Supplemental Condensed Consolidating Financial Information (Tables)

3 Months Ended

Mar. 31, 2018

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 (losses) before equity in earnings (losses) of subsidiaries	31			(1		)	47		—			77
Equity in net earnings (losses) of subsidiaries	46			(2		)	—		(44		)	—
Net income (loss)	$	77		$	(3	)	$	47	$	(44	)	$	77

CONDENSED CONSOLIDATING STATEMENTS OF INCOME



	Three Months Ended March 31, 2018
	Parent Guarantor			Other Guarantors			Non-Guarantors			Eliminations			Consolidated
	(In millions)
Revenue:
Total revenue	$	333		$	52		$	4,592		$	(331	)	$	4,646
Expenses:
Medical care costs	4			—			3,718			—			3,722
Cost of service revenue	—			43			77			—			120
General and administrative expenses	267			4			412			(331		)	352
Premium tax expenses	—			—			104			—			104
Health insurer fees	—			—			75			—			75
Depreciation and amortization	18			—			8			—			26
Restructuring and separation costs	26			—			(1		)	—			25
Total operating expenses	315			47			4,393			(331		)	4,424
Operating income	18			5			199			—			222
Interest expense	33			—			—			—			33
Other expenses, net	10			—			—			—			10
(Loss) income before income taxes	(25		)	5			199			—			179
Income tax expense	9			1			62			—			72
Net (loss) income before equity in net losses of subsidiaries	(34		)	4			137			—			107
Equity in net earnings (losses) of subsidiaries	141			(3		)	—			(138		)	—
Net income	$	107		$	1		$	137		$	(138	)	$	107

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

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME



	Three Months Ended March 31, 2018
	Parent Guarantor			Other Guarantors		Non-Guarantors			Eliminations			Consolidated
	(In millions)
Net income	$	107		$	1	$	137		$	(138	)	$	107
Other comprehensive loss, net of tax	(7		)	—		(7		)	7			(7		)
Comprehensive income	$	100		$	1	$	130		$	(131	)	$	100

CONDENSED CONSOLIDATING BALANCE SHEETS



	March 31, 2018
	Parent Guarantor		Other Guarantors			Non-Guarantors			Eliminations			Consolidated
	(In millions)
ASSETS
Current assets:
Cash and cash equivalents	$	307	$	27		$	3,395		$	—		$	3,729
Investments	399		—			2,045			—			2,444
Restricted investments	77		—			—			—			77
Receivables	2		41			907			—			950
Due from (to) affiliates	147		(5		)	(142		)	—			—
Prepaid expenses and other current assets	60		8			343			—			411
Derivative asset	585		—			—			—			585
Total current assets	1,577		71			6,548			—			8,196
Property, equipment, and capitalized software, net	206		30			82			—			318
Goodwill and intangible assets, net	15		43			192			—			250
Restricted investments	—		—			120			—			120
Investment in subsidiaries, net	2,531		79			—			(2,610		)	—
Deferred income taxes	28		—			104			(18		)	114
Other assets	41		105			5			(16		)	135
	$	4,398	$	328		$	7,051		$	(2,644	)	$	9,133

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Medical claims and benefits payable	$	3	$	—		$	2,020		$	—		$	2,023
Amounts due government agencies	—		1			1,713			—			1,714
Accounts payable and accrued liabilities	151		40			522			—			713
Deferred revenue	—		41			363			—			404
Current portion of long-term debt	566		—			—			—			566
Derivative liability	585		—			—			—			585
Total current liabilities	1,305		82			4,618			—			6,005
Long-term debt	1,516		—			16			(16		)	1,516
Deferred income taxes	—		18			—			(18		)	—
Other long-term liabilities	24		1			34			—			59
Total liabilities	2,845		101			4,668			(34		)	7,580
Total stockholders’ equity	1,553		227			2,383			(2,610		)	1,553
	$	4,398	$	328		$	7,051		$	(2,644	)	$	9,133

CONDENSED CONSOLIDATING BALANCE SHEETS



	December 31, 2017
	Parent Guarantor		Other Guarantors			Non-Guarantors			Eliminations			Consolidated
	(In millions)
ASSETS
Current assets:
Cash and cash equivalents	$	504	$	28		$	2,654		$	—		$	3,186
Investments	192		—			2,332			—			2,524
Restricted investments	169		—			—			—			169
Receivables	2		30			839			—			871
Due from (to) affiliates	148		(6		)	(142		)	—			—
Prepaid expenses and other current assets	103		14			138			(16		)	239
Derivative asset	522		—			—			—			522
Total current assets	1,640		66			5,821			(16		)	7,511
Property, equipment, and capitalized software, net	223		33			86			—			342
Goodwill and intangible assets, net	15		43			197			—			255
Restricted investments	—		—			119			—			119
Investment in subsidiaries, net	2,306		82			—			(2,388		)	—
Deferred income taxes	17		—			101			(15		)	103
Other assets	32		103			7			(1		)	141
	$	4,233	$	327		$	6,331		$	(2,420	)	$	8,471

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Medical claims and benefits payable	$	3	$	—		$	2,189		$	—		$	2,192
Amounts due government agencies	—		1			1,541			—			1,542
Accounts payable and accrued liabilities	178		40			148			—			366
Deferred revenue	—		49			233			—			282
Current portion of long-term debt	653		—			16			(16		)	653
Derivative liability	522		—			—			—			522
Total current liabilities	1,356		90			4,127			(16		)	5,557
Long-term debt	1,516		—			—			—			1,516
Deferred income taxes	—		15			—			(15		)	—
Other long-term liabilities	24		2			36			(1		)	61
Total liabilities	2,896		107			4,163			(32		)	7,134
Total stockholders’ equity	1,337		220			2,168			(2,388		)	1,337
	$	4,233	$	327		$	6,331		$	(2,420	)	$	8,471

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS



	Three Months Ended March 31, 2018
	Parent Guarantor			Other Guarantors			Non-Guarantors			Eliminations		Consolidated
	(In millions)
Operating activities:
Net cash provided by operating activities	$	6		$	9		$	379		$	—	$	394
Investing activities:
Purchases of investments	(130		)	—			(259		)	—		(389		)
Proceeds from sales and maturities of investments	5			—			538			—		543
Purchases of property, equipment and capitalized software	(1		)	(2		)	(1		)	—		(4		)
Capital contributions to subsidiaries	(80		)	—			80			—		—
Change in amounts due to/from affiliates	(3		)	(2		)	5			—		—
Other, net	2			(6		)	(1		)	—		(5		)
Net cash (used in) provided by investing activities	(207		)	(10		)	362			—		145
Financing activities:
Cash paid for financing transaction fees	(5		)	—			—			—		(5		)
Net cash used in financing activities	(5		)	—			—			—		(5		)
Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents	(206		)	(1		)	741			—		534
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period	513			28			2,749			—		3,290
Cash, cash equivalents, and restricted cash and cash equivalents at end of period	$	307		$	27		$	3,490		$	—	$	3,824



	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		)
Decrease in restricted investments held-to-maturity	—			—			(5		)	—		(5		)
Capital contributions to subsidiaries	(106		)	1			105			—		—
Dividends 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		)	(287		)	—		(337		)
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, cash equivalents, and restricted cash and cash equivalents	101			13			267			—		381
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period	86			6			2,820			—		2,912
Cash, cash equivalents, and restricted cash and cash equivalents at end of period	$	187		$	19		$	3,087		$	—	$	3,293