $0.5 and ($0.4), respectively | (0.7 | ) | 0.7 | ||||
Net gain (loss) recognized in other comprehensive income, net of tax (expense) benefit of ($32.4) and $131.3, respectively | $ | 17.5 | $ | (237.5 | ) |
Six Months Ended June 30 | |||||||
2016 | 2015 | ||||||
Investments: | |||||||
Net holding gain (loss) on investment securities arising during the period, net of tax (expense) benefit of ($239.1) and $53.1, respectively | $ | 390.9 | $ | (113.9 | ) | ||
Reclassification adjustment for net realized gain on investment securities, net of tax expense of $4.7 and $36.1, respectively | (8.8 | ) | (66.9 | ) | |||
Total reclassification adjustment on investments | 382.1 | (180.8 | ) | ||||
Non-credit component of other-than-temporary impairments on investments: | |||||||
Non-credit component of other-than-temporary impairments on investments, net of tax benefit (expense) of $3.9 and ($0.4), respectively | (7.1 | ) | 0.7 | ||||
Cash flow hedges: | |||||||
Holding (loss) gain, net of tax benefit (expense) of $245.3 and ($1.0), respectively | (455.5 | ) | 1.8 | ||||
Other: | |||||||
Net change in unrecognized periodic benefit costs for defined benefit pension and postretirement benefit plans, net of tax expense of ($5.0) and ($6.3), respectively | 7.6 | 9.6 | |||||
Foreign currency translation adjustment, net of tax (expense) benefit of ($0.2) and $1.5, respectively | 0.6 | (2.8 | ) | ||||
Net loss recognized in other comprehensive income, net of tax benefit of $9.6 and $83.0, respectively | $ | (72.3 | ) | $ | (171.5 | ) |
13. | Earnings per Share |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||
Denominator for basic earnings per share – weighted-average shares | 263.0 | 263.1 | 262.4 | 264.8 | |||||||
Effect of dilutive securities – employee stock options, nonvested restricted stock awards and convertible debentures | 5.2 | 11.2 | 5.4 | 12.5 | |||||||
Denominator for diluted earnings per share | 268.2 | 274.3 | 267.8 | 277.3 |
14. | Segment Information |
Commercial and Specialty Business | Government Business | Other | Total | ||||||||||||
Three months ended June 30, 2016 | |||||||||||||||
Operating revenue | $ | 9,898.3 | $ | 11,371.1 | $ | 5.1 | $ | 21,274.5 | |||||||
Operating gain (loss) | 1,075.3 | 450.5 | (25.6 | ) | 1,500.2 | ||||||||||
Three months ended June 30, 2015 | |||||||||||||||
Operating revenue | $ | 9,368.2 | $ | 10,385.0 | $ | 5.1 | $ | 19,758.3 | |||||||
Operating gain (loss) | 912.0 | 609.7 | (9.6 | ) | 1,512.1 | ||||||||||
Six Months Ended June 30, 2016 | |||||||||||||||
Operating revenue | $ | 19,408.1 | $ | 22,165.0 | $ | 10.8 | $ | 41,583.9 | |||||||
Operating gain (loss) | 2,368.3 | 775.5 | (73.2 | ) | 3,070.6 | ||||||||||
Six Months Ended June 30, 2015 | |||||||||||||||
Operating revenue | $ | 18,735.1 | $ | 19,865.1 | $ | 9.5 | $ | 38,609.7 | |||||||
Operating gain (loss) | 2,179.0 | 934.1 | (21.7 | ) | 3,091.4 |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Reportable segments operating revenues | $ | 21,274.5 | $ | 19,758.3 | $ | 41,583.9 | $ | 38,609.7 | |||||||
Net investment income | 194.9 | 186.7 | 366.0 | 354.3 | |||||||||||
Net realized gains (losses) on financial instruments | 12.5 | 92.3 | (112.6 | ) | 138.8 | ||||||||||
Other-than-temporary impairment losses recognized in income | (25.7 | ) | (21.8 | ) | (92.6 | ) | (35.8 | ) | |||||||
Total revenues | $ | 21,456.2 | $ | 20,015.5 | $ | 41,744.7 | $ | 39,067.0 |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Reportable segments operating gain | $ | 1,500.2 | $ | 1,512.1 | $ | 3,070.6 | $ | 3,091.4 | |||||||
Net investment income | 194.9 | 186.7 | 366.0 | 354.3 | |||||||||||
Net realized gains (losses) on financial instruments | 12.5 | 92.3 | (112.6 | ) | 138.8 | ||||||||||
Other-than-temporary impairment losses recognized in income | (25.7 | ) | (21.8 | ) | (92.6 | ) | (35.8 | ) | |||||||
Interest expense | (185.7 | ) | (154.1 | ) | (372.8 | ) | (308.5 | ) | |||||||
Amortization of other intangible assets | (47.9 | ) | (60.1 | ) | (98.3 | ) | (112.6 | ) | |||||||
Gain (loss) on extinguishment of debt | — | 2.9 | — | (0.5 | ) | ||||||||||
Income before income tax expense | $ | 1,448.3 | $ | 1,558.0 | $ | 2,760.3 | $ | 3,127.1 |
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
June 30 | |||||||||||
(In thousands) | 2016 | 2015 | Change | % Change | |||||||
Medical Membership | |||||||||||
Customer Type | |||||||||||
Local Group | 15,192 | 15,153 | 39 | 0.3 | % | ||||||
Individual | 1,812 | 1,844 | (32 | ) | (1.7 | )% | |||||
National: | |||||||||||
National Accounts | 7,808 | 7,328 | 480 | 6.6 | % | ||||||
BlueCard® | 5,604 | 5,437 | 167 | 3.1 | % | ||||||
Total National | 13,412 | 12,765 | 647 | 5.1 | % | ||||||
Medicare | 1,426 | 1,432 | (6 | ) | (0.4 | )% | |||||
Medicaid | 6,336 | 5,764 | 572 | 9.9 | % | ||||||
FEP | 1,572 | 1,569 | 3 | 0.2 | % | ||||||
Total Medical Membership by Customer Type | 39,750 | 38,527 | 1,223 | 3.2 | % | ||||||
Funding Arrangement | |||||||||||
Self-Funded | 24,550 | 23,510 | 1,040 | 4.4 | % | ||||||
Fully-Insured | 15,200 | 15,017 | 183 | 1.2 | % | ||||||
Total Medical Membership by Funding Arrangement | 39,750 | 38,527 | 1,223 | 3.2 | % | ||||||
Reportable Segment | |||||||||||
Commercial and Specialty Business | 30,416 | 29,762 | 654 | 2.2 | % | ||||||
Government Business | 9,334 | 8,765 | 569 | 6.5 | % | ||||||
Total Medical Membership by Reportable Segment | 39,750 | 38,527 | 1,223 | 3.2 | % | ||||||
Other Membership & Customers | |||||||||||
Life and Disability Members | 4,689 | 4,803 | (114 | ) | (2.4 | )% | |||||
Dental Members | 5,413 | 5,159 | 254 | 4.9 | % | ||||||
Dental Administration Members | 5,369 | 5,296 | 73 | 1.4 | % | ||||||
Vision Members | 5,929 | 5,494 | 435 | 7.9 | % | ||||||
Medicare Advantage Part D Members | 608 | 609 | (1 | ) | (0.2 | )% | |||||
Medicare Part D Standalone Members | 352 | 372 | (20 | ) | (5.4 | )% |
• | Neonatal Intensive Care Unit Focused Review - Collaborative teams focus on developing a comprehensive plan of care and safe and effective discharge planning so that individuals can be released from the Neonatal Intensive Care Unit as soon as medically appropriate. |
• | Cancer Care Quality Program - This program, developed in collaboration with our subsidiary AIM Specialty Health, identifies certain cancer treatment pathways selected based upon current medical evidence, peer-reviewed published literature, consensus guidelines and our clinical policies to support oncologists in identifying cancer treatment therapies that are highly effective and provide greater value. |
• | Avoidable Emergency Room Visits - This program seeks to help educate members and providers about potentially avoidable emergency room visits. Phone calls and mailings are used to inform members of alternate sites of care, such as primary care physicians, urgent care facilities, and walk-in doctor’s offices that can replace visits to the emergency room in certain situations. |
Three Months Ended June 30 | Six Months Ended June 30 | Change | ||||||||||||||||||||||||||||
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||||||||||||||||
2016 vs. 2015 | 2016 vs. 2015 | |||||||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | $ | % | $ | % | |||||||||||||||||||||||
Total operating revenue | $ | 21,274.5 | $ | 19,758.3 | $ | 41,583.9 | $ | 38,609.7 | $ | 1,516.2 | 7.7 | % | $ | 2,974.2 | 7.7 | % | ||||||||||||||
Net investment income | 194.9 | 186.7 | 366.0 | 354.3 | 8.2 | 4.4 | % | 11.7 | 3.3 | % | ||||||||||||||||||||
Net realized gains (losses) on financial instruments | 12.5 | 92.3 | (112.6 | ) | 138.8 | (79.8 | ) | (86.5 | )% | (251.4 | ) | (181.1 | )% | |||||||||||||||||
Other-than-temporary impairment losses on investments | (25.7 | ) | (21.8 | ) | (92.6 | ) | (35.8 | ) | (3.9 | ) | 17.9 | % | (56.8 | ) | 158.7 | % | ||||||||||||||
Total revenues | 21,456.2 | 20,015.5 | 41,744.7 | 39,067.0 | 1,440.7 | 7.2 | % | 2,677.7 | 6.9 | % | ||||||||||||||||||||
Benefit expense | 16,805.2 | 15,205.4 | 32,344.0 | 29,332.3 | 1,599.8 | 10.5 | % | 3,011.7 | 10.3 | % | ||||||||||||||||||||
Selling, general and administrative expense | 2,969.1 | 3,040.8 | 6,169.3 | 6,186.0 | (71.7 | ) | (2.4 | )% | (16.7 | ) | (0.3 | )% | ||||||||||||||||||
Other expense1 | 233.6 | 211.3 | 471.1 | 421.6 | 22.3 | 10.6 | % | 49.5 | 11.7 | % | ||||||||||||||||||||
Total expenses | 20,007.9 | 18,457.5 | 38,984.4 | 35,939.9 | 1,550.4 | 8.4 | % | 3,044.5 | 8.5 | % | ||||||||||||||||||||
Income before income tax expense | 1,448.3 | 1,558.0 | 2,760.3 | 3,127.1 | (109.7 | ) | (7.0 | )% | (366.8 | ) | (11.7 | )% | ||||||||||||||||||
Income tax expense | 667.7 | 698.9 | 1,276.7 | 1,402.8 | (31.2 | ) | (4.5 | )% | (126.1 | ) | (9.0 | )% | ||||||||||||||||||
Net income | $ | 780.6 | $ | 859.1 | $ | 1,483.6 | $ | 1,724.3 | $ | (78.5 | ) | (9.1 | )% | $ | (240.7 | ) | (14.0 | )% | ||||||||||||
Average diluted shares outstanding | 268.2 | 274.3 | 267.8 | 277.3 | (6.1 | ) | (2.2 | )% | (9.5 | ) | (3.4 | )% | ||||||||||||||||||
Diluted net income per share | $ | 2.91 | $ | 3.13 | $ | 5.54 | $ | 6.22 | $ | (0.22 | ) | (7.0 | )% | $ | (0.68 | ) | (10.9 | )% | ||||||||||||
Benefit expense ratio2 | 84.2 | % | 82.1 | % | 83.1 | % | 81.2 | % | 210bp3 | 190bp3 | ||||||||||||||||||||
Selling, general and administrative expense ratio4 | 14.0 | % | 15.4 | % | 14.8 | % | 16.0 | % | (140)bp3 | (120)bp3 | ||||||||||||||||||||
Income before income taxes as a percentage of total revenue | 6.8 | % | 7.8 | % | 6.6 | % | 8.0 | % | (100)bp3 | (140)bp3 | ||||||||||||||||||||
Net income as a percentage of total revenue | 3.6 | % | 4.3 | % | 3.6 | % | 4.4 | % | (70)bp3 | (80)bp3 | ||||||||||||||||||||
1 | Includes interest expense, amortization of other intangible assets and gain/loss on extinguishment of debt. |
2 | Benefit expense ratio represents benefit expense as a percentage of premium revenue. Premiums for the three months ended June 30, 2016 and 2015 were $19,948.0 and $18,516.3, respectively. Premiums for the six months ended June 30, 2016 and 2015 were $38,936.9 and $36,126.8, respectively. Premiums are included in total operating revenue presented above. |
3 | bp = basis point; one hundred basis points = 1%. |
4 | Selling, general and administrative expense ratio represents selling, general and administrative expense as a percentage of total operating revenue. |
Three Months Ended June 30 | Six Months Ended June 30 | Change | ||||||||||||||||||||||||||||
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||||||||||||||||
2016 vs. 2015 | 2016 vs. 2015 | |||||||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | $ | % | $ | % | |||||||||||||||||||||||
Commercial and Specialty Business | ||||||||||||||||||||||||||||||
Operating revenue | $ | 9,898.3 | $ | 9,368.2 | $ | 19,408.1 | $ | 18,735.1 | $ | 530.1 | 5.7 | % | $ | 673.0 | 3.6 | % | ||||||||||||||
Operating gain | $ | 1,075.3 | $ | 912.0 | $ | 2,368.3 | $ | 2,179.0 | $ | 163.3 | 17.9 | % | $ | 189.3 | 8.7 | % | ||||||||||||||
Operating margin | 10.9 | % | 9.7 | % | 12.2 | % | 11.6 | % | 120bp | 60bp | ||||||||||||||||||||
Government Business | ||||||||||||||||||||||||||||||
Operating revenue | $ | 11,371.1 | $10,385.0 | $ | 22,165.0 | $ | 19,865.1 | $ | 986.1 | 9.5 | % | $ | 2,299.9 | 11.6 | % | |||||||||||||||
Operating gain | $ | 450.5 | $ | 609.7 | $ | 775.5 | $ | 934.1 | $ | (159.2 | ) | (26.1 | )% | $ | (158.6 | ) | (17.0 | )% | ||||||||||||
Operating margin | 4.0 | % | 5.9 | % | 3.5 | % | 4.7 | % | (190 | )bp | (120)bp | |||||||||||||||||||
Other | ||||||||||||||||||||||||||||||
Operating revenue1 | $ | 5.1 | $ | 5.1 | $ | 10.8 | $ | 9.5 | $ | — | — | % | $ | 1.3 | 13.7 | % | ||||||||||||||
Operating loss2 | $ | (25.6 | ) | $ | (9.6 | ) | $ | (73.2 | ) | $ | (21.7 | ) | $ | (16.0 | ) | 166.7 | % | $ | (51.5 | ) | 237.3 | % | ||||||||
1 | Fluctuations not material. |
2 | Fluctuations primarily a result of changes in unallocated corporate expenses. The increase in unallocated corporate expenses for the Six Months Ended June 30, 2016 compared to the Six Months Ended June 30, 2015 is primarily due to costs incurred associated with the pending Acquisition of Cigna. |
Six Months Ended June 30 | Years Ended December 31 | ||||||||||||||||||
2016 | 2015 | 2015 | 2014 | 2013 | |||||||||||||||
Gross medical claims payable, beginning of period | $ | 7,569.8 | $ | 6,861.2 | $ | 6,861.2 | $ | 6,127.2 | $ | 6,174.5 | |||||||||
Ceded medical claims payable, beginning of period | (645.6 | ) | (767.4 | ) | (767.4 | ) | (23.4 | ) | (27.2 | ) | |||||||||
Net medical claims payable, beginning of period | 6,924.2 | 6,093.8 | 6,093.8 | 6,103.8 | 6,147.3 | ||||||||||||||
Business combinations and purchase adjustments | — | 121.8 | 121.8 | — | — | ||||||||||||||
Net incurred medical claims: | |||||||||||||||||||
Current year | 32,452.2 | 29,516.8 | 60,708.4 | 56,305.8 | 55,894.3 | ||||||||||||||
Prior years redundancies | (726.3 | ) | (760.9 | ) | (800.2 | ) | (541.9 | ) | (599.1 | ) | |||||||||
Total net incurred medical claims | 31,725.9 | 28,755.9 | 59,908.2 | 55,763.9 | 55,295.2 | ||||||||||||||
Net payments attributable to: | |||||||||||||||||||
Current year medical claims | 26,197.1 | 24,249.2 | 54,067.7 | 50,353.9 | 49,887.2 | ||||||||||||||
Prior years medical claims | 5,541.4 | 4,594.8 | 5,131.9 | 5,420.0 | 5,451.5 | ||||||||||||||
Total net payments | 31,738.5 | 28,844.0 | 59,199.6 | 55,773.9 | 55,338.7 | ||||||||||||||
Net medical claims payable, end of period | 6,911.6 | 6,127.5 | 6,924.2 | 6,093.8 | 6,103.8 | ||||||||||||||
Ceded medical claims payable, end of period | 587.0 | 1,050.4 | 645.6 | 767.4 | 23.4 | ||||||||||||||
Gross medical claims payable, end of period | $ | 7,498.6 | $ | 7,177.9 | $ | 7,569.8 | $ | 6,861.2 | $ | 6,127.2 | |||||||||
Current year medical claims paid as a percentage of current year net incurred medical claims | 80.7 | % | 82.2 | % | 89.1 | % | 89.4 | % | 89.3 | % | |||||||||
Prior year redundancies in the current period as a percentage of prior year net medical claims payable less prior year redundancies in the current period | 11.7 | % | 14.3 | % | 15.1 | % | 9.7 | % | 10.8 | % | |||||||||
Prior year redundancies in the current period as a percentage of prior year net incurred medical claims | 1.2 | % | 1.4 | % | 1.4 | % | 1.0 | % | 1.3 | % | |||||||||
Favorable Developments by Changes in Key Assumptions | |||||||||||||
2016 | 2015 | ||||||||||||
Assumed trend factors | $ | 518.0 | $ | 481.8 | |||||||||
Assumed completion factors | 208.3 | 279.1 | |||||||||||
Total | $ | 726.3 | $ | 760.9 | |||||||||
Six Months Ended June 30 | |||||||
2016 | 2015 | ||||||
Cash flows provided by (used in): | |||||||
Operating activities | $ | 1,966.3 | $ | 2,823.5 | |||
Investing activities | (1,707.8 | ) | (2,026.7 | ) | |||
Financing activities | (790.3 | ) | (1,391.1 | ) | |||
Effect of foreign exchange rates on cash and cash equivalents | 1.0 | (4.4 | ) | ||||
Change in cash and cash equivalents | $ | (530.8 | ) | $ | (598.7 | ) |
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 4. | CONTROLS AND PROCEDURES |
ITEM 1. | LEGAL PROCEEDINGS |
ITEM 1A. | RISK FACTORS |
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
Period | Total Number of Shares Purchased1 | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Programs2 | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Programs | |||||||||
(in millions, except share and per share data) | |||||||||||||
April 1, 2016 to April 30, 2016 | 39,429 | $ | 141.88 | — | $ | 4,175.9 | |||||||
May 1, 2016 to May 31, 2016 | 6,791 | 140.36 | — | 4,175.9 | |||||||||
June 1, 2016 to June 30, 2016 | 7,461 | 132.61 | — | 4,175.9 | |||||||||
53,681 | — |
1 | Total number of shares purchased represents shares delivered to or withheld by us in connection with employee payroll tax withholding upon exercise or vesting of stock awards. Stock grants to employees and directors and stock issued for stock option plans and stock purchase plans in the consolidated statements of shareholders’ equity are shown net of these shares purchased. |
2 | Represents the number of shares repurchased through the common stock repurchase program authorized by our Board of Directors, which the Board evaluates periodically. There were no share repurchases under the common stock repurchase program during the three months ended June 30, 2016. The Board of Directors has authorized our common stock repurchase program since 2003. The Board's most recent authorized increase to the program was $5,000.0 on October 2, 2014. No duration has been placed on our common stock repurchase program and we reserve the right to discontinue the program at any time. |
ITEM 3. | DEFAULTS UPON SENIOR SECURITIES |
ITEM 4. | MINE SAFETY DISCLOSURES |
ITEM 5. | OTHER INFORMATION |
ITEM 6. | EXHIBITS |
ANTHEM, INC. Registrant | |||
Date: July 27, 2016 | By: | /S/ JOHN E. GALLINA | |
John E. Gallina Executive Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer) | |||
Date: July 27, 2016 | By: | /S/ RONALD W. PENCZEK | |
Ronald W. Penczek Senior Vice President and Chief Accounting Officer (Principal Accounting Officer) |
Exhibit Number | Exhibit | |||
3.1 | Amended and Restated Articles of Incorporation of the Company, as amended effective December 2, 2014, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on December 2, 2014. | |||
3.2 | By-Laws of the Company, as amended February 18, 2016, incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed on February 23, 2016. | |||
4.6 | Upon the request of the Securities and Exchange Commission, the Company will furnish copies of any other instruments defining the rights of holders of long-term debt of the Company or its subsidiaries. | |||
10.11 | * | (c) | Form of Employment Agreement between the Company and John E. Gallina, incorporated by reference to Exhibit A to Exhibit 10.41 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007, SEC File No. 001-16751. | |
31.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Exchange Act Rules, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||
31.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Exchange Act Rules, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||
32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||
32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||
101 | The following material from Anthem, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Income; (iii) the Consolidated Statements of Comprehensive Income; (iv) the Consolidated Statements of Cash Flows; (v) the Consolidated Statements of Shareholders’ Equity; and (vi) Notes to Consolidated Financial Statements. | |||
* | Indicates management contracts or compensatory plans or arrangements. |
1. | I have reviewed this report on Form 10-Q of Anthem, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: July 27, 2016 | /s/ JOSEPH R. SWEDISH | |
Chairman, President and Chief Executive Officer |
1. | I have reviewed this report on Form 10-Q of Anthem, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: July 27, 2016 | /s/ JOHN E. GALLINA | |
Executive Vice President and Chief Financial Officer |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ JOSEPH R. SWEDISH | |
Joseph R. Swedish | |
Chairman, President and Chief Executive Officer | |
July 27, 2016 |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ JOHN E. GALLINA | |
John E. Gallina | |
Executive Vice President and Chief Financial Officer | |
July 27, 2016 |
Document And Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jul. 14, 2016 |
|
Document and Entity Information | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | ANTM | |
Entity Registrant Name | Anthem, Inc. | |
Entity Central Index Key | 0001156039 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 263,153,816 | 263,171,006 |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Available-for-sale fixed maturity securities investments, current, amortized cost | $ 17,957.7 | $ 16,950.0 |
Available-for-sale equity securities investments, current, cost | 1,304.0 | 1,055.8 |
Available-for-sale fixed maturity securities investments, long-term, amortized cost | 493.2 | 550.4 |
Available-for-sale equity securities investments, long-term, cost | $ 27.1 | $ 27.3 |
Preferred stock, par value | $ 0 | $ 0 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 900,000,000 | 900,000,000 |
Common stock, shares issued | 263,153,816 | 261,238,188 |
Common stock, shares outstanding | 263,153,816 | 261,238,188 |
Consolidated Statements Of Income - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Revenues | ||||
Premiums | $ 19,948.0 | $ 18,516.3 | $ 38,936.9 | $ 36,126.8 |
Administrative fees | 1,315.8 | 1,229.5 | 2,626.8 | 2,456.6 |
Other revenue | 10.7 | 12.5 | 20.2 | 26.3 |
Total operating revenue | 21,274.5 | 19,758.3 | 41,583.9 | 38,609.7 |
Net investment income | 194.9 | 186.7 | 366.0 | 354.3 |
Net realized gains (losses) on financial instruments | 12.5 | 92.3 | (112.6) | 138.8 |
Other-than-temporary impairment losses on investments: | ||||
Total other-than-temporary impairment losses on investments | (33.8) | (26.2) | (119.0) | (41.6) |
Portion of other-than-temporary impairment losses recognized in other comprehensive income | 8.1 | 4.4 | 26.4 | 5.8 |
Other-than-temporary impairment losses recognized in income | (25.7) | (21.8) | (92.6) | (35.8) |
Total revenues | 21,456.2 | 20,015.5 | 41,744.7 | 39,067.0 |
Expenses | ||||
Benefit expense | 16,805.2 | 15,205.4 | 32,344.0 | 29,332.3 |
Selling, general and administrative expense: | ||||
Selling expense | 351.5 | 363.8 | 701.4 | 732.0 |
General and administrative expense | 2,617.6 | 2,677.0 | 5,467.9 | 5,454.0 |
Total selling, general and administrative expense | 2,969.1 | 3,040.8 | 6,169.3 | 6,186.0 |
Interest expense | 185.7 | 154.1 | 372.8 | 308.5 |
Amortization of other intangible assets | 47.9 | 60.1 | 98.3 | 112.6 |
(Gain) loss on extinguishment of debt | 0.0 | (2.9) | 0.0 | 0.5 |
Total expenses | 20,007.9 | 18,457.5 | 38,984.4 | 35,939.9 |
Income before income tax expense | 1,448.3 | 1,558.0 | 2,760.3 | 3,127.1 |
Income tax expense | 667.7 | 698.9 | 1,276.7 | 1,402.8 |
Net income | $ 780.6 | $ 859.1 | $ 1,483.6 | $ 1,724.3 |
Net income per share | ||||
Basic net income per share | $ 2.97 | $ 3.27 | $ 5.65 | $ 6.51 |
Diluted net income per share | 2.91 | 3.13 | 5.54 | 6.22 |
Dividends per share | $ 0.650 | $ 0.625 | $ 1.300 | $ 1.250 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 780.6 | $ 859.1 | $ 1,483.6 | $ 1,724.3 |
Other comprehensive income (loss), net of tax: | ||||
Change in net unrealized gains/losses on investments | 209.8 | (241.2) | 382.1 | (180.8) |
Change in non-credit component of other-than-temporary impairment losses on investments | (5.4) | (2.8) | (7.1) | 0.7 |
Change in net unrealized gains/losses on cash flow hedges | (190.0) | 0.9 | (455.5) | 1.8 |
Change in net periodic pension and postretirement costs | 3.8 | 4.9 | 7.6 | 9.6 |
Foreign currency translation adjustments | (0.7) | 0.7 | 0.6 | (2.8) |
Other comprehensive income (loss) | 17.5 | (237.5) | (72.3) | (171.5) |
Total comprehensive income | $ 798.1 | $ 621.6 | $ 1,411.3 | $ 1,552.8 |
Organization |
6 Months Ended |
---|---|
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization References to the terms “we”, “our”, “us”, “Anthem” or the “Company” used throughout these Notes to Consolidated Financial Statements refer to Anthem, Inc., an Indiana corporation, and unless the context otherwise requires, its direct and indirect subsidiaries. We are one of the largest health benefits companies in terms of medical membership in the United States, serving 39.8 medical members through our affiliated health plans as of June 30, 2016. We offer a broad spectrum of network-based managed care plans to large and small employer, individual, Medicaid and Medicare markets. Our managed care plans include: preferred provider organizations, or PPOs; health maintenance organizations, or HMOs; point-of-service, or POS, plans; traditional indemnity plans and other hybrid plans, including consumer-driven health plans, or CDHPs; and hospital only and limited benefit products. In addition, we provide a broad array of managed care services to self-funded customers, including claims processing, underwriting, stop loss insurance, actuarial services, provider network access, medical cost management, disease management, wellness programs and other administrative services. We provide an array of specialty and other insurance products and services such as dental, vision, life and disability insurance benefits, radiology benefit management and analytics-driven personal health care. We also provide services to the federal government in connection with the Federal Employee Program, or FEP. We are an independent licensee of the Blue Cross and Blue Shield Association, or BCBSA, an association of independent health benefit plans. We serve our members as the Blue Cross licensee for California and as the Blue Cross and Blue Shield, or BCBS, licensee for Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri (excluding 30 counties in the Kansas City area), Nevada, New Hampshire, New York (as BCBS in 10 New York City metropolitan and surrounding counties, and as Blue Cross or BCBS in selected upstate counties only), Ohio, Virginia (excluding the Northern Virginia suburbs of Washington, D.C.) and Wisconsin. In a majority of these service areas we do business as Anthem Blue Cross, Anthem Blue Cross and Blue Shield, Blue Cross and Blue Shield of Georgia, and Empire Blue Cross Blue Shield, or Empire Blue Cross (in our New York service areas). We also conduct business through an arrangement with another BCBS licensee in South Carolina. We conduct business through our AMERIGROUP Corporation, or Amerigroup, subsidiary, in Florida, Georgia, Iowa, Kansas, Louisiana, Maryland, Nevada, New Jersey, New Mexico, New York, Tennessee, Texas and Washington. In addition, we conduct business through our Simply Healthcare Holdings, Inc., or Simply Healthcare, subsidiary in Florida. We also serve customers throughout the country as HealthLink, UniCare (including a non-risk arrangement with Massachusetts), and in certain Arizona, California, Nevada and Virginia markets through our CareMore Health Group, Inc., or CareMore, subsidiary. We are licensed to conduct insurance operations in all 50 states through our subsidiaries. |
Basis Of Presentation and Significant Accounting Policies |
6 Months Ended |
---|---|
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies Basis of Presentation: The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP, for interim financial reporting. Accordingly, they do not include all of the information and footnotes required by GAAP for annual financial statements. We have omitted certain footnote disclosures that would substantially duplicate the disclosures in our 2015 Annual Report on Form 10-K, unless the information contained in those disclosures materially changed or is required by GAAP. Certain prior year amounts have been reclassified to conform to the current year presentation. In the opinion of management, all adjustments, including normal recurring adjustments, necessary for a fair statement of the consolidated financial statements as of and for the three and six months ended June 30, 2016 and 2015 have been recorded. The results of operations for the three and six months ended June 30, 2016 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2016. These unaudited consolidated financial statements should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2015 included in our 2015 Annual Report on Form 10-K. Certain of our subsidiaries operate outside of the United States and have functional currencies other than the U.S. dollar, or USD. We translate the assets and liabilities of those subsidiaries to USD using the exchange rate in effect at the end of the period. We translate the revenues and expenses of those subsidiaries to USD using the average exchange rates in effect during the period. The net effect of these translation adjustments is included in “Foreign currency translation adjustments” in our consolidated statements of comprehensive income. Additionally, we control a number of bank accounts that are used exclusively to hold customer funds for the administration of customer benefits. At June 30, 2016 and December 31, 2015, we held $174.3 and $122.6, respectively, of customer funds with an offsetting liability in other current liabilities. Recently Adopted Accounting Guidance: In April 2015, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update No. 2015-05, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement, or ASU 2015-05. This amendment provides guidance to help entities determine whether a cloud computing arrangement contains a software license that should be accounted for as internal-use software or as a service contract. ASU 2015-05 became effective January 1, 2016 and we elected to adopt the provisions of the new guidance prospectively to all arrangements entered into or materially modified on or after January 1, 2016. The adoption of ASU 2015-05 did not have an impact on our consolidated financial position, results of operations or cash flows. In February 2015, the FASB issued Accounting Standards Update No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, or ASU 2015-02. ASU 2015-02 amended the consolidation guidance by modifying the evaluation criteria for whether limited partnerships and similar legal entities are variable interest entities or voting interest entities, eliminating the presumption that a general partner should consolidate a limited partnership, and affecting the consolidation analysis of reporting entities that are involved with variable interest entities. We adopted the provisions of ASU 2015-02 effective January 1, 2016 and re-evaluated all legal entity investments under the revised consolidation model. The adoption of ASU 2015-02 did not have a material impact on our consolidated financial position, results of operations or cash flows. Recent Accounting Guidance Not Yet Adopted: In June 2016, the FASB issued Accounting Standards Update No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, or ASU 2016-13. This update introduces a current expected credit loss model for measuring expected credit losses for certain types of financial instruments held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. ASU 2016-13 replaces the current incurred loss model for measuring expected credit losses, requires expected losses on available-for-sale debt securities to be recognized through an allowance for credit losses rather than as reductions in the amortized cost of the securities, and provides for additional disclosure requirements. ASU 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted for interim and annual reporting periods beginning after December 15, 2018. We are currently evaluating the effects the adoption of ASU 2016-13 will have on our consolidated financial statements, results of operations and cash flows. In May 2016, the FASB issued Accounting Standards Update No. 2016-12, Revenue from Contracts With Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, or ASU 2016-12. In April 2016, the FASB issued Accounting Standards Update No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, or ASU 2016-10. In March 2016, the FASB issued Accounting Standards Update No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross verses Net), or ASU 2016-08. These amendments provide additional clarification and implementation guidance on the previously issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), or ASU 2014-09. The amendments in ASU 2016-12 provide clarifying guidance on assessing collectability; noncash consideration; presentation of sales taxes; and transition. The amendments in ASU 2016-10 provide clarifying guidance on materiality of performance obligations; evaluating distinct performance obligations; treatment of shipping and handling costs; and determining whether an entity's promise to grant a license provides a customer with either a right to use or a right to access an entity's intellectual property. The amendments in ASU 2016-08 clarify how an entity should identify the specified good or service for the principal versus agent evaluation and how it should apply the control principle to certain types of arrangements. The adoption of ASU 2016-12, ASU 2016-10 and ASU 2016-08 is to coincide with an entity's adoption of ASU 2014-09, which we intend to adopt for interim and annual reporting periods beginning after December 15, 2017. We are currently evaluating the impact that these standards will have on our results of operations, cash flows, consolidated financial position and related disclosures. In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, or ASU 2016-09. The amendments in this update simplify several aspects of accounting for and reporting on share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The amendments in ASU 2016-09 are effective for interim and annual reporting periods beginning after December 15, 2016, with early adoption permitted. The various amendments are to be applied differently upon adoption with certain amendments being applied prospectively, retrospectively and under a modified retrospective transition method. We are currently evaluating the effects the adoption of ASU 2016-09 will have on our consolidated financial statements, results of operations and cash flows. In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842), or ASU 2016-02. Upon the effective date, ASU 2016-02 will supersede the current lease guidance in Topic 840, Leases. Under the new guidance, lessees will be required to recognize for all leases, with the exception of short-term leases, a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis. Concurrently, lessees will be required to recognize a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 is effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. The guidance is required to be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative periods presented in the financial statements. We are currently evaluating the effects the adoption of ASU 2016-02 will have on our consolidated financial statements, results of operations and cash flows. There were no other new accounting pronouncements that were issued or became effective since the issuance of our 2015 Annual Report on Form 10-K that had, or are expected to have, a material impact on our consolidated financial position, results of operations or cash flows. |
Business Acquisitions |
6 Months Ended |
---|---|
Jun. 30, 2016 | |
Business Combinations [Abstract] | |
Business Acquisitions | Business Acquisitions Pending Acquisition of Cigna Corporation On July 24, 2015, we and Cigna Corporation, or Cigna, announced that we entered into an Agreement and Plan of Merger, or Merger Agreement, dated as of July 23, 2015, by and among Anthem, Cigna and Anthem Merger Sub Corp., a Delaware corporation and our direct wholly-owned subsidiary, pursuant to which we will acquire all outstanding shares of Cigna, or the Acquisition. The Acquisition will further our goal of creating a premier health benefits company with critical diversification and scale to lead the transformation of health care delivery for consumers. Cigna is a global health services organization that delivers affordable and personalized products and services to customers through employer-based, government-sponsored and individual coverage arrangements. All of Cigna's products and services are provided exclusively by or through its operating subsidiaries, including Connecticut General Life Insurance Company, Cigna Health and Life Insurance Company, Life Insurance Company of North America and Cigna Life Insurance Company of New York. Such products and services include an integrated suite of health services, such as medical, dental, behavioral health, pharmacy, vision, supplemental benefits, and other related products including group life, accident and disability insurance. Cigna maintains sales capability in 30 countries and jurisdictions. Under the terms of the Merger Agreement, Cigna’s shareholders will receive $103.40 in cash and 0.5152 shares of our common stock for each Cigna common share outstanding. The value of the transaction is estimated to be approximately $53,000.0 based on the closing price of our common stock on the New York Stock Exchange on July 23, 2015. The final purchase price will be determined based on our closing stock price on the date of closing of the Acquisition. The combined company will reflect a pro forma equity ownership comprised of approximately 67% Anthem shareholders and approximately 33% Cigna shareholders. We expect to finance the cash portion of the Acquisition through available cash on hand and the issuance of new debt. We entered into a bridge facility commitment letter and a joinder agreement with a group of lenders which will provide up to $22,500.0 under a 364-day senior unsecured bridge term loan credit facility to finance the Acquisition in the event that we have not received proceeds from any combination of (i) senior unsecured term loans, (ii) common or preferred equity or equity-linked securities and/or (iii) senior unsecured notes in a public offering or private placement in an aggregate principal amount of at least $22,500.0 prior to the consummation of the Acquisition. In addition, in August 2015, we entered into a term loan facility which will provide up to $4,000.0 to finance a portion of the Acquisition. The commitment of the lenders to provide the bridge facility and the term loan facility is subject to several conditions, including the completion of the Acquisition. On July 21, 2016, the U.S. Department of Justice, or DOJ, along with certain state attorneys general, filed a civil antitrust lawsuit in the U.S. District Court for the District of Columbia seeking to block the Acquisition. We intend to vigorously defend the Acquisition in this litigation and remain committed to completing the Acquisition as soon as practicable. Though the Merger Agreement provides that the closing of the Acquisition occur by January 31, 2017, this date can be extended to April 30, 2017 by either us or Cigna through written notice to the other party if all conditions to the merger have been satisfied except for the receipt of regulatory approvals and other governmental consents. If the Merger Agreement is terminated because the required regulatory approvals cannot be obtained, under certain conditions, we would be obligated to pay a $1,850.0 termination fee to Cigna. Acquisition of Simply Healthcare On February 17, 2015, we completed our acquisition of Simply Healthcare, a leading managed care company for people enrolled in Medicaid and Medicare programs in Florida. The excess of the consideration transferred over the fair value of net assets acquired resulted in non-tax-deductible goodwill of $474.7 at December 31, 2015. There were no additional measurement period adjustments to the provisional amounts recorded at December 31, 2015. The results of operations of Simply Healthcare are included in our consolidated financial statements within our Government Business segment for the periods following February 17, 2015. |
Investments |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | Investments We evaluate our investment securities for other-than-temporary declines based on qualitative and quantitative factors. Other-than-temporary impairment losses recognized in income totaled $25.7 and $21.8 for the three months ended June 30, 2016 and 2015, respectively. Other-than-temporary impairment losses recognized in income totaled $92.6 and $35.8 for the six months ended June 30, 2016 and 2015, respectively. There were no individually significant other-than-temporary impairment losses on investments during the three and six months ended June 30, 2016 and 2015. We continue to review our investment portfolios under our impairment review policy. Given the inherent uncertainty of changes in market conditions and the significant judgments involved, there is a continuing risk that further declines in fair value may occur and additional material other-than-temporary impairment losses on investments may be recorded in future periods. A summary of current and long-term investments, available-for-sale, at June 30, 2016 and December 31, 2015 is as follows:
At June 30, 2016 and December 31, 2015, we held $765.7 and $777.2, respectively, of energy sector fixed maturity securities within our available-for-sale investment portfolio. These energy sector securities had accumulated net unrealized losses at June 30, 2016 and December 31, 2015 of $0.3 and $172.0, respectively. For available-for-sale securities in an unrealized loss position at June 30, 2016 and December 31, 2015, the following table summarizes the aggregate fair values and gross unrealized losses by length of time those securities have continuously been in an unrealized loss position:
The amortized cost and fair value of available-for-sale fixed maturity securities at June 30, 2016, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations.
Proceeds from fixed maturity securities, equity securities and other invested assets and the related gross realized gains and gross realized losses for the three and six months ended June 30, 2016 and 2015 are as follows:
In the ordinary course of business, we may sell securities at a loss for a number of reasons, including, but not limited to: (i) changes in the investment environment; (ii) expectation that the fair value could deteriorate further; (iii) desire to reduce exposure to an issuer or an industry; (iv) changes in credit quality; or (v) changes in expected cash flow. All securities sold resulting in investment gains and losses are recorded on the trade date. Realized gains and losses are determined on the basis of the cost or amortized cost of the specific securities sold. Securities Lending Programs We participate in securities lending programs whereby marketable securities in our investment portfolio are transferred to independent brokers or dealers in exchange for cash and securities collateral. The fair value of the collateral received at the time of the transactions amounted to $1,512.0 and $1,300.9 at June 30, 2016 and December 31, 2015, respectively. The value of the collateral represented 103% of the market value of the securities on loan at June 30, 2016 and December 31, 2015. Under FASB guidance related to accounting for transfers and servicing of financial assets and extinguishments of liabilities, we recognize the collateral as an asset, which is reported as “Securities lending collateral” on our consolidated balance sheets and we record a corresponding liability for the obligation to return the collateral to the borrower, which is reported as “Securities lending payable.” The securities on loan are reported in the applicable investment category on our consolidated balance sheets. Unrealized gains or losses on securities lending collateral are included in accumulated other comprehensive income as a separate component of shareholders’ equity. The remaining contractual maturity of our securities lending agreements at June 30, 2016 is as follows:
The market value of loaned securities and that of the collateral pledged can fluctuate in non-synchronized fashions. To the extent the loaned securities' value appreciates faster or depreciates slower than the value of the collateral pledged, we are exposed to the risk of the shortfall. As a primary mitigating mechanism, the loaned securities and collateral pledged are marked to market on a daily basis and the shortfall, if any, is collected accordingly. Secondarily, the collateral level is set at 102% of the value of the loaned securities, which provides a cushion before any shortfall arises. The investment of the cash collateral is subject to market risk, which is managed by limiting the investments to higher quality and shorter duration instruments. |
Derivative Financial Instruments Derivative Financial Instruments |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | Derivative Financial Instruments We primarily invest in the following types of derivative financial instruments: interest rate swaps, forward contracts, put and call options, swaptions, embedded derivatives and warrants. We also enter into master netting agreements which reduce credit risk by permitting net settlement of transactions. At June 30, 2016, we had posted collateral of $438.0 and received collateral of $42.1 related to our derivative financial instruments. A summary of the aggregate contractual or notional amounts and estimated fair values related to derivative financial instruments at June 30, 2016 and December 31, 2015 is as follows:
Fair Value Hedges We have entered into various interest rate swap contracts to convert a portion of our interest rate exposure on our long-term debt from fixed rates to floating rates. The floating rates payable on all of our fair value hedges are benchmarked to LIBOR. A summary of our outstanding fair value hedges at June 30, 2016 and December 31, 2015 is as follows:
A summary of the effect of fair value hedges on our income statement for the three and six months ended June 30, 2016 and 2015 is as follows:
Cash Flow Hedges We have entered into a series of forward starting pay fixed interest rate swaps with the objective of eliminating the variability of cash flows in the interest payments on anticipated future financings beginning in 2017. We had $5,350.0 and $4,650.0 in notional amount outstanding under these swaps at June 30, 2016 and December 31, 2015, respectively. The unrecognized loss for all outstanding and terminated cash flow hedges included in accumulated other comprehensive income, net of tax, was $536.6 and $81.1 at June 30, 2016 and December 31, 2015, respectively. As of June 30, 2016, the total amount of amortization over the next twelve months for all cash flow hedges will increase interest expense by approximately $27.6. A summary of the effect of cash flow hedges on our financial statements for the three and six months ended June 30, 2016 and 2015 is as follows:
We test for cash flow hedge effectiveness at hedge inception and re-assess at the end of each reporting period. No amounts were excluded from the assessment of hedge effectiveness. Non-Hedging Derivatives A summary of the effect of non-hedging derivatives on our income statement for the three and six months ended June 30, 2016 and 2015 is as follows:
|
Fair Value |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | Fair Value Assets and liabilities recorded at fair value in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Level inputs, as defined by FASB guidance for fair value measurements and disclosures, are as follows:
The following methods, assumptions and inputs were used to determine the fair value of each class of the following assets and liabilities recorded at fair value in the consolidated balance sheets: Cash equivalents: Cash equivalents primarily consist of highly rated money market funds with maturities of three months or less and are purchased daily at par value with specified yield rates. Due to the high ratings and short-term nature of the funds, we designate all cash equivalents as Level I. Fixed maturity securities, available-for-sale: Fair values of available-for-sale fixed maturity securities are based on quoted market prices, where available. These fair values are obtained primarily from third party pricing services, which generally use Level I or Level II inputs for the determination of fair value to facilitate fair value measurements and disclosures. Level I securities include United States Government securities, certain corporate securities and certain other asset-backed securities. Level II securities include corporate securities, securities from states, municipalities and political subdivisions, mortgage-backed securities, government sponsored securities and certain other asset-backed securities. For securities not actively traded, the pricing services may use quoted market prices of comparable instruments or discounted cash flow analyses, incorporating inputs that are currently observable in the markets for similar securities. We have controls in place to review the pricing services’ qualifications and procedures used to determine fair values. In addition, we periodically review the pricing services’ pricing methodologies, data sources and pricing inputs to ensure the fair values obtained are reasonable. Inputs that are often used in the valuation methodologies include, but are not limited to, broker quotes, benchmark yields, credit spreads, default rates and prepayment speeds. We also have certain fixed maturity securities, primarily corporate debt securities, that are designated Level III securities. For these securities, the valuation methodologies may incorporate broker quotes or discounted cash flow analyses using assumptions for inputs such as expected cash flows, benchmark yields, credit spreads, default rates and prepayment speeds that are not observable in the markets. Equity securities, available-for-sale: Fair values of equity securities are generally designated as Level I and are based on quoted market prices. For certain equity securities, quoted market prices for the identical security are not always available and the fair value is estimated by reference to similar securities for which quoted prices are available. These securities are designated Level II. We also have certain equity securities, including private equity securities, for which the fair value is estimated based on each security’s current condition and future cash flow projections. Such securities are designated Level III. The fair values of these private equity securities are generally based on either broker quotes or discounted cash flow projections using assumptions for inputs such as the weighted-average cost of capital, long-term revenue growth rates and earnings before interest, taxes, depreciation and amortization, or EBITDA, and/or revenue multiples that are not observable in the markets. Other invested assets, current: Other invested assets, current include securities held in rabbi trusts that are classified as trading. These securities are designated Level I securities as fair values are based on quoted market prices. Securities lending collateral: Fair values of securities lending collateral are based on quoted market prices, where available. These fair values are obtained primarily from third party pricing services, which generally use Level I or Level II inputs for the determination of fair value, to facilitate fair value measurements and disclosures. Derivatives: Fair values are based on the quoted market prices by the financial institution that is the counterparty to the derivative transaction. We independently verify prices provided by the counterparties using valuation models that incorporate market observable inputs for similar derivative transactions. Derivatives are designated as Level II securities. Derivatives presented within the fair value hierarchy table below are presented on a gross basis and not on a master netting basis by counterparty. A summary of fair value measurements by level for assets and liabilities measured at fair value on a recurring basis at June 30, 2016 and December 31, 2015 is as follows:
A reconciliation of the beginning and ending balances of assets measured at fair value on a recurring basis using Level III inputs for the three months ended June 30, 2016 and 2015 is as follows:
A reconciliation of the beginning and ending balances of assets measured at fair value on a recurring basis using Level III inputs for the six months ended June 30, 2016 and 2015 is as follows:
Transfers between levels, if any, are recorded as of the beginning of the reporting period. There were no material transfers between levels during the three and six months ended June 30, 2016 or 2015. Certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances. As disclosed in Note 3, “Business Acquisitions,” we completed our acquisition of Simply Healthcare on February 17, 2015. The values of net assets acquired in our acquisition of Simply Healthcare and resulting goodwill and other intangible assets were recorded at fair value primarily using Level III inputs. The majority of Simply Healthcare's assets acquired and liabilities assumed were recorded at their carrying values as of the respective date of acquisition, as their carrying values approximated their fair values due to their short-term nature. The fair values of goodwill and other intangible assets acquired in our acquisition of Simply Healthcare were internally estimated based on the income approach. The income approach estimates fair value based on the present value of the cash flows that the assets could be expected to generate in the future. We developed internal estimates for the expected cash flows and discount rate in the present value calculation. Other than the assets acquired and liabilities assumed in our acquisition of Simply Healthcare described above, there were no other assets or liabilities measured at fair value on a nonrecurring basis during the three and six months ended June 30, 2016 or 2015. Our valuation policy is determined by members of our treasury and accounting departments. Whenever possible, our policy is to obtain quoted market prices in active markets to estimate fair values for recognition and disclosure purposes. Where quoted market prices in active markets are not available, fair values are estimated using discounted cash flow analyses, broker quotes or other valuation techniques. These techniques are significantly affected by our assumptions, including discount rates and estimates of future cash flows. Potential taxes and other transaction costs are not considered in estimating fair values. Our valuation policy is generally to obtain only one quoted price for each security from third party pricing services, which are derived through recently reported trades for identical or similar securities making adjustments through the reporting date based upon available market observable information. When broker quotes are used, we generally obtain only one broker quote per security. As we are responsible for the determination of fair value, we perform monthly analysis on the prices received from the pricing services to determine whether the prices are reasonable estimates of fair value. This analysis is performed by our internal treasury personnel who are familiar with our investment portfolios, the pricing services engaged and the valuation techniques and inputs used. Our analysis includes a review of month-to-month price fluctuations. If unusual fluctuations are noted in this review, we may obtain additional information from other pricing services to validate the quoted price. There were no adjustments to quoted market prices obtained from the pricing services during the three and six months ended June 30, 2016 or 2015. In addition to the preceding disclosures on assets recorded at fair value in the consolidated balance sheets, FASB guidance also requires the disclosure of fair values for certain other financial instruments for which it is practicable to estimate fair value, whether or not such values are recognized in the consolidated balance sheets. Non-financial instruments such as real estate, property and equipment, other current assets, deferred income taxes, intangible assets and certain financial instruments, such as policy liabilities, are excluded from the fair value disclosures. Therefore, the fair value amounts cannot be aggregated to determine our underlying economic value. The carrying amounts reported in the consolidated balance sheets for cash, accrued investment income, premium and self-funded receivables, other receivables, unearned income, accounts payable and accrued expenses, income taxes receivable/payable, security trades pending payable, securities lending payable and certain other current liabilities approximate fair value because of the short term nature of these items. These assets and liabilities are not listed in the table below. The following methods, assumptions and inputs were used to estimate the fair value of each class of financial instrument that is recorded at its carrying value on the consolidated balance sheets: Other invested assets, long-term: Other invested assets, long-term include primarily our investments in limited partnerships, joint ventures and other non-controlled corporations, as well as the cash surrender value of corporate-owned life insurance policies. Investments in limited partnerships, joint ventures and other non-controlled corporations are carried at our share in the entities’ undistributed earnings, which approximates fair value. The carrying value of corporate-owned life insurance policies represents the cash surrender value as reported by the respective insurer, which approximates fair value. Short-term borrowings: The fair value of our short-term borrowings is based on quoted market prices for the same or similar debt, or, if no quoted market prices were available, on the current market interest rates estimated to be available to us for debt of similar terms and remaining maturities. Long-term debt – commercial paper: The carrying amount for commercial paper approximates fair value as the underlying instruments have variable interest rates at market value. Long-term debt – senior unsecured notes, remarketable subordinated notes and surplus notes: The fair values of our notes are based on quoted market prices in active markets for the same or similar debt, or, if no quoted market prices are available, on the current market observable rates estimated to be available to us for debt of similar terms and remaining maturities. Long-term debt – senior unsecured convertible debentures: The fair value of our convertible debentures is based on the market price in the active private market in which the convertible debentures trade. A summary of the estimated fair values by level of each class of financial instrument that is recorded at its carrying value on our consolidated balance sheets at June 30, 2016 and December 31, 2015 are as follows:
|
Income Taxes |
6 Months Ended |
---|---|
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes During the three months ended June 30, 2016 and 2015, we recognized income tax expense of $667.7 and $698.9, respectively, which represents effective tax rates of 46.1% and 44.9%, respectively. The decrease in income tax expense was primarily due to decreased income before income tax expense and the decrease in our portion of the non-tax deductible Health Insurance Provider Fee, or HIP Fee. For the three months ended June 30, 2016 and 2015, the HIP Fee resulted in additional income tax expense of $104.1 and $114.2, respectively. The decrease in income tax expense was partially offset by an increase in our California deferred state tax expense resulting from recent California legislation related to Managed Care Organizations. The increase in the effective income tax rate was primarily due to the discrete tax adjustments from an increase in deferred state tax expense. During the six months ended June 30, 2016 and 2015, we recognized income tax expense of $1,276.7 and $1,402.8, respectively, which represents effective tax rates of 46.3% and 44.9%, respectively. The decrease in income tax expense was primarily due to decreased income before income tax expense and the decrease in our portion of the non-tax deductible HIP Fee. For the six months ended June 30, 2016 and 2015, the HIP Fee resulted in additional income tax expense of $208.2 and $227.5, respectively. The decrease in income tax expense was partially offset by an increase in our California deferred state tax expense resulting from recent California legislation related to Managed Care Organizations. The increase in the effective tax rate was primarily due to the discrete tax adjustments from net realized losses on financial instruments, largely as a result of losses recognized on options entered into to economically hedge the variability of cash flows in the interest payments on anticipated future financings, and an increase in deferred state tax expense. |
Retirement Benefits |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits | Retirement Benefits The components of net periodic (benefit credit) benefit cost included in the consolidated statements of income for the three months ended June 30, 2016 and 2015 are as follows:
The components of net periodic (benefit credit) benefit cost included in the consolidated statements of income for the six months ended June 30, 2016 and 2015 are as follows:
For the year ending December 31, 2016, no material contributions are expected to be necessary to meet the Employee Retirement Income Security Act, or ERISA, required funding levels; however, we may elect to make discretionary contributions up to the maximum amount deductible for income tax purposes. No contributions were made to our retirement benefit plans during the six months ended June 30, 2016 or 2015. |
Debt |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt We generally issue senior unsecured notes for long-term borrowing purposes. At June 30, 2016, we had $13,079.0 outstanding under these notes. On May 12, 2015, we issued 25.0 Equity Units, pursuant to an underwriting agreement dated May 6, 2015, in an aggregate principal amount of $1,250.0. Each Equity Unit has a stated amount of $50 (whole dollars) and consists of a purchase contract obligating the holder to purchase a certain number of shares of our common stock on May 1, 2018, subject to earlier termination or settlement, for a price in cash of $50 (whole dollars); and a 5% undivided beneficial ownership interest in $1,000 (whole dollars) principal amount of our 1.900% remarketable subordinated notes, or RSNs, due 2028. On May 1, 2018, if the applicable market value of our common stock is equal to or greater than $207.7269 per share, the settlement rate will be 0.2406 shares of our common stock. If the applicable market value of our common stock is less than $207.7269 per share but greater than $143.8109 per share, the settlement rate will be a number of shares of our common stock equal to $50 (whole dollars) divided by the applicable market value of our common stock. If the applicable market value of common stock is less than or equal to $143.8109, the settlement rate will be 0.3477 shares of our common stock. Holders of the Equity Units may elect early settlement at a minimum settlement rate of 0.2406 shares of our common stock for each purchase contract being settled. The RSNs are pledged as collateral to secure the purchase of common stock under the related stock purchase contracts. Quarterly interest payments on the RSNs commenced August 1, 2015. The RSNs are scheduled to be remarketed during the five business day period ending on April 26, 2018 and may be remarketed earlier, at our election, during the period from January 30, 2018 through April 12, 2018. Following the re-marketing, the interest rate on the RSNs will be set to current market rates and interest will be payable semi-annually. At June 30, 2016, the present value of the stock purchase contract liability was $82.3 and is included in other current liabilities and other noncurrent liabilities with a corresponding offset to additional paid-in capital in our consolidated balance sheet. Contract adjustment payments commenced on August 1, 2015 at a rate of 3.350% per annum on the stated amount per Equity Unit. Subject to certain specified terms and conditions, we have the right to defer payments on all or part the contract adjustment payments but not beyond the contract settlement date and we have the right to defer payment of interest on the RSNs but not beyond the purchase contract settlement date or maturity date. At June 30, 2016, we have $1,237.0 outstanding under these RSNs. We have an unsecured surplus note with an outstanding principal balance of $24.9 at June 30, 2016. We have a senior revolving credit facility, or the Facility, with a group of lenders for general corporate purposes. The Facility provides credit up to $3,500.0 and matures on August 25, 2020. There were no amounts outstanding under the Facility at any time during the three or six months ended June 30, 2016. We have an authorized commercial paper program of up to $2,500.0, the proceeds of which may be used for general corporate purposes. At June 30, 2016, we had $457.0 outstanding under this program. We have outstanding senior unsecured convertible debentures due 2042, or the Debentures, which are governed by an indenture between us and The Bank of New York Mellon Trust Company, N.A., as trustee. We have accounted for the Debentures in accordance with the cash conversion guidance in FASB guidance for debt with conversion and other options. As a result, the value of the embedded conversion option has been bifurcated from its debt host and recorded as a component of additional paid-in capital (net of deferred taxes and equity issuance costs) in our consolidated balance sheets. The following table summarizes at June 30, 2016 the related balances, conversion rate and conversion price of the Debentures:
We have $440.0 in outstanding short-term borrowings from various Federal Home Loan Banks, or FHLBs, at June 30, 2016 with fixed interest rates of 0.428%. During the year ended December 31, 2015, we entered into a bridge facility commitment letter and a joinder agreement, and a term loan facility, to finance a portion of the pending Acquisition of Cigna. We paid $106.6 in fees in connection with the bridge facility which were capitalized in other current assets and are amortized as interest expense over the term of the facility. We recorded $31.5 and $63.1 of amortization of the bridge facility fees during the three and six months ended June 30, 2016, respectively. The commitment of the lenders to provide the bridge facility and term loan facility is subject to several conditions, including the completion of the Acquisition. For additional information, see the “Pending Acquisition of Cigna Corporation” section of Note 3, “Business Acquisitions.” All debt is a direct obligation of Anthem, Inc., except for the surplus note and the FHLB borrowings. |
Commitments And Contingencies |
6 Months Ended |
---|---|
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments And Contingencies | Commitments and Contingencies Litigation In the ordinary course of business, we are defendants in, or parties to, a number of pending or threatened legal actions or proceedings. To the extent a plaintiff or plaintiffs in the following cases have specified in their complaint or in other court filings the amount of damages being sought, we have noted those alleged damages in the descriptions below. With respect to the cases described below, we contest liability and/or the amount of damages in each matter and believe we have meritorious defenses. We are defending a certified class action filed as a result of the 2001 demutualization of Anthem Insurance. The lawsuit names Anthem Insurance as well as Anthem, Inc. and is captioned Ronald Gold, et al. v. Anthem, Inc. et al. Anthem Insurance’s 2001 Plan of Conversion, or the Plan, provided for the conversion of Anthem Insurance from a mutual insurance company into a stock insurance company pursuant to Indiana law. Under the Plan, Anthem Insurance distributed the fair value of the company at the time of conversion to its Eligible Statutory Members, or ESMs, in the form of cash or Anthem common stock in exchange for their membership interests in the mutual company. Plaintiffs in Gold allege that Anthem Insurance distributed value to the wrong ESMs. A trial on liability was held in October 2014. In June 2015, the court entered judgment for Anthem Insurance on all issues, finding that (i) Anthem Insurance correctly determined the State of Connecticut to be an ESM, not Plaintiffs; (ii) Anthem Insurance acted in good faith in making this determination, while Plaintiffs failed to present sufficient evidence to override a presumption that Anthem Insurance’s ESM determination was correct; and (iii) Plaintiffs failed to prove the breach of any contractual obligation. In July 2015, Plaintiffs filed a notice of appeal from the judgment entered for Anthem Insurance. In December 2015, the Connecticut Supreme Court decided it would hear the appeal directly rather than the appeal going to the intermediate appellate court. A date for argument has not been set. We intend to vigorously seek the affirmation of the trial court's judgment; however, the suit's ultimate outcome cannot be presently determined. We are currently a defendant in eleven putative class actions relating to out-of-network, or OON, reimbursement that were consolidated into a single multi-district lawsuit called In re WellPoint, Inc. (n/k/a Anthem, Inc.) Out-of-Network “UCR” Rates Litigation that is pending in the United States District Court for the Central District of California. The lawsuits were filed in 2009. The plaintiffs include current and former members on behalf of a putative class of members who received OON services for which the defendants paid less than billed charges, the American Medical Association, four state medical associations, OON physicians, OON non-physician providers, the American Podiatric Medical Association, California Chiropractic Association and the California Psychological Association on behalf of putative classes of OON physicians and all OON non-physician health care providers. The plaintiffs filed several amended complaints alleging that the defendants violated the Racketeer Influenced and Corrupt Organizations Act, or RICO, the Sherman Antitrust Act, ERISA, federal regulations, and state law by using an OON reimbursement database called Ingenix and by using non-Ingenix OON reimbursement methodologies. We filed motions to dismiss in response to each of those amended complaints, which were granted in part and denied in part. The most recent pleading filed by the plaintiffs is a Fourth Amended Complaint to which we filed a motion to dismiss most, but not all, of the claims. In July 2013 the court issued an order granting in part and denying in part our motion. The court held that the state and federal anti-trust claims along with the RICO claims should be dismissed in their entirety with prejudice. The court further found that the ERISA claims, to the extent they involved non-Ingenix methodologies, along with those that involved our alleged non-disclosures should be dismissed with prejudice. The court also dismissed most of the plaintiffs’ state law claims with prejudice. The only claims that remain after the court’s decision are an ERISA benefits claim relating to claims priced based on Ingenix, a breach of contract claim on behalf of one subscriber plaintiff, a breach of implied covenant claim on behalf of one subscriber plaintiff, and one subscriber plaintiff’s claim under the California Unfair Competition Law. The plaintiffs filed a motion for reconsideration of the motion to dismiss order, which the court granted in part and denied in part. The court ruled that the plaintiffs adequately allege that one Georgia provider plaintiff is deemed to have exhausted administrative remedies regarding non-Ingenix methodologies based on the facts alleged regarding that plaintiff. Fact discovery is complete. The plaintiffs filed a motion for class certification in November 2013 seeking six different classes. Following oral argument, the court denied the plaintiffs' motion for class certification in late 2014. The California subscriber plaintiffs filed a motion for leave to file a renewed motion for class certification with more narrowly defined proposed classes, which the court denied. All but two of the individually named subscribers and all of the providers and medical associations dismissed their claims with prejudice. We filed a motion for summary judgment in March 2016, and a motion for summary judgment was also filed by one of the remaining individual plaintiffs. In July 2016, the court denied plaintiffs' motion and granted our motion for summary judgment on all remaining claims. We intend to vigorously defend these suits; however, ultimate outcome cannot be presently determined. We are a defendant in multiple lawsuits that were initially filed in 2012 against the BCBSA as well as Blue Cross and/or Blue Shield licensees across the country. The cases were consolidated into a single multi-district lawsuit called In re Blue Cross Blue Shield Antitrust Litigation that is pending in the United States District Court for the Northern District of Alabama. Generally, the suits allege that the BCBSA and the Blue plans have engaged in a conspiracy to horizontally allocate geographic markets through license agreements, best efforts rules (which limit the percentage of non-Blue revenue of each plan), restrictions on acquisitions and other arrangements in violation of the Sherman Antitrust Act and related state laws. The cases were brought by two putative nationwide classes of plaintiffs, health plan subscribers and providers. Subscriber and provider plaintiffs each filed consolidated amended complaints in July 2013. The consolidated amended subscriber complaint was also brought on behalf of putative state classes of health plan subscribers in Alabama, Arkansas, California, Florida, Hawaii, Illinois, Louisiana, Michigan, Mississippi, Missouri, New Hampshire, North Carolina, Pennsylvania, Rhode Island, South Carolina, Tennessee, and Texas. Defendants filed motions to dismiss in September 2013, which were argued in April 2014. In June 2014, the court denied the majority of the motions, ruling that plaintiffs had alleged sufficient facts at this stage of the litigation to avoid dismissal of their claims. Following the subsequent filing of amended complaints by each of the subscriber and provider plaintiffs, we filed our answer and asserted our affirmative defenses in December 2014. Discovery has commenced. In October 2015, the court issued an order accelerating deadlines for the underlying actions originally filed in Alabama, setting a January 2017 discovery deadline, and scheduling class certification and expert proceedings in 2017 and a pretrial conference in January 2018. Since January 2016, subscribers have filed additional actions asserting damage claims in Indiana, Kansas, Kansas City, Minnesota, Montana, Nebraska, North Dakota, Oklahoma, South Dakota, Vermont, and Virginia, all of which have been or will be consolidated into the multi-district lawsuit. We intend to vigorously defend these suits; however, their ultimate outcome cannot be presently determined. Our California affiliate Blue Cross of California, doing business as Anthem Blue Cross, or BCC, has been named as a defendant, along with an unaffiliated entity, in a California taxpayer action filed in Los Angeles County Superior Court, captioned as Michael D. Myers v. State Board of Equalization, et al., Los Angeles Superior Court Case No. BS143436, Second Appellate District Court Case No. B255455. This action is brought under a California statute that permits an individual taxpayer to sue a governmental agency when the taxpayer believes the agency has failed to enforce governing law. Plaintiff contends that BCC, a licensed Health Care Service Plan, or HCSP, is an “insurer” for purposes of taxation despite acknowledging it is not an “insurer” under regulatory law. Under California law, “insurers” must pay a gross premiums tax, or GPT, calculated as 2.35% on gross premiums. As a licensed HCSP, BCC has paid the California Corporate Franchise Tax, or CFT, the tax paid by California businesses generally. Plaintiff contends that BCC must pay the GPT rather than the CFT. Plaintiff seeks a writ of mandate directing the taxing agencies to collect the GPT, and seeks an order requiring BCC to pay GPT back taxes, interest, and penalties, for a period dating to eight years prior to the July 2013 filing of the complaint. In February 2014, the Superior Court sustained BCC’s demurrer to the complaint, without leave to amend, ruling that BCC is not an “insurer” for purposes of taxation. Plaintiff appealed. In September 2015, the Court of Appeal reversed the Superior Court’s ruling, and remanded. The Court of Appeal held that a HCSP could be an insurer for purposes of taxation if it wrote predominantly “indemnity” products. In October 2015, BCC filed a petition for rehearing in the Court of Appeal which was denied. In November 2015, BCC filed a petition for review with the California Supreme Court which was denied in December 2015. This lawsuit is being coordinated with similar lawsuits filed against other entities. The parties are awaiting the appointment of a new judge, as the previous judge recently retired. BCC intends to vigorously defend this suit; however, its ultimate outcome cannot be presently determined. In March 2016, we filed a lawsuit against our vendor for pharmacy benefit management services, captioned Anthem, Inc. v. Express Scripts, Inc., in the U.S. District Court for the Southern District of New York. The lawsuit seeks to recover damages for pharmacy pricing that is higher than competitive benchmark pricing, damages related to operational breaches and seeks various declarations under the agreement between the parties. Our suit asserts that Express Scripts, Inc.’s, or Express Scripts, current pricing exceeds the competitive benchmark pricing required by the agreement by approximately $13,000.0 over the remaining term of the agreement, and by approximately $1,800.0 through the post-termination transition period. Further, we believe that Express Scripts’ excessive pricing has caused us to lose existing customers and prevented us from gaining new business. In addition to the amounts associated with competitive benchmark pricing, we are seeking over $158.0 in damages associated with operational breaches incurred to date, together with a declaratory judgment that Express Scripts: (i) breached its obligation to negotiate in good faith and to agree in writing to new pricing terms; (ii) is required to provide competitive benchmark pricing to us through the term of the agreement; (iii) has breached the agreement, and that we can terminate the agreement either due to Express Scripts’ breaches or because we have determined that Express Scripts’ performance with respect to the delegated Medicare Part D functions has been unsatisfactory; and (iv) is required under the agreement to provide post-termination services, at competitive benchmark pricing, for one year following any termination. In April 2016, Express Scripts filed an answer to the lawsuit disputing our contractual claims and alleging various defenses and counterclaims. Express Scripts contends that we breached the agreement by failing to negotiate proposed new pricing terms in good faith and that we breached the implied covenant of good faith and fair dealing by disregarding the terms of the transaction. In addition, Express Scripts is seeking declaratory judgments: (i) regarding the timing of the periodic pricing review under the agreement; (ii) that it has no obligation to ensure that we receive any specific level of pricing, that we have no contractual right to any change in pricing under the agreement and that its sole obligation is to negotiate proposed pricing terms in good faith; and (iii) that we do not have the right to terminate the agreement. In the alternative, Express Scripts claims that we have been unjustly enriched by its payment of $4,675.0 at the time of the agreement. We believe that Express Scripts’ defenses and counterclaims are without merit. We intend to vigorously pursue our claims and defend against any counterclaims; however, the ultimate outcome cannot be presently determined. Anthem, Inc. and Express Scripts were named as defendants in a purported class action lawsuit filed in June 2016 in the Southern District of New York by three members of ERISA plans alleging ERISA violations. The lawsuit is captioned Karen Burnett, Brendan Farrell, and Robert Shullich, individually and on behalf of all others similarly situated v. Express Scripts, Inc. and Anthem, Inc. The lawsuit is purportedly filed on behalf of participants in, or beneficiaries of, ERISA governed employee welfare benefit plans from December 1, 2009 to the present who received prescription drug benefits under an Anthem plan provided through an agreement with Express Scripts. The complaint alleges that Express Scripts violated ERISA by overcharging Plaintiffs and the proposed class for percentage based copays based on prescription drug charges that are higher than competitive prices. Plaintiffs allege that Anthem is an ERISA fiduciary and breached its fiduciary obligations by (i) entering into an agreement with Express Scripts that was imprudent and not in the best interests of the members of the proposed class but enriched Anthem and granted to Express Scripts excessive discretion to set prescription drug prices, and (ii) failing to properly monitor and prevent Express Scripts from overcharging Plaintiffs and the proposed class for copays. The complaint asserts seven claims for relief under ERISA, four of which are asserted against Anthem. Plaintiffs seek to recover all losses suffered by the proposed class, equitable relief, disgorgement of alleged ill-gotten gains, injunctive relief, joint and several liability, attorney’s fees and costs and interest. We intend to vigorously defend this suit; however, its ultimate outcome cannot be presently determined. As discussed in Note 3, “Business Acquisitions - Pending Acquisition of Cigna Corporation,” on July 21, 2016, the DOJ, along with certain state attorneys general, filed a civil antitrust lawsuit in the U.S. District Court for the District of Columbia seeking to block the Acquisition. We intend to vigorously defend the Acquisition in this litigation and remain committed to completing the Acquisition as soon as practicable. Though the Merger Agreement provides that the closing of the Acquisition occur by January 31, 2017, this date can be extended to April 30, 2017 by either us or Cigna through written notice to the other party if all conditions to the merger have been satisfied except for the receipt of regulatory approvals and other governmental consents. Where available information indicates that it is probable that a loss has been incurred as of the date of the consolidated financial statements and we can reasonably estimate the amount of that loss, we accrue the estimated loss by a charge to income. In many proceedings, however, it is difficult to determine whether any loss is probable or reasonably possible. In addition, even where loss is possible or an exposure to loss exists in excess of the liability already accrued with respect to a previously identified loss contingency, it is not always possible to reasonably estimate the amount of the possible loss or range of loss. With respect to many of the proceedings to which we are a party, we cannot provide an estimate of the possible losses, or the range of possible losses in excess of the amount, if any, accrued, for various reasons, including but not limited to some or all of the following: (i) there are novel or unsettled legal issues presented, (ii) the proceedings are in early stages, (iii) there is uncertainty as to the likelihood of a class being certified or decertified or the ultimate size and scope of the class, (iv) there is uncertainty as to the outcome of pending appeals or motions, (v) there are significant factual issues to be resolved, and/or (vi) in many cases, the plaintiffs have not specified damages in their complaint or in court filings. For those legal proceedings where a loss is probable, or reasonably possible, and for which it is possible to reasonably estimate the amount of the possible loss or range of losses, we currently believe that the range of possible losses, in excess of established reserves, for all of those proceedings is from $0.0 to approximately $250.0 at June 30, 2016. This estimated aggregate range of reasonably possible losses is based upon currently available information taking into account our best estimate of such losses for which such an estimate can be made. Cyber Attack Incident In February 2015, we reported that we were the target of a sophisticated external cyber attack. The attackers gained unauthorized access to certain of our information technology systems and obtained personal information related to many individuals and employees, such as names, birthdays, health care identification/social security numbers, street addresses, email addresses, phone numbers and employment information, including income data. To date, there is no evidence that credit card or medical information, such as claims, test results or diagnostic codes, were targeted, accessed or obtained, although no assurance can be given that we will not identify additional information that was accessed or obtained. We have continued to implement security enhancements since this incident and are supporting federal law enforcement efforts to identify the responsible parties. Upon discovery of the cyber attack, we took immediate action to remediate the security vulnerability and retained a cybersecurity firm to evaluate our systems and identify solutions based on the evolving landscape. We are providing credit monitoring and identity protection services to those who have been affected by this cyber attack. We have incurred expenses subsequent to the cyber attack to investigate and remediate this matter and expect to continue to incur expenses of this nature in the foreseeable future. We will recognize these expenses in the periods in which they are incurred. Actions have been filed in various federal and state courts and other claims have been or may be asserted against us on behalf of current or former members, current or former employees, other individuals, shareholders or others seeking damages or other related relief, allegedly arising out of the cyber attack. State and federal agencies, including state insurance regulators, state attorneys general, the Health and Human Services Office of Civil Rights and the Federal Bureau of Investigation, are investigating events related to the cyber attack, including how it occurred, its consequences and our responses. Although we are cooperating in these investigations, we may be subject to fines or other obligations, which may have an adverse effect on how we operate our business and our results of operations. With respect to the civil actions, a motion to transfer was filed with the Judicial Panel on Multidistrict Litigation in February 2015 and was subsequently heard by the Panel in May 2015. In June 2015, the Panel entered its order transferring the consolidated matter to the U.S. District Court for the Northern District of California. The U.S. District Court entered its case management order in September 2015. We filed a motion to dismiss ten of the counts that are before the U.S. District Court. In February 2016, the court issued an order granting in part and denying in part our motion, dismissing three counts with prejudice, four counts without prejudice and allowing three counts to proceed. Plaintiffs filed a second amended complaint in March 2016, and we subsequently filed a second motion to dismiss. In May 2016, the court issued an order granting in part and denying in part our motion, dismissing one count with prejudice, dismissing certain counts asserted by specific named plaintiffs with or without prejudice depending on their individualized facts, and allowing the remaining counts to proceed. In July 2016, plaintiffs filed a third amended complaint. There remain two state court cases that are presently proceeding outside of the Multidistrict Litigation. We have contingency plans and insurance coverage for certain expenses and potential liabilities of this nature. The coverage has been sufficient to cover the majority of claims and liabilities incurred to date. While a loss from these matters is reasonably possible, we cannot reasonably estimate a range of possible losses because our investigation into the matter is ongoing, the proceedings remain in the early stages, alleged damages have not been specified, there is uncertainty as to the likelihood of a class or classes being certified or the ultimate size of any class if certified, and there are significant factual and legal issues to be resolved. Other Contingencies From time to time, we and certain of our subsidiaries are parties to various legal proceedings, many of which involve claims for coverage encountered in the ordinary course of business. We, like HMOs and health insurers generally, exclude certain health care and other services from coverage under our HMO, PPO and other plans. We are, in the ordinary course of business, subject to the claims of our enrollees arising out of decisions to restrict or deny reimbursement for uncovered services. The loss of even one such claim, if it results in a significant punitive damage award, could have a material adverse effect on us. In addition, the risk of potential liability under punitive damage theories may increase significantly the difficulty of obtaining reasonable settlements of coverage claims. In addition to the lawsuits described above, we are also involved in other pending and threatened litigation of the character incidental to our business, and are from time to time involved as a party in various governmental investigations, audits, reviews and administrative proceedings. These investigations, audits, reviews and administrative proceedings include routine and special inquiries by state insurance departments, state attorneys general, the U.S. Attorney General and subcommittees of the U.S. Congress. Such investigations, audits, reviews and administrative proceedings could result in the imposition of civil or criminal fines, penalties, other sanctions and additional rules, regulations or other restrictions on our business operations. Any liability that may result from any one of these actions, or in the aggregate, could have a material adverse effect on our consolidated financial position or results of operations. The National Organization of Life & Health Insurance Guaranty Associations, or NOLHGA, is a voluntary organization consisting of the state life and health insurance guaranty associations located throughout the U.S. Such associations, working together with NOLHGA, provide a safety net for their state’s policyholders, ensuring that they continue to receive coverage, subject to state maximum limits, even if their insurer is declared insolvent. We are aware that the Pennsylvania Insurance Commissioner, or Insurance Commissioner, has placed Penn Treaty Network America Insurance Company and its subsidiary American Network Insurance Company, or collectively Penn Treaty, in rehabilitation, an intermediate action before insolvency. The state court denied the Insurance Commissioner’s petition for the liquidation of Penn Treaty and ordered the Insurance Commissioner to file an updated plan of rehabilitation. The state court commenced a hearing in connection with the updated plan in July 2015, which has been adjourned. Settlement conferences to resolve outstanding issues with the plan continue to be scheduled by the state court. In the event rehabilitation of Penn Treaty is unsuccessful and Penn Treaty is declared insolvent and placed in liquidation, we and other insurers may be required to pay a portion of their policyholder claims through state guaranty association assessments in future periods. Given the uncertainty around whether Penn Treaty will ultimately be declared insolvent and, if so, the amount of the insolvency, the amount and timing of any associated future guaranty fund assessments, and the availability and amount of any potential premium tax and other offsets, we currently cannot estimate our net exposure, if any, to this potential insolvency. We will continue to monitor the situation and may record a liability and expense in future reporting periods, which could be material to our cash flows and results of operations. Contractual Obligations and Commitments We are a party to an agreement with Express Scripts, whereby Express Scripts is the exclusive provider of certain pharmacy benefit management, or PBM, services to our plans, excluding our CareMore and Simply Healthcare subsidiaries and certain self-insured members, which have exclusive agreements with different PBM service providers. The initial term of this agreement expires on December 31, 2019. Under this agreement, the Express Scripts PBM services include, but are not limited to, pharmacy network management, mail order and specialty drug fulfillment, claims processing, rebate management and specialty pharmaceutical management services. Accordingly, the agreement contains certain financial and operational requirements obligating both Express Scripts and us. Express Scripts’ primary obligations relate to the performance of such services in a compliant manner and meeting certain pricing guarantees and performance standards. Our primary responsibilities relate to formulary management, product and benefit design, provision of data, payment for services, certain minimum volume requirements and oversight. The failure by either party to meet the respective requirements could potentially serve as a basis for financial penalties or early termination of the agreement. In March 2016, we filed a lawsuit against Express Scripts seeking to recover damages for pharmacy pricing that is higher than competitive benchmark pricing, damages related to operational breaches and seeking various declarations under the agreement between the parties. For additional information regarding this lawsuit, refer to the “Litigation” section above. We believe we have appropriately recognized all rights and obligations under this agreement at June 30, 2016. During November 2015, we entered into an amended and restated agreement with Accenture LLP to provide business process outsourcing services. This new agreement supersedes certain prior agreements, converts certain services to transaction based pricing and also includes provisions for additional services. Our remaining commitment under this agreement at June 30, 2016 was $196.0 through December 31, 2019. We have the ability to terminate this agreement upon the occurrence of certain events, subject to early termination fees. During December 2014, we entered into a new agreement with International Business Machines Corporation to provide information technology infrastructure services. This new agreement supersedes certain prior agreements and also includes provisions for additional services. Our remaining commitment under this agreement at June 30, 2016 was $328.2 through March 31, 2020. We have the ability to terminate this agreement upon the occurrence of certain events, subject to early termination fees. Vulnerability from Concentrations Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash equivalents, investment securities, premium receivables and instruments held through hedging activities. All investment securities are managed by professional investment managers within policies authorized by our Board of Directors. Such policies limit the amounts that may be invested in any one issuer and prescribe certain investee company criteria. Concentrations of credit risk with respect to premium receivables are limited due to the large number of employer groups that constitute our customer base in the states in which we conduct business. As of June 30, 2016, there were no significant concentrations of financial instruments in a single investee, industry or geographic location. |
Capital Stock |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital Stock | Capital Stock Use of Capital – Dividends and Stock Repurchase Program We regularly review the appropriate use of capital, including acquisitions, common stock and debt security repurchases and dividends to shareholders. The declaration and payment of any dividends or repurchases of our common stock or debt is at the discretion of our Board of Directors and depends upon our financial condition, results of operations, future liquidity needs, regulatory and capital requirements and other factors deemed relevant by our Board of Directors. A summary of the cash dividend activity for the six months ended June 30, 2016 and 2015 is as follows:
Under our Board of Directors’ authorization, we maintain a common stock repurchase program. On October 2, 2014, the Board of Directors authorized a $5,000.0 increase to the common stock repurchase program. Repurchases may be made from time to time at prevailing market prices, subject to certain restrictions on volume, pricing and timing. The repurchases are effected from time to time in the open market, through negotiated transactions, including accelerated share repurchase agreements, and through plans designed to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. Our stock repurchase program is discretionary as we are under no obligation to repurchase shares. We repurchase shares under the program when we believe it is a prudent use of capital. The excess cost of the repurchased shares over par value is charged on a pro rata basis to additional paid-in capital and retained earnings. There were no common stock repurchases during the six months ended June 30, 2016. Total authorization remaining at June 30, 2016 was $4,175.9. A summary of common stock repurchases for the six months ended June 30, 2015 is as follows:
During the six months ended June 30, 2015, we entered into a series of call and put options with certain counterparties to repurchase shares of our common stock. We exercised call options that enabled us to repurchase 2.1 shares of our common stock at an average strike price of $135.03. In order to set the call option strike prices below our market price at inception, we sold 5.3 put options at equal strike prices. During the six months ended June 30, 2015, 2.5 put options expired unexercised. The initial value of the call options was recognized as a reduction of shareholders' equity and the initial value of the put options was recognized as a liability. Equity Units On May 12, 2015, we issued 25.0 Equity Units, pursuant to an underwriting agreement dated May 6, 2015, in an aggregate principal amount of $1,250.0. For additional information relating to the Equity Units, see Note 9, “Debt.” Stock Incentive Plans A summary of stock option activity for the six months ended June 30, 2016 is as follows:
A summary of the status of nonvested restricted stock activity, including restricted stock units, for the six months ended June 30, 2016 is as follows:
Fair Value We use a binomial lattice valuation model to estimate the fair value of all stock options granted. For a more detailed discussion of our stock incentive plan fair value methodology, see Note 14, “Capital Stock,” to our audited consolidated financial statements as of and for the year ended December 31, 2015 included in our 2015 Annual Report on Form 10-K. The following weighted-average assumptions were used to estimate the fair values of options granted during the six months ended June 30, 2016 and 2015:
The following weighted-average fair values were determined for the six months ended June 30, 2016 and 2015:
|
Accumulated Other Comprehensive Income |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive (Loss) Income A reconciliation of the components of accumulated other comprehensive (loss) income at June 30, 2016 and 2015 is as follows:
Other comprehensive income (loss) reclassification adjustments for the three months ended June 30, 2016 and 2015 are as follows:
Other comprehensive income (loss) reclassification adjustments for the six months ended June 30, 2016 and 2015 are as follows:
|
Earnings Per Share |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings per Share The denominator for basic and diluted earnings per share for the three and six months ended June 30, 2016 and 2015 is as follows:
During the three months ended June 30, 2016 and 2015, weighted-average shares related to certain stock options of 2.6 and 1.2, respectively, were excluded from the denominator for diluted earnings per share because the stock options were anti-dilutive. During the six months ended June 30, 2016 and 2015, weighted-average shares related to certain stock options of 2.2 and 0.8, respectively, were excluded from the denominator for diluted earnings per share because the stock options were anti-dilutive. The Equity Units are potentially dilutive securities but were excluded from the denominator for diluted earnings per share for the three and six months ended June 30, 2016 and 2015, as the dilutive stock price threshold was not met. During the six months ended June 30, 2016, we issued approximately 1.0 of restricted stock units under our stock incentive plans, 0.5 of which vesting is contingent upon us meeting specified annual earnings targets for the three year period of 2016 through 2018. During the six months ended June 30, 2015, we issued approximately 0.9 restricted stock units under our stock incentive plans, 0.4 of which vesting is contingent upon us meeting specified annual earnings targets for the three year period of 2015 through 2017. The contingent restricted stock units have been excluded from the denominator for diluted earnings per share and are included only if and when the contingency is met. |
Segment Information |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information The results of our operations are described through three reportable segments: Commercial and Specialty Business, Government Business and Other, as further described in Note 19, “Segment Information,” to our audited consolidated financial statements as of and for the year ended December 31, 2015 included in our 2015 Annual Report on Form 10-K. Financial data by reportable segment for the three and six months ended June 30, 2016 and 2015 is as follows:
A reconciliation of reportable segments operating revenues to the amounts of total revenues included in the consolidated statements of income for the three and six months ended June 30, 2016 and 2015 is as follows:
A reconciliation of reportable segments operating gain to income before income tax expense included in the consolidated statements of income for the three and six months ended June 30, 2016 and 2015 is as follows:
|
Basis of Presentation and Significant Accounting Policies (Policies) |
6 Months Ended |
---|---|
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation: The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP, for interim financial reporting. Accordingly, they do not include all of the information and footnotes required by GAAP for annual financial statements. We have omitted certain footnote disclosures that would substantially duplicate the disclosures in our 2015 Annual Report on Form 10-K, unless the information contained in those disclosures materially changed or is required by GAAP. Certain prior year amounts have been reclassified to conform to the current year presentation. In the opinion of management, all adjustments, including normal recurring adjustments, necessary for a fair statement of the consolidated financial statements as of and for the three and six months ended June 30, 2016 and 2015 have been recorded. The results of operations for the three and six months ended June 30, 2016 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2016. These unaudited consolidated financial statements should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2015 included in our 2015 Annual Report on Form 10-K. |
Foreign Currency | Certain of our subsidiaries operate outside of the United States and have functional currencies other than the U.S. dollar, or USD. We translate the assets and liabilities of those subsidiaries to USD using the exchange rate in effect at the end of the period. We translate the revenues and expenses of those subsidiaries to USD using the average exchange rates in effect during the period. The net effect of these translation adjustments is included in “Foreign currency translation adjustments” in our consolidated statements of comprehensive income. |
Recently Adopted Accounting Guidance | Recently Adopted Accounting Guidance: In April 2015, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update No. 2015-05, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement, or ASU 2015-05. This amendment provides guidance to help entities determine whether a cloud computing arrangement contains a software license that should be accounted for as internal-use software or as a service contract. ASU 2015-05 became effective January 1, 2016 and we elected to adopt the provisions of the new guidance prospectively to all arrangements entered into or materially modified on or after January 1, 2016. The adoption of ASU 2015-05 did not have an impact on our consolidated financial position, results of operations or cash flows. In February 2015, the FASB issued Accounting Standards Update No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, or ASU 2015-02. ASU 2015-02 amended the consolidation guidance by modifying the evaluation criteria for whether limited partnerships and similar legal entities are variable interest entities or voting interest entities, eliminating the presumption that a general partner should consolidate a limited partnership, and affecting the consolidation analysis of reporting entities that are involved with variable interest entities. We adopted the provisions of ASU 2015-02 effective January 1, 2016 and re-evaluated all legal entity investments under the revised consolidation model. The adoption of ASU 2015-02 did not have a material impact on our consolidated financial position, results of operations or cash flows. |
Recent Accounting Guidance Not Yet Adopted | Recent Accounting Guidance Not Yet Adopted: In June 2016, the FASB issued Accounting Standards Update No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, or ASU 2016-13. This update introduces a current expected credit loss model for measuring expected credit losses for certain types of financial instruments held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. ASU 2016-13 replaces the current incurred loss model for measuring expected credit losses, requires expected losses on available-for-sale debt securities to be recognized through an allowance for credit losses rather than as reductions in the amortized cost of the securities, and provides for additional disclosure requirements. ASU 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted for interim and annual reporting periods beginning after December 15, 2018. We are currently evaluating the effects the adoption of ASU 2016-13 will have on our consolidated financial statements, results of operations and cash flows. In May 2016, the FASB issued Accounting Standards Update No. 2016-12, Revenue from Contracts With Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, or ASU 2016-12. In April 2016, the FASB issued Accounting Standards Update No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, or ASU 2016-10. In March 2016, the FASB issued Accounting Standards Update No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross verses Net), or ASU 2016-08. These amendments provide additional clarification and implementation guidance on the previously issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), or ASU 2014-09. The amendments in ASU 2016-12 provide clarifying guidance on assessing collectability; noncash consideration; presentation of sales taxes; and transition. The amendments in ASU 2016-10 provide clarifying guidance on materiality of performance obligations; evaluating distinct performance obligations; treatment of shipping and handling costs; and determining whether an entity's promise to grant a license provides a customer with either a right to use or a right to access an entity's intellectual property. The amendments in ASU 2016-08 clarify how an entity should identify the specified good or service for the principal versus agent evaluation and how it should apply the control principle to certain types of arrangements. The adoption of ASU 2016-12, ASU 2016-10 and ASU 2016-08 is to coincide with an entity's adoption of ASU 2014-09, which we intend to adopt for interim and annual reporting periods beginning after December 15, 2017. We are currently evaluating the impact that these standards will have on our results of operations, cash flows, consolidated financial position and related disclosures. In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, or ASU 2016-09. The amendments in this update simplify several aspects of accounting for and reporting on share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The amendments in ASU 2016-09 are effective for interim and annual reporting periods beginning after December 15, 2016, with early adoption permitted. The various amendments are to be applied differently upon adoption with certain amendments being applied prospectively, retrospectively and under a modified retrospective transition method. We are currently evaluating the effects the adoption of ASU 2016-09 will have on our consolidated financial statements, results of operations and cash flows. In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842), or ASU 2016-02. Upon the effective date, ASU 2016-02 will supersede the current lease guidance in Topic 840, Leases. Under the new guidance, lessees will be required to recognize for all leases, with the exception of short-term leases, a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis. Concurrently, lessees will be required to recognize a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 is effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. The guidance is required to be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative periods presented in the financial statements. We are currently evaluating the effects the adoption of ASU 2016-02 will have on our consolidated financial statements, results of operations and cash flows. There were no other new accounting pronouncements that were issued or became effective since the issuance of our 2015 Annual Report on Form 10-K that had, or are expected to have, a material impact on our consolidated financial position, results of operations or cash flows. |
Investments (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current and Long-Term Investments, Available-For-Sale | A summary of current and long-term investments, available-for-sale, at June 30, 2016 and December 31, 2015 is as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aggregate Fair Value and Gross Unrealized Loss of Fixed Maturity Securities and Equity Securities in an Unrealized Loss Position | For available-for-sale securities in an unrealized loss position at June 30, 2016 and December 31, 2015, the following table summarizes the aggregate fair values and gross unrealized losses by length of time those securities have continuously been in an unrealized loss position:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortized Cost and Fair Value of Fixed Maturity Securities, By Contractual Maturity | The amortized cost and fair value of available-for-sale fixed maturity securities at June 30, 2016, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proceeds and Realized Gains and Losses from Investments | Proceeds from fixed maturity securities, equity securities and other invested assets and the related gross realized gains and gross realized losses for the three and six months ended June 30, 2016 and 2015 are as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities Lending Programs | The remaining contractual maturity of our securities lending agreements at June 30, 2016 is as follows:
|
Derivative Financial Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Aggregate Contractual Or Notional Amounts And Estimated Fair Values | A summary of the aggregate contractual or notional amounts and estimated fair values related to derivative financial instruments at June 30, 2016 and December 31, 2015 is as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Outstanding Fair Value Hedges | A summary of our outstanding fair value hedges at June 30, 2016 and December 31, 2015 is as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effect Of Fair Value Hedges On Income Statement | A summary of the effect of fair value hedges on our income statement for the three and six months ended June 30, 2016 and 2015 is as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effect Of Cash Flow Hedges On Financial Statements | A summary of the effect of cash flow hedges on our financial statements for the three and six months ended June 30, 2016 and 2015 is as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effect Of Non-Hedging Derivatives On Income Statement And Included In Net Realized Gains (Losses) On Investments) | A summary of the effect of non-hedging derivatives on our income statement for the three and six months ended June 30, 2016 and 2015 is as follows:
|
Fair Value (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements By Level For Assets Measured At Fair Value On A Recurring Basis | A summary of fair value measurements by level for assets and liabilities measured at fair value on a recurring basis at June 30, 2016 and December 31, 2015 is as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation Of The Beginning And Ending Balances Of Assets Measured At Fair Value On A Recurring Basis Using Level III Inputs | A reconciliation of the beginning and ending balances of assets measured at fair value on a recurring basis using Level III inputs for the three months ended June 30, 2016 and 2015 is as follows:
A reconciliation of the beginning and ending balances of assets measured at fair value on a recurring basis using Level III inputs for the six months ended June 30, 2016 and 2015 is as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying And Fair Values By Level Of Financial Instruments Not Recorded At Fair Value On Consolidated Balance Sheet | A summary of the estimated fair values by level of each class of financial instrument that is recorded at its carrying value on our consolidated balance sheets at June 30, 2016 and December 31, 2015 are as follows:
|
Retirement Benefits (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Net Periodic Benefit Cost (Benefit Credit) | The components of net periodic (benefit credit) benefit cost included in the consolidated statements of income for the three months ended June 30, 2016 and 2015 are as follows:
The components of net periodic (benefit credit) benefit cost included in the consolidated statements of income for the six months ended June 30, 2016 and 2015 are as follows:
|
Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | |||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||
Convertible Debenture Terms | The following table summarizes at June 30, 2016 the related balances, conversion rate and conversion price of the Debentures:
|
Capital Stock (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Cash Dividend Activity | A summary of the cash dividend activity for the six months ended June 30, 2016 and 2015 is as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Share Repurchases | There were no common stock repurchases during the six months ended June 30, 2016. Total authorization remaining at June 30, 2016 was $4,175.9. A summary of common stock repurchases for the six months ended June 30, 2015 is as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Stock Option Activity | A summary of stock option activity for the six months ended June 30, 2016 is as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Nonvested Restricted Stock Activity Including Restricted Stock Units | A summary of the status of nonvested restricted stock activity, including restricted stock units, for the six months ended June 30, 2016 is as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Weighted-Average Assumptions Used to Estimate the Fair Value of Options Granted During the Periods | The following weighted-average assumptions were used to estimate the fair values of options granted during the six months ended June 30, 2016 and 2015:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Weighted-Average Fair Values Determined for the Periods | The following weighted-average fair values were determined for the six months ended June 30, 2016 and 2015:
|
Accumulated Other Comprehensive Income (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components Of Accumulated Other Comprehensive Income | A reconciliation of the components of accumulated other comprehensive (loss) income at June 30, 2016 and 2015 is as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Comprehensive Income Reclassification Adjustments |
Other comprehensive income (loss) reclassification adjustments for the six months ended June 30, 2016 and 2015 are as follows:
|
Earnings Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Denominator for Basic and Diluted Earnings Per Share | The denominator for basic and diluted earnings per share for the three and six months ended June 30, 2016 and 2015 is as follows:
|
Segment Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Data By Reportable Segment | Financial data by reportable segment for the three and six months ended June 30, 2016 and 2015 is as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation Of Reportable Segments Operating Revenues To Total Revenues Reported In The Consolidated Statements Of Income | A reconciliation of reportable segments operating revenues to the amounts of total revenues included in the consolidated statements of income for the three and six months ended June 30, 2016 and 2015 is as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation Of Reportable Segments Operating Gain To Income Before Income Tax Expense Included In The Consolidated Statements Of Income | A reconciliation of reportable segments operating gain to income before income tax expense included in the consolidated statements of income for the three and six months ended June 30, 2016 and 2015 is as follows:
|
Organization (Details) medical_member in Millions |
Jun. 30, 2016
medical_member
county
states
|
---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of medical members | medical_member | 39.8 |
Number of counties in the Kansas City area the Company does not serve | 30 |
Number of counties in the New York City metropolitan area the Company serves as an independent licensee | 10 |
Number of states in which the Company is licensed to conduct insurance operations | states | 50 |
Basis of Presentation and Signficant Accounting Policies Basis of Presentation and Significant Acconting Policies (Details) - USD ($) $ in Millions |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Accounting Policies [Abstract] | ||
Customer funds | $ 174.3 | $ 122.6 |
Investments (Proceeds and Realized Gains Losses From Investments) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Investments [Abstract] | ||||
Proceeds | $ 2,480.5 | $ 3,234.8 | $ 5,542.6 | $ 6,160.7 |
Gross realized gains | 108.4 | 148.4 | 229.8 | 282.1 |
Gross realized losses | $ (31.0) | $ (56.1) | $ (123.7) | $ (143.3) |
Investments (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
Dec. 31, 2015 |
|
Schedule of Investments [Line Items] | |||||
Other-than-temporary impairment losses recognized in income | $ 25.7 | $ 21.8 | $ 92.6 | $ 35.8 | |
Available-for-sale Securities | 20,739.6 | 20,739.6 | $ 18,951.0 | ||
Fair value of collateral received at time of securities lending transactions | 1,512.0 | $ 1,512.0 | $ 1,300.9 | ||
Securities lending transactions, ratio of fair value of collateral held to securities on loan | 103.00% | 103.00% | |||
Securities lending transactions, initial collateral percentage value | 102.00% | 102.00% | |||
Energy Sector Fixed Maturity Securities [Member] | |||||
Schedule of Investments [Line Items] | |||||
Available-for-sale Securities | $ 765.7 | $ 765.7 | $ 777.2 | ||
Unrealized Gain (Loss) on Securities | $ (0.3) | $ (172.0) |
Derivative Financial Instruments (Effect Of Fair Value Hedges On Income Statement) (Details) - Fixed Rate Debt [Member] - Interest Rate Swaps [Member] - Interest Expense [Member] - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Hedge Gain Recognized | $ 2.2 | $ 3.0 | $ 4.6 | $ 5.8 |
Hedged Item Loss Recognized | $ (2.2) | $ (3.0) | $ (4.6) | $ (5.8) |
Derivative Financial Instruments (Effect Of Cash Flow Hedges On Financial Statements) (Details) - Forward Starting Pay Fixed Swaps [Member] - Interest Expense [Member] - Cash Flow Hedging [Member] - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Effective Portion Pretax Hedge Loss Recognized in Other Comprehensive (Loss) Income | $ (293.8) | $ 0.0 | $ (703.6) | $ 0.0 |
Effective Portion Hedge Loss Reclassified from Accumulated Other Comprehensive Income | (1.5) | (1.3) | (2.9) | (2.7) |
Ineffective Portion Hedge Loss Recognized | $ 0.0 | $ 0.0 | $ 0.0 | $ 0.0 |
Derivative Financial Statement (Narrative) (Details) - USD ($) $ in Millions |
Jun. 30, 2016 |
Dec. 31, 2015 |
Jun. 30, 2015 |
---|---|---|---|
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Collateral posted | $ 438.0 | ||
Collateral received | 42.1 | ||
Contractual Notional Amount | 24,794.9 | $ 23,376.1 | |
Unrecognized loss for all outstanding and terminated cash flow hedges included in accumulated other comprehensive income | 536.6 | $ 34.1 | |
Cash Flow Hedging [Member] | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Contractual Notional Amount | 5,350.0 | 4,650.0 | |
Unrecognized loss for all outstanding and terminated cash flow hedges included in accumulated other comprehensive income | 536.6 | $ 81.1 | |
Total amount of amortization over the next twelve months for all cash flow hedges | $ 27.6 |
Income Taxes (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 667.7 | $ 698.9 | $ 1,276.7 | $ 1,402.8 |
Effective tax rate | 46.10% | 44.90% | 46.30% | 44.90% |
Health Insurance Provider Fee, increase in nondeductible income tax expense | $ 104.1 | $ 114.2 | $ 208.2 | $ 227.5 |
Retirement Benefits (Components Of Net Periodic Benefit (Credit) Cost) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Pension Benefits [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 2.9 | $ 3.3 | $ 5.7 | $ 6.6 |
Interest cost | 17.3 | 17.1 | 34.6 | 34.1 |
Expected return on assets | (36.7) | (35.9) | (73.4) | (71.6) |
Recognized actuarial loss | 4.3 | 6.5 | 8.7 | 12.9 |
Settlement loss | 3.2 | 1.7 | 5.6 | 3.0 |
Amortization of prior service credit | (0.1) | (0.2) | (0.2) | (0.4) |
Net periodic (benefit credit) benefit cost | (9.1) | (7.5) | (19.0) | (15.4) |
Other Benefits [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 0.4 | 0.6 | 0.8 | 1.1 |
Interest cost | 5.6 | 5.8 | 11.2 | 11.7 |
Expected return on assets | (5.6) | (5.9) | (11.2) | (11.8) |
Recognized actuarial loss | 3.1 | 3.8 | 6.2 | 7.6 |
Settlement loss | 0.0 | 0.0 | 0.0 | 0.0 |
Amortization of prior service credit | (3.4) | (3.6) | (6.9) | (7.2) |
Net periodic (benefit credit) benefit cost | $ 0.1 | $ 0.7 | $ 0.1 | $ 1.4 |
Debt (Carrying Value Of Long-term Debt) (Details) - USD ($) $ in Millions |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Debt Instrument [Line Items] | ||
Current portion of long-term debt | $ (927.9) | $ 0.0 |
Long-term debt, less current portion | $ 14,202.4 | $ 15,324.5 |
Debt (Convertible Debenture Terms) (Details) - Convertible Debt [Member] $ / shares in Units, $ in Millions |
6 Months Ended |
---|---|
Jun. 30, 2016
USD ($)
$ / shares
| |
Debt Instrument [Line Items] | |
Outstanding principal amount | $ 513.4 |
Unamortized debt discount | 175.2 |
Net debt carrying amount | 332.4 |
Equity component carrying amount | $ 186.1 |
Conversion rate (shares of common stock per $1,000 of principal) | 13.5624 |
Effective conversion price (per $1,000 of principal amount) per share | $ / shares | $ 73.7326 |
Capital Stock (Summary of Cash Dividend Activity) (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2016 |
Mar. 31, 2016 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Capital [Abstract] | ||||||
Declaration date | Apr. 26, 2016 | Feb. 18, 2016 | Apr. 28, 2015 | Jan. 27, 2015 | ||
Record date | Jun. 10, 2016 | Mar. 10, 2016 | Jun. 10, 2015 | Mar. 10, 2015 | ||
Payment date | Jun. 24, 2016 | Mar. 25, 2016 | Jun. 25, 2015 | Mar. 25, 2015 | ||
Common Stock, Dividends, Per Share, Declared | $ 0.650 | $ 0.625 | $ 1.300 | $ 1.250 | ||
Cash dividends per share | $ 0.650 | $ 0.650 | $ 0.625 | $ 0.625 | ||
Total payment | $ 170.9 | $ 170.7 | $ 163.9 | $ 166.6 | $ 341.6 | $ 330.5 |
Capital Stock (Summary of Share Repurchases) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Equity, Class of Treasury Stock [Line Items] | ||
Shares repurchased | 9.7 | |
Average price per share | $ 145.63 | |
Aggregate cost | $ 0.0 | $ 1,410.6 |
Authorization remaining at the end of each period | $ 4,175.9 | $ 4,281.0 |
Capital Stock (Nonvested Restricted Stock Activity Including Restricted Stock Units) (Details) - $ / shares shares in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Restricted Stock Shares and Units [Roll Forward] | ||
Nonvested at Beginning Balance, Restricted Stock Shares and Units | 2.7 | |
Granted, Restricted Stock Shares and Units | 1.0 | 0.9 |
Vested, Restricted Stock Shares And Units | (1.3) | |
Forfeited, Restricted Stock Shares And Units | (0.2) | |
Nonvested at Ending Balance, Restricted Stock Shares and Units | 2.2 | |
Weighted-Average Grant Date Fair Value Per Share [Roll Forward] | ||
Nonvested at Beginning Balance, Weighted-Average Grant Date Fair Value per Share | $ 101.66 | |
Granted, Weighted-Average Grant Date Fair Value per Share | 131.90 | $ 147.10 |
Vested, Weighted-Average Grant Date Fair Value per Share | 82.17 | |
Forfeited, Weighted-Average Grant Date Fair Value per Share | 116.41 | |
Nonvested at Ending Balance, Weighted-Average Grant Date Fair Value per Share | $ 126.38 |
Capital Stock (Fair Values of Options Granted During The Period Estimated Using Weighted-Average Assumptions) (Details) |
6 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Capital [Abstract] | ||
Risk-free interest rate | 1.76% | 1.96% |
Volatility factor | 32.00% | 31.00% |
Quarterly dividend yield | 0.491% | 0.425% |
Weighted-average expected life (years) | 4 years 1 month 5 days | 4 years |
Capital Stock (Schedule Of Weighted-Average Fair Values Determined For The Periods) (Details) - $ / shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Capital [Abstract] | ||
Options granted during the period | $ 30.57 | $ 34.01 |
Restricted stock awards granted during the period | $ 131.90 | $ 147.10 |
Capital Stock (Narrative) (Details) - USD ($) $ / shares in Units, shares in Millions |
6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2015 |
Dec. 31, 2015 |
Jun. 30, 2016 |
Oct. 02, 2014 |
|
Option Indexed to Issuer's Equity [Line Items] | ||||
Increase In Stock Repurchase Program Authorization | $ 5,000,000,000 | |||
Repurchase and retirement of common stock, shares | 9.7 | |||
Call Option [Member] | ||||
Option Indexed to Issuer's Equity [Line Items] | ||||
Repurchase and retirement of common stock, shares | 2.1 | |||
Average strike price | $ 135.03 | |||
Put Option [Member] | ||||
Option Indexed to Issuer's Equity [Line Items] | ||||
Options indexed to issuer's equity, shares | 5.3 | |||
Options expired unexercised | 2.5 | |||
Equity Unit Purchase Agreements [Member] | ||||
Option Indexed to Issuer's Equity [Line Items] | ||||
Equity Units Issued | 25.0 | |||
Equity Units, outstanding principal amount | $ 1,000 | |||
Long-term Debt, Gross | $ 1,250,000,000 |
Earnings Per Share (Denominator For Basic And Diluted Earnings Per Share) (Details) - shares shares in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Earnings Per Share [Abstract] | ||||
Denominator for basic earnings per share - weighted-average shares | 263.0 | 263.1 | 262.4 | 264.8 |
Effect of dilutive securities – employee stock options, nonvested restricted stock awards and convertible debentures | 5.2 | 11.2 | 5.4 | 12.5 |
Denominator for diluted earnings per share | 268.2 | 274.3 | 267.8 | 277.3 |
Earnings Per Share (Narrative) (Details) - shares shares in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Earnings Per Share [Abstract] | ||||
Weighted average shares excluded from denominator for diluted earnings per share because the stock options were anti-dilutive | 2.6 | 1.2 | 2.2 | 0.8 |
Restricted stock units issued under stock incentive plan | 1.0 | 0.9 | ||
Restricted stock units excluded from the denominator for diluted earnings per share | 0.5 | 0.4 |
Segment Information (Financial Data By Reportable Segment) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Segment Reporting Information [Line Items] | ||||
Operating revenue | $ 21,274.5 | $ 19,758.3 | $ 41,583.9 | $ 38,609.7 |
Operating gain (loss) | 1,500.2 | 1,512.1 | 3,070.6 | 3,091.4 |
Commercial and Specialty Business [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating revenue | 9,898.3 | 9,368.2 | 19,408.1 | 18,735.1 |
Operating gain (loss) | 1,075.3 | 912.0 | 2,368.3 | 2,179.0 |
Government Business [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating revenue | 11,371.1 | 10,385.0 | 22,165.0 | 19,865.1 |
Operating gain (loss) | 450.5 | 609.7 | 775.5 | 934.1 |
Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating revenue | 5.1 | 5.1 | 10.8 | 9.5 |
Operating gain (loss) | $ (25.6) | $ (9.6) | $ (73.2) | $ (21.7) |
Segment Information (Reconciliation Of Reportable Segments Operating Revenues To Total Revenues Reported In The Consolidated Statements Of Income) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Segment Reporting [Abstract] | ||||
Reportable segments operating revenues | $ 21,274.5 | $ 19,758.3 | $ 41,583.9 | $ 38,609.7 |
Net investment income | 194.9 | 186.7 | 366.0 | 354.3 |
Net realized gains (losses) on financial instruments | 12.5 | 92.3 | (112.6) | 138.8 |
Other-than-temporary impairment losses recognized in income | (25.7) | (21.8) | (92.6) | (35.8) |
Total revenues | $ 21,456.2 | $ 20,015.5 | $ 41,744.7 | $ 39,067.0 |
Segment Information (Reconciliation Of Reportable Segments Operating Gain To Income Before Income Tax Expense Included In The Consolidated Statements Of Income) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Segment Reporting [Abstract] | ||||
Reportable segments operating gain | $ 1,500.2 | $ 1,512.1 | $ 3,070.6 | $ 3,091.4 |
Net investment income | 194.9 | 186.7 | 366.0 | 354.3 |
Net realized gains (losses) on financial instruments | 12.5 | 92.3 | (112.6) | 138.8 |
Other-than-temporary impairment losses recognized in income | (25.7) | (21.8) | (92.6) | (35.8) |
Interest expense | (185.7) | (154.1) | (372.8) | (308.5) |
Amortization of other intangible assets | (47.9) | (60.1) | (98.3) | (112.6) |
Gain (loss) on extinguishment of debt | 0.0 | 2.9 | 0.0 | (0.5) |
Income before income tax expense | $ 1,448.3 | $ 1,558.0 | $ 2,760.3 | $ 3,127.1 |
!;L04<"IT<"GU5T5$\'.CL'.@Q/[;.+OCX3?9+=A=^<
M/D5'\]&=\%EXKK;3XKKXD<$'34$E42&XKZLQ=(8DJI[ &E'M;]TS084$2A>N
MUF$M'#'L/.X0):DDQE@@1NC6F&8&N]\6.$"VESNPS=/,/09Y++-(9A\WM]
MNM33[6"V1R@]W)XV)%&)E,*2S_4#:.:+;:DWQP7'3J3U>\%[*=%V-)ZT NR@
M\Z9"YECN,X_@SI1$%!=*!TBR7)E1B=)(%TH)IB !0-5M^V)
M'=T+)K/\GR-6L , +,
M+K(C!KNE'[.SV,MNZ4<5DX!BFXXB"J5R28#'CNE1. <]A@?GL\>DET:SR0S#P>"^AF0<=CH;GI
M)?/1:0+].=Q0S?A9G?B(H(\(W!=]6")J1#>[B 0=XQ_B0JET
MOIJZ%1OW(N5U[?NBO-"&"(]=::N^G!AOB%1+?O;%E5-R-$Y-[>,@B/V&5*U;
MY&;OC1&PO=V]R:V)O;VLN>&ULE9A14]LX%$;_BL9/]&$W
MB6.;EFEV!D*[RTQ;&,*TS\)6$DUE*2O)T/;7[[5"X'.XF\)3$L
B5U0!Z!Z!W#*@+
MVJH0Q&G];T?:IM""OHU1N/%SP(6]HXB0!H_-!IXRHIXKK^]DOY+%1VW),"T-
M21&B3PL!46CKA-'UH]1>?)6F4]@*U9PP;O8"MDK
F]#"W5@"73(&7.I\I[ 1C/X)DJN'8(]+G-!UV/96+W97T,
M)Y+G< 8G;.?49MKT7!C][+Q**N"$G<8-K+:FYFP\3B93MXIP;<"@-B!9&["V
MZ!#SN$HK (N_*;5!T;$]54? '>*
B68P:+0'=![&,,1L9L%$T&]E"CYS=.@!9A_3(:F/,
M1@9L#)J-#-CH3; ?5;/LC&.G)1B+#/+7H/-Q!GDI.6=B&=2E%)U#&+,,,!LT
M9MDFICKW8 #8X.,DPGQED+\&G9TQRE\%W""DH^F6>6X)\YH!KX/F-5L.=_E0
MFIE-!Q)V@Q9BICPFMD]M' H1G'G,6 \8&S1C/4 GD9A;#72AR)+(YL5CP'H
MV& . ^FG4]$#N!+ET5N,X>H!7(.&ZRCZT(V5K%S!:<1,Y)@48#5HK'J[1^\V
MV,:/59&CF!U,50^HFFFJ>L#++H,S?I"LR&.&,%@] &NFP>HM,'NNZD"(9'&L
M>HQ5#[":::QZRTP'UA8@*S'' K/'9/6 K)DFJ__YJ:L'4'4AAGF/F>H!4S/-
MU%'TH1EP]!IB:9U@E I(?C.=_(ZBC[P(.@OP+KK#$(QE 5C.-);%XM:'S.3B
M8@\-(LM*,)$%$#G31!9P%L"SR#^Z03J.GMD+QK( +&<:RV)SVW?9MW[\^6W!Y;?WR_E.*Z^\Y
MMO\!4$L#!!0 ( /M<^T@R*VZR$00 $T3 8 >&PO=V]R:W-H965T
M$NN"]E)S?%>P2
MB>:8TQ3#5S&[)8(%]B4%WTIQXO_ ^38\WU28)WC^0>&7;8+])L$^$>S_6^)&
M3)[]E82M>JK!MFET'*EP,&E05]YE.N]Y>I/W\++H10L_A&VE<>2,/KQLZG^#
MZ"%(R6YN*>G"_UD,!8V/Q\_A;*>1F@R/_?6#++^T_ -02P,$% @ ^US[
M2&!7\X*= 0 L0, !D !X;"]W;W)KTHV^[$8C1:A,0Y_2]$8M BD[0-T/@]L.]4R7U( 0)+PMP!]H$!',KY MQB1
M%G7HF >BQ4BSG^C060PCF]*ALZA#IRV=%]2@4X9=/!AN-J4_9VGCS7H:[U1E
M)!==#H/2I73G'&B[21)<2.6YQYC#.'0IK3D'6G.&V@$JECT.T]"E-.,
>O' BX^\>-;\7H?(
M"]>XX+&1 (T$8"3ZDMO [Y +.G(26*L$FV<%]E) +P7P$O7)VX(W?J#,YF<_
M<446_)XJ3=C8 %/$GYQ;DRI!"0A3Z76M('X^*9U0V9-HUFT8I)"H$"BE,*:4
M2:CM2>3GG,GBZ@8R32I3@B&,/86X%]?W))KU'Q6RF'Q(9L3>K##\%*)?7.23
MZ/Q.Q)4%)%+7P^!3B'QQD2N.OCPV&G%,9 A?BI.>C^-8AZ("L,BP)^BA-SF,8DZ @_I3$).L1/:=]/<9$0YD!C
M7C3P4YSP4QK#H"/\E,8PZ! _-0<%W,F:>!,'7HI3EPO#H".\E,8PZ! OI7TO
MQ1-J6# Q&C@I3DQ?&K.@(YR4P2R8$",3X&6"I!
MW2V8#!-AJ0PFPX18*A-LJ2R&QP)+):A%/4R&C;!4%I-A0RS5'+0<9WK]$>-C
M@:D2!!@6@V$C3)7%8-@04S4'9;\9V72Q:'_)7]R_>?-2G-O5<]UU=36NTA_K
MNG-].I;TZ4XN/]QV2G?LALVAGV;Z4C'M=/7E_+[>O/[B=02P,$% @
M^US[2-M]_I._ @ .PH !D !X;"]W;W)K$*%)FE,B+2S6"N4,25^$8*S!5Z!U
!V))EUF(M.&IIPS$4'
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M#*%&68
M(E,YM'TRRC^1W6#C6UAXSR IM&D0E L7:D)1GC9S)C!I)S4I)X5V,T#>9 ^#
M"Y"$X(^#9S(E!,20U>BC,V+!JT-W.J^5K3B7C32(4>OM'X 74YXQ07O(EA$C
MVF.V3/KS_3W]9G5*#_QG6AVRLE;>1-.>;+OSYUZ(AK>U&UJ[XQUYNKO=Y'S?
MR$NOO:[Z4WY_TXC3]4^+VS\GF_]02P,$% @ ^US[2*,F&?>\ 0 /P0
M !D !X;"]W;W)KB2%,+/@7"'>U(
MS#^8/B%]$*U9M'7;/9VHU*N7)B^J.KX8HZMFYS1HH4EG1:S=9P3R(7;H+CPO
M-GX#[,T16P/\Q:#T&V1>@\P:9$N#,ED5Z32EU0Q.D^(H\V-R+R;W8-(5QFFJ
M!28M\PCY,8474W@P:(4I[C 8HT?5E%Y,Z<'@%::\.[2T*J('7T?EQ50>3+;"
M.$V*EQP^*U9;Z):[BY:+(
M+T[1K8]SW"Q#-I?U9&Z;P7;NVM_J8I?UZ,?2#^3"_6@<]9A5A^$#3,1TR(L-
M,1 ;&T$^73%N3?+*E".F*VXYX'J(M8V(#,C+72>O]YUL@!,?9T*PYM3:T[#F
M,L .!'0@6@="F[3 F+0.$[68K,5X1KEL!(^\YL^HV5U/KS;BFZ][TI+R85(^
M2"HTDNHP2'C3,F8')NH/2Z6"Q94!M0W,3@"!3DN^ =#)8:AG0VLC*&H'8
M2!RLA@S(H7GF6#%;CT).L&DF('5:6+D8D*Z(3%H()$Q&MT'ZV0^+(/> BQ%U
MXE@$.9NNHQP+')\B<#U(4PA& DW5)*A.#,L;!_(6C2@!Q[+$Q0/EP6+"@9A$
MAIAL.)()