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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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INDIANA
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35-2145715
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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120 MONUMENT CIRCLE
INDIANAPOLIS, INDIANA
(Address of principal executive offices)
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46204-4903
(Zip Code)
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Large accelerated filer
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x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Title of Each Class
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Outstanding at October 10, 2013
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Common Stock, $0.01 par value
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295,417,144 shares
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Page
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PART I. FINANCIAL INFORMATION
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ITEM 1.
|
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ITEM 2.
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ITEM 3.
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ITEM 4.
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PART II. OTHER INFORMATION
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ITEM 1.
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ITEM 1A.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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ITEM 5.
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ITEM 6.
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ITEM 1.
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FINANCIAL STATEMENTS
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September 30,
2013 |
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December 31,
2012 |
||||
(In millions, except share data)
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(Unaudited)
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|
||||
Assets
|
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|
||||
Current assets:
|
|
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|
||||
Cash and cash equivalents
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$
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2,185.7
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$
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2,484.6
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Investments available-for-sale, at fair value:
|
|
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|
||||
Fixed maturity securities (amortized cost of $17,271.6 and $16,033.1)
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17,538.0
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16,912.9
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Equity securities (cost of $1,023.5 and $869.9)
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1,484.9
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1,212.4
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Other invested assets, current
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15.0
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|
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14.8
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Accrued investment income
|
175.4
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|
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162.2
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|
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Premium and self-funded receivables
|
4,014.0
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3,687.4
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Other receivables
|
1,018.3
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|
|
928.8
|
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Income taxes receivable
|
152.3
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|
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228.5
|
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Securities lending collateral
|
837.6
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|
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564.6
|
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Deferred tax assets, net
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367.9
|
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243.2
|
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Other current assets
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1,807.8
|
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1,829.0
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Total current assets
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29,596.9
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28,268.4
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Long-term investments available-for-sale, at fair value:
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Fixed maturity securities (amortized cost of $442.6 and $426.0)
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437.8
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431.5
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Equity securities (cost of $27.0 and $27.1)
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30.3
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30.1
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Other invested assets, long-term
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1,516.8
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1,387.7
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Property and equipment, net
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1,806.5
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1,738.3
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Goodwill
|
17,497.6
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17,510.5
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Other intangible assets
|
8,921.6
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9,102.8
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Other noncurrent assets
|
456.0
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486.1
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Total assets
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$
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60,263.5
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$
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58,955.4
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Liabilities and shareholders’ equity
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Liabilities
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Current liabilities:
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Policy liabilities:
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Medical claims payable
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$
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6,117.3
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$
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6,174.5
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Reserves for future policy benefits
|
60.2
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|
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61.3
|
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Other policyholder liabilities
|
2,322.6
|
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2,345.7
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Total policy liabilities
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8,500.1
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|
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8,581.5
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Unearned income
|
939.7
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896.8
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Accounts payable and accrued expenses
|
3,301.2
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3,132.5
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Security trades pending payable
|
284.8
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69.3
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Securities lending payable
|
837.7
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564.7
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Short-term borrowings
|
350.0
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250.0
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Current portion of long-term debt
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0.1
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557.1
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Other current liabilities
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1,828.8
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1,785.0
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Total current liabilities
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16,042.4
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15,836.9
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Long-term debt, less current portion
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14,514.0
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14,170.8
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Reserves for future policy benefits, noncurrent
|
701.9
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750.8
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Deferred tax liabilities, net
|
3,322.9
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3,381.0
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Other noncurrent liabilities
|
874.2
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1,013.2
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Total liabilities
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35,455.4
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35,152.7
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Commitment and contingencies – Note 9
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Shareholders’ equity
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Preferred stock, without par value, shares authorized – 100,000,000; shares issued and outstanding – none
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—
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—
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Common stock, par value $0.01, shares authorized – 900,000,000; shares issued and outstanding:
296,188,115 and 304,715,144
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3.0
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3.0
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Additional paid-in capital
|
10,769.4
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10,853.5
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Retained earnings
|
14,040.5
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12,647.1
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Accumulated other comprehensive (loss) income
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(4.8
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)
|
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299.1
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Total shareholders’ equity
|
24,808.1
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|
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23,802.7
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Total liabilities and shareholders’ equity
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$
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60,263.5
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$
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58,955.4
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Three Months Ended
September 30 |
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Nine Months Ended
September 30 |
||||||||||||
(In millions, except per share data)
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2013
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2012
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2013
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2012
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||||||||
Revenues
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Premiums
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$
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16,580.9
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$
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14,037.1
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$
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49,509.5
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$
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42,336.6
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Administrative fees
|
1,027.8
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955.6
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3,006.4
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2,928.9
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|
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Other revenue
|
124.3
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|
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141.0
|
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360.6
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191.7
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|
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Total operating revenue
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17,733.0
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15,133.7
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52,876.5
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45,457.2
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|
||||
Net investment income
|
167.6
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168.6
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482.8
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|
507.0
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|
||||
Net realized gains on investments
|
95.4
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54.6
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|
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166.4
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|
232.0
|
|
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Other-than-temporary impairment losses on investments:
|
|
|
|
|
|
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|
||||||||
Total other-than-temporary impairment losses on investments
|
(27.1
|
)
|
|
(3.8
|
)
|
|
(74.0
|
)
|
|
(24.0
|
)
|
||||
Portion of other-than-temporary impairment losses recognized in other comprehensive income
|
0.9
|
|
|
—
|
|
|
0.9
|
|
|
3.4
|
|
||||
Other-than-temporary impairment losses recognized in income
|
(26.2
|
)
|
|
(3.8
|
)
|
|
(73.1
|
)
|
|
(20.6
|
)
|
||||
Total revenues
|
17,969.8
|
|
|
15,353.1
|
|
|
53,452.6
|
|
|
46,175.6
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|
||||
Expenses
|
|
|
|
|
|
|
|
||||||||
Benefit expense
|
14,075.0
|
|
|
11,984.8
|
|
|
41,656.3
|
|
|
35,849.8
|
|
||||
Selling, general and administrative expense:
|
|
|
|
|
|
|
|
||||||||
Selling expense
|
377.3
|
|
|
390.2
|
|
|
1,139.9
|
|
|
1,176.5
|
|
||||
General and administrative expense
|
2,202.7
|
|
|
1,688.4
|
|
|
6,275.6
|
|
|
5,149.6
|
|
||||
Total selling, general and administrative expense
|
2,580.0
|
|
|
2,078.6
|
|
|
7,415.5
|
|
|
6,326.1
|
|
||||
Cost of products
|
68.6
|
|
|
66.5
|
|
|
196.0
|
|
|
73.2
|
|
||||
Interest expense
|
151.5
|
|
|
133.6
|
|
|
456.9
|
|
|
360.3
|
|
||||
Amortization of other intangible assets
|
66.6
|
|
|
63.9
|
|
|
202.2
|
|
|
182.1
|
|
||||
Loss on extinguishment of debt
|
145.3
|
|
|
—
|
|
|
145.3
|
|
|
—
|
|
||||
Total expenses
|
17,087.0
|
|
|
14,327.4
|
|
|
50,072.2
|
|
|
42,791.5
|
|
||||
Income before income tax expense
|
882.8
|
|
|
1,025.7
|
|
|
3,380.4
|
|
|
3,384.1
|
|
||||
Income tax expense
|
226.6
|
|
|
334.5
|
|
|
1,038.9
|
|
|
1,192.8
|
|
||||
Net income
|
$
|
656.2
|
|
|
$
|
691.2
|
|
|
$
|
2,341.5
|
|
|
$
|
2,191.3
|
|
Net income per share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
2.21
|
|
|
$
|
2.17
|
|
|
$
|
7.81
|
|
|
$
|
6.70
|
|
Diluted
|
$
|
2.16
|
|
|
$
|
2.15
|
|
|
$
|
7.69
|
|
|
$
|
6.63
|
|
Dividends per share
|
$
|
0.3750
|
|
|
$
|
0.2875
|
|
|
$
|
1.1250
|
|
|
$
|
0.8625
|
|
|
Three Months Ended
September 30 |
|
Nine Months Ended
September 30 |
||||||||||||
(In millions)
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Net income
|
$
|
656.2
|
|
|
$
|
691.2
|
|
|
$
|
2,341.5
|
|
|
$
|
2,191.3
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Change in net unrealized gains/losses on investments
|
16.3
|
|
|
168.3
|
|
|
(327.0
|
)
|
|
248.5
|
|
||||
Change in non-credit component of other-than-temporary impairment losses on investments
|
(0.6
|
)
|
|
—
|
|
|
1.6
|
|
|
4.4
|
|
||||
Change in net unrealized gains/losses on cash flow hedges
|
0.7
|
|
|
(1.0
|
)
|
|
2.2
|
|
|
(0.6
|
)
|
||||
Change in net periodic pension and postretirement costs
|
4.8
|
|
|
6.9
|
|
|
18.6
|
|
|
19.9
|
|
||||
Foreign currency translation adjustments
|
1.2
|
|
|
0.5
|
|
|
0.7
|
|
|
(0.2
|
)
|
||||
Other comprehensive income (loss)
|
22.4
|
|
|
174.7
|
|
|
(303.9
|
)
|
|
272.0
|
|
||||
Total comprehensive income
|
$
|
678.6
|
|
|
$
|
865.9
|
|
|
$
|
2,037.6
|
|
|
$
|
2,463.3
|
|
|
Nine Months Ended
September 30 |
||||||
(In millions)
|
2013
|
|
2012
|
||||
Operating activities
|
|
|
|
||||
Net income
|
$
|
2,341.5
|
|
|
$
|
2,191.3
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Net realized gains on investments
|
(166.4
|
)
|
|
(232.0
|
)
|
||
Other-than-temporary impairment losses recognized in income
|
73.1
|
|
|
20.6
|
|
||
Loss on extinguishment of debt
|
145.3
|
|
|
—
|
|
||
Loss on disposal of assets
|
5.1
|
|
|
1.6
|
|
||
Deferred income taxes
|
(12.0
|
)
|
|
255.3
|
|
||
Amortization, net of accretion
|
592.7
|
|
|
474.8
|
|
||
Depreciation expense
|
78.4
|
|
|
72.8
|
|
||
Share-based compensation
|
103.7
|
|
|
123.7
|
|
||
Excess tax benefits from share-based compensation
|
(23.5
|
)
|
|
(23.2
|
)
|
||
Changes in operating assets and liabilities, net of effect of business combinations:
|
|
|
|
||||
Receivables, net
|
(368.0
|
)
|
|
(133.2
|
)
|
||
Other invested assets
|
1.7
|
|
|
(26.6
|
)
|
||
Other assets
|
51.6
|
|
|
(33.3
|
)
|
||
Policy liabilities
|
(130.3
|
)
|
|
(16.8
|
)
|
||
Unearned income
|
42.9
|
|
|
(102.8
|
)
|
||
Accounts payable and accrued expenses
|
95.9
|
|
|
(446.7
|
)
|
||
Other liabilities
|
(78.0
|
)
|
|
(57.5
|
)
|
||
Income taxes
|
87.5
|
|
|
(79.5
|
)
|
||
Other, net
|
(61.7
|
)
|
|
(3.7
|
)
|
||
Net cash provided by operating activities
|
2,779.5
|
|
|
1,984.8
|
|
||
Investing activities
|
|
|
|
||||
Purchases of fixed maturity securities
|
(11,494.1
|
)
|
|
(11,808.8
|
)
|
||
Proceeds from fixed maturity securities:
|
|
|
|
||||
Sales
|
8,756.4
|
|
|
8,433.4
|
|
||
Maturities, calls and redemptions
|
1,490.0
|
|
|
1,347.8
|
|
||
Purchases of equity securities
|
(574.4
|
)
|
|
(245.1
|
)
|
||
Proceeds from sales of equity securities
|
575.2
|
|
|
312.3
|
|
||
Purchases of other invested assets
|
(207.9
|
)
|
|
(153.7
|
)
|
||
Proceeds from sales of other invested assets
|
53.0
|
|
|
25.4
|
|
||
Changes in securities lending collateral
|
(273.1
|
)
|
|
171.5
|
|
||
Purchases of subsidiaries, net of cash acquired
|
—
|
|
|
(992.3
|
)
|
||
Purchases of property and equipment
|
(408.1
|
)
|
|
(375.1
|
)
|
||
Proceeds from sales of property and equipment
|
—
|
|
|
0.4
|
|
||
Other, net
|
(3.8
|
)
|
|
(0.9
|
)
|
||
Net cash used in investing activities
|
(2,086.8
|
)
|
|
(3,285.1
|
)
|
||
Financing activities
|
|
|
|
||||
Net proceeds from commercial paper borrowings
|
224.1
|
|
|
30.1
|
|
||
Proceeds from long-term borrowings
|
1,250.0
|
|
|
4,935.2
|
|
||
Repayments of long-term borrowings
|
(1,801.9
|
)
|
|
(1,251.2
|
)
|
||
Proceeds from short-term borrowings
|
600.0
|
|
|
392.0
|
|
||
Repayments of short-term borrowings
|
(500.0
|
)
|
|
(300.0
|
)
|
||
Changes in securities lending payable
|
273.0
|
|
|
(171.5
|
)
|
||
Changes in bank overdrafts
|
72.3
|
|
|
(94.6
|
)
|
||
Repurchase and retirement of common stock
|
(1,170.4
|
)
|
|
(1,828.8
|
)
|
||
Cash dividends
|
(337.5
|
)
|
|
(280.0
|
)
|
||
Proceeds from issuance of common stock under employee stock plans
|
374.9
|
|
|
86.7
|
|
||
Excess tax benefits from share-based compensation
|
23.5
|
|
|
23.2
|
|
||
Net cash (used in) provided by financing activities
|
(992.0
|
)
|
|
1,541.1
|
|
||
Effect of foreign exchange rates on cash and cash equivalents
|
0.4
|
|
|
(0.3
|
)
|
||
Change in cash and cash equivalents
|
(298.9
|
)
|
|
240.5
|
|
||
Cash and cash equivalents at beginning of period
|
2,484.6
|
|
|
2,201.6
|
|
||
Cash and cash equivalents at end of period
|
$
|
2,185.7
|
|
|
$
|
2,442.1
|
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
Shareholders’
Equity
|
|||||||||||||
(In millions)
|
Number of
Shares
|
|
Par
Value
|
|
||||||||||||||||||
January 1, 2013
|
304.7
|
|
|
$
|
3.0
|
|
|
$
|
10,853.5
|
|
|
$
|
12,647.1
|
|
|
$
|
299.1
|
|
|
$
|
23,802.7
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
2,341.5
|
|
|
—
|
|
|
2,341.5
|
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(303.9
|
)
|
|
(303.9
|
)
|
|||||
Repurchase and retirement of common stock
|
(15.6
|
)
|
|
(0.1
|
)
|
|
(566.2
|
)
|
|
(607.4
|
)
|
|
—
|
|
|
(1,173.7
|
)
|
|||||
Convertible debenture tax adjustment
|
—
|
|
|
—
|
|
|
(3.3
|
)
|
|
—
|
|
|
—
|
|
|
(3.3
|
)
|
|||||
Dividends and dividend equivalents
|
—
|
|
|
—
|
|
|
—
|
|
|
(340.7
|
)
|
|
—
|
|
|
(340.7
|
)
|
|||||
Issuance of common stock under employee stock plans, net of related tax benefits
|
7.1
|
|
|
0.1
|
|
|
485.4
|
|
|
—
|
|
|
—
|
|
|
485.5
|
|
|||||
September 30, 2013
|
296.2
|
|
|
$
|
3.0
|
|
|
$
|
10,769.4
|
|
|
$
|
14,040.5
|
|
|
$
|
(4.8
|
)
|
|
$
|
24,808.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
January 1, 2012
|
339.4
|
|
|
$
|
3.4
|
|
|
$
|
11,679.2
|
|
|
$
|
11,490.7
|
|
|
$
|
114.9
|
|
|
$
|
23,288.2
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
2,191.3
|
|
|
—
|
|
|
2,191.3
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
272.0
|
|
|
272.0
|
|
|||||
Repurchase and retirement of common stock
|
(28.6
|
)
|
|
(0.3
|
)
|
|
(986.4
|
)
|
|
(842.1
|
)
|
|
—
|
|
|
(1,828.8
|
)
|
|||||
Dividends and dividend equivalents
|
—
|
|
|
—
|
|
|
—
|
|
|
(283.1
|
)
|
|
—
|
|
|
(283.1
|
)
|
|||||
Issuance of common stock under employee stock plans, net of related tax benefits
|
3.2
|
|
|
—
|
|
|
176.9
|
|
|
—
|
|
|
—
|
|
|
176.9
|
|
|||||
September 30, 2012
|
314.0
|
|
|
$
|
3.1
|
|
|
$
|
10,869.7
|
|
|
$
|
12,556.8
|
|
|
$
|
386.9
|
|
|
$
|
23,816.5
|
|
1.
|
Organization
|
2.
|
Basis of Presentation
|
3.
|
Restructuring Activities
|
|
Commercial
and Specialty
Business
|
|
Government
Business
|
|
Other
|
|
Total
|
||||||||
2012 Restructuring Activities
|
|
|
|
|
|
|
|
||||||||
Employee termination costs:
|
|
|
|
|
|
|
|
||||||||
Liability for employee termination costs at January 1, 2013
|
$
|
60.0
|
|
|
$
|
54.7
|
|
|
$
|
2.9
|
|
|
$
|
117.6
|
|
Payments
|
(30.2
|
)
|
|
(32.4
|
)
|
|
(1.5
|
)
|
|
(64.1
|
)
|
||||
Liability released
|
(6.1
|
)
|
|
(1.6
|
)
|
|
(0.2
|
)
|
|
(7.9
|
)
|
||||
Liability for employee termination costs at September 30, 2013
|
23.7
|
|
|
20.7
|
|
|
1.2
|
|
|
45.6
|
|
||||
Lease and other contract exit costs:
|
|
|
|
|
|
|
|
||||||||
Liability for lease and other contract exit costs at January 1, 2013
|
8.8
|
|
|
2.9
|
|
|
0.1
|
|
|
11.8
|
|
||||
Payments
|
(5.1
|
)
|
|
(1.7
|
)
|
|
(0.2
|
)
|
|
(7.0
|
)
|
||||
Liability released
|
(0.6
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
(0.8
|
)
|
||||
Liability for lease and other contract exit costs at September 30, 2013
|
3.1
|
|
|
1.0
|
|
|
(0.1
|
)
|
|
4.0
|
|
||||
Total liability for 2012 restructuring activities at September 30, 2013
|
$
|
26.8
|
|
|
$
|
21.7
|
|
|
$
|
1.1
|
|
|
$
|
49.6
|
|
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
|
|
|
||||||||||||||||
September 30, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
United States Government securities
|
$
|
464.0
|
|
|
$
|
4.1
|
|
|
$
|
(1.4
|
)
|
|
$
|
—
|
|
|
$
|
466.7
|
|
|
$
|
—
|
|
Government sponsored securities
|
195.2
|
|
|
0.9
|
|
|
(1.5
|
)
|
|
—
|
|
|
194.6
|
|
|
—
|
|
||||||
States, municipalities and political subdivisions, tax-exempt
|
6,143.2
|
|
|
234.9
|
|
|
(93.6
|
)
|
|
(1.2
|
)
|
|
6,283.3
|
|
|
—
|
|
||||||
Corporate securities
|
7,780.3
|
|
|
212.0
|
|
|
(109.3
|
)
|
|
(12.4
|
)
|
|
7,870.6
|
|
|
(0.1
|
)
|
||||||
Options embedded in convertible debt securities
|
81.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
81.0
|
|
|
—
|
|
||||||
Residential mortgage-backed securities
|
2,198.4
|
|
|
52.6
|
|
|
(29.4
|
)
|
|
(3.3
|
)
|
|
2,218.3
|
|
|
—
|
|
||||||
Commercial mortgage-backed securities
|
488.1
|
|
|
11.3
|
|
|
(3.4
|
)
|
|
—
|
|
|
496.0
|
|
|
—
|
|
||||||
Other debt securities
|
364.0
|
|
|
5.8
|
|
|
(3.2
|
)
|
|
(1.3
|
)
|
|
365.3
|
|
|
(0.8
|
)
|
||||||
Total fixed maturity securities
|
17,714.2
|
|
|
521.6
|
|
|
(241.8
|
)
|
|
(18.2
|
)
|
|
17,975.8
|
|
|
$
|
(0.9
|
)
|
|||||
Equity securities
|
1,050.5
|
|
|
481.4
|
|
|
(16.7
|
)
|
|
—
|
|
|
1,515.2
|
|
|
|
|||||||
Total investments, available-for-sale
|
$
|
18,764.7
|
|
|
$
|
1,003.0
|
|
|
$
|
(258.5
|
)
|
|
$
|
(18.2
|
)
|
|
$
|
19,491.0
|
|
|
|
||
December 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
United States Government securities
|
$
|
330.3
|
|
|
$
|
13.1
|
|
|
$
|
(0.2
|
)
|
|
$
|
—
|
|
|
$
|
343.2
|
|
|
$
|
—
|
|
Government sponsored securities
|
153.6
|
|
|
2.6
|
|
|
—
|
|
|
—
|
|
|
156.2
|
|
|
—
|
|
||||||
States, municipalities and political subdivisions, tax-exempt
|
5,501.3
|
|
|
388.2
|
|
|
(5.7
|
)
|
|
(1.6
|
)
|
|
5,882.2
|
|
|
—
|
|
||||||
Corporate securities
|
7,642.0
|
|
|
387.0
|
|
|
(17.0
|
)
|
|
(8.0
|
)
|
|
8,004.0
|
|
|
(1.7
|
)
|
||||||
Options embedded in convertible debt securities
|
67.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
67.2
|
|
|
—
|
|
||||||
Residential mortgage-backed securities
|
2,204.7
|
|
|
103.1
|
|
|
(1.1
|
)
|
|
(1.9
|
)
|
|
2,304.8
|
|
|
(0.4
|
)
|
||||||
Commercial mortgage-backed securities
|
323.2
|
|
|
22.5
|
|
|
—
|
|
|
—
|
|
|
345.7
|
|
|
—
|
|
||||||
Other debt securities
|
236.8
|
|
|
7.6
|
|
|
(0.2
|
)
|
|
(3.1
|
)
|
|
241.1
|
|
|
(1.3
|
)
|
||||||
Total fixed maturity securities
|
16,459.1
|
|
|
924.1
|
|
|
(24.2
|
)
|
|
(14.6
|
)
|
|
17,344.4
|
|
|
$
|
(3.4
|
)
|
|||||
Equity securities
|
897.0
|
|
|
358.0
|
|
|
(12.5
|
)
|
|
—
|
|
|
1,242.5
|
|
|
|
|||||||
Total investments, available-for-sale
|
$
|
17,356.1
|
|
|
$
|
1,282.1
|
|
|
$
|
(36.7
|
)
|
|
$
|
(14.6
|
)
|
|
$
|
18,586.9
|
|
|
|
|
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
|
||||||||||
September 30, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States Government securities
|
24
|
|
|
$
|
119.9
|
|
|
$
|
(1.4
|
)
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Government sponsored securities
|
23
|
|
|
56.6
|
|
|
(1.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
States, municipalities and political subdivisions, tax-exempt
|
768
|
|
|
1,979.3
|
|
|
(93.6
|
)
|
|
22
|
|
|
14.3
|
|
|
(1.2
|
)
|
||||
Corporate securities
|
1,700
|
|
|
3,075.0
|
|
|
(109.3
|
)
|
|
57
|
|
|
53.0
|
|
|
(12.4
|
)
|
||||
Residential mortgage-backed securities
|
434
|
|
|
921.9
|
|
|
(29.4
|
)
|
|
54
|
|
|
65.8
|
|
|
(3.3
|
)
|
||||
Commercial mortgage-backed securities
|
50
|
|
|
216.8
|
|
|
(3.4
|
)
|
|
1
|
|
|
0.6
|
|
|
—
|
|
||||
Other debt securities
|
52
|
|
|
145.7
|
|
|
(3.2
|
)
|
|
17
|
|
|
17.7
|
|
|
(1.3
|
)
|
||||
Total fixed maturity securities
|
3,051
|
|
|
6,515.2
|
|
|
(241.8
|
)
|
|
151
|
|
|
151.4
|
|
|
(18.2
|
)
|
||||
Equity securities
|
624
|
|
|
194.2
|
|
|
(16.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total fixed maturity and equity securities
|
3,675
|
|
|
$
|
6,709.4
|
|
|
$
|
(258.5
|
)
|
|
151
|
|
|
$
|
151.4
|
|
|
$
|
(18.2
|
)
|
December 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States Government securities
|
17
|
|
|
$
|
48.5
|
|
|
$
|
(0.2
|
)
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
States, municipalities and political subdivisions, tax-exempt
|
184
|
|
|
420.1
|
|
|
(5.7
|
)
|
|
1
|
|
|
46.9
|
|
|
(1.6
|
)
|
||||
Corporate securities
|
457
|
|
|
1,066.5
|
|
|
(17.0
|
)
|
|
74
|
|
|
52.6
|
|
|
(8.0
|
)
|
||||
Residential mortgage-backed securities
|
79
|
|
|
211.0
|
|
|
(1.1
|
)
|
|
44
|
|
|
25.5
|
|
|
(1.9
|
)
|
||||
Commercial mortgage-backed securities
|
4
|
|
|
10.1
|
|
|
—
|
|
|
3
|
|
|
4.1
|
|
|
—
|
|
||||
Other debt securities
|
7
|
|
|
5.4
|
|
|
(0.2
|
)
|
|
21
|
|
|
28.9
|
|
|
(3.1
|
)
|
||||
Total fixed maturity securities
|
748
|
|
|
1,761.6
|
|
|
(24.2
|
)
|
|
143
|
|
|
158.0
|
|
|
(14.6
|
)
|
||||
Equity securities
|
961
|
|
|
149.6
|
|
|
(12.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total fixed maturity and equity securities
|
1,709
|
|
|
$
|
1,911.2
|
|
|
$
|
(36.7
|
)
|
|
143
|
|
|
$
|
158.0
|
|
|
$
|
(14.6
|
)
|
|
Amortized
Cost
|
|
Estimated
Fair Value
|
||||
Due in one year or less
|
$
|
429.4
|
|
|
$
|
448.2
|
|
Due after one year through five years
|
4,704.9
|
|
|
4,837.6
|
|
||
Due after five years through ten years
|
5,176.7
|
|
|
5,272.4
|
|
||
Due after ten years
|
4,716.7
|
|
|
4,703.3
|
|
||
Mortgage-backed securities
|
2,686.5
|
|
|
2,714.3
|
|
||
Total available-for-sale fixed maturity securities
|
$
|
17,714.2
|
|
|
$
|
17,975.8
|
|
|
Three Months Ended
September 30 |
|
Nine Months Ended
September 30 |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Proceeds
|
$
|
5,411.6
|
|
|
$
|
3,492.3
|
|
|
$
|
10,821.6
|
|
|
$
|
10,093.5
|
|
Gross realized gains
|
160.4
|
|
|
109.0
|
|
|
339.3
|
|
|
364.1
|
|
||||
Gross realized losses
|
(65.0
|
)
|
|
(54.4
|
)
|
|
(172.9
|
)
|
|
(132.1
|
)
|
5.
|
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
|
||||||||
September 30, 2013:
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
774.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
774.5
|
|
Investments available-for-sale:
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
||||||||
United States Government securities
|
466.7
|
|
|
—
|
|
|
—
|
|
|
466.7
|
|
||||
Government sponsored securities
|
—
|
|
|
194.6
|
|
|
—
|
|
|
194.6
|
|
||||
States, municipalities and political subdivisions, tax-exempt
|
—
|
|
|
6,283.3
|
|
|
—
|
|
|
6,283.3
|
|
||||
Corporate securities
|
—
|
|
|
7,736.3
|
|
|
134.3
|
|
|
7,870.6
|
|
||||
Options embedded in convertible debt securities
|
—
|
|
|
81.0
|
|
|
—
|
|
|
81.0
|
|
||||
Residential mortgage-backed securities
|
—
|
|
|
2,218.3
|
|
|
—
|
|
|
2,218.3
|
|
||||
Commercial mortgage-backed securities
|
—
|
|
|
485.7
|
|
|
10.3
|
|
|
496.0
|
|
||||
Other debt securities
|
24.3
|
|
|
326.3
|
|
|
14.7
|
|
|
365.3
|
|
||||
Total fixed maturity securities
|
491.0
|
|
|
17,325.5
|
|
|
159.3
|
|
|
17,975.8
|
|
||||
Equity securities
|
1,303.5
|
|
|
174.6
|
|
|
37.1
|
|
|
1,515.2
|
|
||||
Other invested assets, current
|
15.0
|
|
|
—
|
|
|
—
|
|
|
15.0
|
|
||||
Securities lending collateral
|
424.7
|
|
|
412.9
|
|
|
—
|
|
|
837.6
|
|
||||
Derivatives excluding embedded options (reported with other assets)
|
—
|
|
|
40.3
|
|
|
—
|
|
|
40.3
|
|
||||
Total assets
|
$
|
3,008.7
|
|
|
$
|
17,953.3
|
|
|
$
|
196.4
|
|
|
$
|
21,158.4
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivatives excluding embedded options (reported with other liabilities)
|
$
|
—
|
|
|
$
|
(20.6
|
)
|
|
$
|
—
|
|
|
$
|
(20.6
|
)
|
Total liabilities
|
$
|
—
|
|
|
$
|
(20.6
|
)
|
|
$
|
—
|
|
|
$
|
(20.6
|
)
|
December 31, 2012:
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
728.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
728.3
|
|
Investments available-for-sale:
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
||||||||
United States Government securities
|
343.2
|
|
|
—
|
|
|
—
|
|
|
343.2
|
|
||||
Government sponsored securities
|
—
|
|
|
156.2
|
|
|
—
|
|
|
156.2
|
|
||||
States, municipalities and political subdivisions, tax-exempt
|
—
|
|
|
5,882.2
|
|
|
—
|
|
|
5,882.2
|
|
||||
Corporate securities
|
—
|
|
|
7,882.9
|
|
|
121.1
|
|
|
8,004.0
|
|
||||
Options embedded in convertible debt securities
|
—
|
|
|
67.2
|
|
|
—
|
|
|
67.2
|
|
||||
Residential mortgage-backed securities
|
—
|
|
|
2,300.5
|
|
|
4.3
|
|
|
2,304.8
|
|
||||
Commercial mortgage-backed securities
|
—
|
|
|
345.7
|
|
|
—
|
|
|
345.7
|
|
||||
Other debt securities
|
33.8
|
|
|
203.4
|
|
|
3.9
|
|
|
241.1
|
|
||||
Total fixed maturity securities
|
377.0
|
|
|
16,838.1
|
|
|
129.3
|
|
|
17,344.4
|
|
||||
Equity securities
|
1,103.1
|
|
|
113.2
|
|
|
26.2
|
|
|
1,242.5
|
|
||||
Other invested assets, current
|
14.8
|
|
|
—
|
|
|
—
|
|
|
14.8
|
|
||||
Securities lending collateral
|
231.7
|
|
|
332.9
|
|
|
—
|
|
|
564.6
|
|
||||
Derivatives excluding embedded options (reported with other assets)
|
—
|
|
|
58.6
|
|
|
—
|
|
|
58.6
|
|
||||
Total assets
|
$
|
2,454.9
|
|
|
$
|
17,342.8
|
|
|
$
|
155.5
|
|
|
$
|
19,953.2
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivatives excluding embedded options (reported with other liabilities)
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
Total liabilities
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
|
Corporate
Securities
|
|
Residential
Mortgage-
backed
Securities
|
|
Commercial
Mortgage-
backed
Securities
|
|
Other Debt
Securities
|
|
Equity
Securities
|
|
Total
|
||||||||||||
Three Months Ended September 30, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Beginning balance at July 1, 2013
|
$
|
139.2
|
|
|
$
|
12.6
|
|
|
$
|
—
|
|
|
$
|
5.4
|
|
|
$
|
35.8
|
|
|
$
|
193.0
|
|
Total gains (losses):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Recognized in net income
|
(14.9
|
)
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
(15.0
|
)
|
||||||
Recognized in accumulated other comprehensive income
|
4.9
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
(2.4
|
)
|
|
2.6
|
|
||||||
Purchases
|
6.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.7
|
|
|
10.1
|
|
||||||
Sales
|
(1.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.6
|
)
|
||||||
Issuances
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Settlements
|
(2.7
|
)
|
|
—
|
|
|
(2.3
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
(5.2
|
)
|
||||||
Transfers into Level III
|
3.0
|
|
|
—
|
|
|
12.6
|
|
|
9.8
|
|
|
—
|
|
|
25.4
|
|
||||||
Transfers out of Level III
|
—
|
|
|
(12.6
|
)
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
(12.9
|
)
|
||||||
Ending balance at September 30, 2013
|
$
|
134.3
|
|
|
$
|
—
|
|
|
$
|
10.3
|
|
|
$
|
14.7
|
|
|
$
|
37.1
|
|
|
$
|
196.4
|
|
Change in unrealized losses included in net income related to assets still held for the three months ended September 30, 2013
|
$
|
(14.9
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
|
$
|
—
|
|
|
$
|
(15.0
|
)
|
Three Months Ended September 30, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Beginning balance at July 1, 2012
|
$
|
127.7
|
|
|
$
|
1.4
|
|
|
$
|
5.3
|
|
|
$
|
3.9
|
|
|
$
|
28.8
|
|
|
$
|
167.1
|
|
Total gains (losses):
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Recognized in net income
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
(0.4
|
)
|
||||||
Recognized in accumulated other comprehensive income
|
2.0
|
|
|
—
|
|
|
0.1
|
|
|
0.6
|
|
|
(5.5
|
)
|
|
(2.8
|
)
|
||||||
Purchases
|
15.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.2
|
|
|
19.8
|
|
||||||
Sales
|
(21.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21.2
|
)
|
||||||
Issuances
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Settlements
|
(5.7
|
)
|
|
—
|
|
|
(0.1
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
(6.0
|
)
|
||||||
Transfers into Level III
|
—
|
|
|
—
|
|
|
—
|
|
|
10.0
|
|
|
—
|
|
|
10.0
|
|
||||||
Transfers out of Level III
|
(5.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.8
|
)
|
||||||
Ending balance at September 30, 2012
|
$
|
112.4
|
|
|
$
|
1.4
|
|
|
$
|
5.3
|
|
|
$
|
14.3
|
|
|
$
|
27.3
|
|
|
$
|
160.7
|
|
Change in unrealized losses included in net income related to assets still held for the three months ended September 30, 2012
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.2
|
)
|
|
$
|
(0.2
|
)
|
|
Corporate
Securities
|
|
Residential
Mortgage-
backed
Securities
|
|
Commercial
Mortgage-
backed
Securities
|
|
Other Debt
Securities
|
|
Equity
Securities
|
|
Total
|
||||||||||||
Nine Months Ended September 30, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Beginning balance at January 1, 2013
|
$
|
121.1
|
|
|
$
|
4.3
|
|
|
$
|
—
|
|
|
$
|
3.9
|
|
|
$
|
26.2
|
|
|
$
|
155.5
|
|
Total gains (losses):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Recognized in net income
|
(16.0
|
)
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
(1.0
|
)
|
|
(17.1
|
)
|
||||||
Recognized in accumulated other comprehensive income
|
1.8
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
4.8
|
|
|
7.0
|
|
||||||
Purchases
|
45.3
|
|
|
—
|
|
|
—
|
|
|
1.6
|
|
|
9.6
|
|
|
56.5
|
|
||||||
Sales
|
(1.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.5
|
)
|
|
(4.1
|
)
|
||||||
Issuances
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Settlements
|
(12.6
|
)
|
|
(1.9
|
)
|
|
(2.3
|
)
|
|
(0.6
|
)
|
|
—
|
|
|
(17.4
|
)
|
||||||
Transfers into Level III
|
3.0
|
|
|
13.1
|
|
|
12.6
|
|
|
9.8
|
|
|
—
|
|
|
38.5
|
|
||||||
Transfers out of Level III
|
(6.7
|
)
|
|
(15.5
|
)
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
(22.5
|
)
|
||||||
Ending balance at September 30, 2013
|
$
|
134.3
|
|
|
$
|
—
|
|
|
$
|
10.3
|
|
|
$
|
14.7
|
|
|
$
|
37.1
|
|
|
$
|
196.4
|
|
Change in unrealized losses included in net income related to assets still held for the nine months ended September 30, 2013
|
$
|
(16.5
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
|
$
|
(3.0
|
)
|
|
$
|
(19.6
|
)
|
Nine Months Ended September 30, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Beginning balance at January 1, 2012
|
$
|
195.1
|
|
|
$
|
—
|
|
|
$
|
6.3
|
|
|
$
|
59.0
|
|
|
$
|
24.4
|
|
|
$
|
284.8
|
|
Total gains (losses):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Recognized in net income
|
15.3
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
(0.5
|
)
|
|
14.9
|
|
||||||
Recognized in accumulated other comprehensive income
|
(15.5
|
)
|
|
—
|
|
|
0.1
|
|
|
0.8
|
|
|
(13.2
|
)
|
|
(27.8
|
)
|
||||||
Purchases
|
61.8
|
|
|
—
|
|
|
3.4
|
|
|
—
|
|
|
4.5
|
|
|
69.7
|
|
||||||
Sales
|
(26.3
|
)
|
|
—
|
|
|
—
|
|
|
(6.6
|
)
|
|
(0.4
|
)
|
|
(33.3
|
)
|
||||||
Issuances
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Settlements
|
(64.5
|
)
|
|
—
|
|
|
(0.1
|
)
|
|
(1.0
|
)
|
|
—
|
|
|
(65.6
|
)
|
||||||
Transfers into Level III
|
1.7
|
|
|
1.4
|
|
|
1.9
|
|
|
12.0
|
|
|
12.5
|
|
|
29.5
|
|
||||||
Transfers out of Level III
|
(55.2
|
)
|
|
—
|
|
|
(6.3
|
)
|
|
(50.0
|
)
|
|
—
|
|
|
(111.5
|
)
|
||||||
Ending balance at September 30, 2012
|
$
|
112.4
|
|
|
$
|
1.4
|
|
|
$
|
5.3
|
|
|
$
|
14.3
|
|
|
$
|
27.3
|
|
|
$
|
160.7
|
|
Change in unrealized losses included in net income related to assets still held for the nine months ended September 30, 2012
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.6
|
)
|
|
$
|
(0.6
|
)
|
|
Carrying
Value
|
|
Fair Value
|
||||||||||||||||
|
|
Level I
|
|
Level II
|
|
Level III
|
|
Total
|
|||||||||||
September 30, 2013
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Other invested assets, long-term
|
$
|
1,516.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,516.8
|
|
|
$
|
1,516.8
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
350.0
|
|
|
—
|
|
|
350.0
|
|
|
—
|
|
|
350.0
|
|
|||||
Commercial paper
|
794.9
|
|
|
—
|
|
|
794.9
|
|
|
—
|
|
|
794.9
|
|
|||||
Notes
|
12,755.1
|
|
|
—
|
|
|
13,071.5
|
|
|
—
|
|
|
13,071.5
|
|
|||||
Convertible debentures
|
964.0
|
|
|
—
|
|
|
1,909.7
|
|
|
—
|
|
|
1,909.7
|
|
|||||
December 31, 2012
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Other invested assets, long-term
|
$
|
1,387.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,387.7
|
|
|
$
|
1,387.7
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
250.0
|
|
|
—
|
|
|
250.0
|
|
|
—
|
|
|
250.0
|
|
|||||
Commercial paper
|
570.9
|
|
|
—
|
|
|
570.9
|
|
|
—
|
|
|
570.9
|
|
|||||
Notes
|
13,198.9
|
|
|
—
|
|
|
14,407.1
|
|
|
—
|
|
|
14,407.1
|
|
|||||
Convertible debentures
|
958.1
|
|
|
—
|
|
|
1,613.4
|
|
|
—
|
|
|
1,613.4
|
|
6.
|
Income Taxes
|
7.
|
Retirement Benefits
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Service cost
|
$
|
3.5
|
|
|
$
|
4.1
|
|
|
$
|
1.6
|
|
|
$
|
1.7
|
|
Interest cost
|
17.2
|
|
|
19.1
|
|
|
5.6
|
|
|
6.8
|
|
||||
Expected return on assets
|
(33.2
|
)
|
|
(33.7
|
)
|
|
(5.5
|
)
|
|
(5.2
|
)
|
||||
Recognized actuarial loss
|
6.1
|
|
|
7.6
|
|
|
2.8
|
|
|
3.5
|
|
||||
Settlement loss
|
2.6
|
|
|
4.0
|
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
|
(0.2
|
)
|
|
(0.2
|
)
|
|
(3.3
|
)
|
|
(3.3
|
)
|
||||
Net periodic benefit (credit) cost
|
$
|
(4.0
|
)
|
|
$
|
0.9
|
|
|
$
|
1.2
|
|
|
$
|
3.5
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Service cost
|
$
|
10.8
|
|
|
$
|
12.3
|
|
|
$
|
5.0
|
|
|
$
|
5.1
|
|
Interest cost
|
50.6
|
|
|
57.4
|
|
|
16.8
|
|
|
20.6
|
|
||||
Expected return on assets
|
(99.8
|
)
|
|
(101.0
|
)
|
|
(16.5
|
)
|
|
(15.7
|
)
|
||||
Recognized actuarial loss
|
23.2
|
|
|
22.8
|
|
|
8.4
|
|
|
10.6
|
|
||||
Settlement loss
|
9.7
|
|
|
10.6
|
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
|
(0.6
|
)
|
|
(0.6
|
)
|
|
(10.0
|
)
|
|
(10.0
|
)
|
||||
Net periodic benefit (credit) cost
|
$
|
(6.1
|
)
|
|
$
|
1.5
|
|
|
$
|
3.7
|
|
|
$
|
10.6
|
|
8.
|
Debt
|
|
September 30,
2013 |
|
December 31,
2012 |
||||
Senior unsecured notes:
|
|
|
|
||||
6.000%, face amount of $400.0, due 2014
|
$
|
—
|
|
|
$
|
399.8
|
|
5.000%, face amount of $500.0, due 2014
|
527.6
|
|
|
535.9
|
|
||
1.250%, face amount of $625.0, due 2015
|
624.8
|
|
|
624.8
|
|
||
5.250%, face amount of $1,100.0, due 2016
|
1,109.6
|
|
|
1,114.0
|
|
||
2.375%, face amount of $400.0, due 2017
|
399.3
|
|
|
401.5
|
|
||
5.875%, face amount of $700.0, due 2017
|
545.0
|
|
|
697.4
|
|
||
1.875%, face amount of $625.0, due 2018
|
612.7
|
|
|
625.2
|
|
||
2.300%, face amount of $650.0, due 2018
|
647.3
|
|
|
—
|
|
||
7.500%, face amount of $475.0, due 2019
|
—
|
|
|
556.9
|
|
||
7.000%, face amount of $600.0, due 2019
|
452.8
|
|
|
599.3
|
|
||
4.350%, face amount of $700.0, due 2020
|
690.8
|
|
|
701.0
|
|
||
3.700%, face amount of $700.0, due 2021
|
699.3
|
|
|
699.3
|
|
||
3.125%, face amount of $850.0, due 2022
|
846.2
|
|
|
845.9
|
|
||
3.300%, face amount of $1,000.0, due 2023
|
996.9
|
|
|
996.7
|
|
||
5.950%, face amount of $500.0, due 2034
|
447.3
|
|
|
498.8
|
|
||
5.850%, face amount of $900.0, due 2036
|
775.6
|
|
|
895.7
|
|
||
6.375%, face amount of $800.0, due 2037
|
651.4
|
|
|
796.7
|
|
||
5.800%, face amount of $300.0, due 2040
|
216.2
|
|
|
296.8
|
|
||
4.625%, face amount of $900.0, due 2042
|
893.8
|
|
|
893.7
|
|
||
4.650%, face amount of $1,000.0, due 2043
|
994.3
|
|
|
994.2
|
|
||
5.100%, face amount of $600.0, due 2044
|
599.2
|
|
|
—
|
|
||
Senior convertible debentures:
|
|
|
|
||||
2.750%, face amount of $1,500.0, due 2042
|
964.0
|
|
|
958.1
|
|
||
Surplus notes:
|
|
|
|
||||
9.000%, face amount of $25.1, due 2027
|
25.0
|
|
|
25.0
|
|
||
Variable rate debt:
|
|
|
|
||||
Commercial paper program
|
794.9
|
|
|
570.9
|
|
||
Capital leases
|
0.1
|
|
|
0.3
|
|
||
Total long-term debt
|
14,514.1
|
|
|
14,727.9
|
|
||
Current portion of long-term debt
|
(0.1
|
)
|
|
(557.1
|
)
|
||
Long-term debt, less current portion
|
$
|
14,514.0
|
|
|
$
|
14,170.8
|
|
|
|
||
Outstanding principal amount
|
$
|
1,500.0
|
|
Unamortized debt discount
|
536.0
|
|
|
Net debt carrying amount
|
964.0
|
|
|
Equity component carrying amount
|
543.6
|
|
|
Conversion rate (shares of common stock per $1,000 of principal amount)
|
13.2790
|
|
|
Effective conversion price (per $1,000 of principal amount)
|
$
|
75.3065
|
|
9.
|
Commitments and Contingencies
|
10.
|
Capital Stock
|
Declaration Date
|
|
Record Date
|
|
Payment Date
|
|
Cash
Dividend
per Share
|
|
Total
|
||||
Nine Months Ended September 30, 2013
|
|
|
|
|
|
|
|
|
||||
February 20, 2013
|
|
March 8, 2013
|
|
March 25, 2013
|
|
$
|
0.3750
|
|
|
$
|
113.4
|
|
May 15, 2013
|
|
June 10, 2013
|
|
June 25, 2013
|
|
0.3750
|
|
|
112.7
|
|
||
July 23, 2013
|
|
September 10, 2013
|
|
September 25, 2013
|
|
0.3750
|
|
|
111.4
|
|
||
|
|
|
|
|
|
|
|
|
||||
Nine Months Ended September 30, 2012
|
|
|
|
|
|
|
|
|
||||
January 24, 2012
|
|
March 9, 2012
|
|
March 23, 2012
|
|
$
|
0.2875
|
|
|
$
|
95.8
|
|
May 16, 2012
|
|
June 8, 2012
|
|
June 25, 2012
|
|
0.2875
|
|
|
93.5
|
|
||
July 24, 2012
|
|
September 10, 2012
|
|
September 25, 2012
|
|
0.2875
|
|
|
90.7
|
|
|
October 1, 2013
Through
October 10, 2013
|
|
Nine Months Ended
September 30 |
||||||||
|
|
2013
|
|
2012
|
|||||||
Shares repurchased
|
0.9
|
|
|
15.6
|
|
|
28.6
|
|
|||
Average price per share
|
$
|
85.28
|
|
|
$
|
74.86
|
|
|
$
|
63.85
|
|
Aggregate cost
|
$
|
72.7
|
|
|
$
|
1,170.4
|
|
|
$
|
1,828.8
|
|
Authorization remaining at the end of each period
|
$
|
4,093.8
|
|
|
$
|
4,166.5
|
|
|
$
|
2,504.9
|
|
|
Number of
Shares
|
|
Weighted-
Average
Option Price
per Share
|
|
Weighted-
Average
Remaining
Contractual
Life (Years)
|
|
Aggregate
Intrinsic
Value
|
|||||
Outstanding at January 1, 2013
|
17.8
|
|
|
$
|
64.67
|
|
|
|
|
|
||
Granted
|
2.0
|
|
|
62.37
|
|
|
|
|
|
|||
Exercised
|
(6.2
|
)
|
|
60.28
|
|
|
|
|
|
|||
Forfeited or expired
|
(1.3
|
)
|
|
70.88
|
|
|
|
|
|
|||
Outstanding at September 30, 2013
|
12.3
|
|
|
$
|
65.85
|
|
|
3.4
|
|
$
|
217.5
|
|
Exercisable at September 30, 2013
|
9.7
|
|
|
$
|
66.54
|
|
|
2.8
|
|
$
|
166.5
|
|
|
Restricted
Stock Shares
and Units
|
|
Weighted-
Average
Grant Date
Fair Value
per Share
|
|||
Nonvested at January 1, 2013
|
2.6
|
|
|
$
|
63.87
|
|
Granted
|
2.4
|
|
|
62.69
|
|
|
Vested
|
(0.4
|
)
|
|
59.64
|
|
|
Forfeited
|
(0.5
|
)
|
|
64.61
|
|
|
Nonvested at September 30, 2013
|
4.1
|
|
|
$
|
63.50
|
|
|
2013
|
|
2012
|
||
Risk-free interest rate
|
1.25
|
%
|
|
1.41
|
%
|
Volatility factor
|
35.00
|
%
|
|
34.00
|
%
|
Quarterly dividend yield
|
0.600
|
%
|
|
0.400
|
%
|
Weighted-average expected life (years)
|
4.0
|
|
|
4.1
|
|
|
2013
|
|
2012
|
||||
Options granted during the period
|
$
|
14.60
|
|
|
$
|
16.51
|
|
11.
|
Accumulated Other Comprehensive Income (Loss)
|
|
2013
|
|
2012
|
||||
Investments:
|
|
|
|
||||
Gross unrealized gains
|
$
|
1,003.0
|
|
|
$
|
1,373.9
|
|
Gross unrealized losses
|
(276.7
|
)
|
|
(46.7
|
)
|
||
Net pre-tax unrealized gains
|
726.3
|
|
|
1,327.2
|
|
||
Deferred tax liability
|
(249.7
|
)
|
|
(465.0
|
)
|
||
Net unrealized gains on investments
|
476.6
|
|
|
862.2
|
|
||
Non-credit components of other-than-temporary impairments on investments:
|
|
|
|
||||
Unrealized losses
|
(0.9
|
)
|
|
(3.4
|
)
|
||
Deferred tax asset
|
0.3
|
|
|
1.2
|
|
||
Net unrealized non-credit component of other-than-temporary impairments on investments
|
(0.6
|
)
|
|
(2.2
|
)
|
||
Cash flow hedges:
|
|
|
|
||||
Gross unrealized losses
|
(50.8
|
)
|
|
(55.4
|
)
|
||
Deferred tax asset
|
17.8
|
|
|
19.4
|
|
||
Net unrealized losses on cash flow hedges
|
(33.0
|
)
|
|
(36.0
|
)
|
||
Defined benefit pension plans:
|
|
|
|
||||
Deferred net actuarial loss
|
(654.0
|
)
|
|
(620.3
|
)
|
||
Deferred prior service credits
|
3.3
|
|
|
4.1
|
|
||
Deferred tax asset
|
256.4
|
|
|
249.6
|
|
||
Net unrecognized periodic benefit costs for defined benefit pension plans
|
(394.3
|
)
|
|
(366.6
|
)
|
||
Postretirement benefit plans:
|
|
|
|
||||
Deferred net actuarial loss
|
(182.7
|
)
|
|
(224.0
|
)
|
||
Deferred prior service credits
|
93.2
|
|
|
106.5
|
|
||
Deferred tax asset
|
35.2
|
|
|
47.6
|
|
||
Net unrecognized periodic benefit costs for postretirement benefit plans
|
(54.3
|
)
|
|
(69.9
|
)
|
||
Foreign currency translation adjustments:
|
|
|
|
||||
Gross unrealized gains (losses)
|
1.3
|
|
|
(0.9
|
)
|
||
Deferred tax (liability) asset
|
(0.5
|
)
|
|
0.3
|
|
||
Net unrealized gains (losses) on foreign currency translation adjustments
|
0.8
|
|
|
(0.6
|
)
|
||
Accumulated other comprehensive (loss) income
|
$
|
(4.8
|
)
|
|
$
|
386.9
|
|
|
2013
|
|
2012
|
||||
Investments:
|
|
|
|
||||
Net holding (loss) gain on investment securities arising during the period, net of tax (benefit) expense of $(9.4) and $73.4, respectively
|
$
|
(15.0
|
)
|
|
$
|
135.3
|
|
Reclassification adjustment for net realized gain on investment securities, net of tax expense of $16.9 and $17.8, respectively
|
31.3
|
|
|
33.0
|
|
||
Total reclassification adjustment on investments
|
16.3
|
|
|
168.3
|
|
||
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 $0.3 and $0.0, respectively
|
(0.6
|
)
|
|
—
|
|
||
Cash flow hedges:
|
|
|
|
||||
Holding gain (loss), net of tax expense (benefit) of $0.4 and $(0.6), respectively
|
0.7
|
|
|
(1.0
|
)
|
||
Other:
|
|
|
|
||||
Net change in unrecognized periodic benefit costs for defined benefit pension and postretirement benefit plans, net of tax expense of $3.2 and $4.7, respectively
|
4.8
|
|
|
6.9
|
|
||
Foreign currency translation adjustment, net of tax expense of $0.6 and $0.3, respectively
|
1.2
|
|
|
0.5
|
|
||
Net gain recognized in other comprehensive income (loss), net of tax expense of $11.4 and $95.6, respectively
|
$
|
22.4
|
|
|
$
|
174.7
|
|
|
2013
|
|
2012
|
||||
Investments:
|
|
|
|
||||
Net holding (loss) gain on investment securities arising during the period, net of tax (benefit) expense of $(213.6) and $59.1, respectively
|
$
|
(390.1
|
)
|
|
$
|
111.1
|
|
Reclassification adjustment for net realized gain on investment securities, net of tax expense of $34.0 and $74.0, respectively
|
63.1
|
|
|
137.4
|
|
||
Total reclassification adjustment on investments
|
(327.0
|
)
|
|
248.5
|
|
||
Non-credit component of other-than-temporary impairments on investments:
|
|
|
|
||||
Non-credit component of other-than-temporary impairments on investments, net of tax expense of $0.9 and $2.4, respectively
|
1.6
|
|
|
4.4
|
|
||
Cash flow hedges:
|
|
|
|
||||
Holding gain (loss), net of tax expense (benefit) of $1.2 and $(0.3), respectively
|
2.2
|
|
|
(0.6
|
)
|
||
Other:
|
|
|
|
||||
Net change in unrecognized periodic benefit costs for defined benefit pension and postretirement benefit plans, net of tax expense of $12.1 and $13.5, respectively
|
18.6
|
|
|
19.9
|
|
||
Foreign currency translation adjustment, net of tax expense (benefit) of $0.4 and $(0.1), respectively
|
0.7
|
|
|
(0.2
|
)
|
||
Net (loss) gain recognized in other comprehensive income (loss), net of tax (benefit) expense of $(165.0) and $148.6, respectively
|
$
|
(303.9
|
)
|
|
$
|
272.0
|
|
12.
|
Earnings per Share
|
|
Three Months Ended
September 30 |
|
Nine Months Ended
September 30 |
||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||
Denominator for basic earnings per share – weighted average shares
|
297.4
|
|
|
318.9
|
|
|
300.0
|
|
|
327.2
|
|
Effect of dilutive securities – employee stock options, non-vested restricted stock awards and convertible debentures
|
7.1
|
|
|
3.0
|
|
|
4.5
|
|
|
3.5
|
|
Denominator for diluted earnings per share
|
304.5
|
|
|
321.9
|
|
|
304.5
|
|
|
330.7
|
|
13.
|
Segment Information
|
|
Commercial
and Specialty
Business
|
|
Government
Business
|
|
Other
|
|
Total
|
||||||||
Three Months Ended September 30, 2013:
|
|
|
|
|
|
|
|
||||||||
Operating revenue from external customers
|
$
|
9,789.1
|
|
|
$
|
7,931.1
|
|
|
$
|
12.8
|
|
|
$
|
17,733.0
|
|
Operating gain (loss)
|
688.2
|
|
|
326.5
|
|
|
(5.3
|
)
|
|
1,009.4
|
|
||||
Three Months Ended September 30, 2012:
|
|
|
|
|
|
|
|
||||||||
Operating revenue from external customers
|
$
|
9,751.2
|
|
|
$
|
5,374.1
|
|
|
$
|
8.4
|
|
|
$
|
15,133.7
|
|
Operating gain (loss)
|
852.3
|
|
|
169.0
|
|
|
(17.5
|
)
|
|
1,003.8
|
|
||||
Nine Months Ended September 30, 2013:
|
|
|
|
|
|
|
|
||||||||
Operating revenue from external customers
|
$
|
29,358.7
|
|
|
$
|
23,493.5
|
|
|
$
|
24.3
|
|
|
$
|
52,876.5
|
|
Operating gain (loss)
|
2,869.9
|
|
|
757.6
|
|
|
(18.8
|
)
|
|
3,608.7
|
|
||||
Nine Months Ended September 30, 2012:
|
|
|
|
|
|
|
|
||||||||
Operating revenue from external customers
|
$
|
29,391.7
|
|
|
$
|
16,039.2
|
|
|
$
|
26.3
|
|
|
$
|
45,457.2
|
|
Operating gain (loss)
|
2,863.2
|
|
|
381.8
|
|
|
(36.9
|
)
|
|
3,208.1
|
|
|
Three Months Ended
September 30 |
|
Nine Months Ended
September 30 |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Reportable segments operating revenues
|
$
|
17,733.0
|
|
|
$
|
15,133.7
|
|
|
$
|
52,876.5
|
|
|
$
|
45,457.2
|
|
Net investment income
|
167.6
|
|
|
168.6
|
|
|
482.8
|
|
|
507.0
|
|
||||
Net realized gains on investments
|
95.4
|
|
|
54.6
|
|
|
166.4
|
|
|
232.0
|
|
||||
Other-than-temporary impairment losses recognized in income
|
(26.2
|
)
|
|
(3.8
|
)
|
|
(73.1
|
)
|
|
(20.6
|
)
|
||||
Total revenues
|
$
|
17,969.8
|
|
|
$
|
15,353.1
|
|
|
$
|
53,452.6
|
|
|
$
|
46,175.6
|
|
|
Three Months Ended
September 30 |
|
Nine Months Ended
September 30 |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Reportable segments operating gain
|
$
|
1,009.4
|
|
|
$
|
1,003.8
|
|
|
$
|
3,608.7
|
|
|
$
|
3,208.1
|
|
Net investment income
|
167.6
|
|
|
168.6
|
|
|
482.8
|
|
|
507.0
|
|
||||
Net realized gains on investments
|
95.4
|
|
|
54.6
|
|
|
166.4
|
|
|
232.0
|
|
||||
Other-than-temporary impairment losses recognized in income
|
(26.2
|
)
|
|
(3.8
|
)
|
|
(73.1
|
)
|
|
(20.6
|
)
|
||||
Interest expense
|
(151.5
|
)
|
|
(133.6
|
)
|
|
(456.9
|
)
|
|
(360.3
|
)
|
||||
Loss on extinguishment of debt
|
(145.3
|
)
|
|
—
|
|
|
(145.3
|
)
|
|
—
|
|
||||
Amortization of other intangible assets
|
(66.6
|
)
|
|
(63.9
|
)
|
|
(202.2
|
)
|
|
(182.1
|
)
|
||||
Income before income tax expense
|
$
|
882.8
|
|
|
$
|
1,025.7
|
|
|
$
|
3,380.4
|
|
|
$
|
3,384.1
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Three Months Ended
September 30 |
|
|
|
|
|||||||||
|
2013
|
|
2012
|
|
Change
|
|
% Change
|
|||||||
Net income
|
$
|
656.2
|
|
|
$
|
691.2
|
|
|
$
|
(35.0
|
)
|
|
(5.1
|
)%
|
Less (net of tax):
|
|
|
|
|
|
|
|
|||||||
Net realized gains on investments
|
62.0
|
|
|
35.5
|
|
|
26.5
|
|
|
|
||||
Other-than-temporary impairment losses on investments
|
(17.0
|
)
|
|
(2.5
|
)
|
|
(14.5
|
)
|
|
|
||||
Loss on extinguishment of debt
|
(94.4
|
)
|
|
—
|
|
|
(94.4
|
)
|
|
|
||||
Tax benefit from favorable tax election
|
65.0
|
|
|
—
|
|
|
65.0
|
|
|
|
||||
Acquisition and integration related costs
|
—
|
|
|
(13.9
|
)
|
|
13.9
|
|
|
|
||||
Adjusted net income
|
$
|
640.6
|
|
|
$
|
672.1
|
|
|
$
|
(31.5
|
)
|
|
(4.7
|
)%
|
|
|
|
|
|
|
|
|
|||||||
EPS
|
$
|
2.16
|
|
|
$
|
2.15
|
|
|
$
|
0.01
|
|
|
0.5
|
%
|
Less (net of tax):
|
|
|
|
|
|
|
|
|||||||
Net realized gains on investments
|
0.20
|
|
|
0.11
|
|
|
0.09
|
|
|
|
||||
Other-than-temporary impairment losses on investments
|
(0.05
|
)
|
|
(0.01
|
)
|
|
(0.04
|
)
|
|
|
||||
Loss on extinguishment of debt
|
(0.31
|
)
|
|
—
|
|
|
(0.31
|
)
|
|
|
||||
Tax benefit from favorable tax election
|
0.21
|
|
|
—
|
|
|
0.21
|
|
|
|
||||
Acquisition and integration related costs
|
—
|
|
|
(0.04
|
)
|
|
0.04
|
|
|
|
||||
Per share rounding impact
|
0.01
|
|
|
—
|
|
|
0.01
|
|
|
|
||||
Adjusted EPS
|
$
|
2.10
|
|
|
$
|
2.09
|
|
|
$
|
0.01
|
|
|
0.5
|
%
|
|
Nine Months Ended
September 30 |
|
|
|
|
|||||||||
|
2013
|
|
2012
|
|
Change
|
|
% Change
|
|||||||
Net income
|
$
|
2,341.5
|
|
|
$
|
2,191.3
|
|
|
$
|
150.2
|
|
|
6.9
|
%
|
Less (net of tax):
|
|
|
|
|
|
|
|
|||||||
Net realized gains on investments
|
108.2
|
|
|
150.8
|
|
|
(42.6
|
)
|
|
|
||||
Other-than-temporary impairment losses on investments
|
(47.5
|
)
|
|
(13.4
|
)
|
|
(34.1
|
)
|
|
|
||||
Loss on extinguishment of debt
|
(94.4
|
)
|
|
—
|
|
|
(94.4
|
)
|
|
|
||||
Tax benefit from favorable tax election
|
65.0
|
|
|
—
|
|
|
65.0
|
|
|
|
||||
Acquisition and integration related costs
|
(16.3
|
)
|
|
(21.1
|
)
|
|
4.8
|
|
|
|
||||
Litigation related costs
|
—
|
|
|
(24.0
|
)
|
|
24.0
|
|
|
|
||||
Tax impact of non-deductible litigation related costs
|
—
|
|
|
(41.4
|
)
|
|
41.4
|
|
|
|
||||
Adjusted net income
|
$
|
2,326.5
|
|
|
$
|
2,140.4
|
|
|
$
|
186.1
|
|
|
8.7
|
%
|
|
|
|
|
|
|
|
|
|||||||
EPS
|
$
|
7.69
|
|
|
$
|
6.63
|
|
|
$
|
1.06
|
|
|
16.0
|
%
|
Less (net of tax):
|
|
|
|
|
|
|
|
|||||||
Net realized gains on investments
|
0.36
|
|
|
0.46
|
|
|
(0.10
|
)
|
|
|
||||
Other-than-temporary impairment losses on investments
|
(0.16
|
)
|
|
(0.04
|
)
|
|
(0.12
|
)
|
|
|
||||
Loss on extinguishment of debt
|
(0.31
|
)
|
|
—
|
|
|
(0.31
|
)
|
|
|
||||
Tax benefit from favorable tax election
|
0.21
|
|
|
—
|
|
|
0.21
|
|
|
|
||||
Acquisition and integration related costs
|
(0.05
|
)
|
|
(0.06
|
)
|
|
0.01
|
|
|
|
||||
Litigation related costs
|
—
|
|
|
(0.07
|
)
|
|
0.07
|
|
|
|
||||
Tax impact of non-deductible litigation related costs
|
—
|
|
|
(0.13
|
)
|
|
0.13
|
|
|
|
||||
Adjusted EPS
|
$
|
7.64
|
|
|
$
|
6.47
|
|
|
$
|
1.17
|
|
|
18.1
|
%
|
|
September 30
|
|
|
|
|
||||||
(In thousands)
|
2013
|
|
2012
|
|
Change
|
|
% Change
|
||||
Medical Membership
|
|
|
|
|
|
|
|
||||
Customer Type
|
|
|
|
|
|
|
|
||||
Local Group
|
14,497
|
|
|
14,602
|
|
|
(105
|
)
|
|
(0.7
|
)%
|
Individual
|
1,807
|
|
|
1,862
|
|
|
(55
|
)
|
|
(3.0
|
)
|
National:
|
|
|
|
|
|
|
|
||||
National Accounts
|
6,797
|
|
|
7,019
|
|
|
(222
|
)
|
|
(3.2
|
)
|
BlueCard
®
|
5,079
|
|
|
5,062
|
|
|
17
|
|
|
0.3
|
|
Total National
|
11,876
|
|
|
12,081
|
|
|
(205
|
)
|
|
(1.7
|
)
|
Medicare
|
1,477
|
|
|
1,538
|
|
|
(61
|
)
|
|
(4.0
|
)
|
Medicaid
|
4,323
|
|
|
1,891
|
|
|
2,432
|
|
|
128.6
|
|
FEP
|
1,528
|
|
|
1,519
|
|
|
9
|
|
|
0.6
|
|
Total Medical Membership by Customer Type
|
35,508
|
|
|
33,493
|
|
|
2,015
|
|
|
6.0
|
|
Funding Arrangement
|
|
|
|
|
|
|
|
||||
Self-Funded
|
20,139
|
|
|
20,172
|
|
|
(33
|
)
|
|
(0.2
|
)
|
Fully-Insured
|
15,369
|
|
|
13,321
|
|
|
2,048
|
|
|
15.4
|
|
Total Medical Membership by Funding Arrangement
|
35,508
|
|
|
33,493
|
|
|
2,015
|
|
|
6.0
|
|
Reportable Segment
|
|
|
|
|
|
|
|
||||
Commercial and Specialty Business
|
28,180
|
|
|
28,545
|
|
|
(365
|
)
|
|
(1.3
|
)
|
Government Business
|
7,328
|
|
|
4,948
|
|
|
2,380
|
|
|
48.1
|
|
Total Medical Membership by Reportable Segment
|
35,508
|
|
|
33,493
|
|
|
2,015
|
|
|
6.0
|
|
Other Membership & Customers
|
|
|
|
|
|
|
|
||||
Behavioral Health Members
|
24,345
|
|
|
24,386
|
|
|
(41
|
)
|
|
(0.2
|
)
|
Life and Disability Members
|
4,750
|
|
|
4,895
|
|
|
(145
|
)
|
|
(3.0
|
)
|
Dental Members
|
4,900
|
|
|
4,871
|
|
|
29
|
|
|
0.6
|
|
Dental Administration Members
|
4,888
|
|
|
4,103
|
|
|
785
|
|
|
19.1
|
|
Vision Members
|
4,723
|
|
|
4,435
|
|
|
288
|
|
|
6.5
|
|
Medicare Advantage Part D Members
|
625
|
|
|
689
|
|
|
(64
|
)
|
|
(9.3
|
)
|
Medicare Part D Standalone Members
|
477
|
|
|
579
|
|
|
(102
|
)
|
|
(17.6
|
)
|
Retail Vision Customers
|
3,127
|
|
|
3,112
|
|
|
15
|
|
|
0.5
|
|
|
Three Months Ended September 30
|
|
Nine Months Ended September 30
|
|
Change
|
||||||||||||||||||||||||
|
Three Months Ended September 30
|
|
Nine Months Ended September 30
|
||||||||||||||||||||||||||
|
2013 vs. 2012
|
|
2013 vs. 2012
|
||||||||||||||||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||||
Total operating revenue
|
$
|
17,733.0
|
|
|
$
|
15,133.7
|
|
|
$
|
52,876.5
|
|
|
$
|
45,457.2
|
|
|
$
|
2,599.3
|
|
|
17.2
|
%
|
|
$
|
7,419.3
|
|
|
16.3
|
%
|
Net investment income
|
167.6
|
|
|
168.6
|
|
|
482.8
|
|
|
507.0
|
|
|
(1.0
|
)
|
|
(0.6
|
)%
|
|
(24.2
|
)
|
|
(4.8
|
)%
|
||||||
Net realized gains on investments
|
95.4
|
|
|
54.6
|
|
|
166.4
|
|
|
232.0
|
|
|
40.8
|
|
|
74.7
|
%
|
|
(65.6
|
)
|
|
(28.3
|
)%
|
||||||
Other-than-temporary impairment losses on investments
|
(26.2
|
)
|
|
(3.8
|
)
|
|
(73.1
|
)
|
|
(20.6
|
)
|
|
(22.4
|
)
|
|
589.5
|
%
|
|
(52.5
|
)
|
|
254.9
|
%
|
||||||
Total revenues
|
17,969.8
|
|
|
15,353.1
|
|
|
53,452.6
|
|
|
46,175.6
|
|
|
2,616.7
|
|
|
17.0
|
%
|
|
7,277.0
|
|
|
15.8
|
%
|
||||||
Benefit expense
|
14,075.0
|
|
|
11,984.8
|
|
|
41,656.3
|
|
|
35,849.8
|
|
|
2,090.2
|
|
|
17.4
|
%
|
|
5,806.5
|
|
|
16.2
|
%
|
||||||
Selling, general and administrative expense
|
2,580.0
|
|
|
2,078.6
|
|
|
7,415.5
|
|
|
6,326.1
|
|
|
501.4
|
|
|
24.1
|
%
|
|
1,089.4
|
|
|
17.2
|
%
|
||||||
Cost of products
|
68.6
|
|
|
66.5
|
|
|
196.0
|
|
|
73.2
|
|
|
2.1
|
|
|
3.2
|
%
|
|
122.8
|
|
|
167.8
|
%
|
||||||
Other expense
1
|
363.4
|
|
|
197.5
|
|
|
804.4
|
|
|
542.4
|
|
|
165.9
|
|
|
84.0
|
%
|
|
262.0
|
|
|
48.3
|
%
|
||||||
Total expenses
|
17,087.0
|
|
|
14,327.4
|
|
|
50,072.2
|
|
|
42,791.5
|
|
|
2,759.6
|
|
|
19.3
|
%
|
|
7,280.7
|
|
|
17.0
|
%
|
||||||
Income before income tax expense
|
882.8
|
|
|
1,025.7
|
|
|
3,380.4
|
|
|
3,384.1
|
|
|
(142.9
|
)
|
|
(13.9
|
)%
|
|
(3.7
|
)
|
|
(0.1
|
)%
|
||||||
Income tax expense
|
226.6
|
|
|
334.5
|
|
|
1,038.9
|
|
|
1,192.8
|
|
|
(107.9
|
)
|
|
(32.3
|
)%
|
|
(153.9
|
)
|
|
(12.9
|
)%
|
||||||
Net income
|
$
|
656.2
|
|
|
$
|
691.2
|
|
|
$
|
2,341.5
|
|
|
$
|
2,191.3
|
|
|
$
|
(35.0
|
)
|
|
(5.1
|
)%
|
|
$
|
150.2
|
|
|
6.9
|
%
|
Average diluted shares outstanding
|
304.5
|
|
|
321.9
|
|
|
304.5
|
|
|
330.7
|
|
|
(17.4
|
)
|
|
(5.4
|
)%
|
|
(26.2
|
)
|
|
(7.9
|
)%
|
||||||
Diluted net income per share
|
$
|
2.16
|
|
|
$
|
2.15
|
|
|
$
|
7.69
|
|
|
$
|
6.63
|
|
|
$
|
0.01
|
|
|
0.5
|
%
|
|
$
|
1.06
|
|
|
16.0
|
%
|
Benefit expense ratio
2
|
84.9
|
%
|
|
85.4
|
%
|
|
84.1
|
%
|
|
84.7
|
%
|
|
|
|
(50)bp
3
|
|
|
|
|
(60)bp
3
|
|
||||||||
Selling, general and administrative expense ratio
4
|
14.5
|
%
|
|
13.7
|
%
|
|
14.0
|
%
|
|
13.9
|
%
|
|
|
|
80bp
3
|
|
|
|
|
10bp
3
|
|
||||||||
Income before income taxes as a percentage of total revenue
|
4.9
|
%
|
|
6.7
|
%
|
|
6.3
|
%
|
|
7.3
|
%
|
|
|
|
(180)bp
3
|
|
|
|
|
(100)bp
3
|
|
||||||||
Net income as a percentage of total revenue
|
3.7
|
%
|
|
4.5
|
%
|
|
4.4
|
%
|
|
4.7
|
%
|
|
|
|
(80)bp
3
|
|
|
|
|
(30)bp
3
|
|
1
|
Includes interest expense, amortization of other intangible assets and loss on extinguishment of debt.
|
2
|
Benefit expense ratio = Benefit expense ÷ Premiums. Premiums for the three months ended
September 30, 2013
and
2012
were
$16,580.9
and
$14,037.1
, respectively. Premiums for the
nine months ended September 30, 2013
and
2012
were
$49,509.5
and
$42,336.6
, 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 = Selling, general and administrative expense ÷ Total operating revenue.
|
|
Three Months Ended
September 30 |
|
Nine Months Ended
September 30 |
|
Change
|
||||||||||||||||||||||||
|
Three Months Ended
September 30 |
|
Nine Months Ended
September 30 |
||||||||||||||||||||||||||
|
2013 vs. 2012
|
|
2013 vs. 2012
|
||||||||||||||||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||||
Commercial and Specialty Business
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Operating revenue
|
$
|
9,789.1
|
|
|
$
|
9,751.2
|
|
|
$
|
29,358.7
|
|
|
$
|
29,391.7
|
|
|
$
|
37.9
|
|
|
0.4
|
%
|
|
$
|
(33.0
|
)
|
|
(0.1
|
)%
|
Operating gain
|
$
|
688.2
|
|
|
$
|
852.3
|
|
|
$
|
2,869.9
|
|
|
$
|
2,863.2
|
|
|
$
|
(164.1
|
)
|
|
(19.3
|
)%
|
|
$
|
6.7
|
|
|
0.2
|
%
|
Operating margin
|
7.0
|
%
|
|
8.7
|
%
|
|
9.8
|
%
|
|
9.7
|
%
|
|
NA
1
|
|
|
(170)bp
|
|
|
NA
1
|
|
|
10bp
|
|
||||||
Government Business
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Operating revenue
|
$
|
7,931.1
|
|
|
$
|
5,374.1
|
|
|
$
|
23,493.5
|
|
|
$
|
16,039.2
|
|
|
$
|
2,557.0
|
|
|
47.6
|
%
|
|
$
|
7,454.3
|
|
|
46.5
|
%
|
Operating gain
|
$
|
326.5
|
|
|
$
|
169.0
|
|
|
$
|
757.6
|
|
|
$
|
381.8
|
|
|
$
|
157.5
|
|
|
93.2
|
%
|
|
$
|
375.8
|
|
|
98.4
|
%
|
Operating margin
|
4.1
|
%
|
|
3.1
|
%
|
|
3.2
|
%
|
|
2.4
|
%
|
|
NA
1
|
|
|
100bp
|
|
|
NA
1
|
|
|
80bp
|
|
||||||
Other
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Operating revenue
|
$
|
12.8
|
|
|
$
|
8.4
|
|
|
$
|
24.3
|
|
|
26.3
|
|
|
$
|
4.4
|
|
|
52.4
|
%
|
|
$
|
(2.0
|
)
|
|
(7.6
|
)%
|
|
Operating loss
|
$
|
(5.3
|
)
|
|
$
|
(17.5
|
)
|
|
$
|
(18.8
|
)
|
|
(36.9
|
)
|
|
$
|
12.2
|
|
|
(69.7
|
)%
|
|
$
|
18.1
|
|
|
(49.1
|
)%
|
1
|
Not Applicable
|
2
|
Not Material
|
|
Nine Months Ended
September 30 |
|
Years Ended December 31
|
||||||||||||||||
2013
|
|
2012
|
|
2012
|
|
2011
|
|
2010
|
|||||||||||
Gross medical claims payable, beginning of period
|
$
|
6,174.5
|
|
|
$
|
5,489.0
|
|
|
$
|
5,489.0
|
|
|
$
|
4,852.4
|
|
|
$
|
5,450.5
|
|
Ceded medical claims payable, beginning of period
|
(27.2
|
)
|
|
(16.4
|
)
|
|
(16.4
|
)
|
|
(32.9
|
)
|
|
(29.9
|
)
|
|||||
Net medical claims payable, beginning of period
|
6,147.3
|
|
|
5,472.6
|
|
|
5,472.6
|
|
|
4,819.5
|
|
|
5,420.6
|
|
|||||
Business combinations and purchase adjustments
|
—
|
|
|
—
|
|
|
804.4
|
|
|
100.9
|
|
|
—
|
|
|||||
Net incurred medical claims:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current year
|
41,547.0
|
|
|
35,860.9
|
|
|
48,080.1
|
|
|
47,281.6
|
|
|
45,077.1
|
|
|||||
Prior years redundancies
|
(560.1
|
)
|
|
(483.3
|
)
|
|
(513.6
|
)
|
|
(209.7
|
)
|
|
(718.0
|
)
|
|||||
Total net incurred medical claims
|
40,986.9
|
|
|
35,377.6
|
|
|
47,566.5
|
|
|
47,071.9
|
|
|
44,359.1
|
|
|||||
Net payments attributable to:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current year medical claims
|
35,630.8
|
|
|
30,557.9
|
|
|
42,832.4
|
|
|
41,999.0
|
|
|
40,387.8
|
|
|||||
Prior years medical claims
|
5,415.3
|
|
|
4,798.4
|
|
|
4,863.8
|
|
|
4,520.7
|
|
|
4,572.4
|
|
|||||
Total net payments
|
41,046.1
|
|
|
35,356.3
|
|
|
47,696.2
|
|
|
46,519.7
|
|
|
44,960.2
|
|
|||||
Net medical claims payable, end of period
|
6,088.1
|
|
|
5,493.9
|
|
|
6,147.3
|
|
|
5,472.6
|
|
|
4,819.5
|
|
|||||
Ceded medical claims payable, end of period
|
29.2
|
|
|
29.3
|
|
|
27.2
|
|
|
16.4
|
|
|
32.9
|
|
|||||
Gross medical claims payable, end of period
|
$
|
6,117.3
|
|
|
$
|
5,523.2
|
|
|
$
|
6,174.5
|
|
|
$
|
5,489.0
|
|
|
$
|
4,852.4
|
|
Current year medical claims paid as a percentage of current year net incurred medical claims
|
85.8
|
%
|
|
85.2
|
%
|
|
89.1
|
%
|
|
88.8
|
%
|
|
89.6
|
%
|
|||||
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
|
10.0
|
%
|
|
9.7
|
%
|
|
10.4
|
%
|
|
4.5
|
%
|
|
15.3
|
%
|
|||||
Prior year redundancies in the current period as a percentage of prior year net incurred medical claims
|
1.2
|
%
|
|
1.0
|
%
|
|
1.1
|
%
|
|
0.5
|
%
|
|
1.5
|
%
|
|
Favorable Developments by
Changes in Key Assumptions
|
||||||
|
2013
|
|
2012
|
||||
Assumed trend factors
|
$
|
417.0
|
|
|
$
|
375.3
|
|
Assumed completion factors
|
143.1
|
|
|
108.0
|
|
||
Total
|
$
|
560.1
|
|
|
$
|
483.3
|
|
|
Nine Months Ended
September 30
|
||||||
|
2013
|
|
2012
|
||||
Cash flows provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
2,779.5
|
|
|
$
|
1,984.8
|
|
Investing activities
|
(2,086.8
|
)
|
|
(3,285.1
|
)
|
||
Financing activities
|
(992.0
|
)
|
|
1,541.1
|
|
||
Effect of foreign exchange rates on cash and cash equivalents
|
0.4
|
|
|
(0.3
|
)
|
||
(Decrease) increase in cash and cash equivalents
|
$
|
(298.9
|
)
|
|
$
|
240.5
|
|
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
Purchased
1
|
|
Average
Price Paid
per Share
|
|
Total Number
of Shares
Purchased
as Part
of Publicly
Announced
Programs
2
|
|
Approximate
Dollar Value
of Shares
that May Yet
Be Purchased
Under the
Programs
|
||||||
(in millions, except share and per share data)
|
|
|
|
|
|
|
|
||||||
July 1, 2013 to July 31, 2013
|
1,731,532
|
|
|
$
|
83.89
|
|
|
1,719,000
|
|
|
$
|
1,077.2
|
|
August 1, 2013 to August 31, 2013
|
2,348,072
|
|
|
86.52
|
|
|
2,345,200
|
|
|
874.3
|
|
||
September 1, 2013 to September 30, 2013
|
2,431,113
|
|
|
85.73
|
|
|
2,424,100
|
|
|
4,166.5
|
|
||
|
6,510,717
|
|
|
|
|
6,488,300
|
|
|
|
1
|
Total number of shares purchased includes 22,417 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. During the three months ended
September 30, 2013
, we repurchased
6,488,300
shares at a cost of $554.9 under the program. The Board of Directors has authorized our common stock repurchase program since 2003. The Board's most recent authorized increase to the program was $3,500.0 on September 25, 2013. Between October 1, 2013 and October 10, 2013, we repurchased 852,000 shares at a cost of
$72.7
,
|
ITEM 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
OTHER INFORMATION
|
ITEM 6.
|
EXHIBITS
|
|
|
|
|
|
WELLPOINT, INC.
Registrant
|
||
|
|
|
|
Date: October 23, 2013
|
By:
|
|
/
S
/ W
AYNE
S. D
E
V
EYDT
|
|
|
|
Wayne S. DeVeydt
Executive Vice President and Chief Financial Officer
(Duly Authorized Officer and Principal Financial Officer)
|
|
|
|
|
Date: October 23, 2013
|
By:
|
|
/
S
/ J
OHN
E. G
ALLINA
|
|
|
|
John E. Gallina
Senior Vice President and Chief Accounting Officer
(Principal Accounting Officer)
|
(1)
|
authorize dividends or other distributions, except a committee may authorize or approve a reacquisition of shares, dividends or other distribution if done according to a formula or method, or within a range, prescribed by the Board of Directors;
|
(2)
|
approve or propose to shareholders action that is required to be approved by shareholders;
|
(3)
|
fill vacancies on the Board of Directors or on any of its committees;
|
(4)
|
except as permitted under Section 2.12(a)(7) below, amend the Corporation’s Articles of Incorporation under Ind. Code 23-1-38-2;
|
(5)
|
adopt, amend, repeal, or waive provisions of these By-Laws;
|
(6)
|
approve a plan of merger not requiring shareholder approval; or
|
(7)
|
authorize or approve the issuance or sale or a contract for sale of shares, or determine the designation and relative rights, preferences, and limitations of a class or series of shares, except the Board of Directors may authorize a committee (or an executive officer of the Corporation designated by the Board of Directors) to take the action described in this Section 2.12(a)(7) within limits prescribed by the Board of Directors.
|
1.
|
Section 3.2 is amended by replacing the chart that appears therein by the following effective as of August 6, 2013:
|
|
(A)
|
(B)
|
(C)
|
(D)
|
Position
|
Percentage absent Change in Control
|
Severance Period, absent Change in Control, Over Which Severance Pay will be Paid
|
Percentage -- Change in Control
|
Severance Period -- Change in Control Over Which Severance Pay will be Paid
|
Other Key Executive
|
100%
|
One year
|
100%
|
One year
|
Senior Vice President
1
and Vice President
|
100%
|
One year
|
100%
|
One year
|
Senior Vice President
2
|
150%
|
One and one-half years
|
250%
|
Two and one-half years
|
Executive Vice President
|
200%
|
Two years
|
300%
|
Three years
|
2.
|
The introductory paragraph of Section 3.6(c) is amended, in its entirety, effective August 6, 2013 to read as follows:
|
3.
|
Sections 6.1 and 6.2 are amended, in their entirety, effective as of August 6, 2013 to read as follows:
|
Corporate Title
|
Cash Credits
|
Chief Executive Officer
|
$54,000 per year
|
Executive Vice President
|
$30,000 per year
|
Senior Vice President
|
$12,000 per year
|
•
|
Automobile-related benefits
1
|
•
|
First class air travel
2
|
•
|
Airline clubs
|
•
|
Savings or retirement accounts
|
•
|
Additional life insurance or long-term disability insurance
|
•
|
Country club memberships
|
1.
|
I have reviewed this report on Form 10-Q of WellPoint, 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: October 23, 2013
|
|
|
|
/s/ JOSEPH R. SWEDISH
|
|
|
|
|
Chief Executive Officer
|
1.
|
I have reviewed this report on Form 10-Q of WellPoint, 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: October 23, 2013
|
|
/s/ WAYNE S. DEVEYDT
|
|
|
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
Chief Executive Officer
October 23, 2013
|
|
(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/ WAYNE S. DEVEYDT
|
|
Wayne S. DeVeydt
|
|
Executive Vice President and Chief Financial Officer
October 23, 2013
|
|