Supplemental Condensed Consolidating Financial Information (Tables)

12 Months Ended

Dec. 31, 2018

Condensed Financial Information [Abstract]

Condensed Consolidating Statements of Income

Condensed Statements of Operations

	Year Ended December 31,
	2018			2017			2016
	(In millions)
Revenue:
Management fees	$	1,138		$	1,317		$	1,062
Investment income and other revenue	17			16			16
Total revenue	1,155			1,333			1,078
Expenses:
Medical care costs	8			16			73
General and administrative expenses	1,007			1,082			899
Depreciation and amortization	69			93			95
Restructuring and separation costs	35			153			—
Impairment losses	—			39			—
Total operating expenses	1,119			1,383			1,067
Gain on sale of subsidiary	37			—			—
Operating income (loss)	73			(50		)	11
Interest expense	114			117			101
Other expense (income)	17			(61		)	—
Loss before income tax (benefit) expense and equity in net earnings (losses) of subsidiaries	(58		)	(106		)	(90		)
Income tax (benefit) expense	(14		)	8			(24		)
Net loss before equity in net earnings (losses) of subsidiaries	(44		)	(114		)	(66		)
Equity in net earnings (losses) of subsidiaries	751			(398		)	118
Net income (loss)	$	707		$	(512	)	$	52

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

	Year Ended December 31, 2018
	Parent Issuer			Other Guarantor			Non-Guarantors		Eliminations			Consolidated
	(In millions)
Revenue:
Total revenue	$	1,155		$	3		$	18,884	$	(1,152	)	$	18,890
Expenses:
Medical care costs	8			—			15,129		—			15,137
Cost of service revenue	—			—			364		—			364
General and administrative expenses	1,007			4			1,474		(1,152		)	1,333
Premium tax expenses	—			—			417		—			417
Health insurer fees	—			—			348		—			348
Depreciation and amortization	69			—			30		—			99
Restructuring and separation costs	35			—			11		—			46
Total operating expenses	1,119			4			17,773		(1,152		)	17,744
Gain (loss) on sales of subsidiaries	37			(52		)	—		—			(15		)
Operating income (loss)	73			(53		)	1,111		—			1,131
Interest expense	114			—			1		—			115
Other expense	17			—			—		—			17
(Loss) income before income tax (benefit) expense	(58		)	(53		)	1,110		—			999
Income tax (benefit) expense	(14		)	(11		)	317		—			292
Net (loss) income before equity in net earnings (losses) of subsidiaries	(44		)	(42		)	793		—			707
Equity in net earnings (losses) of subsidiaries	751			(5		)	—		(746		)	—
Net income (loss)	$	707		$	(47	)	$	793	$	(746	)	$	707

	Year Ended December 31, 2017
	Parent Issuer			Other Guarantor			Non-Guarantors			Eliminations			Consolidated
	(In millions)
Revenue:
Total revenue	$	1,333		$	2		$	19,904		$	(1,356	)	$	19,883
Expenses:
Medical care costs	16			—			17,058			(1		)	17,073
Cost of service revenue	—			—			492			—			492
General and administrative expenses	1,082			2			1,865			(1,355		)	1,594
Premium tax expenses	—			—			438			—			438
Depreciation and amortization	93			—			44			—			137
Restructuring and separation costs	153			—			81			—			234
Impairment losses	39			—			431			—			470
Total operating expenses	1,383			2			20,409			(1,356		)	20,438
Operating loss	(50		)	—			(505		)	—			(555		)
Total other expenses, net	56			—			1			—			57
Loss before income taxes	(106		)	—			(506		)	—			(612		)
Income tax expense (benefit)	8			—			(108		)	—			(100		)
Net loss before equity in net (losses) earnings of subsidiaries	(114		)	—			(398		)	—			(512		)
Equity in net (losses) earnings of subsidiaries	(398		)	(164		)	8			554			—
Net loss	$	(512	)	$	(164	)	$	(390	)	$	554		$	(512	)

	Year Ended December 31, 2016
	Parent Issuer			Other Guarantor			Non-Guarantors		Eliminations			Consolidated
	(In millions)
Revenue:
Total revenue	$	1,078		$	—		$	17,786	$	(1,082	)	$	17,782
Expenses:
Medical care costs	73			—			14,702		(1		)	14,774
Cost of service revenue	—			—			485		—			485
General and administrative expenses	899			2			1,573		(1,081		)	1,393
Premium tax expenses	—			—			468		—			468
Health insurer fees	—			—			217		—			217
Depreciation and amortization	95			—			44		—			139
Total operating expenses	1,067			2			17,489		(1,082		)	17,476
Operating income (loss)	11			(2		)	297		—			306
Total other expenses, net	101			—			—		—			101
(Loss) income before income taxes	(90		)	(2		)	297		—			205
Income tax (benefit) expense	(24		)	(1		)	178		—			153
Net (loss) income before equity in earnings of subsidiaries	(66		)	(1		)	119		—			52
Equity in net earnings of subsidiaries	118			2			—		(120		)	—
Net income	$	52		$	1		$	119	$	(120	)	$	52

Condensed Consolidating Statements of Comprehensive Income (Loss)

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

	Year Ended December 31, 2018
	Parent Issuer			Other Guarantor			Non-Guarantors			Eliminations			Consolidated
	(In millions)
Net income (loss)	$	707		$	(47	)	$	793		$	(746	)	$	707
Other comprehensive loss, net of tax	(2		)	—			(2		)	2			(2		)
Comprehensive income (loss)	$	705		$	(47	)	$	791		$	(744	)	$	705

	Year Ended December 31, 2017
	Parent Issuer			Other Guarantor			Non-Guarantors			Eliminations		Consolidated
	(In millions)
Net loss	$	(512	)	$	(164	)	$	(390	)	$	554	$	(512	)
Other comprehensive loss, net of tax	(3		)	—			(2		)	2		(3		)
Comprehensive loss	$	(515	)	$	(164	)	$	(392	)	$	556	$	(515	)

	Year Ended December 31, 2016
	Parent Issuer		Other Guarantor		Non-Guarantors		Eliminations			Consolidated
	(In millions)
Net income	$	52	$	1	$	119	$	(120	)	$	52
Other comprehensive income, net of tax	2		—		1		(1		)	2
Comprehensive income	$	54	$	1	$	120	$	(121	)	$	54

Condensed Consolidating Balance Sheets

Condensed Balance Sheets

	December 31,
	2018			2017
	(In millions, except share data)
ASSETS
Current assets:
Cash and cash equivalents	$	70		$	504
Investments	100			192
Restricted investments	—			169
Receivables	2			2
Due from affiliates	90			148
Prepaid expenses and other current assets	47			103
Derivative asset	476			522
Total current assets	785			1,640
Property, equipment, and capitalized software, net	176			223
Goodwill and intangible assets, net	13			15
Investments in subsidiaries	2,768			2,306
Deferred income taxes	39			17
Advances to related parties and other assets	40			32
	$	3,821		$	4,233
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Medical claims and benefits payable	$	4		$	3
Accounts payable and accrued liabilities	223			178
Current portion of long-term debt	241			653
Derivative liability	476			522
Total current liabilities	944			1,356
Long-term debt	1,020			1,318
Lease financing obligations	197			198
Other long-term liabilities	13			24
Total liabilities	2,174			2,896
Stockholders’ equity:
Common stock, $0.001 par value; 150 million shares authorized; outstanding:
62 million shares at December 31, 2018 and 60 million shares at December 31, 2017	—			—
Preferred stock, $0.001 par value; 20 million shares authorized, no shares issued and outstanding	—			—
Additional paid-in capital	643			1,044
Accumulated other comprehensive loss	(8		)	(5		)
Retained earnings	1,012			298
Total stockholders’ equity	1,647			1,337
	$	3,821		$	4,233

CONDENSED CONSOLIDATING BALANCE SHEETS

	December 31, 2018
	Parent Issuer		Other Guarantor			Non-Guarantors			Eliminations			Consolidated
	(In millions)
ASSETS
Current assets:
Cash and cash equivalents	$	70	$	2		$	2,754		$	—		$	2,826
Investments	100		—			1,581			—			1,681
Receivables	2		—			1,328			—			1,330
Due from (to) affiliates	90		7			(97		)	—			—
Prepaid expenses and other current assets	47		29			73			—			149
Derivative asset	476		—			—			—			476
Total current assets	785		38			5,639			—			6,462
Property, equipment, and capitalized software, net	176		—			65			—			241
Goodwill and intangible assets, net	13		—			177			—			190
Restricted investments	—		—			120			—			120
Investment in subsidiaries, net	2,768		(5		)	—			(2,763		)	—
Deferred income taxes	39		—			78			—			117
Other assets	40		—			5			(21		)	24
	$	3,821	$	33		$	6,084		$	(2,784	)	$	7,154
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Medical claims and benefits payable	$	4	$	—		$	1,957		$	—		$	1,961
Amounts due government agencies	—		—			967			—			967
Accounts payable and accrued liabilities	223		—			167			—			390
Deferred revenue	—		—			211			—			211
Current portion of long-term debt	241		—			—			—			241
Derivative liability	476		—			—			—			476
Total current liabilities	944		—			3,302			—			4,246
Long-term debt and lease financing obligations	1,217		—			20			(20		)	1,217
Other long-term liabilities	13		—			32			(1		)	44
Total liabilities	2,174		—			3,354			(21		)	5,507
Total stockholders’ equity	1,647		33			2,730			(2,763		)	1,647
	$	3,821	$	33		$	6,084		$	(2,784	)	$	7,154

CONDENSED CONSOLIDATING BALANCE SHEETS

	December 31, 2017
	Parent Issuer		Other Guarantor		Non-Guarantors			Eliminations			Consolidated
	(In millions)
ASSETS
Current assets:
Cash and cash equivalents	$	504	$	—	$	2,682		$	—		$	3,186
Investments	192		—		2,332			—			2,524
Restricted investments	169		—		—			—			169
Receivables	2		—		869			—			871
Due from (to) affiliates	148		2		(150		)	—			—
Prepaid expenses and other current assets	103		2		150			(16		)	239
Derivative asset	522		—		—			—			522
Total current assets	1,640		4		5,883			(16		)	7,511
Property, equipment, and capitalized software, net	223		—		119			—			342
Goodwill and intangible assets, net	15		—		240			—			255
Restricted investments	—		—		119			—			119
Investment in subsidiaries, net	2,306		75		—			(2,381		)	—
Deferred income taxes	17		—		101			(15		)	103
Other assets	32		—		110			(1		)	141
	$	4,233	$	79	$	6,572		$	(2,413	)	$	8,471
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Medical claims and benefits payable	$	3	$	—	$	2,189		$	—		$	2,192
Amounts due government agencies	—		—		1,542			—			1,542
Accounts payable and accrued liabilities	178		1		188			(1		)	366
Deferred revenue	—		—		282			—			282
Current portion of long-term debt	653		—		16			(16		)	653
Derivative liability	522		—		—			—			522
Total current liabilities	1,356		1		4,217			(17		)	5,557
Long-term debt and lease financing obligations	1,516		—		—			—			1,516
Deferred income taxes	—		—		15			(15		)	—
Other long-term liabilities	24		—		37			—			61
Total liabilities	2,896		1		4,269			(32		)	7,134
Total stockholders’ equity	1,337		78		2,303			(2,381		)	1,337
	$	4,233	$	79	$	6,572		$	(2,413	)	$	8,471

Condensed Consolidating Statements of Cash Flows

Condensed Statements of Cash Flows

	Year Ended December 31,
	2018			2017			2016
	(In millions)
Operating activities:
Net cash provided by operating activities	$	118		$	166		$	55
Investing activities:
Capital contributions to subsidiaries	(145		)	(370		)	(386		)
Dividends received from subsidiaries	298			286			101
Purchases of investments	(136		)	(331		)	(115		)
Proceeds from sales and maturities of investments	388			156			188
Purchases of property, equipment and capitalized software	(22		)	(67		)	(125		)
Net cash received from sale of subsidiaries	242			—			—
Change in amounts due to/from affiliates	6			(49		)	(18		)
Other, net	—			—			6
Net cash provided by (used in) investing activities	631			(375		)	(349		)
Financing activities:
Repayment of credit facility	(300		)	—			—
Repayment of principal amount of 1.125% Convertible Notes	(298		)	—			—
Cash paid for partial settlement of 1.125% Conversion Option	(623		)	—			—
Cash received for partial settlement of 1.125% Call Option	623			—			—
Cash paid for partial termination of 1.125% Warrants	(549		)	—			—
Repayment of principal amount of 1.625% Convertible Notes	(64		)	—			—
Proceeds from senior notes offerings, net of issuance costs	—			325			—
Proceeds from borrowings under credit facility	—			300			—
Other, net	19			11			20
Net cash (used in) provided by financing activities	(1,192		)	636			20
Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents	(443		)	427			(274		)
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period	513			86			360
Cash, cash equivalents, and restricted cash and cash equivalents at end of period	$	70		$	513		$	86

See accompanying notes.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

	Year Ended December 31, 2018
	Parent Issuer			Other Guarantor			Non-Guarantors			Eliminations		Consolidated
	(In millions)
Operating activities:
Net cash provided by (used in) operating activities	$	118		(2		)	(430		)	—		$	(314	)
Investing activities:
Purchases of investments	(136		)	—			(1,308		)	—		(1,444		)
Proceeds from sales and maturities of investments	388			—			2,057			—		2,445
Purchases of property, equipment and capitalized software	(22		)	—			(8		)	—		(30		)
Net cash received from sales of subsidiaries	242			—			(52		)	—		190
Capital contributions to subsidiaries	(145		)	—			145			—		—
Dividends received from subsidiaries	298			—			(298		)	—		—
Change in amounts due to/from affiliates	6			4			(10		)	—		—
Other, net	—			—			(18		)	—		(18		)
Net cash provided by investing activities	631			4			508			—		1,143
Financing activities:
Repayment of credit facility	(300		)	—			—			—		(300		)
Repayment of principal amount of 1.125% Convertible Notes	(298		)	—			—			—		(298		)
Cash paid for partial settlement of 1.125% Conversion Option	(623		)	—			—			—		(623		)
Cash received for partial settlement of 1.125% Call Option	623			—			—			—		623
Cash paid for partial termination of 1.125% Warrants	(549		)	—			—			—		(549		)
Repayment of principal amount of 1.625% Convertible Notes	(64		)	—			—			—		(64		)
Other, net	19			—			(1		)	—		18
Net cash used in financing activities	(1,192		)	—			(1		)	—		(1,193		)
Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents	(443		)	2			77			—		(364		)
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period	513			—			2,777			—		3,290
Cash, cash equivalents, and restricted cash and cash equivalents at end of period	$	70		$	2		$	2,854		$	—	$	2,926

	Year Ended December 31, 2017
	Parent Issuer			Other Guarantor			Non-Guarantors			Eliminations		Consolidated
	(In millions)
Operating activities:
Net cash provided by operating activities	$	166		—			638			—		$	804
Investing activities:
Purchases of investments	(331		)	—			(2,366		)	—		(2,697		)
Proceeds from sales and maturities of investments	156			—			1,603			—		1,759
Purchases of property, equipment and capitalized software	(67		)	—			(19		)	—		(86		)
Capital contributions to subsidiaries	(370		)	2			368			—		—
Dividends received from subsidiaries	286			—			(286		)	—		—
Change in amounts due to/from affiliates	(49		)	(2		)	51			—		—
Other, net	—			—			(38		)	—		(38		)
Net cash used in investing activities	(375		)	—			(687		)	—		(1,062		)
Financing activities:
Proceeds from senior notes offerings, net of issuance costs	325			—			—			—		325
Proceeds from borrowings under credit facility	300			—			—			—		300
Other, net	11			—			—			—		11
Net cash provided by financing activities	636			—			—			—		636
Net increase (decrease) in cash, cash equivalents, and restricted cash and cash equivalents	427			—			(49		)	—		378
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period	86			—			2,826			—		2,912
Cash, cash equivalents, and restricted cash and cash equivalents at end of period	$	513		$	—		$	2,777		$	—	$	3,290

	Year Ended December 31, 2016
	Parent Issuer			Other Guarantor			Non-Guarantors			Eliminations		Consolidated
	(In millions)
Operating activities:
Net cash provided by (used in) operating activities	$	55		(1		)	619			—		$	673
Investing activities:
Purchases of investments	(115		)	—			(1,814		)	—		(1,929		)
Proceeds from sales and maturities of investments	188			—			1,778			—		1,966
Purchases of property, equipment and capitalized software	(125		)	—			(51		)	—		(176		)
Net cash paid in business combinations	—			—			(48		)	—		(48		)
Capital contributions to subsidiaries	(386		)	7			379			—		—
Dividends received from subsidiaries	101			—			(101		)	—		—
Change in amounts due to/from affiliates	(18		)	(6		)	24			—		—
Other, net	6			—			(25		)	—		(19		)
Net cash (used in) provided by investing activities	(349		)	1			142			—		(206		)
Financing activities:
Other, net	20			—			(1		)	—		19
Net cash provided by (used in) financing activities	20			—			(1		)	—		19
Net increase (decrease) in cash, cash equivalents, and restricted cash and cash equivalents	(274		)	—			760			—		486
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period	360			—			2,066			—		2,426
Cash, cash equivalents, and restricted cash and cash equivalents at end of period	$	86		$	—		$	2,826		$	—	$	2,912