Supplemental Condensed Consolidating Financial Information (Tables)

3 Months Ended

Mar. 31, 2017

CONDENSED CONSOLIDATING STATEMENTS OF INCOME



	Three Months Ended March 31, 2017
	Parent Guarantor			Other Guarantors			Non-Guarantors		Eliminations			Consolidated
	(In millions)
Revenue:
Total revenue	$	341		$	48		$	4,857	$	(342	)	$	4,904
Expenses:
Medical care costs	4			—			4,107		—			4,111
Cost of service revenue	—			42			80		—			122
General and administrative expenses	297			7			477		(342		)	439
Premium tax expenses	—			—			111		—			111
Depreciation and amortization	27			—			12		—			39
Total operating expenses	328			49			4,787		(342		)	4,822
Operating income (loss)	13			(1		)	70		—			82
Interest expense	26			—			—		—			26
Other income, net	(75		)	—			—		—			(75		)
Income (loss) before income taxes	62			(1		)	70		—			131
Income tax expense	31			—			23		—			54
Net income (loss) before equity in earnings of subsidiaries	31			(1		)	47		—			77
Equity in net earnings of subsidiaries	46			(2		)	—		(44		)	—
Net income (loss)	$	77		$	(3	)	$	47	$	(44	)	$	77



	Three Months Ended March 31, 2016
	Parent Guarantor			Other Guarantors			Non-Guarantors		Eliminations			Consolidated
	(In millions)
Revenue:
Total revenue	$	251		$	52		$	4,290	$	(250	)	$	4,343
Expenses:
Medical care costs	12			—			3,576		—			3,588
Cost of service revenue	—			65			62		—			127
General and administrative expenses	217			(15		)	388		(250		)	340
Premium tax expenses	—			—			109		—			109
Health insurer fee expenses	—			—			58		—			58
Depreciation and amortization	22			2			8		—			32
Total operating expenses	251			52			4,201		(250		)	4,254
Operating income	—			—			89		—			89
Interest expense	25			—			—		—			25
(Loss) income before income taxes	(25		)	—			89		—			64
Income tax (benefit) expense	(16		)	—			56		—			40
Net (loss) income before equity in earnings of subsidiaries	(9		)	—			33		—			24
Equity in net earnings of subsidiaries	33			2			—		(35		)	—
Net income	$	24		$	2		$	33	$	(35	)	$	24

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME



	Three Months Ended March 31, 2017
	Parent Guarantor		Other Guarantors			Non-Guarantors		Eliminations			Consolidated

	(In millions)
Net income (loss)	$	77	$	(3	)	$	47	$	(44	)	$	77
Other comprehensive income, net of tax	1		—			1		(1		)	1
Comprehensive income (loss)	$	78	$	(3	)	$	48	$	(45	)	$	78



	Three Months Ended March 31, 2016
	Parent Guarantor		Other Guarantors		Non-Guarantors		Eliminations			Consolidated

	(In millions)
Net income	$	24	$	2	$	33	$	(35	)	$	24
Other comprehensive income, net of tax	6		—		5		(5		)	6
Comprehensive income	$	30	$	2	$	38	$	(40	)	$	30

CONDENSED CONSOLIDATING BALANCE SHEETS



	March 31, 2017
	Parent Guarantor		Other Guarantors			Non-Guarantors			Eliminations			Consolidated
	(In millions)
ASSETS
Current assets:
Cash and cash equivalents	$	187	$	19		$	2,992		$	—		$	3,198
Investments	86		—			1,970			—			2,056
Receivables	2		41			963			—			1,006
Due from (to) affiliates	155		(7		)	(148		)	—			—
Prepaid expenses and other current assets	53		22			67			—			142
Total current assets	483		75			5,844			—			6,402
Property, equipment, and capitalized software, net	294		47			106			—			447
Deferred contract costs	—		89			—			—			89
Goodwill and intangible assets, net	56		72			623			—			751
Restricted investments	—		—			115			—			115
Investment in subsidiaries, net	2,722		244			—			(2,966		)	—
Deferred income taxes	10		—			—			—			10
Derivative asset	181		—			—			—			181
Other assets	50		3			6			(16		)	43
	$	3,796	$	530		$	6,694		$	(2,982	)	$	8,038

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Medical claims and benefits payable	$	—	$	—		$	1,926		$	—		$	1,926
Amounts due government agencies	—		—			1,575			—			1,575
Accounts payable and accrued liabilities	187		39			212			—			438
Deferred revenue	—		48			413			—			461
Income taxes payable	17		(7		)	11			—			21
Current portion of long-term debt	1		—			—			—			1
Total current liabilities	205		80			4,137			—			4,422
Long-term debt	1,653		—			16			(16		)	1,653
Deferred income taxes	8		42			(39		)	—			11
Derivative liability	181		—			—			—			181
Other long-term liabilities	22		1			21			—			44
Total liabilities	2,069		123			4,135			(16		)	6,311
Total stockholders’ equity	1,727		407			2,559			(2,966		)	1,727
	$	3,796	$	530		$	6,694		$	(2,982	)	$	8,038



	December 31, 2016
	Parent Guarantor		Other Guarantors			Non-Guarantors			Eliminations			Consolidated
	(In millions)
ASSETS
Current assets:
Cash and cash equivalents	$	86	$	6		$	2,727		$	—		$	2,819
Investments	178		—			1,580			—			1,758
Receivables	2		34			938			—			974
Income tax refundable	17		4			18			—			39
Due from (to) affiliates	104		(5		)	(99		)	—			—
Prepaid expenses and other current assets	58		30			43			—			131
Derivative asset	267		—			—			—			267
Total current assets	712		69			5,207			—			5,988
Property, equipment, and capitalized software, net	301		46			107			—			454
Deferred contract costs	—		86			—			—			86
Goodwill and intangible assets, net	58		73			629			—			760
Restricted investments	—		—			110			—			110
Investment in subsidiaries, net	2,609		246			—			(2,855		)	—
Deferred income taxes	10		—			—			—			10
Other assets	48		3			6			(16		)	41
	$	3,738	$	523		$	6,059		$	(2,871	)	$	7,449

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Medical claims and benefits payable	$	1	$	—		$	1,928		$	—		$	1,929
Amounts due government agencies	—		—			1,202			—			1,202
Accounts payable and accrued liabilities	146		34			205			—			385
Deferred revenue	—		40			275			—			315
Current portion of long-term debt	472		—			—			—			472
Derivative liability	267		—			—			—			267
Total current liabilities	886		74			3,610			—			4,570
Long-term debt	1,173		—			16			(16		)	1,173
Deferred income taxes	11		39			(35		)	—			15
Other long-term liabilities	19		1			22			—			42
Total liabilities	2,089		114			3,613			(16		)	5,800
Total stockholders’ equity	1,649		409			2,446			(2,855		)	1,649
	$	3,738	$	523		$	6,059		$	(2,871	)	$	7,449

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS



	Three Months Ended March 31, 2017
	Parent Guarantor			Other Guarantors			Non-Guarantors			Eliminations		Consolidated
	(In millions)
Operating activities:
Net cash provided by operating activities	$	144		$	21		$	554		$	—	$	719
Investing activities:
Purchases of investments	—			—			(733		)	—		(733		)
Proceeds from sales and maturities of investments	92			—			341			—		433
Purchases of property, equipment and capitalized software	(18		)	(5		)	(3		)	—		(26		)
Increase in restricted investments	—			—			(7		)	—		(7		)
Capital contributions to/from subsidiaries	(106		)	1			105			—		—
Dividends to/from subsidiaries	50			—			(50		)	—		—
Change in amounts due to/from affiliates	(60		)	2			58			—		—
Other, net	—			(6		)	—			—		(6		)
Net cash used in investing activities	(42		)	(8		)	(289		)	—		(339		)
Financing activities:
Proceeds from employee stock plans	1			—			—			—		1
Other, net	(2		)	—			—			—		(2		)
Net cash used in financing activities	(1		)	—			—			—		(1		)
Net increase in cash and cash equivalents	101			13			265			—		379
Cash and cash equivalents at beginning of period	86			6			2,727			—		2,819
Cash and cash equivalents at end of period	$	187		$	19		$	2,992		$	—	$	3,198



	Three Months Ended March 31, 2016
	Parent Guarantor			Other Guarantors			Non-Guarantors			Eliminations		Consolidated
	(In millions)
Operating activities:
Net cash (used in) provided by operating activities	$	(38	)	$	23		$	154		$	—	$	139
Investing activities:
Purchases of investments	(35		)	—			(576		)	—		(611		)
Proceeds from sales and maturities of investments	10			—			338			—		348
Purchases of property, equipment and capitalized software	(28		)	(14		)	(4		)	—		(46		)
Increase in restricted investments	—			—			(4		)	—		(4		)
Net cash paid in business combinations	—			(1		)	(1		)	—		(2		)
Capital contributions to/from subsidiaries	(36		)	2			34			—		—
Change in amounts due to/from affiliates	23			(5		)	(18		)	—		—
Other, net	6			(5		)	—			—		1
Net cash used in investing activities	(60		)	(23		)	(231		)	—		(314		)
Financing activities:
Other, net	2			—			—			—		2
Net cash provided by financing activities	2			—			—			—		2
Net decrease in cash and cash equivalents	(96		)	—			(77		)	—		(173		)
Cash and cash equivalents at beginning of period	360			13			1,956			—		2,329
Cash and cash equivalents at end of period	$	264		$	13		$	1,879		$	—	$	2,156