Segment Information

12 Months Ended

Dec. 31, 2017

Segment Information [Abstract]

Segment Information [Text Block]

Note 22– Segment Information

See Note 1 for a description of our reporting segments.

In the Company’s segment disclosures, we present “operating revenues,” defined as total revenues excluding realized investment results. The Company excludes realized investment results from this measure because its portfolio managers may sell investments based on factors largely unrelated to the underlying business purposes of each segment. As a result, gains or losses created in this process may not be indicative of past or future underlying performance of the business.

The Company uses “adjusted income from operations” as its principal financial measure of segment operating performance because management believes it best reflects the underlying results of business operations and permits analysis of trends in underlying revenue, expenses and profitability. Adjusted income from operations is defined as shareholders’ net income excluding after-tax realized investment gains and losses, net amortization of other acquired intangible assets and special items. Income or expense amounts are excluded from adjusted income from operations for the following reasons:

• Realized investment results are excluded because, as noted above, our portfolio managers may sell investments based on factors largely unrelated to the underlying business purposes of each segment.
• Net amortization of other intangible assets is excluded because it relates to costs incurred for acquisitions and, as a result, it does not relate to the core performance of the Company’s business operations. In 2015, the amortization amount was net of a bargain purchase gain on an acquisition.

• Special items, if any, are excluded because management believes they are not representative of the underlying results of operations. This is generally because the nature and size of these matters are not indicative of our ongoing business operations. Additional details about these items that provide further context as to why they are not considered indicative of ongoing business operations may be found in the footnotes referenced in the table below.

The following table presents the special items recorded by the Company for the years ended December 31, 2017, 2016 and 2015.

(In millions)
Description of Special Item and Financial Statement Line Item(s)			After-tax		Before-tax
Year ended December 31, 2017
	Charges associated with U.S. tax reform
	- Other operating expenses (see Note 20 for details)	$	(36)	$	(56)
	- Tax expense (see Note 20 for details)		232		-
	Total charges associated with U.S. tax reform	$	196	$	(56)
	Debt extinguishment costs (Other operating expenses, see Note 5 for details)	$	209	$	321
	Long-term care guaranty fund assessment (Other operating expenses, see Note 21(D) for details)	$	83	$	129
	Transaction-related costs (Other operating expenses, see Note 3 for details)	$	33	$	126
Year ended December 31, 2016
	Transaction-related costs (Other operating expenses, see Note 3 for details)	$	147	$	166
	Risk corridor allowance (Other operating expenses, see page ##EndofNotesPage in this Note for details)	$	80	$	124
	Charges associated with litigation matters (Other operating expenses, see Note 21(E) for a discussion of litigation charges)	$	25	$	40
Year ended December 31, 2015
	Debt extinguishment costs (Other operating expenses, see Note 5 for details)	$	65	$	100
	Transaction-related costs (Other operating expenses, see Note 3 for details)	$	57	$	66

Summarized segment financial information for the years ended December 31, was as follows:

(In millions)	Global Health Care		Global Supplemental Benefits		Group Disability and Life		Other Operations		Corporate		Total
2017
Premiums	$	24,538	$	3,684	$	3,985	$	112	$	(12)	$	32,307
Fees and other revenues (1)		4,722		66		106		10		(37)		4,867
Net investment income		378		122		350		346		30		1,226
Mail order pharmacy revenues		2,979		-		-		-		-		2,979
Total operating revenues		32,617		3,872		4,441		468		(19)		41,379
Net realized investment gains (losses)		136		32		74		(5)		-		237
Total revenues		32,753		3,904		4,515		463		(19)		41,616
Depreciation and amortization		477		54		30		1		4		566
Total benefits and expenses		29,440		3,407		4,044		316		803		38,010
Income (loss) before income taxes		3,313		497		471		147		(822)		3,606
Income taxes (benefits) and net loss attributable to noncontrolling interests		1,031		195		113		222		(192)		1,369
Shareholders' net income (loss) by segment		2,282		302		358		(75)		(630)		2,237
After-tax adjustments to reconcile to adjusted income from operations
Net realized investment (gains) losses		(88)		(24)		(49)		4		1		(156)
Amortization of other acquired intangible assets, net		48		18		-		-		-		66
Special items
U.S. tax reform		(137)		73		(39)		138		161		196
Debt extinguishment costs		-		-		-		-		209		209
Long-term care guaranty fund assessment		68		-		15		-		-		83
Transaction-related costs		-		-		-		-		33		33
Adjusted income (loss) from operations	$	2,173	$	369	$	285	$	67	$	(226)	$	2,668
(In millions)	Global Health Care		Global Supplemental Benefits		Group Disability and Life		Other Operations		Corporate		Total
2016
Premiums	$	23,295	$	3,226	$	4,002	$	103	$	-	$	30,626
Fees and other revenues (1)		4,623		49		98		11		(21)		4,760
Net investment income		315		110		343		358		21		1,147
Mail order pharmacy revenues		2,966		-		-		-		-		2,966
Total operating revenues		31,199		3,385		4,443		472		-		39,499
Net realized investment gains		119		(5)		59		(5)		1		169
Total revenues		31,318		3,380		4,502		467		1		39,668
Depreciation and amortization		526		54		28		1		1		610
Total benefits and expenses		28,467		3,052		4,273		369		528		36,689
Income (loss) before taxes		2,851		328		229		98		(527)		2,979
Income taxes (benefits) and net loss attributable to noncontrolling interests		1,100		60		65		30		(143)		1,112
Shareholders' net income (loss) by segment		1,751		268		164		68		(384)		1,867
After-tax adjustments to reconcile to adjusted income from operations
Net realized investment (gains)		(78)		6		(39)		2		-		(109)
Amortization of other acquired intangible assets, net		74		20		-		-		-		94
Special items
Transaction-related costs		-		-		-		-		147		147
Risk corridor allowance		80		-		-		-		-		80
Charges associated with litigation matters		25		-		-		-		-		25
Adjusted income (loss) from operations	$	1,852	$	294	$	125	$	70	$	(237)	$	2,104
(1) Includes the Company's share of the earnings of its joint ventures in China and India in the Global Supplemental Benefits segment.
(In millions)	Global Health Care		Global Supplemental Benefits		Group Disability and Life		Other Operations		Corporate		Total
2015
Premiums	$	22,696	$	3,000	$	3,843	$	103	$	-	$	29,642
Fees and other revenues (1)		4,357		46		91		13		(19)		4,488
Net investment income		340		103		337		369		4		1,153
Mail order pharmacy revenues		2,536		-		-		-		-		2,536
Total operating revenues		29,929		3,149		4,271		485		(15)		37,819
Net realized investment gains		43		-		5		9		-		57
Total revenues		29,972		3,149		4,276		494		(15)		37,876
Depreciation and amortization		526		31		26		1		1		585
Total benefits and expenses		27,028		2,849		3,796		374		502		34,549
Income (loss) before taxes		2,944		300		480		120		(517)		3,327
Income taxes (benefits) and net income attributable to noncontrolling interests		1,150		33		152		40		(142)		1,233
Shareholders' net income (loss) by segment		1,794		267		328		80		(375)		2,094
After-tax adjustments to reconcile to adjusted income from operations
Net realized investment (gains)		(30)		(1)		(4)		(5)		-		(40)
Amortization of other acquired intangible assets, net (2)		84		(4)		-		-		-		80
Special items
Debt extinguishment costs		-		-		-		-		65		65
Transaction-related costs		-		-		-		-		57		57
Adjusted income (loss) from operations	$	1,848	$	262	$	324	$	75	$	(253)	$	2,256
(1) Includes the Company's share of the earnings of its joint ventures in China and India in the Global Supplemental Benefits segment.
(2) Includes a $23 million bargain purchase gain for a 2015 acquisition.

Revenue from external customers includes premiums, fees and other revenues and mail order pharmacy revenues. The following tablepresents these revenues by product type for the years ended December 31:

(In millions)	2017		2016		2015
Global Health Care premiums by product:
Guaranteed cost	$	6,245	$	4,610	$	4,761
Experience-rated		2,741		2,383		2,329
Stop loss		3,483		3,082		2,701
International health care		1,934		1,859		1,834
Dental		1,791		1,586		1,392
Medicare		5,534		6,621		6,142
Medicaid		1,061		1,146		1,102
Medicare Part D		764		1,122		1,589
Other		985		886		846
Total premiums		24,538		23,295		22,696
Fees		4,503		4,368		4,107
Total Global Health Care premiums and fees		29,041		27,663		26,803
Disability		2,091		2,045		1,899
Life, Accident and Supplemental Health		5,704		5,300		5,054
Mail order pharmacy		2,979		2,966		2,536
Other		338		378		374
Total	$	40,153	$	38,352	$	36,666

Foreign and U.S. revenues from external customers for the three years ended December 31 are shown below. The Company’s foreign revenues are generated by its foreign operating entities. In the periods shown, no foreign country contributed more than 5% of consolidated revenues from external customers.

(In millions)	2017		2016		2015
United States	$	36,128	$	34,672	$	33,185
South Korea		1,892		1,666		1,521
All other foreign countries		2,133		2,014		1,960
Total	$	40,153	$	38,352	$	36,666

The Company had net receivables from CMS of $0.5 billion as of December 31, 2017 and $0.6 billion as of December 31, 2016. These amounts were included in premiums, accounts and notes receivable and reinsurance recoverables. As a percentage of consolidated revenues, premiums and fees from CMS were 17% in 2017, 20% in 2016 and 21% in 2015. These amounts were reported in the Global Health Care segment.

In 2016, the Company recorded an allowance for the balance of its risk corridor receivable from CMS of $124 million based on court decisions and the large risk corridor program deficit. As of December 31, 2017, the Company continues to hold an allowance for the balance of its risk corridor receivable of $109 million based on the current status of court decisions. However, the Company continues to believe that the government has a binding obligation to satisfy the risk corridor receivable.