x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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o
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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
(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common Stock, Par Value $0.01
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New York Stock Exchange
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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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Emerging growth company
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¨
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ITEM 1.
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ITEM 1A.
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ITEM 1B.
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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 7.
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ITEM 7A.
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ITEM 8.
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ITEM 9.
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ITEM 9A.
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ITEM 9B.
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ITEM 10.
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ITEM 11.
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ITEM 12.
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ITEM 13.
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ITEM 14.
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ITEM 15.
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ITEM 16.
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FORM 10-K SUMMARY
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•
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Acquisition of America's 1st Choice (2018);
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•
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Acquisition of HealthSun (2017)
;
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•
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Acquisition of Simply Healthcare (2015);
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•
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Use of Capital—
Board of Directors declaration of dividends on common stock (2013 through January 2018); authorization for repurchases of our common stock (2017 and prior); and debt repurchases and new debt issuances (2017 and prior)
; and
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•
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grant, suspend and revoke licenses to transact business;
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regulate our products and services in great detail;
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regulate, limit, or suspend our ability to market products, including the exclusion of our plans from participating on public exchanges;
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retroactively adjust premium rates;
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monitor our solvency and reserve adequacy;
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•
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scrutinize our investment activities on the basis of quality, diversification and other quantitative criteria; and
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impose monetary and criminal sanctions for non-compliance with regulatory requirements.
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The minimum MLR thresholds by line of business for the Commercial market, as defined by HHS, are as follows:
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Line of Business
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%
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Large Group
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85
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Small Group
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80
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Individual
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80
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•
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The ACA created an incentive payment program for Medicare Advantage plans. CMS developed the Medicare Advantage Star Ratings System, which awards between 1.0 and 5.0 stars to Medicare Advantage plans based on performance in several categories, including quality of care and customer service. The star ratings are used by CMS to award quality-based bonus payments to plans that receive a rating of 4.0 or higher. The methodology and measures included in the star ratings system can be modified by CMS annually. As of December 31, 2017, all of our Medicare Advantage plans have received a rating of 3.0 or higher.
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•
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Regulations require premium rate increases to be reviewed for Small Group and Individual products above specified thresholds, generally 10%, as may be adjusted from time to time. The regulations provide for state insurance regulators to conduct the reviews, except for cases where a state does not have an “effective” rate review program or in federal enforcement states, in which cases HHS will conduct the reviews for any rate increase.
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•
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Prior to the implementation of the ACA, health insurers were permitted to use differential pricing, commonly referred to as “rating bands,” based on factors such as health status, gender and age. The ACA precludes health insurers from using health status and gender in the determination of the insurance premium. In addition, rating bands for age cannot vary by more than 3 to 1 and rating bands for tobacco use cannot vary by more than 1.5 to 1. The ongoing use of the 3 to 1 rating bands may have a significant impact on the majority of Individual and Small Group customers and could lead to adverse selection in the market as well as increased variability in projecting future premiums for those customer markets.
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•
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In 2014 significant new taxes and fees became effective for health insurers, some of which may or may not be passed through to customers. The most significant of the taxes and fees is the annual Health Insurance Provider Fee, or HIP Fee,
on health insurers that write certain types of health insurance on U.S. risks. The annual HIP Fee is allocated to health insurers based on the ratio of the amount of an insurer's net premium revenues written during the preceding calendar year to an adjusted amount of health insurance for all U.S. health risk for those certain lines of business written during the preceding calendar year. We record our estimated liability for the HIP Fee in full at the beginning of the year with a corresponding deferred asset that is amortized on a straight-line basis to general and administrative expense. The final calculation and payment of the annual HIP Fee occurs in the third quarter each year. The HIP Fee is non-deductible for federal income tax purposes. We price our affected products to cover the increased general and administrative and tax expenses associated with the HIP Fee. The total amount due from allocations to health insurers was
$11.3 billion
for each of 2015 and 2016, was suspended for 2017, has resumed and increased to
$14.3 billion for 2018 and is suspended for 2019.
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•
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Medicare Advantage reimbursement rates will not increase as much as they would otherwise due to a new payment formula promulgated by the ACA that is expected to significantly reduce reimbursements in the future. We also expect further and ongoing regulatory guidance on a number of issues related to Medicare, evolving methodology
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some of the business combinations may not achieve anticipated revenues, earnings or cash flow, business opportunities, synergies, growth prospects and other anticipated benefits;
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the goodwill or other intangible assets established as a result of our business combinations may be incorrectly valued or become non-recoverable;
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we may assume liabilities that were not disclosed to us or which were under-estimated;
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we may experience difficulties in integrating business combinations, be unable to integrate business combinations successfully or as quickly as expected, and be unable to realize anticipated economic, operational and other benefits in a timely manner, which could result in substantial costs and delays or other operational, technical or financial problems;
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•
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business combinations, and proposed business combinations that are not completed, could disrupt our ongoing business, lead to the incurrence of significant fees, distract management, result in the loss of key employees, divert resources, result in tax costs or inefficiencies and make it difficult to maintain our current business standards, controls, information technology systems, policies and procedures;
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we may finance future business combinations by issuing common stock for some or all of the purchase price, which could dilute the ownership interests of our shareholders;
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we may also incur additional debt related to future business combinations;
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we would be competing with other firms, some of which may have greater financial and other resources, to acquire attractive companies; and
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future business combinations may make it difficult to comply with the requirements of the BCBSA and lead to an increased risk that our BCBSA license agreements may be terminated.
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any requirement to restate financial results in the event of inappropriate application of accounting principles;
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a significant failure of our internal control over financial reporting;
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failure of our prevention and control systems related to employee compliance with internal policies, including data security;
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provider fraud that is not prevented or detected and impacts our medical costs or those of self-insured customers;
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failure to protect our proprietary information; and
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failure of our corporate governance policies or procedures.
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High
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Low
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||||
2017
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First Quarter
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$
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170.79
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$
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140.50
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Second Quarter
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194.94
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163.87
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Third Quarter
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198.98
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179.40
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Fourth Quarter
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236.39
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182.31
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2016
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First Quarter
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$
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144.69
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$
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115.63
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Second Quarter
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148.00
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122.91
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Third Quarter
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143.18
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122.52
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Fourth Quarter
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148.26
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114.85
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Period
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Total Number
of Shares
Purchased
1
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Average
Price Paid
per Share
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Total Number
of Shares
Purchased as
Part of
Publicly
Announced
Programs
2
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Approximate
Dollar Value
of Shares that
May Yet Be
Purchased
Under the
Programs
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||||||
(In millions, except share and per share data)
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October 1, 2017 to October 31, 2017
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991,701
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$
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190.43
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989,900
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$
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2,352.0
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November 1, 2017 to November 30, 2017
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250,400
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219.60
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249,900
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2,297.1
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December 1, 2017 to December 31, 2017
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524,817
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226.95
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524,244
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7,178.1
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1,766,918
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1,764,044
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1
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Total number of shares purchased includes 2,874 shares 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.
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2
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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 year ended
December 31, 2017
, we repurchased 10,518,545 shares at a cost of $1,997.7 under the program, including the cost of options to purchase shares. The Board of Directors has authorized our common stock repurchase program since 2003. The Board's most recent authorized increase to the program was $5,000.0 on December 7, 2017. Between January 1, 2018 and February 9, 2018, we repurchased 660,010 shares at a cost of $156.6, bringing our current availability to $7,021.5 at February 9, 2018. No duration has been placed on our common stock repurchase program and we reserve the right to discontinue the program at any time.
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December 31,
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2012
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2013
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2014
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2015
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2016
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2017
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||||||||||||
Anthem, Inc.
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$
|
100
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$
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155
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$
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213
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$
|
241
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$
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253
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$
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402
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S&P 500 Index
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100
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132
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151
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153
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171
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208
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S&P Managed Health Care Index
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100
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148
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198
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|
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241
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|
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288
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415
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As of and for the Years Ended December 31
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||||||||||||||||||
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2017
1
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2016
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2015
1
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2014
2
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2013
2
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(in millions, except where indicated and except per share data)
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Income Statement Data
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Total operating revenue
3
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$
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89,061.2
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$
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84,194.0
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$
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78,404.8
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$
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73,021.7
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$
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70,191.4
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Total revenues
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90,039.4
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84,863.0
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79,156.5
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73,874.1
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71,023.5
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Income from continuing operations
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3,842.8
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2,469.8
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2,560.0
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2,560.1
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2,634.3
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||||||
Net income
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3,842.8
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2,469.8
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2,560.0
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2,569.7
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2,489.7
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Per Share Data
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Basic net income per share - continuing operations
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$
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14.70
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$
|
9.39
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$
|
9.73
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$
|
9.28
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$
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8.83
|
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Diluted net income per share - continuing operations
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14.35
|
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9.21
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|
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9.38
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8.96
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|
8.67
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||||||
Dividends per share
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2.70
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2.60
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|
2.50
|
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1.75
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|
|
1.50
|
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||||||
Other Data (unaudited)
|
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|||||||||||
Benefit expense ratio
4
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86.4
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%
|
|
84.8
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%
|
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83.3
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%
|
|
83.1
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%
|
|
85.1
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%
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||||||
Selling, general and administrative expense ratio
5
|
14.2
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%
|
|
14.9
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%
|
|
16.0
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%
|
|
16.1
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%
|
|
14.2
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%
|
||||||
Income from continuing operations before income tax expense as a percentage of total revenues
|
4.4
|
%
|
|
5.4
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%
|
|
5.9
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%
|
|
5.9
|
%
|
|
5.4
|
%
|
||||||
Net income as a percentage of total revenues
|
4.3
|
%
|
|
2.9
|
%
|
|
3.2
|
%
|
|
3.5
|
%
|
|
3.5
|
%
|
||||||
Medical membership (
in thousands
)
|
40,244
|
|
|
39,919
|
|
|
38,599
|
|
|
37,499
|
|
|
35,653
|
|
||||||
Balance Sheet Data
|
|
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|
|
|
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|
|||||||||||
Cash and investments
6
|
$
|
25,179.0
|
|
|
$
|
23,262.7
|
|
|
$
|
21,064.5
|
|
|
$
|
22,061.6
|
|
|
$
|
21,107.0
|
|
|
Total assets
|
70,540.0
|
|
|
65,083.1
|
|
|
61,717.8
|
|
|
61,676.3
|
|
|
59,095.3
|
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||||||
Long-term debt, less current portion
|
17,382.2
|
|
|
14,358.5
|
|
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15,324.5
|
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|
14,019.6
|
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|
13,477.4
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||||||
Total liabilities
|
44,037.1
|
|
|
39,982.7
|
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38,673.7
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37,425.0
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34,330.1
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||||||
Total shareholders’ equity
|
26,502.9
|
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25,100.4
|
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23,044.1
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24,251.3
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24,765.2
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||||||
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1
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The net assets of and results of operations for HealthSun and Simply Healthcare are included from their respective acquisition dates of December 21, 2017 and February 17, 2015, respectively.
|
2
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The operating results of 1-800 CONTACTS, Inc. are reported as discontinued operations at December 31, 2014 and 2013 as a result of the divestiture completed on January 31, 2014. Included in net income for the year ended December 31, 2014 is income from discontinued operations, net of tax, of $9.6. Included in net income for the year ended December 31, 2013 is a loss from discontinued operations, net of tax, of $144.6.
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3
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Operating revenue is obtained by adding premiums, administrative fees and other revenue.
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4
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The benefit expense ratio represents benefit expenses as a percentage of premium revenue.
|
5
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The selling, general and administrative expense ratio represents selling, general and administrative expenses as a percentage of total operating revenue.
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6
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Cash and investments is obtained by adding cash and cash equivalents, current and long-term fixed maturity securities and current and long-term equity securities.
|
•
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Acquisition of America's 1st Choice (2018);
|
•
|
Acquisition of HealthSun (2017)
;
|
•
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Acquisition of Simply Healthcare (2015); and
|
•
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Board of Directors declaration of dividends on common stock (2013 through January 2018); authorization for repurchases of our common stock (2017 and prior); and debt repurchases and new debt issuance (2017 and prior).
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•
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Local Group consists of those employer customers with less than 5% of eligible employees located outside of the headquarter state, as well as customers with more than 5% of eligible employees located outside of the headquarter state with up to 5,000 eligible employees. In addition, Local Group includes UniCare members and Employer Group Medicare Advantage members, or retired members of Local Group accounts who have selected a Medicare Advantage product. Local Group accounts are generally sold through brokers or consultants working with industry specialists from our in-house sales force and are offered both on and off the public exchanges. Local Group insurance premiums may be based on claims incurred by the group or sold on a self-insured basis. The customer’s buying decision is typically based upon the size and breadth of our networks, customer service, the quality of our medical management services, the administrative cost included in our quoted price, our financial stability, our reputation and our ability to effectively service large complex accounts. Local Group accounted for
39.4%
,
38.7%
and
39.5%
of our medical members at December 31,
2017
,
2016
and
2015
, respectively.
|
•
|
Individual consists of individual customers under age 65 and their covered dependents.
Individual policies are generally sold through independent agents and brokers, retail partnerships, our in-house sales force or via the exchanges. Individual business is sold on a fully-insured basis. We offer on-exchange products through public exchanges and off-exchange products. Federal premium subsidies are available only for certain public exchange Individual products. Unsubsidized Individual customers are generally more sensitive to product pricing and, to a lesser extent, the configuration of the network, and the efficiency of administration.
Customer turnover is generally
|
•
|
National Accounts generally consist of multi-state employer groups primarily headquartered in an Anthem service area with at least 5% of the eligible employees located outside of the headquarter state and with more than 5,000 eligible employees. Some exceptions are allowed based on broker and consultant relationships. Service area is defined as the geographic area in which we are licensed to sell BCBS products. National Accounts are generally sold through independent brokers or consultants retained by the customer working with our in-house sales force. We believe we have an advantage when competing for very large National Accounts due to the size and breadth of our networks and our ability to access the national provider networks of BCBS companies at their competitive local market rates. In addition, Employer Group Medicare Advantage members related to National Accounts groups are reported as part of National Accounts membership. National Accounts represented
19.1%
,
19.4%
and
19.1%
of our medical members at December 31,
2017
,
2016
and
2015
, respectively.
|
•
|
BlueCard
®
host customers represent enrollees of Blue Cross and/or Blue Shield plans not owned by Anthem who receive healthcare services in our BCBSA licensed markets. BlueCard
®
membership consists of estimated host members using the national BlueCard
®
program. Host members are generally members who reside in or travel to a state in which an Anthem subsidiary is the Blue Cross and/or Blue Shield licensee and who are covered under an employer-sponsored health plan issued by a non-Anthem controlled BCBSA licensee (i.e., the “home plan”). We perform certain administrative functions for BlueCard
®
members, for which we receive administrative fees from the BlueCard
®
members’ home plans. Other administrative functions, including maintenance of enrollment information and customer service, are performed by the home plan. Host members are computed using, among other things, the average number of BlueCard
®
claims received per month. BlueCard
®
host membership accounted for
13.7%
,
13.9%
and
14.0%
of our medical members at December 31,
2017
,
2016
and
2015
, respectively.
|
•
|
Medicare customers are Medicare-eligible individual members age 65 and over who have enrolled in Medicare Supplement plans; Medicare Advantage, including Special Needs Plans; Medicare Part D; and dual-eligible programs through Medicare-Medicaid Plans, or MMPs. Medicare Supplement plans typically pay the difference between healthcare costs incurred by a beneficiary and amounts paid by Medicare. Medicare Advantage plans provide Medicare beneficiaries with a managed care alternative to traditional Medicare and often include a Medicare Part D benefit. In addition, our Medicare Advantage Special Needs Plans provide tailored benefits to Medicare beneficiaries who have chronic diseases and also cover certain dual-eligible customers, who are low-income seniors and persons under age 65 with disabilities. Medicare Part D offers a prescription drug plan to Medicare and MMP beneficiaries. MMP is a demonstration program focused on serving members who are dually eligible for Medicaid and Medicare, which was established as a result of the passage of the ACA. Medicare Supplement and Medicare Advantage products are marketed in the same manner, primarily through independent agents and brokers. Medicare business accounted for
3.8%
,
3.6%
and
3.7%
of our medical members at December 31,
2017
,
2016
and
2015
, respectively.
|
•
|
Medicaid membership represents eligible members who receive healthcare benefits through publicly funded healthcare programs, including Medicaid, ACA-related Medicaid expansion programs, Temporary Assistance for Needy Families, programs for seniors and people with disabilities, Children’s Health Insurance Programs, and specialty programs such as those focused on long-term services and support, HIV/AIDS, foster care, behavioral health and/or substance abuse disorders, and intellectual disabilities or developmental disabilities, among others. Total Medicaid program business accounted for
16.1%
,
16.4%
and
15.3%
of our medical members at December 31,
2017
,
2016
and
2015
, respectively.
|
•
|
FEP
®
members consist of United States government employees and their dependents within our geographic markets through our participation in the national contract between the BCBSA and the U.S. Office of Personnel Management. FEP
®
business accounted for
3.9%
,
3.9%
and
4.1%
of our medical members at December 31,
2017
,
2016
and
2015
, respectively.
|
|
|
December 31
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
|||||||||||||||
(In thousands)
|
|
2017
|
|
2016
|
|
2015
|
|
Change
|
|
% Change
|
|
Change
|
|
% Change
|
|||||||
Medical Membership
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Customer Type
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Local Group
|
|
15,870
|
|
|
15,429
|
|
|
15,241
|
|
|
441
|
|
|
2.9
|
%
|
|
188
|
|
|
1.2
|
%
|
Individual
|
|
1,588
|
|
|
1,664
|
|
|
1,675
|
|
|
(76
|
)
|
|
(4.6
|
)%
|
|
(11
|
)
|
|
(0.7
|
)%
|
National:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
National Accounts
|
|
7,683
|
|
|
7,741
|
|
|
7,355
|
|
|
(58
|
)
|
|
(0.7
|
)%
|
|
386
|
|
|
5.2
|
%
|
BlueCard
®
|
|
5,521
|
|
|
5,550
|
|
|
5,407
|
|
|
(29
|
)
|
|
(0.5
|
)%
|
|
143
|
|
|
2.6
|
%
|
Total National
|
|
13,204
|
|
|
13,291
|
|
|
12,762
|
|
|
(87
|
)
|
|
(0.7
|
)%
|
|
529
|
|
|
4.1
|
%
|
Medicare
|
|
1,545
|
|
|
1,438
|
|
|
1,439
|
|
|
107
|
|
|
7.4
|
%
|
|
(1
|
)
|
|
(0.1
|
)%
|
Medicaid
|
|
6,475
|
|
|
6,527
|
|
|
5,914
|
|
|
(52
|
)
|
|
(0.8
|
)%
|
|
613
|
|
|
10.4
|
%
|
FEP
®
|
|
1,562
|
|
|
1,570
|
|
|
1,568
|
|
|
(8
|
)
|
|
(0.5
|
)%
|
|
2
|
|
|
0.1
|
%
|
Total Medical Membership
|
|
40,244
|
|
|
39,919
|
|
|
38,599
|
|
|
325
|
|
|
0.8
|
%
|
|
1,320
|
|
|
3.4
|
%
|
Funding Arrangement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Self-Funded
|
|
24,966
|
|
|
24,688
|
|
|
23,666
|
|
|
278
|
|
|
1.1
|
%
|
|
1,022
|
|
|
4.3
|
%
|
Fully-Insured
|
|
15,278
|
|
|
15,231
|
|
|
14,933
|
|
|
47
|
|
|
0.3
|
%
|
|
298
|
|
|
2.0
|
%
|
Total Medical Membership
|
|
40,244
|
|
|
39,919
|
|
|
38,599
|
|
|
325
|
|
|
0.8
|
%
|
|
1,320
|
|
|
3.4
|
%
|
Reportable Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Commercial & Specialty Business
|
|
30,662
|
|
|
30,384
|
|
|
29,678
|
|
|
278
|
|
|
0.9
|
%
|
|
706
|
|
|
2.4
|
%
|
Government Business
|
|
9,582
|
|
|
9,535
|
|
|
8,921
|
|
|
47
|
|
|
0.5
|
%
|
|
614
|
|
|
6.9
|
%
|
Total Medical Membership
|
|
40,244
|
|
|
39,919
|
|
|
38,599
|
|
|
325
|
|
|
0.8
|
%
|
|
1,320
|
|
|
3.4
|
%
|
Other Membership
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Life and Disability Members
|
|
4,700
|
|
|
4,732
|
|
|
4,849
|
|
|
(32
|
)
|
|
(0.7
|
)%
|
|
(117
|
)
|
|
(2.4
|
)%
|
Dental Members
|
|
5,864
|
|
|
5,486
|
|
|
5,206
|
|
|
378
|
|
|
6.9
|
%
|
|
280
|
|
|
5.4
|
%
|
Dental Administration Members
|
|
5,342
|
|
|
5,294
|
|
|
5,282
|
|
|
48
|
|
|
0.9
|
%
|
|
12
|
|
|
0.2
|
%
|
Vision Members
|
|
6,867
|
|
|
6,388
|
|
|
5,641
|
|
|
479
|
|
|
7.5
|
%
|
|
747
|
|
|
13.2
|
%
|
Medicare Advantage Part D Members
|
|
702
|
|
|
629
|
|
|
622
|
|
|
73
|
|
|
11.6
|
%
|
|
7
|
|
|
1.1
|
%
|
Medicare Part D Standalone Members
|
|
318
|
|
|
350
|
|
|
371
|
|
|
(32
|
)
|
|
(9.1
|
)%
|
|
(21
|
)
|
|
(5.7
|
)%
|
|
|
|
|
|
|
|
|
Change
|
||||||||||||||||||
|
|
Years Ended December 31
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||
Total operating revenue
|
$
|
89,061.2
|
|
|
$
|
84,194.0
|
|
|
$
|
78,404.8
|
|
|
$
|
4,867.2
|
|
|
5.8
|
%
|
|
$
|
5,789.2
|
|
|
7.4
|
%
|
|
Net investment income
|
866.5
|
|
|
779.5
|
|
|
677.6
|
|
|
87.0
|
|
|
11.2
|
%
|
|
101.9
|
|
|
15.0
|
%
|
||||||
Net realized gains on financial instruments
|
144.8
|
|
|
4.9
|
|
|
157.5
|
|
|
139.9
|
|
|
2,855.1
|
%
|
|
(152.6
|
)
|
|
(96.9
|
)%
|
||||||
Other-than-temporary impairment losses on investments
|
(33.1
|
)
|
|
(115.4
|
)
|
|
(83.4
|
)
|
|
82.3
|
|
|
71.3
|
%
|
|
(32.0
|
)
|
|
(38.4
|
)%
|
||||||
Total revenues
|
90,039.4
|
|
|
84,863.0
|
|
|
79,156.5
|
|
|
5,176.4
|
|
|
6.1
|
%
|
|
5,706.5
|
|
|
7.2
|
%
|
||||||
Benefit expense
|
72,236.2
|
|
|
66,834.4
|
|
|
61,116.9
|
|
|
5,401.8
|
|
|
8.1
|
%
|
|
5,717.5
|
|
|
9.4
|
%
|
||||||
Selling, general and administrative expense
|
12,649.6
|
|
|
12,557.9
|
|
|
12,534.8
|
|
|
91.7
|
|
|
0.7
|
%
|
|
23.1
|
|
|
0.2
|
%
|
||||||
Other expense
1
|
1,189.8
|
|
|
915.3
|
|
|
873.8
|
|
|
274.5
|
|
|
30.0
|
%
|
|
41.5
|
|
|
4.7
|
%
|
||||||
Total expenses
|
86,075.6
|
|
|
80,307.6
|
|
|
74,525.5
|
|
|
5,768.0
|
|
|
7.2
|
%
|
|
5,782.1
|
|
|
7.8
|
%
|
||||||
Income before income tax expense
|
3,963.8
|
|
|
4,555.4
|
|
|
4,631.0
|
|
|
(591.6
|
)
|
|
(13.0
|
)%
|
|
(75.6
|
)
|
|
(1.6
|
)%
|
||||||
Income tax expense
|
121.0
|
|
|
2,085.6
|
|
|
2,071.0
|
|
|
(1,964.6
|
)
|
|
(94.2
|
)%
|
|
14.6
|
|
|
0.7
|
%
|
||||||
Net income
|
$
|
3,842.8
|
|
|
$
|
2,469.8
|
|
|
$
|
2,560.0
|
|
|
$
|
1,373.0
|
|
|
55.6
|
%
|
|
$
|
(90.2
|
)
|
|
(3.5
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Average diluted shares outstanding
|
267.8
|
|
|
268.1
|
|
|
272.9
|
|
|
(0.3
|
)
|
|
(0.1
|
)%
|
|
(4.8
|
)
|
|
(1.8
|
)%
|
||||||
Diluted net income per share
|
$
|
14.35
|
|
|
$
|
9.21
|
|
|
$
|
9.38
|
|
|
$
|
5.14
|
|
|
55.8
|
%
|
|
$
|
(0.17
|
)
|
|
(1.8
|
)%
|
|
Benefit expense ratio
2
|
86.4
|
%
|
|
84.8
|
%
|
|
83.3
|
%
|
|
|
|
160bp
3
|
|
|
|
|
150bp
3
|
|
||||||||
Selling, general and administrative expense ratio
4
|
14.2
|
%
|
|
14.9
|
%
|
|
16.0
|
%
|
|
|
|
(70)bp
3
|
|
|
|
|
(110)bp
3
|
|
||||||||
Income before income tax expense as a percentage of total revenues
|
4.4
|
%
|
|
5.4
|
%
|
|
5.9
|
%
|
|
|
|
(100)bp
3
|
|
|
|
|
(50)bp
3
|
|
||||||||
Net income as a percentage of total revenues
|
4.3
|
%
|
|
2.9
|
%
|
|
3.2
|
%
|
|
|
|
140bp
3
|
|
|
|
|
(30)bp
3
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Includes interest expense, amortization of other intangible assets and gain/loss on extinguishment of debt.
|
2
|
Benefit expense ratio represents benefit expense as a percentage of premium revenue. Premiums for the years ended
December 31, 2017
,
2016
and
2015
were
$83,647.7
,
$78,860.1
and
$73,385.1
, 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 represents selling, general and administrative expense as a percentage of total operating revenue.
|
|
|
|
|
|
|
|
|
|
Change
|
||||||||||||||||||
|
|
|
Years Ended December 31
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||||||||||||
|
|
|
2017
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||
Commercial & Specialty Business
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Operating revenue
|
$
|
40,754.1
|
|
|
$
|
38,692.1
|
|
|
$
|
37,570.8
|
|
|
$
|
2,062.0
|
|
|
5.3
|
%
|
|
$
|
1,121.3
|
|
|
3.0
|
%
|
||
Operating gain
|
$
|
2,876.1
|
|
|
$
|
3,195.2
|
|
|
$
|
2,854.0
|
|
|
$
|
(319.1
|
)
|
|
(10.0
|
)%
|
|
$
|
341.2
|
|
|
12.0
|
%
|
||
Operating margin
|
7.1
|
%
|
|
8.3
|
%
|
|
7.6
|
%
|
|
|
|
(120
|
)bp
|
|
|
|
70
|
bp
|
|||||||||
Government Business
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Operating revenue
|
$
|
48,276.2
|
|
|
$
|
45,477.7
|
|
|
$
|
40,813.0
|
|
|
$
|
2,798.5
|
|
|
6.2
|
%
|
|
$
|
4,664.7
|
|
|
11.4
|
%
|
||
Operating gain
|
$
|
1,430.2
|
|
|
$
|
1,784.3
|
|
|
$
|
1,978.5
|
|
|
$
|
(354.1
|
)
|
|
(19.8
|
)%
|
|
$
|
(194.2
|
)
|
|
(9.8
|
)%
|
||
Operating margin
|
3.0
|
%
|
|
3.9
|
%
|
|
4.8
|
%
|
|
|
|
(90
|
)bp
|
|
|
|
(90
|
)bp
|
|||||||||
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Operating revenue
1
|
$
|
30.9
|
|
|
$
|
24.2
|
|
|
$
|
21.0
|
|
|
$
|
6.7
|
|
|
27.7
|
%
|
|
$
|
3.2
|
|
|
15.2
|
%
|
||
Operating loss
2
|
$
|
(130.9
|
)
|
|
$
|
(177.8
|
)
|
|
$
|
(79.4
|
)
|
|
$
|
46.9
|
|
|
(26.4
|
)%
|
|
$
|
(98.4
|
)
|
|
123.9
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Fluctuations not material.
|
2
|
Fluctuations are primarily a result of changes in unallocated corporate expenses. The increase in 2016 was primarily due to transaction costs incurred associated with the Cigna Merger Agreement. The decrease in 2017 was primarily due to lower transaction costs incurred associated with the Cigna Merger Agreement as a result of the termination of the Cigna Merger Agreement in May 2017.
|
|
Years Ended December 31
|
||||||
|
2016
|
|
2015
|
||||
Total net incurred medical claims, as reported
|
$
|
65,521.0
|
|
|
$
|
59,908.2
|
|
Retrospective basis, as described above
|
65,206.8
|
|
|
59,858.0
|
|
||
Variance
|
$
|
314.2
|
|
|
$
|
50.2
|
|
Variance to total net incurred medical claims, as reported
|
0.5
|
%
|
|
0.1
|
%
|
•
|
the types of temporary differences that created the deferred tax asset;
|
•
|
the amount of taxes paid in prior periods and available for a carry-back claim;
|
•
|
the tax rate at which the deferred tax assets will likely be utilized at in the future;
|
•
|
the forecasted future taxable income, and therefore, likely future deduction of the deferred tax item; and
|
•
|
any significant other issues impacting the likely realization of the benefit of the temporary differences.
|
|
Years Ended December 31
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
4,184.8
|
|
|
$
|
3,270.2
|
|
|
$
|
4,211.9
|
|
Investing activities
|
(5,082.4
|
)
|
|
(513.9
|
)
|
|
(1,151.5
|
)
|
|||
Financing activities
|
426.9
|
|
|
(798.6
|
)
|
|
(3,093.3
|
)
|
|||
Effect of foreign exchange rates on cash and cash equivalents
|
4.3
|
|
|
4.1
|
|
|
(5.3
|
)
|
|||
(Decrease) increase in cash and cash equivalents
|
$
|
(466.4
|
)
|
|
$
|
1,961.8
|
|
|
$
|
(38.2
|
)
|
Declaration Date
|
|
Record Date
|
|
Payment Date
|
|
Cash
Dividend
per Share
|
|
Total
|
||||
February 22, 2017
|
|
March 10, 2017
|
|
March 24, 2017
|
|
$
|
0.65
|
|
|
$
|
172.2
|
|
April 27, 2017
|
|
June 9, 2017
|
|
June 23, 2017
|
|
0.65
|
|
|
171.8
|
|
||
July 25, 2017
|
|
September 8, 2017
|
|
September 25, 2017
|
|
0.70
|
|
|
181.4
|
|
||
October 24, 2017
|
|
December 5, 2017
|
|
December 21, 2017
|
|
0.70
|
|
|
179.5
|
|
|
January 1, 2018
through
February 9, 2018
|
|
Year Ended
December 31,
2017
|
||||
Shares repurchased
|
0.7
|
|
|
10.5
|
|
||
Average price per share
|
$
|
237.35
|
|
|
$
|
189.93
|
|
Aggregate cost
|
$
|
156.6
|
|
|
$
|
1,997.7
|
|
Authorization remaining at the end of each period
|
$
|
7,021.5
|
|
|
$
|
7,178.1
|
|
|
|
|
|
Payments Due by Period
|
||||||||||||||||
|
Total
|
|
Less than
1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More than
5 Years
|
|||||||||||
On-Balance Sheet:
|
|
|
|
|
|
|
|
|
|
|||||||||||
Debt
1
|
$
|
29,967.1
|
|
|
$
|
4,013.6
|
|
|
$
|
3,685.7
|
|
|
$
|
3,374.9
|
|
|
$
|
18,892.9
|
|
|
Other long-term liabilities
2
|
1,186.8
|
|
|
47.5
|
|
|
414.2
|
|
|
384.1
|
|
|
341.0
|
|
||||||
Off-Balance Sheet:
|
|
|
|
|
|
|
|
|
|
|||||||||||
Purchase obligations
3
|
1,747.5
|
|
|
995.5
|
|
|
671.5
|
|
|
70.8
|
|
|
9.7
|
|
||||||
Operating lease commitments
|
898.5
|
|
|
154.5
|
|
|
269.4
|
|
|
188.6
|
|
|
286.0
|
|
||||||
Investment commitments
4
|
823.8
|
|
|
255.2
|
|
|
360.6
|
|
|
168.4
|
|
|
39.6
|
|
||||||
Total contractual obligations and commitments
|
$
|
34,623.7
|
|
|
$
|
5,466.3
|
|
|
$
|
5,401.4
|
|
|
$
|
4,186.8
|
|
|
$
|
19,569.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Includes estimated interest expense.
|
2
|
Primarily consists of reserves for future policy benefits, projected other postretirement benefits, deferred compensation, supplemental executive retirement plan liabilities and certain other miscellaneous long-term obligations. Estimated future payments for funded pension benefits have been excluded from this table as we had no funding requirements under ERISA at
December 31, 2017
as a result of the value of the assets in the plans.
|
3
|
Includes estimated payments for future services under contractual arrangements from third-party service contracts.
|
4
|
Includes unfunded capital commitments for alternative investments.
|
Report of Independent Registered Public Accounting Firm
|
|
|
|
Audited Consolidated Financial Statements:
|
|
Consolidated Balance Sheets
|
|
Consolidated Statements of Income
|
|
Consolidated Statements of Comprehensive Income
|
|
Consolidated Statements of Cash Flows
|
|
Consolidated Statements of Shareholders’ Equity
|
|
Notes to Consolidated Financial Statements
|
|
December 31,
2017 |
|
December 31,
2016 |
||||
(In millions, except share data)
|
|
|
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
3,608.9
|
|
|
$
|
4,075.3
|
|
Investments available-for-sale, at fair value:
|
|
|
|
||||
Fixed maturity securities (amortized cost of $17,054.5 and $16,991.8)
|
17,377.3
|
|
|
17,163.1
|
|
||
Equity securities (cost of $3,098.1 and $1,076.1)
|
3,599.2
|
|
|
1,468.5
|
|
||
Other invested assets, current
|
17.2
|
|
|
15.8
|
|
||
Accrued investment income
|
162.5
|
|
|
164.5
|
|
||
Premium and self-funded receivables
|
6,184.9
|
|
|
5,860.8
|
|
||
Other receivables
|
2,266.5
|
|
|
2,536.6
|
|
||
Income taxes receivable
|
341.9
|
|
|
168.7
|
|
||
Securities lending collateral
|
455.1
|
|
|
1,079.8
|
|
||
Other current assets
|
2,249.3
|
|
|
1,781.8
|
|
||
Total current assets
|
36,262.8
|
|
|
34,314.9
|
|
||
Long-term investments available-for-sale, at fair value:
|
|
|
|
||||
Fixed maturity securities (amortized cost of $556.0 and $524.6)
|
560.8
|
|
|
524.4
|
|
||
Equity securities (cost of $26.7 and $27.2)
|
32.8
|
|
|
31.4
|
|
||
Other invested assets, long-term
|
3,343.8
|
|
|
2,240.5
|
|
||
Property and equipment, net
|
2,174.9
|
|
|
1,977.9
|
|
||
Goodwill
|
19,231.2
|
|
|
17,561.2
|
|
||
Other intangible assets
|
8,368.4
|
|
|
7,964.9
|
|
||
Other noncurrent assets
|
565.3
|
|
|
467.9
|
|
||
Total assets
|
$
|
70,540.0
|
|
|
$
|
65,083.1
|
|
|
|
|
|
||||
Liabilities and shareholders’ equity
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Policy liabilities:
|
|
|
|
||||
Medical claims payable
|
$
|
7,991.5
|
|
|
$
|
7,892.6
|
|
Reserves for future policy benefits
|
69.9
|
|
|
71.8
|
|
||
Other policyholder liabilities
|
2,950.3
|
|
|
2,221.1
|
|
||
Total policy liabilities
|
11,011.7
|
|
|
10,185.5
|
|
||
Unearned income
|
860.3
|
|
|
971.9
|
|
||
Accounts payable and accrued expenses
|
5,024.4
|
|
|
4,014.9
|
|
||
Security trades pending payable
|
112.6
|
|
|
93.5
|
|
||
Securities lending payable
|
454.4
|
|
|
1,078.9
|
|
||
Short-term borrowings
|
1,275.0
|
|
|
440.0
|
|
||
Current portion of long-term debt
|
1,274.6
|
|
|
928.4
|
|
||
Other current liabilities
|
3,343.0
|
|
|
3,581.3
|
|
||
Total current liabilities
|
23,356.0
|
|
|
21,294.4
|
|
||
Long-term debt, less current portion
|
17,382.2
|
|
|
14,358.5
|
|
||
Reserves for future policy benefits, noncurrent
|
647.3
|
|
|
666.1
|
|
||
Deferred tax liabilities, net
|
1,726.5
|
|
|
2,779.9
|
|
||
Other noncurrent liabilities
|
925.1
|
|
|
883.8
|
|
||
Total liabilities
|
44,037.1
|
|
|
39,982.7
|
|
||
|
|
|
|
||||
Commitments and contingencies—Note 13
|
|
|
|
||||
Shareholders’ equity
|
|
|
|
||||
Preferred stock, without par value, shares authorized - 100,000,000; shares issued and outstanding - none
|
—
|
|
|
—
|
|
||
Common stock, par value $0.01, shares authorized - 900,000,000; shares issued and outstanding - 256,084,913 and 263,747,395
|
2.6
|
|
|
2.6
|
|
||
Additional paid-in capital
|
8,547.4
|
|
|
8,805.1
|
|
||
Retained earnings
|
18,054.4
|
|
|
16,560.6
|
|
||
Accumulated other comprehensive loss
|
(101.5
|
)
|
|
(267.9
|
)
|
||
Total shareholders’ equity
|
26,502.9
|
|
|
25,100.4
|
|
||
Total liabilities and shareholders’ equity
|
$
|
70,540.0
|
|
|
$
|
65,083.1
|
|
|
Years Ended December 31
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
(In millions, except per share data)
|
|
|
|
|
|
||||||
Revenues
|
|
|
|
|
|
||||||
Premiums
|
$
|
83,647.7
|
|
|
$
|
78,860.1
|
|
|
$
|
73,385.1
|
|
Administrative fees
|
5,380.4
|
|
|
5,298.8
|
|
|
4,976.6
|
|
|||
Other revenue
|
33.1
|
|
|
35.1
|
|
|
43.1
|
|
|||
Total operating revenue
|
89,061.2
|
|
|
84,194.0
|
|
|
78,404.8
|
|
|||
Net investment income
|
866.5
|
|
|
779.5
|
|
|
677.6
|
|
|||
Net realized gains on financial instruments
|
144.8
|
|
|
4.9
|
|
|
157.5
|
|
|||
Other-than-temporary impairment losses on investments:
|
|
|
|
|
|
||||||
Total other-than-temporary impairment losses on investments
|
(34.7
|
)
|
|
(147.1
|
)
|
|
(99.9
|
)
|
|||
Portion of other-than-temporary impairment losses recognized in other comprehensive income (loss)
|
1.6
|
|
|
31.7
|
|
|
16.5
|
|
|||
Other-than-temporary impairment losses recognized in income
|
(33.1
|
)
|
|
(115.4
|
)
|
|
(83.4
|
)
|
|||
Total revenues
|
90,039.4
|
|
|
84,863.0
|
|
|
79,156.5
|
|
|||
Expenses
|
|
|
|
|
|
||||||
Benefit expense
|
72,236.2
|
|
|
66,834.4
|
|
|
61,116.9
|
|
|||
Selling, general and administrative expense:
|
|
|
|
|
|
||||||
Selling expense
|
1,395.5
|
|
|
1,391.5
|
|
|
1,441.1
|
|
|||
General and administrative expense
|
11,254.1
|
|
|
11,166.4
|
|
|
11,093.7
|
|
|||
Total selling, general and administrative expense
|
12,649.6
|
|
|
12,557.9
|
|
|
12,534.8
|
|
|||
Interest expense
|
739.0
|
|
|
723.0
|
|
|
653.0
|
|
|||
Amortization of other intangible assets
|
168.4
|
|
|
192.3
|
|
|
230.1
|
|
|||
Loss (gain) on extinguishment of debt
|
282.4
|
|
|
—
|
|
|
(9.3
|
)
|
|||
Total expenses
|
86,075.6
|
|
|
80,307.6
|
|
|
74,525.5
|
|
|||
Income before income tax expense
|
3,963.8
|
|
|
4,555.4
|
|
|
4,631.0
|
|
|||
Income tax expense
|
121.0
|
|
|
2,085.6
|
|
|
2,071.0
|
|
|||
Net income
|
$
|
3,842.8
|
|
|
$
|
2,469.8
|
|
|
$
|
2,560.0
|
|
Net income per share
|
|
|
|
|
|
||||||
Basic
|
$
|
14.70
|
|
|
$
|
9.39
|
|
|
$
|
9.73
|
|
Diluted
|
$
|
14.35
|
|
|
$
|
9.21
|
|
|
$
|
9.38
|
|
Dividends per share
|
$
|
2.70
|
|
|
$
|
2.60
|
|
|
$
|
2.50
|
|
|
|
Years Ended December 31
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
(In millions)
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
3,842.8
|
|
|
$
|
2,469.8
|
|
|
$
|
2,560.0
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
||||||
Change in net unrealized gains/losses on investments
|
|
172.5
|
|
|
117.9
|
|
|
(384.3
|
)
|
|||
Change in non-credit component of other-than-temporary impairment losses on investments
|
|
4.4
|
|
|
5.4
|
|
|
(5.6
|
)
|
|||
Change in net unrealized gains/losses on cash flow hedges
|
|
(64.6
|
)
|
|
(87.3
|
)
|
|
(45.2
|
)
|
|||
Change in net periodic pension and postretirement costs
|
|
51.3
|
|
|
(13.4
|
)
|
|
(26.0
|
)
|
|||
Foreign currency translation adjustments
|
|
2.8
|
|
|
2.1
|
|
|
(3.4
|
)
|
|||
Other comprehensive income (loss)
|
|
166.4
|
|
|
24.7
|
|
|
(464.5
|
)
|
|||
Total comprehensive income
|
|
$
|
4,009.2
|
|
|
$
|
2,494.5
|
|
|
$
|
2,095.5
|
|
|
Years Ended December 31
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
(In millions)
|
|
|
|
|
|
||||||
Operating activities
|
|
|
|
|
|
||||||
Net income
|
$
|
3,842.8
|
|
|
$
|
2,469.8
|
|
|
$
|
2,560.0
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Net realized gains on financial instruments
|
(144.8
|
)
|
|
(4.9
|
)
|
|
(157.5
|
)
|
|||
Other-than-temporary impairment losses recognized in income
|
33.1
|
|
|
115.4
|
|
|
83.4
|
|
|||
Loss (gain) on extinguishment of debt
|
282.4
|
|
|
—
|
|
|
(9.3
|
)
|
|||
Loss on disposal of assets
|
13.0
|
|
|
4.5
|
|
|
16.0
|
|
|||
Deferred income taxes
|
(1,272.1
|
)
|
|
126.9
|
|
|
(65.9
|
)
|
|||
Amortization, net of accretion
|
779.7
|
|
|
807.8
|
|
|
802.1
|
|
|||
Depreciation expense
|
110.7
|
|
|
104.0
|
|
|
105.8
|
|
|||
Impairment of property and equipment
|
2.5
|
|
|
44.8
|
|
|
1.8
|
|
|||
Share-based compensation
|
169.6
|
|
|
164.6
|
|
|
148.2
|
|
|||
Excess tax benefits from share-based compensation
|
—
|
|
|
(53.5
|
)
|
|
(95.8
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Receivables, net
|
(22.2
|
)
|
|
(1,380.5
|
)
|
|
(42.9
|
)
|
|||
Other invested assets
|
(35.5
|
)
|
|
(19.4
|
)
|
|
5.9
|
|
|||
Other assets
|
(629.0
|
)
|
|
(127.7
|
)
|
|
33.8
|
|
|||
Policy liabilities
|
731.6
|
|
|
321.7
|
|
|
193.0
|
|
|||
Unearned income
|
(120.1
|
)
|
|
(173.6
|
)
|
|
33.9
|
|
|||
Accounts payable and accrued expenses
|
921.8
|
|
|
182.3
|
|
|
(123.4
|
)
|
|||
Other liabilities
|
(120.2
|
)
|
|
605.7
|
|
|
686.4
|
|
|||
Income taxes
|
(193.9
|
)
|
|
178.8
|
|
|
41.5
|
|
|||
Other, net
|
(164.6
|
)
|
|
(96.5
|
)
|
|
(5.1
|
)
|
|||
Net cash provided by operating activities
|
4,184.8
|
|
|
3,270.2
|
|
|
4,211.9
|
|
|||
Investing activities
|
|
|
|
|
|
||||||
Purchases of fixed maturity securities
|
(9,794.6
|
)
|
|
(10,157.7
|
)
|
|
(9,792.0
|
)
|
|||
Proceeds from fixed maturity securities:
|
|
|
|
|
|
||||||
Sales
|
7,931.7
|
|
|
8,636.0
|
|
|
8,909.2
|
|
|||
Maturities, calls and redemptions
|
1,847.6
|
|
|
1,418.6
|
|
|
1,313.6
|
|
|||
Purchases of equity securities
|
(5,416.3
|
)
|
|
(1,476.3
|
)
|
|
(1,561.4
|
)
|
|||
Proceeds from sales of equity securities
|
3,462.5
|
|
|
1,592.8
|
|
|
1,471.1
|
|
|||
Purchases of other invested assets
|
(1,163.8
|
)
|
|
(433.1
|
)
|
|
(505.8
|
)
|
|||
Proceeds from sales of other invested assets
|
219.0
|
|
|
304.9
|
|
|
85.9
|
|
|||
Changes in collateral and settlement of non-hedging derivatives
|
64.9
|
|
|
(34.5
|
)
|
|
(36.5
|
)
|
|||
Changes in securities lending collateral
|
624.5
|
|
|
222.0
|
|
|
214.4
|
|
|||
Purchases of subsidiaries, net of cash acquired
|
(2,079.6
|
)
|
|
—
|
|
|
(638.9
|
)
|
|||
Purchases of property and equipment
|
(799.5
|
)
|
|
(583.6
|
)
|
|
(638.2
|
)
|
|||
Proceeds from sales of property and equipment
|
9.3
|
|
|
—
|
|
|
35.3
|
|
|||
Other, net
|
11.9
|
|
|
(3.0
|
)
|
|
(8.2
|
)
|
|||
Net cash used in investing activities
|
(5,082.4
|
)
|
|
(513.9
|
)
|
|
(1,151.5
|
)
|
|||
Financing activities
|
|
|
|
|
|
||||||
Net proceeds from (repayments of) commercial paper borrowings
|
174.6
|
|
|
(53.2
|
)
|
|
682.2
|
|
|||
Proceeds from long-term borrowings
|
5,457.8
|
|
|
—
|
|
|
1,226.5
|
|
|||
Repayments of long-term borrowings
|
(2,815.1
|
)
|
|
—
|
|
|
(2,697.2
|
)
|
|||
Proceeds from short-term borrowings
|
5,835.0
|
|
|
2,400.0
|
|
|
2,760.0
|
|
|||
Repayments of short-term borrowings
|
(5,000.0
|
)
|
|
(2,500.0
|
)
|
|
(2,620.0
|
)
|
|||
Changes in securities lending payable
|
(624.5
|
)
|
|
(222.0
|
)
|
|
(214.4
|
)
|
|||
Changes in bank overdrafts
|
71.0
|
|
|
513.8
|
|
|
(243.8
|
)
|
|||
Premiums paid on equity call options
|
—
|
|
|
—
|
|
|
(16.7
|
)
|
|||
Proceeds from sale of put options
|
0.9
|
|
|
—
|
|
|
16.6
|
|
|||
Repurchase and retirement of common stock
|
(1,997.7
|
)
|
|
—
|
|
|
(1,515.8
|
)
|
|||
Change in collateral and settlements of debt-related derivatives
|
(149.0
|
)
|
|
(360.4
|
)
|
|
—
|
|
|||
Cash dividends
|
(704.9
|
)
|
|
(684.0
|
)
|
|
(656.6
|
)
|
|||
Proceeds from issuance of common stock under employee stock plans
|
225.3
|
|
|
119.4
|
|
|
186.0
|
|
|||
Taxes paid through withholding of common stock under employee stock plans
|
(46.5
|
)
|
|
(65.7
|
)
|
|
(95.9
|
)
|
|||
Excess tax benefits from share-based compensation
|
—
|
|
|
53.5
|
|
|
95.8
|
|
|||
Net cash provided by (used in) financing activities
|
426.9
|
|
|
(798.6
|
)
|
|
(3,093.3
|
)
|
|||
Effect of foreign exchange rates on cash and cash equivalents
|
4.3
|
|
|
4.1
|
|
|
(5.3
|
)
|
|||
Change in cash and cash equivalents
|
(466.4
|
)
|
|
1,961.8
|
|
|
(38.2
|
)
|
|||
Cash and cash equivalents at beginning of year
|
4,075.3
|
|
|
2,113.5
|
|
|
2,151.7
|
|
|||
Cash and cash equivalents at end of year
|
$
|
3,608.9
|
|
|
$
|
4,075.3
|
|
|
$
|
2,113.5
|
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
|
|
Accumulated
Other
Comprehensive
Income (Loss) |
|
Total
Shareholders’
Equity |
|||||||||||||
|
Number
of Shares
|
|
Par
Value
|
|
|
Retained
Earnings
|
|
|
||||||||||||||
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
January 1, 2015
|
268.1
|
|
|
$
|
2.7
|
|
|
$
|
10,062.3
|
|
|
$
|
14,014.4
|
|
|
$
|
171.9
|
|
|
$
|
24,251.3
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
2,560.0
|
|
|
—
|
|
|
2,560.0
|
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(464.5
|
)
|
|
(464.5
|
)
|
|||||
Premiums for and settlement of equity options
|
—
|
|
|
—
|
|
|
(14.0
|
)
|
|
—
|
|
|
—
|
|
|
(14.0
|
)
|
|||||
Repurchase and retirement of common stock
|
(10.4
|
)
|
|
(0.1
|
)
|
|
(382.2
|
)
|
|
(1,133.5
|
)
|
|
—
|
|
|
(1,515.8
|
)
|
|||||
Dividends and dividend equivalents
|
—
|
|
|
—
|
|
|
—
|
|
|
(662.4
|
)
|
|
—
|
|
|
(662.4
|
)
|
|||||
Issuance of common stock under employee stock plans, net of related tax benefits
|
3.5
|
|
|
—
|
|
|
308.2
|
|
|
—
|
|
|
—
|
|
|
308.2
|
|
|||||
Convertible debenture repurchases and conversions
|
—
|
|
|
—
|
|
|
(1,287.8
|
)
|
|
—
|
|
|
—
|
|
|
(1,287.8
|
)
|
|||||
Equity Units contract payments and issuance costs
|
—
|
|
|
—
|
|
|
(130.9
|
)
|
|
—
|
|
|
—
|
|
|
(130.9
|
)
|
|||||
December 31, 2015
|
261.2
|
|
|
2.6
|
|
|
8,555.6
|
|
|
14,778.5
|
|
|
(292.6
|
)
|
|
23,044.1
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
2,469.8
|
|
|
—
|
|
|
2,469.8
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24.7
|
|
|
24.7
|
|
|||||
Dividends and dividend equivalents
|
—
|
|
|
—
|
|
|
—
|
|
|
(687.7
|
)
|
|
—
|
|
|
(687.7
|
)
|
|||||
Issuance of common stock under employee stock plans, net of related tax benefits
|
2.5
|
|
|
—
|
|
|
249.2
|
|
|
—
|
|
|
—
|
|
|
249.2
|
|
|||||
Equity Units issuance costs adjustment
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|||||
December 31, 2016
|
263.7
|
|
|
2.6
|
|
|
8,805.1
|
|
|
16,560.6
|
|
|
(267.9
|
)
|
|
25,100.4
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
3,842.8
|
|
|
—
|
|
|
3,842.8
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
166.4
|
|
|
166.4
|
|
|||||
Premiums for and settlement of equity options
|
—
|
|
|
—
|
|
|
0.9
|
|
|
—
|
|
|
—
|
|
|
0.9
|
|
|||||
Repurchase and retirement of common stock
|
(10.5
|
)
|
|
—
|
|
|
(356.1
|
)
|
|
(1,641.6
|
)
|
|
—
|
|
|
(1,997.7
|
)
|
|||||
Dividends and dividend equivalents
|
—
|
|
|
—
|
|
|
—
|
|
|
(707.4
|
)
|
|
—
|
|
|
(707.4
|
)
|
|||||
Issuance of common stock under employee stock plans, net of related tax benefits
|
2.9
|
|
|
—
|
|
|
342.5
|
|
|
—
|
|
|
—
|
|
|
342.5
|
|
|||||
Convertible debenture conversions
|
—
|
|
|
—
|
|
|
(245.0
|
)
|
|
—
|
|
|
—
|
|
|
(245.0
|
)
|
|||||
December 31, 2017
|
256.1
|
|
|
$
|
2.6
|
|
|
$
|
8,547.4
|
|
|
$
|
18,054.4
|
|
|
$
|
(101.5
|
)
|
|
$
|
26,502.9
|
|
|
|
|
|
|
|
|
|
|
Non-Credit
Component of OTTIs Recognized in Accumulated Other Comprehensive Loss |
||||||||||||||
|
Cost or
Amortized Cost |
|
Gross
Unrealized Gains |
|
Gross Unrealized Losses
|
|
Estimated
Fair Value |
|
|||||||||||||||
|
|
|
Less than
12 Months |
|
12 Months
or Greater |
|
|
||||||||||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
United States Government securities
|
$
|
649.0
|
|
|
$
|
2.2
|
|
|
$
|
(5.0
|
)
|
|
$
|
(0.7
|
)
|
|
$
|
645.5
|
|
|
$
|
—
|
|
Government sponsored securities
|
90.3
|
|
|
0.3
|
|
|
(0.1
|
)
|
|
(0.4
|
)
|
|
90.1
|
|
|
—
|
|
||||||
States, municipalities and political subdivisions, tax-exempt
|
5,854.6
|
|
|
192.6
|
|
|
(5.0
|
)
|
|
(7.3
|
)
|
|
6,034.9
|
|
|
—
|
|
||||||
Corporate securities
|
7,362.8
|
|
|
165.8
|
|
|
(30.2
|
)
|
|
(12.6
|
)
|
|
7,485.8
|
|
|
(0.3
|
)
|
||||||
Residential mortgage-backed securities
|
2,520.0
|
|
|
38.5
|
|
|
(8.0
|
)
|
|
(11.6
|
)
|
|
2,538.9
|
|
|
—
|
|
||||||
Commercial mortgage-backed securities
|
80.1
|
|
|
0.7
|
|
|
(0.1
|
)
|
|
(2.0
|
)
|
|
78.7
|
|
|
—
|
|
||||||
Other securities
|
1,053.7
|
|
|
14.4
|
|
|
(2.4
|
)
|
|
(1.5
|
)
|
|
1,064.2
|
|
|
—
|
|
||||||
Total fixed maturity securities
|
17,610.5
|
|
|
414.5
|
|
|
(50.8
|
)
|
|
(36.1
|
)
|
|
17,938.1
|
|
|
$
|
(0.3
|
)
|
|||||
Equity securities
|
3,124.8
|
|
|
525.2
|
|
|
(18.0
|
)
|
|
—
|
|
|
3,632.0
|
|
|
|
|||||||
Total investments, available-for-sale
|
$
|
20,735.3
|
|
|
$
|
939.7
|
|
|
$
|
(68.8
|
)
|
|
$
|
(36.1
|
)
|
|
$
|
21,570.1
|
|
|
|
||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
United States Government securities
|
$
|
561.7
|
|
|
$
|
2.5
|
|
|
$
|
(5.7
|
)
|
|
$
|
—
|
|
|
$
|
558.5
|
|
|
$
|
—
|
|
Government sponsored securities
|
40.1
|
|
|
0.3
|
|
|
(0.3
|
)
|
|
(0.1
|
)
|
|
40.0
|
|
|
—
|
|
||||||
States, municipalities and political subdivisions, tax-exempt
|
6,024.6
|
|
|
139.1
|
|
|
(55.2
|
)
|
|
(3.2
|
)
|
|
6,105.3
|
|
|
(3.8
|
)
|
||||||
Corporate securities
|
8,011.7
|
|
|
159.5
|
|
|
(49.5
|
)
|
|
(27.1
|
)
|
|
8,094.6
|
|
|
(3.4
|
)
|
||||||
Residential mortgage-backed securities
|
1,916.9
|
|
|
32.3
|
|
|
(15.3
|
)
|
|
(4.6
|
)
|
|
1,929.3
|
|
|
—
|
|
||||||
Commercial mortgage-backed securities
|
216.8
|
|
|
1.2
|
|
|
(0.3
|
)
|
|
(3.4
|
)
|
|
214.3
|
|
|
—
|
|
||||||
Other securities
|
744.6
|
|
|
6.4
|
|
|
(1.5
|
)
|
|
(4.0
|
)
|
|
745.5
|
|
|
—
|
|
||||||
Total fixed maturity securities
|
17,516.4
|
|
|
341.3
|
|
|
(127.8
|
)
|
|
(42.4
|
)
|
|
17,687.5
|
|
|
$
|
(7.2
|
)
|
|||||
Equity securities
|
1,103.3
|
|
|
407.3
|
|
|
(10.7
|
)
|
|
—
|
|
|
1,499.9
|
|
|
|
|||||||
Total investments, available-for-sale
|
$
|
18,619.7
|
|
|
$
|
748.6
|
|
|
$
|
(138.5
|
)
|
|
$
|
(42.4
|
)
|
|
$
|
19,187.4
|
|
|
|
|
Less than 12 Months
|
|
12 Months or Greater
|
||||||||||||||||||
|
Number of
Securities
|
|
Estimated
Fair Value
|
|
Gross
Unrealized
Loss
|
|
Number of
Securities
|
|
Estimated
Fair Value
|
|
Gross
Unrealized
Loss
|
||||||||||
(Securities are whole amounts)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States Government securities
|
36
|
|
|
$
|
450.4
|
|
|
$
|
(5.0
|
)
|
|
11
|
|
|
$
|
56.1
|
|
|
$
|
(0.7
|
)
|
Government sponsored securities
|
12
|
|
|
16.3
|
|
|
(0.1
|
)
|
|
16
|
|
|
14.8
|
|
|
(0.4
|
)
|
||||
States, municipalities and political subdivisions, tax-exempt
|
414
|
|
|
641.4
|
|
|
(5.0
|
)
|
|
189
|
|
|
355.5
|
|
|
(7.3
|
)
|
||||
Corporate securities
|
1,081
|
|
|
2,200.1
|
|
|
(30.2
|
)
|
|
279
|
|
|
329.7
|
|
|
(12.6
|
)
|
||||
Residential mortgage-backed securities
|
445
|
|
|
1,050.3
|
|
|
(8.0
|
)
|
|
287
|
|
|
478.0
|
|
|
(11.6
|
)
|
||||
Commercial mortgage-backed securities
|
7
|
|
|
13.7
|
|
|
(0.1
|
)
|
|
12
|
|
|
27.2
|
|
|
(2.0
|
)
|
||||
Other securities
|
132
|
|
|
406.1
|
|
|
(2.4
|
)
|
|
20
|
|
|
35.8
|
|
|
(1.5
|
)
|
||||
Total fixed maturity securities
|
2,127
|
|
|
4,778.3
|
|
|
(50.8
|
)
|
|
814
|
|
|
1,297.1
|
|
|
(36.1
|
)
|
||||
Equity securities
|
386
|
|
|
1,070.5
|
|
|
(18.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total fixed maturity and equity securities
|
2,513
|
|
|
$
|
5,848.8
|
|
|
$
|
(68.8
|
)
|
|
814
|
|
|
$
|
1,297.1
|
|
|
$
|
(36.1
|
)
|
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States Government securities
|
51
|
|
|
$
|
359.9
|
|
|
$
|
(5.7
|
)
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Government sponsored securities
|
18
|
|
|
26.4
|
|
|
(0.3
|
)
|
|
1
|
|
|
1.0
|
|
|
(0.1
|
)
|
||||
States, municipalities and political subdivisions, tax-exempt
|
1,022
|
|
|
1,849.0
|
|
|
(55.2
|
)
|
|
28
|
|
|
60.7
|
|
|
(3.2
|
)
|
||||
Corporate securities
|
1,272
|
|
|
2,640.6
|
|
|
(49.5
|
)
|
|
203
|
|
|
422.8
|
|
|
(27.1
|
)
|
||||
Residential mortgage-backed securities
|
430
|
|
|
905.8
|
|
|
(15.3
|
)
|
|
114
|
|
|
136.9
|
|
|
(4.6
|
)
|
||||
Commercial mortgage-backed securities
|
19
|
|
|
61.2
|
|
|
(0.3
|
)
|
|
24
|
|
|
60.8
|
|
|
(3.4
|
)
|
||||
Other securities
|
66
|
|
|
144.3
|
|
|
(1.5
|
)
|
|
55
|
|
|
133.8
|
|
|
(4.0
|
)
|
||||
Total fixed maturity securities
|
2,878
|
|
|
5,987.2
|
|
|
(127.8
|
)
|
|
425
|
|
|
816.0
|
|
|
(42.4
|
)
|
||||
Equity securities
|
452
|
|
|
233.1
|
|
|
(10.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total fixed maturity and equity securities
|
3,330
|
|
|
$
|
6,220.3
|
|
|
$
|
(138.5
|
)
|
|
425
|
|
|
$
|
816.0
|
|
|
$
|
(42.4
|
)
|
|
Amortized
Cost
|
|
Estimated
Fair Value
|
||||
Due in one year or less
|
$
|
496.2
|
|
|
$
|
496.5
|
|
Due after one year through five years
|
4,945.2
|
|
|
5,000.1
|
|
||
Due after five years through ten years
|
5,556.4
|
|
|
5,668.0
|
|
||
Due after ten years
|
4,012.6
|
|
|
4,155.9
|
|
||
Mortgage-backed securities
|
2,600.1
|
|
|
2,617.6
|
|
||
Total available-for-sale fixed maturity securities
|
$
|
17,610.5
|
|
|
$
|
17,938.1
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Fixed maturity securities
|
$
|
614.2
|
|
|
$
|
673.1
|
|
|
$
|
679.0
|
|
Equity securities
|
116.4
|
|
|
61.7
|
|
|
61.7
|
|
|||
Cash equivalents
|
24.8
|
|
|
3.6
|
|
|
0.7
|
|
|||
Other
|
152.2
|
|
|
84.9
|
|
|
(22.6
|
)
|
|||
Investment income
|
907.6
|
|
|
823.3
|
|
|
718.8
|
|
|||
Investment expense
|
(41.1
|
)
|
|
(43.8
|
)
|
|
(41.2
|
)
|
|||
Net investment income
|
$
|
866.5
|
|
|
$
|
779.5
|
|
|
$
|
677.6
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net realized gains (losses):
|
|
|
|
|
|
||||||
Fixed maturity securities:
|
|
|
|
|
|
||||||
Gross realized gains from sales
|
$
|
136.6
|
|
|
$
|
209.9
|
|
|
$
|
135.9
|
|
Gross realized losses from sales
|
(54.9
|
)
|
|
(152.1
|
)
|
|
(182.1
|
)
|
|||
Net realized gains (losses) from sales of fixed maturity securities
|
81.7
|
|
|
57.8
|
|
|
(46.2
|
)
|
|||
Equity securities:
|
|
|
|
|
|
||||||
Gross realized gains from sales
|
140.1
|
|
|
205.5
|
|
|
233.4
|
|
|||
Gross realized losses from sales
|
(16.9
|
)
|
|
(50.0
|
)
|
|
(45.1
|
)
|
|||
Net realized gains from sales of equity securities
|
123.2
|
|
|
155.5
|
|
|
188.3
|
|
|||
Other investments:
|
|
|
|
|
|
||||||
Gross realized gains from sales
|
0.3
|
|
|
7.2
|
|
|
5.0
|
|
|||
Gross realized losses from sales
|
(4.9
|
)
|
|
(0.4
|
)
|
|
—
|
|
|||
Net realized (losses) gains from sales of other investments
|
(4.6
|
)
|
|
6.8
|
|
|
5.0
|
|
|||
Net realized gains
|
200.3
|
|
|
220.1
|
|
|
147.1
|
|
|||
|
|
|
|
|
|
||||||
Other-than-temporary impairment losses recognized in income:
|
|
|
|
|
|
||||||
Fixed maturity securities
|
(3.7
|
)
|
|
(74.7
|
)
|
|
(31.2
|
)
|
|||
Equity securities
|
(15.5
|
)
|
|
(22.3
|
)
|
|
(35.6
|
)
|
|||
Other investments
|
(13.9
|
)
|
|
(18.4
|
)
|
|
(16.6
|
)
|
|||
Other-than-temporary impairment losses recognized in income
|
(33.1
|
)
|
|
(115.4
|
)
|
|
(83.4
|
)
|
|||
|
|
|
|
|
|
||||||
Change in net unrealized gains (losses) on investments:
|
|
|
|
|
|
||||||
Fixed maturity securities
|
156.5
|
|
|
193.3
|
|
|
(372.9
|
)
|
|||
Equity securities
|
110.6
|
|
|
6.9
|
|
|
(217.7
|
)
|
|||
Other investments
|
(9.8
|
)
|
|
(2.5
|
)
|
|
(4.1
|
)
|
|||
Total change in net unrealized gains (losses) on investments
|
257.3
|
|
|
197.7
|
|
|
(594.7
|
)
|
|||
Deferred income tax (expense) benefit
|
(84.8
|
)
|
|
(79.8
|
)
|
|
210.4
|
|
|||
Net change in net unrealized gains (losses) on investments
|
172.5
|
|
|
117.9
|
|
|
(384.3
|
)
|
|||
|
|
|
|
|
|
||||||
Net realized gains on investments, other-than-temporary impairment losses recognized in income and net change in net unrealized gains (losses) on investments
|
$
|
339.7
|
|
|
$
|
222.6
|
|
|
$
|
(320.6
|
)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Proceeds
|
$
|
13,460.8
|
|
|
$
|
11,952.3
|
|
|
$
|
11,779.8
|
|
Gross realized gains
|
277.0
|
|
|
422.6
|
|
|
374.3
|
|
|||
Gross realized losses
|
(76.7
|
)
|
|
(202.5
|
)
|
|
(227.2
|
)
|
|
Overnight and Continuous
|
|
Less than 30 days
|
|
30-90 days
|
|
Greater Than 90 days
|
|
Total
|
||||||||||
Securities lending transactions
|
|
|
|
|
|
|
|
|
|
||||||||||
United States Government securities
|
$
|
16.3
|
|
|
$
|
—
|
|
|
$
|
6.1
|
|
|
$
|
—
|
|
|
$
|
22.4
|
|
Corporate securities
|
368.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
368.6
|
|
|||||
Equity securities
|
63.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
63.4
|
|
|||||
Total
|
$
|
448.3
|
|
|
$
|
—
|
|
|
$
|
6.1
|
|
|
$
|
—
|
|
|
$
|
454.4
|
|
|
Contractual/
Notional
Amount
|
|
Balance Sheet Location
|
|
Estimated Fair Value
|
||||||||
|
Asset
|
|
(Liability)
|
||||||||||
December 31, 2017
|
|
|
|
|
|
|
|
||||||
Hedging instruments
|
|
|
|
|
|
|
|
||||||
Interest rate swaps - fixed to floating
|
$
|
1,235.0
|
|
|
Other assets/other liabilities
|
|
$
|
2.0
|
|
|
$
|
(5.3
|
)
|
Interest rate swaps - forward starting pay fixed
|
425.0
|
|
|
Other assets/other liabilities
|
|
—
|
|
|
(8.9
|
)
|
|||
Subtotal hedging
|
1,660.0
|
|
|
Subtotal hedging
|
|
2.0
|
|
|
(14.2
|
)
|
|||
|
|
|
|
|
|
|
|
||||||
Non-hedging instruments
|
|
|
|
|
|
|
|
||||||
Interest rate swaps
|
171.3
|
|
|
Equity securities
|
|
1.0
|
|
|
(4.7
|
)
|
|||
Options
|
100.0
|
|
|
Other assets/other liabilities
|
|
—
|
|
|
(0.1
|
)
|
|||
Futures
|
116.8
|
|
|
Equity securities
|
|
0.1
|
|
|
(2.5
|
)
|
|||
Subtotal non-hedging
|
388.1
|
|
|
Subtotal non-hedging
|
|
1.1
|
|
|
(7.3
|
)
|
|||
Total derivatives
|
$
|
2,048.1
|
|
|
Total derivatives
|
|
3.1
|
|
|
(21.5
|
)
|
||
|
|
|
Amounts netted
|
|
(1.6
|
)
|
|
1.6
|
|
||||
|
|
|
Net derivatives
|
|
$
|
1.5
|
|
|
$
|
(19.9
|
)
|
||
|
|
|
|
|
|
|
|
||||||
December 31, 2016
|
|
|
|
|
|
|
|
||||||
Hedging instruments
|
|
|
|
|
|
|
|
||||||
Interest rate swaps - fixed to floating
|
$
|
1,385.0
|
|
|
Other assets/other liabilities
|
|
$
|
4.0
|
|
|
$
|
(0.7
|
)
|
Interest rate swaps - forward starting pay fixed
|
4,775.0
|
|
|
Other assets/other liabilities
|
|
528.8
|
|
|
$
|
(6.0
|
)
|
||
Subtotal hedging
|
6,160.0
|
|
|
Subtotal hedging
|
|
532.8
|
|
|
(6.7
|
)
|
|||
|
|
|
|
|
|
|
|
||||||
Non-hedging instruments
|
|
|
|
|
|
|
|
||||||
Interest rate swaps
|
209.4
|
|
|
Equity securities
|
|
4.7
|
|
|
(0.2
|
)
|
|||
Options
|
10,280.2
|
|
|
Other assets/other liabilities
|
|
220.7
|
|
|
(233.9
|
)
|
|||
Futures
|
185.3
|
|
|
Equity securities
|
|
0.5
|
|
|
(1.1
|
)
|
|||
Subtotal non-hedging
|
10,674.9
|
|
|
Subtotal non-hedging
|
|
225.9
|
|
|
(235.2
|
)
|
|||
Total derivatives
|
$
|
16,834.9
|
|
|
Total derivatives
|
|
758.7
|
|
|
(241.9
|
)
|
||
|
|
|
Amounts netted
|
|
(92.8
|
)
|
|
92.8
|
|
||||
|
|
|
Net derivatives
|
|
$
|
665.9
|
|
|
$
|
(149.1
|
)
|
Type of Fair Value Hedges
|
|
Year
Entered
Into
|
|
Outstanding Notional Amount
|
|
Interest Rate
Received
|
|
Expiration Date
|
|||||||
|
2017
|
|
2016
|
|
|||||||||||
Interest rate swap
|
|
2017
|
|
$
|
50.0
|
|
|
$
|
—
|
|
|
4.350
|
%
|
|
August 15, 2020
|
Interest rate swap
|
|
2015
|
|
200.0
|
|
|
200.0
|
|
|
4.350
|
|
|
August 15, 2020
|
||
Interest rate swap
|
|
2014
|
|
150.0
|
|
|
150.0
|
|
|
4.350
|
|
|
August 15, 2020
|
||
Interest rate swap
|
|
2013
|
|
10.0
|
|
|
10.0
|
|
|
4.350
|
|
|
August 15, 2020
|
||
Interest rate swap
|
|
2012
|
|
200.0
|
|
|
200.0
|
|
|
4.350
|
|
|
August 15, 2020
|
||
Interest rate swap
|
|
2012
|
|
625.0
|
|
|
625.0
|
|
|
1.875
|
|
|
January 15, 2018
|
||
Interest rate swap
|
|
2012
|
|
—
|
|
|
200.0
|
|
|
2.375
|
|
|
February 15, 2017
|
||
Total notional amount outstanding
|
|
|
|
$
|
1,235.0
|
|
|
$
|
1,385.0
|
|
|
|
|
|
|
Balance Sheet Classification in Which Hedged Item is Included
|
|
Carrying Amount of Hedged Liability
|
|
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liability
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
Current portion of long term-debt
|
|
$
|
1,274.6
|
|
|
$
|
928.4
|
|
|
$
|
2.0
|
|
|
$
|
0.3
|
|
Long-term debt
|
|
17,382.2
|
|
|
14,358.5
|
|
|
(5.3
|
)
|
|
3.0
|
|
|
|
Hedge
Loss Recognized in Other Comprehensive Income |
|
Income Statement
Location of Loss Reclassification from Accumulated Other Comprehensive Loss |
|
Hedge Loss
Reclassified from Accumulated Other Comprehensive Loss |
||||
Type of Cash Flow Hedge
|
|
|
|
|||||||
Year ended December 31, 2017
|
|
|
|
|
|
|
||||
Forward starting pay fixed swaps
|
|
$
|
(112.0
|
)
|
|
Interest expense
|
|
$
|
(6.6
|
)
|
Forward starting pay fixed swaps
|
|
|
|
Net realized gains on financial instruments
|
|
$
|
(7.2
|
)
|
|
Classification and Amount of Gain (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||||||||||
|
Net Realized Gains on Financial Instruments
|
|
Interest Expense
|
|
Net Realized Gains on Financial Instruments
|
|
Interest Expense
|
|
Interest Expense
|
||||||||||
Total amount of income or expense in the income statement in which the effects of fair value or cash flow hedges are recorded
|
$
|
144.8
|
|
|
$
|
(739.0
|
)
|
|
$
|
4.9
|
|
|
$
|
(723.0
|
)
|
|
$
|
(653.0
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gain (loss) on fair value hedging relationships
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate swaps
|
|
|
|
|
|
|
|
|
|
||||||||||
Hedged items
|
—
|
|
|
0.4
|
|
|
—
|
|
|
(8.1
|
)
|
|
(12.1
|
)
|
|||||
Derivatives designated as hedging instruments
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|
8.1
|
|
|
12.1
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss on cash flow hedging relationships
|
|
|
|
|
|
|
|
|
|
||||||||||
Forward starting pay fixed swaps
|
|
|
|
|
|
|
|
|
|
||||||||||
Amount of loss reclassified from accumulated other comprehensive loss into net income
|
—
|
|
|
(6.6
|
)
|
|
—
|
|
|
(5.8
|
)
|
|
(5.5
|
)
|
|||||
Amount of loss reclassified from accumulated other comprehensive loss into net income due to ineffectiveness and missed forecasted transactions
|
(7.2
|
)
|
|
—
|
|
|
(7.7
|
)
|
|
—
|
|
|
—
|
|
Type of Non-hedging Derivatives
|
|
Income Statement Location of
(Loss) Gain Recognized
|
|
Derivative
(Loss) Gain
Recognized
|
||
Year ended December 31, 2017
|
|
|
|
|
||
Interest rate swaps
|
|
Net realized gains on financial instruments
|
|
$
|
(9.2
|
)
|
Options
|
|
Net realized gains on financial instruments
|
|
(35.6
|
)
|
|
Futures
|
|
Net realized gains on financial instruments
|
|
(3.5
|
)
|
|
Total
|
|
|
|
$
|
(48.3
|
)
|
Year ended December 31, 2016
|
|
|
|
|
||
Interest rate swaps
|
|
Net realized gains on financial instruments
|
|
$
|
0.2
|
|
Options
|
|
Net realized gains on financial instruments
|
|
(209.1
|
)
|
|
Futures
|
|
Net realized gains on financial instruments
|
|
1.4
|
|
|
Total
|
|
|
|
$
|
(207.5
|
)
|
Year ended December 31, 2015
|
|
|
|
|
||
Derivatives embedded in convertible fixed maturity securities
|
|
Net realized gains on financial instruments
|
|
$
|
(22.2
|
)
|
Interest rate swaps
|
|
Net realized gains on financial instruments
|
|
(1.9
|
)
|
|
Options
|
|
Net realized gains on financial instruments
|
|
34.6
|
|
|
Futures
|
|
Net realized gains on financial instruments
|
|
(0.1
|
)
|
|
Total
|
|
|
|
$
|
10.4
|
|
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
|
||||||||
December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
1,956.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,956.4
|
|
Investments available-for-sale:
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
||||||||
United States Government securities
|
—
|
|
|
645.5
|
|
|
—
|
|
|
645.5
|
|
||||
Government sponsored securities
|
—
|
|
|
90.1
|
|
|
—
|
|
|
90.1
|
|
||||
States, municipalities and political subdivisions, tax-exempt
|
—
|
|
|
6,034.9
|
|
|
—
|
|
|
6,034.9
|
|
||||
Corporate securities
|
24.8
|
|
|
7,231.8
|
|
|
229.2
|
|
|
7,485.8
|
|
||||
Residential mortgage-backed securities
|
—
|
|
|
2,533.9
|
|
|
5.0
|
|
|
2,538.9
|
|
||||
Commercial mortgage-backed securities
|
—
|
|
|
78.7
|
|
|
—
|
|
|
78.7
|
|
||||
Other securities
|
75.2
|
|
|
973.1
|
|
|
15.9
|
|
|
1,064.2
|
|
||||
Total fixed maturity securities
|
100.0
|
|
|
17,588.0
|
|
|
250.1
|
|
|
17,938.1
|
|
||||
Equity securities
|
2,446.9
|
|
|
897.7
|
|
|
287.4
|
|
|
3,632.0
|
|
||||
Other invested assets, current
|
17.2
|
|
|
—
|
|
|
—
|
|
|
17.2
|
|
||||
Securities lending collateral
|
214.1
|
|
|
241.0
|
|
|
—
|
|
|
455.1
|
|
||||
Derivatives
|
—
|
|
|
3.1
|
|
|
—
|
|
|
3.1
|
|
||||
Total assets
|
$
|
4,734.6
|
|
|
$
|
18,729.8
|
|
|
$
|
537.5
|
|
|
$
|
24,001.9
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
$
|
—
|
|
|
$
|
(21.5
|
)
|
|
$
|
—
|
|
|
$
|
(21.5
|
)
|
Total liabilities
|
$
|
—
|
|
|
$
|
(21.5
|
)
|
|
$
|
—
|
|
|
$
|
(21.5
|
)
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2016
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
1,546.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,546.0
|
|
Investments available-for-sale:
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
||||||||
United States Government securities
|
558.5
|
|
|
—
|
|
|
—
|
|
|
558.5
|
|
||||
Government sponsored securities
|
—
|
|
|
40.0
|
|
|
—
|
|
|
40.0
|
|
||||
States, municipalities and political subdivisions, tax-exempt
|
—
|
|
|
6,105.3
|
|
|
—
|
|
|
6,105.3
|
|
||||
Corporate securities
|
79.9
|
|
|
7,775.9
|
|
|
238.8
|
|
|
8,094.6
|
|
||||
Residential mortgage-backed securities
|
—
|
|
|
1,917.3
|
|
|
12.0
|
|
|
1,929.3
|
|
||||
Commercial mortgage-backed securities
|
—
|
|
|
214.3
|
|
|
—
|
|
|
214.3
|
|
||||
Other securities
|
53.4
|
|
|
649.3
|
|
|
42.8
|
|
|
745.5
|
|
||||
Total fixed maturity securities
|
691.8
|
|
|
16,702.1
|
|
|
293.6
|
|
|
17,687.5
|
|
||||
Equity securities
|
1,200.2
|
|
|
111.9
|
|
|
187.8
|
|
|
1,499.9
|
|
||||
Other invested assets, current
|
15.8
|
|
|
—
|
|
|
—
|
|
|
15.8
|
|
||||
Securities lending collateral
|
726.0
|
|
|
353.8
|
|
|
—
|
|
|
1,079.8
|
|
||||
Derivatives
|
—
|
|
|
758.7
|
|
|
—
|
|
|
758.7
|
|
||||
Total assets
|
$
|
4,179.8
|
|
|
$
|
17,926.5
|
|
|
$
|
481.4
|
|
|
$
|
22,587.7
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
$
|
—
|
|
|
$
|
(241.9
|
)
|
|
$
|
—
|
|
|
$
|
(241.9
|
)
|
Total liabilities
|
$
|
—
|
|
|
$
|
(241.9
|
)
|
|
$
|
—
|
|
|
$
|
(241.9
|
)
|
|
Corporate
Securities
|
|
Residential
Mortgage-
backed
Securities
|
|
Commercial
Mortgage-
backed
Securities
|
|
Other
Securities
|
|
Equity
Securities
|
|
Total
|
||||||||||||
Year ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Beginning balance at January 1, 2017
|
$
|
238.8
|
|
|
$
|
12.0
|
|
|
$
|
—
|
|
|
$
|
42.8
|
|
|
$
|
187.8
|
|
|
$
|
481.4
|
|
Total (losses) gains:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Recognized in net income
|
(0.7
|
)
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
(0.2
|
)
|
|
(1.0
|
)
|
||||||
Recognized in accumulated other comprehensive loss
|
3.3
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
10.7
|
|
|
14.2
|
|
||||||
Purchases
|
88.3
|
|
|
3.6
|
|
|
—
|
|
|
35.6
|
|
|
89.6
|
|
|
217.1
|
|
||||||
Sales
|
(48.1
|
)
|
|
(5.4
|
)
|
|
—
|
|
|
(1.2
|
)
|
|
(0.5
|
)
|
|
(55.2
|
)
|
||||||
Settlements
|
(64.1
|
)
|
|
(2.3
|
)
|
|
—
|
|
|
(6.7
|
)
|
|
—
|
|
|
(73.1
|
)
|
||||||
Transfers into Level III
|
14.2
|
|
|
3.2
|
|
|
—
|
|
|
15.3
|
|
|
—
|
|
|
32.7
|
|
||||||
Transfers out of Level III
|
(2.5
|
)
|
|
(6.1
|
)
|
|
—
|
|
|
(70.0
|
)
|
|
—
|
|
|
(78.6
|
)
|
||||||
Ending balance at December 31, 2017
|
$
|
229.2
|
|
|
$
|
5.0
|
|
|
$
|
—
|
|
|
$
|
15.9
|
|
|
$
|
287.4
|
|
|
$
|
537.5
|
|
Change in unrealized losses included in net income related to assets still held for the year ended December 31, 2017
|
$
|
(3.3
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(3.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Year ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Beginning balance at January 1, 2016
|
$
|
186.2
|
|
|
$
|
—
|
|
|
$
|
1.9
|
|
|
$
|
25.6
|
|
|
$
|
102.1
|
|
|
$
|
315.8
|
|
Total (losses) gains:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Recognized in net income
|
(2.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
|
(2.2
|
)
|
||||||
Recognized in accumulated other comprehensive loss
|
(2.0
|
)
|
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|
(0.5
|
)
|
|
(3.0
|
)
|
||||||
Purchases
|
170.2
|
|
|
4.3
|
|
|
—
|
|
|
—
|
|
|
222.6
|
|
|
397.1
|
|
||||||
Sales
|
(5.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(136.7
|
)
|
|
(142.1
|
)
|
||||||
Settlements
|
(56.8
|
)
|
|
—
|
|
|
—
|
|
|
(0.9
|
)
|
|
(0.4
|
)
|
|
(58.1
|
)
|
||||||
Transfers into Level III
|
6.6
|
|
|
9.3
|
|
|
—
|
|
|
28.8
|
|
|
—
|
|
|
44.7
|
|
||||||
Transfers out of Level III
|
(57.1
|
)
|
|
(1.6
|
)
|
|
(1.9
|
)
|
|
(10.2
|
)
|
|
—
|
|
|
(70.8
|
)
|
||||||
Ending balance at December 31, 2016
|
$
|
238.8
|
|
|
$
|
12.0
|
|
|
$
|
—
|
|
|
$
|
42.8
|
|
|
$
|
187.8
|
|
|
$
|
481.4
|
|
Change in unrealized losses included in net income related to assets still held for the year ended December 31, 2016
|
$
|
(2.0
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(2.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Year ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Beginning balance at January 1, 2015
|
$
|
144.6
|
|
|
$
|
—
|
|
|
$
|
3.3
|
|
|
$
|
6.6
|
|
|
$
|
48.3
|
|
|
$
|
202.8
|
|
Total gains (losses):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Recognized in net income
|
1.4
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
(1.5
|
)
|
|
0.1
|
|
||||||
Recognized in accumulated other comprehensive loss
|
0.7
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
3.9
|
|
|
4.4
|
|
||||||
Purchases
|
132.6
|
|
|
—
|
|
|
1.1
|
|
|
28.3
|
|
|
52.1
|
|
|
214.1
|
|
||||||
Sales
|
(11.7
|
)
|
|
—
|
|
|
(1.1
|
)
|
|
(0.9
|
)
|
|
(13.8
|
)
|
|
(27.5
|
)
|
||||||
Settlements
|
(51.6
|
)
|
|
—
|
|
|
(1.4
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
(53.2
|
)
|
||||||
Transfers into Level III
|
4.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13.1
|
|
|
17.9
|
|
||||||
Transfers out of Level III
|
(34.6
|
)
|
|
—
|
|
|
—
|
|
|
(8.2
|
)
|
|
—
|
|
|
(42.8
|
)
|
||||||
Ending balance at December 31, 2015
|
$
|
186.2
|
|
|
$
|
—
|
|
|
$
|
1.9
|
|
|
$
|
25.6
|
|
|
$
|
102.1
|
|
|
$
|
315.8
|
|
Change in unrealized losses included in net income related to assets still held for the year ended December 31, 2015
|
$
|
(0.6
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1.4
|
)
|
|
$
|
(2.0
|
)
|
|
Carrying
Value
|
|
Estimated Fair Value
|
||||||||||||||||
|
Level I
|
|
Level II
|
|
Level III
|
|
Total
|
||||||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Other invested assets, long-term
|
$
|
3,343.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,343.8
|
|
|
$
|
3,343.8
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
1,275.0
|
|
|
—
|
|
|
1,275.0
|
|
|
—
|
|
|
1,275.0
|
|
|||||
Commercial paper
|
803.6
|
|
|
—
|
|
|
803.6
|
|
|
—
|
|
|
803.6
|
|
|||||
Notes
|
17,592.7
|
|
|
—
|
|
|
18,815.1
|
|
|
—
|
|
|
18,815.1
|
|
|||||
Convertible debentures
|
260.5
|
|
|
—
|
|
|
1,215.7
|
|
|
—
|
|
|
1,215.7
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Other invested assets, long-term
|
$
|
2,240.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,240.5
|
|
|
$
|
2,240.5
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
440.0
|
|
|
—
|
|
|
440.0
|
|
|
—
|
|
|
440.0
|
|
|||||
Commercial paper
|
629.0
|
|
|
—
|
|
|
629.0
|
|
|
—
|
|
|
629.0
|
|
|||||
Notes
|
14,323.8
|
|
|
—
|
|
|
14,858.4
|
|
|
—
|
|
|
14,858.4
|
|
|||||
Convertible debentures
|
334.1
|
|
|
—
|
|
|
1,020.2
|
|
|
—
|
|
|
1,020.2
|
|
|
2017
|
|
2016
|
||||
Deferred tax assets relating to:
|
|
|
|
||||
Retirement benefits
|
$
|
210.7
|
|
|
$
|
362.9
|
|
Accrued expenses
|
278.6
|
|
|
331.9
|
|
||
Insurance reserves
|
136.5
|
|
|
229.5
|
|
||
Net operating loss carryforwards
|
3.7
|
|
|
9.2
|
|
||
Bad debt reserves
|
128.4
|
|
|
119.6
|
|
||
State income tax
|
32.7
|
|
|
59.8
|
|
||
Deferred compensation
|
23.7
|
|
|
38.2
|
|
||
Investment basis difference
|
23.9
|
|
|
42.4
|
|
||
Other
|
81.5
|
|
|
110.5
|
|
||
Total deferred tax assets
|
919.7
|
|
|
1,304.0
|
|
||
Deferred tax liabilities relating to:
|
|
|
|
||||
Unrealized gains on securities
|
174.9
|
|
|
202.9
|
|
||
Intangible assets:
|
|
|
|
||||
Trademarks and state Medicaid licenses
|
1,528.5
|
|
|
2,547.6
|
|
||
Customer, provider and hospital relationships
|
186.0
|
|
|
194.1
|
|
||
Internally developed software and other amortization differences
|
324.1
|
|
|
450.5
|
|
||
Retirement benefits
|
170.2
|
|
|
267.3
|
|
||
Debt discount
|
27.6
|
|
|
60.8
|
|
||
State deferred tax
|
104.5
|
|
|
106.0
|
|
||
Depreciation and amortization
|
41.5
|
|
|
54.1
|
|
||
Other
|
88.9
|
|
|
200.6
|
|
||
Total deferred tax liabilities
|
2,646.2
|
|
|
4,083.9
|
|
||
Net deferred tax liability
|
$
|
(1,726.5
|
)
|
|
$
|
(2,779.9
|
)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Current tax expense:
|
|
|
|
|
|
||||||
Federal
|
$
|
1,355.9
|
|
|
$
|
1,862.6
|
|
|
$
|
1,996.6
|
|
State and local
|
39.5
|
|
|
93.9
|
|
|
133.0
|
|
|||
Total current tax expense
|
1,395.4
|
|
|
1,956.5
|
|
|
2,129.6
|
|
|||
Deferred tax (benefit) expense
|
(1,274.4
|
)
|
|
129.1
|
|
|
(58.6
|
)
|
|||
Total income tax expense
|
$
|
121.0
|
|
|
$
|
2,085.6
|
|
|
$
|
2,071.0
|
|
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|||||||||
Amount at statutory rate
|
$
|
1,387.3
|
|
|
35.0
|
%
|
|
$
|
1,594.4
|
|
|
35.0
|
%
|
|
$
|
1,620.9
|
|
|
35.0
|
%
|
State and local income taxes net of federal tax expense/benefit
|
(2.2
|
)
|
|
(0.1
|
)
|
|
61.5
|
|
|
1.4
|
|
|
75.3
|
|
|
1.6
|
|
|||
Tax exempt interest and dividends received deduction
|
(57.9
|
)
|
|
(1.4
|
)
|
|
(61.7
|
)
|
|
(1.4
|
)
|
|
(63.2
|
)
|
|
(1.3
|
)
|
|||
HIP Fee
|
—
|
|
|
—
|
|
|
411.7
|
|
|
9.0
|
|
|
422.6
|
|
|
9.1
|
|
|||
Tax Cuts and Jobs Act
|
(1,108.3
|
)
|
|
(27.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Other, net
|
(97.9
|
)
|
|
(2.5
|
)
|
|
79.7
|
|
|
1.8
|
|
|
15.4
|
|
|
0.3
|
|
|||
Total income tax expense
|
$
|
121.0
|
|
|
3.1
|
%
|
|
$
|
2,085.6
|
|
|
45.8
|
%
|
|
$
|
2,071.0
|
|
|
44.7
|
%
|
|
2017
|
|
2016
|
||||
Balance at January 1
|
$
|
131.1
|
|
|
$
|
212.0
|
|
Additions based on:
|
|
|
|
||||
Tax positions related to current year
|
2.6
|
|
|
—
|
|
||
Tax positions related to prior years
|
83.4
|
|
|
13.9
|
|
||
Reductions based on:
|
|
|
|
||||
Tax positions related to current year
|
—
|
|
|
(1.1
|
)
|
||
Tax positions related to prior years
|
(18.5
|
)
|
|
(88.4
|
)
|
||
Settlements with taxing authorities
|
(9.0
|
)
|
|
(5.3
|
)
|
||
Balance at December 31
|
$
|
189.6
|
|
|
$
|
131.1
|
|
|
2017
|
|
2016
|
||||
Land and improvements
|
$
|
17.8
|
|
|
$
|
21.2
|
|
Building and improvements
|
167.7
|
|
|
215.1
|
|
||
Computer equipment, furniture and other equipment
|
1,080.1
|
|
|
1,024.5
|
|
||
Computer software, purchased and internally developed
|
2,612.9
|
|
|
2,416.7
|
|
||
Leasehold improvements
|
494.0
|
|
|
462.4
|
|
||
Property and equipment, gross
|
4,372.5
|
|
|
4,139.9
|
|
||
Accumulated depreciation and amortization
|
(2,197.6
|
)
|
|
(2,162.0
|
)
|
||
Property and equipment, net
|
$
|
2,174.9
|
|
|
$
|
1,977.9
|
|
|
Commercial
and Specialty
Business
|
|
Government
Business
|
|
Other
|
|
Total
|
||||||||
Balance as of January 1, 2016
|
$
|
11,818.9
|
|
|
$
|
5,743.3
|
|
|
$
|
—
|
|
|
$
|
17,562.2
|
|
Other adjustments
|
(1.0
|
)
|
|
—
|
|
|
—
|
|
|
(1.0
|
)
|
||||
Balance as of December 31, 2016
|
11,817.9
|
|
|
5,743.3
|
|
|
—
|
|
|
17,561.2
|
|
||||
Acquisitions
|
—
|
|
|
1,658.5
|
|
|
11.5
|
|
|
1,670.0
|
|
||||
Balance as of December 31, 2017
|
$
|
11,817.9
|
|
|
$
|
7,401.8
|
|
|
$
|
11.5
|
|
|
$
|
19,231.2
|
|
Accumulated impairment as of December 31, 2017
|
$
|
(41.0
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(41.0
|
)
|
|
2017
|
|
2016
|
||||||||||||||||||||
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization |
|
Net
Carrying
Amount
|
|||||||||||||
Intangible assets with finite lives:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer relationships
|
$
|
3,724.9
|
|
|
$
|
(2,877.8
|
)
|
|
$
|
847.1
|
|
|
$
|
3,310.9
|
|
|
$
|
(2,759.7
|
)
|
|
$
|
551.2
|
|
Provider and hospital relationships
|
187.4
|
|
|
(73.2
|
)
|
|
114.2
|
|
|
150.5
|
|
|
(65.9
|
)
|
|
84.6
|
|
||||||
Other
|
184.0
|
|
|
(67.2
|
)
|
|
116.8
|
|
|
89.4
|
|
|
(50.6
|
)
|
|
38.8
|
|
||||||
Total
|
4,096.3
|
|
|
(3,018.2
|
)
|
|
1,078.1
|
|
|
3,550.8
|
|
|
(2,876.2
|
)
|
|
674.6
|
|
||||||
Intangible assets with indefinite lives:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Blue Cross and Blue Shield and other trademarks
|
6,298.7
|
|
|
—
|
|
|
6,298.7
|
|
|
6,298.7
|
|
|
—
|
|
|
6,298.7
|
|
||||||
State Medicaid licenses
|
991.6
|
|
|
—
|
|
|
991.6
|
|
|
991.6
|
|
|
—
|
|
|
991.6
|
|
||||||
Total
|
7,290.3
|
|
|
—
|
|
|
7,290.3
|
|
|
7,290.3
|
|
|
—
|
|
|
7,290.3
|
|
||||||
Other intangible assets
|
$
|
11,386.6
|
|
|
$
|
(3,018.2
|
)
|
|
$
|
8,368.4
|
|
|
$
|
10,841.1
|
|
|
$
|
(2,876.2
|
)
|
|
$
|
7,964.9
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Benefit obligation at beginning of year
|
$
|
1,824.9
|
|
|
$
|
1,833.3
|
|
|
$
|
565.2
|
|
|
$
|
578.7
|
|
Service cost
|
10.1
|
|
|
11.6
|
|
|
1.4
|
|
|
1.6
|
|
||||
Interest cost
|
66.3
|
|
|
68.5
|
|
|
20.8
|
|
|
22.4
|
|
||||
Actuarial loss (gain)
|
103.7
|
|
|
32.2
|
|
|
(39.2
|
)
|
|
(4.2
|
)
|
||||
Benefits paid
|
(132.6
|
)
|
|
(120.7
|
)
|
|
(24.0
|
)
|
|
(33.3
|
)
|
||||
Benefit obligation at end of year
|
$
|
1,872.4
|
|
|
$
|
1,824.9
|
|
|
$
|
524.2
|
|
|
$
|
565.2
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Fair value of plan assets at beginning of year
|
$
|
1,887.8
|
|
|
$
|
1,865.2
|
|
|
$
|
331.8
|
|
|
$
|
328.4
|
|
Actual return on plan assets
|
253.2
|
|
|
132.2
|
|
|
41.0
|
|
|
21.8
|
|
||||
Employer contributions
|
3.9
|
|
|
11.1
|
|
|
7.5
|
|
|
14.9
|
|
||||
Benefits paid
|
(132.6
|
)
|
|
(120.7
|
)
|
|
(24.0
|
)
|
|
(33.3
|
)
|
||||
Fair value of plan assets at end of year
|
$
|
2,012.3
|
|
|
$
|
1,887.8
|
|
|
$
|
356.3
|
|
|
$
|
331.8
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Noncurrent assets
|
$
|
202.0
|
|
|
$
|
126.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Current liabilities
|
(5.4
|
)
|
|
(3.7
|
)
|
|
—
|
|
|
—
|
|
||||
Noncurrent liabilities
|
(56.7
|
)
|
|
(60.1
|
)
|
|
(167.9
|
)
|
|
(233.4
|
)
|
||||
Net amount at December 31
|
$
|
139.9
|
|
|
$
|
62.9
|
|
|
$
|
(167.9
|
)
|
|
$
|
(233.4
|
)
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net actuarial loss
|
$
|
624.7
|
|
|
$
|
655.8
|
|
|
$
|
77.5
|
|
|
$
|
146.6
|
|
Prior service cost (credit)
|
1.0
|
|
|
0.5
|
|
|
(46.1
|
)
|
|
(59.7
|
)
|
||||
Net amount before tax at December 31
|
$
|
625.7
|
|
|
$
|
656.3
|
|
|
$
|
31.4
|
|
|
$
|
86.9
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Discount rate
|
3.44
|
%
|
|
3.77
|
%
|
|
3.42
|
%
|
|
3.82
|
%
|
Rate of compensation increase
|
3.00
|
%
|
|
3.00
|
%
|
|
3.00
|
%
|
|
3.00
|
%
|
Expected rate of return on plan assets
|
7.83
|
%
|
|
7.95
|
%
|
|
7.00
|
%
|
|
7.00
|
%
|
|
2017
|
|
2016
|
|
2015
|
||||||
Pension Benefits
|
|
|
|
|
|
||||||
Service cost
|
$
|
10.1
|
|
|
$
|
11.6
|
|
|
$
|
13.1
|
|
Interest cost
|
66.3
|
|
|
68.5
|
|
|
68.2
|
|
|||
Expected return on assets
|
(147.6
|
)
|
|
(147.1
|
)
|
|
(143.2
|
)
|
|||
Recognized actuarial loss
|
21.8
|
|
|
19.0
|
|
|
25.7
|
|
|||
Amortization of prior service credit
|
(0.4
|
)
|
|
(0.6
|
)
|
|
(0.6
|
)
|
|||
Settlement loss
|
7.4
|
|
|
7.3
|
|
|
6.5
|
|
|||
Net periodic benefit credit
|
$
|
(42.4
|
)
|
|
$
|
(41.3
|
)
|
|
$
|
(30.3
|
)
|
|
|
|
|
|
|
||||||
Other Benefits
|
|
|
|
|
|
||||||
Service cost
|
$
|
1.4
|
|
|
$
|
1.6
|
|
|
$
|
2.1
|
|
Interest cost
|
20.8
|
|
|
22.4
|
|
|
23.4
|
|
|||
Expected return on assets
|
(22.6
|
)
|
|
(22.4
|
)
|
|
(23.7
|
)
|
|||
Recognized actuarial loss
|
11.4
|
|
|
12.4
|
|
|
15.3
|
|
|||
Amortization of prior service credit
|
(13.6
|
)
|
|
(13.8
|
)
|
|
(14.4
|
)
|
|||
Net periodic (benefit credit) benefit cost
|
$
|
(2.6
|
)
|
|
$
|
0.2
|
|
|
$
|
2.7
|
|
|
Level I
|
|
Level II
|
|
Level III
|
|
Total
|
||||||||
December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Pension Benefit Assets:
|
|
|
|
|
|
|
|
||||||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
U.S. securities
|
$
|
584.4
|
|
|
$
|
4.8
|
|
|
$
|
—
|
|
|
$
|
589.2
|
|
Foreign securities
|
178.7
|
|
|
—
|
|
|
—
|
|
|
178.7
|
|
||||
Mutual funds
|
39.4
|
|
|
—
|
|
|
—
|
|
|
39.4
|
|
||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
||||||||
Government securities
|
226.9
|
|
|
—
|
|
|
—
|
|
|
226.9
|
|
||||
Corporate securities
|
—
|
|
|
376.5
|
|
|
—
|
|
|
376.5
|
|
||||
Asset-backed securities
|
—
|
|
|
139.9
|
|
|
—
|
|
|
139.9
|
|
||||
Other types of investments:
|
|
|
|
|
|
|
|
||||||||
Common and collective trusts
|
—
|
|
|
53.9
|
|
|
—
|
|
|
53.9
|
|
||||
Partnership interests
|
—
|
|
|
—
|
|
|
220.8
|
|
|
220.8
|
|
||||
Insurance company contracts
|
—
|
|
|
—
|
|
|
173.4
|
|
|
173.4
|
|
||||
Total pension benefit assets
|
$
|
1,029.4
|
|
|
$
|
575.1
|
|
|
$
|
394.2
|
|
|
$
|
1,998.7
|
|
|
|
|
|
|
|
|
|
||||||||
Other Benefit Assets:
|
|
|
|
|
|
|
|
||||||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
U.S. securities
|
$
|
10.3
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
10.5
|
|
Foreign securities
|
3.3
|
|
|
—
|
|
|
—
|
|
|
3.3
|
|
||||
Mutual funds
|
47.8
|
|
|
—
|
|
|
—
|
|
|
47.8
|
|
||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
||||||||
Government securities
|
2.5
|
|
|
—
|
|
|
—
|
|
|
2.5
|
|
||||
Corporate securities
|
—
|
|
|
5.2
|
|
|
—
|
|
|
5.2
|
|
||||
Asset-backed securities
|
—
|
|
|
4.7
|
|
|
—
|
|
|
4.7
|
|
||||
Other types of investments:
|
|
|
|
|
|
|
|
||||||||
Common and collective trusts
|
—
|
|
|
0.5
|
|
|
—
|
|
|
0.5
|
|
||||
Partnership interests
|
—
|
|
|
—
|
|
|
0.4
|
|
|
0.4
|
|
||||
Life insurance contracts
|
—
|
|
|
—
|
|
|
268.5
|
|
|
268.5
|
|
||||
Investment in DOL 103-12 trust
|
—
|
|
|
11.4
|
|
|
—
|
|
|
11.4
|
|
||||
Total other benefit assets
|
$
|
63.9
|
|
|
$
|
22.0
|
|
|
$
|
268.9
|
|
|
$
|
354.8
|
|
|
Level I
|
|
Level II
|
|
Level III
|
|
Total
|
||||||||
December 31, 2016
|
|
|
|
|
|
|
|
||||||||
Pension Benefit Assets:
|
|
|
|
|
|
|
|
||||||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
U.S. securities
|
$
|
561.4
|
|
|
$
|
4.4
|
|
|
$
|
—
|
|
|
$
|
565.8
|
|
Foreign securities
|
264.5
|
|
|
—
|
|
|
—
|
|
|
264.5
|
|
||||
Mutual funds
|
36.6
|
|
|
—
|
|
|
—
|
|
|
36.6
|
|
||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
||||||||
Government securities
|
183.9
|
|
|
—
|
|
|
—
|
|
|
183.9
|
|
||||
Corporate securities
|
—
|
|
|
385.9
|
|
|
—
|
|
|
385.9
|
|
||||
Asset-backed securities
|
—
|
|
|
134.7
|
|
|
—
|
|
|
134.7
|
|
||||
Other types of investments:
|
|
|
|
|
|
|
|
||||||||
Common and collective trusts
|
—
|
|
|
27.5
|
|
|
—
|
|
|
27.5
|
|
||||
Partnership interests
|
—
|
|
|
—
|
|
|
112.5
|
|
|
112.5
|
|
||||
Insurance company contracts
|
—
|
|
|
—
|
|
|
173.3
|
|
|
173.3
|
|
||||
Treasury futures contracts
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
||||
Total pension benefit assets
|
$
|
1,046.7
|
|
|
$
|
552.5
|
|
|
$
|
285.8
|
|
|
$
|
1,885.0
|
|
|
|
|
|
|
|
|
|
||||||||
Other Benefit Assets:
|
|
|
|
|
|
|
|
||||||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
U.S. securities
|
$
|
13.0
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
13.2
|
|
Foreign securities
|
5.4
|
|
|
—
|
|
|
—
|
|
|
5.4
|
|
||||
Mutual funds
|
47.1
|
|
|
—
|
|
|
—
|
|
|
47.1
|
|
||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
||||||||
Government securities
|
2.7
|
|
|
—
|
|
|
—
|
|
|
2.7
|
|
||||
Corporate securities
|
—
|
|
|
7.9
|
|
|
—
|
|
|
7.9
|
|
||||
Asset-backed securities
|
—
|
|
|
5.8
|
|
|
—
|
|
|
5.8
|
|
||||
Other types of investments:
|
|
|
|
|
|
|
|
||||||||
Common and collective trusts
|
—
|
|
|
1.0
|
|
|
—
|
|
|
1.0
|
|
||||
Partnership interests
|
—
|
|
|
—
|
|
|
1.2
|
|
|
1.2
|
|
||||
Life insurance contracts
|
—
|
|
|
—
|
|
|
237.7
|
|
|
237.7
|
|
||||
Investment in DOL 103-12 trust
|
—
|
|
|
9.8
|
|
|
—
|
|
|
9.8
|
|
||||
Total other benefit assets
|
$
|
68.2
|
|
|
$
|
24.7
|
|
|
$
|
238.9
|
|
|
$
|
331.8
|
|
|
Partnership
Interests
|
|
Insurance
Company
Contracts
|
|
Life
Insurance
Contracts
|
|
Total
|
||||||||
Year ended December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Beginning balance at January 1, 2017
|
$
|
113.7
|
|
|
$
|
173.3
|
|
|
$
|
237.7
|
|
|
$
|
524.7
|
|
Actual return on plan assets relating to assets still held at the reporting date
|
20.4
|
|
|
(0.5
|
)
|
|
30.8
|
|
|
50.7
|
|
||||
Purchases
|
126.1
|
|
|
9.7
|
|
|
—
|
|
|
135.8
|
|
||||
Sales
|
(39.0
|
)
|
|
(9.1
|
)
|
|
—
|
|
|
(48.1
|
)
|
||||
Ending balance at December 31, 2017
|
$
|
221.2
|
|
|
$
|
173.4
|
|
|
$
|
268.5
|
|
|
$
|
663.1
|
|
|
|
|
|
|
|
|
|
||||||||
Year ended December 31, 2016
|
|
|
|
|
|
|
|
||||||||
Beginning balance at January 1, 2016
|
$
|
118.6
|
|
|
$
|
174.2
|
|
|
$
|
229.9
|
|
|
$
|
522.7
|
|
Actual return on plan assets relating to assets still held at the reporting date
|
(3.5
|
)
|
|
(3.1
|
)
|
|
10.8
|
|
|
4.2
|
|
||||
Purchases
|
17.8
|
|
|
8.9
|
|
|
—
|
|
|
26.7
|
|
||||
Sales
|
(19.2
|
)
|
|
(6.7
|
)
|
|
(3.0
|
)
|
|
(28.9
|
)
|
||||
Ending balance at December 31, 2016
|
$
|
113.7
|
|
|
$
|
173.3
|
|
|
$
|
237.7
|
|
|
$
|
524.7
|
|
|
|
|
|
|
|
|
|
||||||||
Year ended December 31, 2015
|
|
|
|
|
|
|
|
||||||||
Beginning balance at January 1, 2015
|
$
|
122.2
|
|
|
$
|
187.7
|
|
|
$
|
238.4
|
|
|
$
|
548.3
|
|
Actual return on plan assets relating to assets still held at the reporting date
|
(5.9
|
)
|
|
(5.7
|
)
|
|
(6.8
|
)
|
|
(18.4
|
)
|
||||
Purchases
|
10.9
|
|
|
7.0
|
|
|
—
|
|
|
17.9
|
|
||||
Sales
|
(8.6
|
)
|
|
(14.8
|
)
|
|
(1.7
|
)
|
|
(25.1
|
)
|
||||
Ending balance at December 31, 2015
|
$
|
118.6
|
|
|
$
|
174.2
|
|
|
$
|
229.9
|
|
|
$
|
522.7
|
|
|
Pension
Benefits
|
|
Other
Benefits
|
||||
2018
|
$
|
156.4
|
|
|
$
|
39.6
|
|
2019
|
152.3
|
|
|
40.0
|
|
||
2020
|
149.6
|
|
|
39.9
|
|
||
2021
|
145.8
|
|
|
39.6
|
|
||
2022
|
144.5
|
|
|
39.3
|
|
||
2023 - 2027
|
636.9
|
|
|
179.4
|
|
|
Commercial
& Specialty
Business
|
|
Government
Business
|
|
Total
|
||||||
Gross medical claims payable, beginning of year
|
$
|
3,267.0
|
|
|
$
|
4,625.6
|
|
|
$
|
7,892.6
|
|
Ceded medical claims payable, beginning of year
|
(521.3
|
)
|
|
(17.8
|
)
|
|
(539.1
|
)
|
|||
Net medical claims payable, beginning of year
|
2,745.7
|
|
|
4,607.8
|
|
|
7,353.5
|
|
|||
Business combinations and purchase adjustments
|
—
|
|
|
75.8
|
|
|
75.8
|
|
|||
Net incurred medical claims:
|
|
|
|
|
|
||||||
Current year
|
29,722.1
|
|
|
42,150.2
|
|
|
71,872.3
|
|
|||
Prior years redundancies
|
(462.7
|
)
|
|
(701.9
|
)
|
|
(1,164.6
|
)
|
|||
Total net incurred medical claims
|
29,259.4
|
|
|
41,448.3
|
|
|
70,707.7
|
|
|||
Net payments attributable to:
|
|
|
|
|
|
||||||
Current year medical claims
|
26,481.8
|
|
|
37,767.9
|
|
|
64,249.7
|
|
|||
Prior years medical claims
|
2,194.7
|
|
|
3,806.0
|
|
|
6,000.7
|
|
|||
Total net payments
|
28,676.5
|
|
|
41,573.9
|
|
|
70,250.4
|
|
|||
Net medical claims payable, end of year
|
3,328.6
|
|
|
4,558.0
|
|
|
7,886.6
|
|
|||
Ceded medical claims payable, end of year
|
78.0
|
|
|
26.9
|
|
|
104.9
|
|
|||
Gross medical claims payable, end of year
|
$
|
3,406.6
|
|
|
$
|
4,584.9
|
|
|
$
|
7,991.5
|
|
|
Commercial
& Specialty
Business
|
|
Government
Business
|
|
Total
|
||||||
Gross medical claims payable, beginning of year
|
$
|
3,396.1
|
|
|
$
|
4,173.7
|
|
|
$
|
7,569.8
|
|
Ceded medical claims payable, beginning of year
|
(635.7
|
)
|
|
(9.9
|
)
|
|
(645.6
|
)
|
|||
Net medical claims payable, beginning of year
|
2,760.4
|
|
|
4,163.8
|
|
|
6,924.2
|
|
|||
Net incurred medical claims:
|
|
|
|
|
|
||||||
Current year
|
27,797.3
|
|
|
38,574.1
|
|
|
66,371.4
|
|
|||
Prior years redundancies
|
(466.5
|
)
|
|
(383.9
|
)
|
|
(850.4
|
)
|
|||
Total net incurred medical claims
|
27,330.8
|
|
|
38,190.2
|
|
|
65,521.0
|
|
|||
Net payments attributable to:
|
|
|
|
|
|
||||||
Current year medical claims
|
25,119.3
|
|
|
34,037.3
|
|
|
59,156.6
|
|
|||
Prior years medical claims
|
2,226.2
|
|
|
3,708.9
|
|
|
5,935.1
|
|
|||
Total net payments
|
27,345.5
|
|
|
37,746.2
|
|
|
65,091.7
|
|
|||
Net medical claims payable, end of year
|
2,745.7
|
|
|
4,607.8
|
|
|
7,353.5
|
|
|||
Ceded medical claims payable, end of year
|
521.3
|
|
|
17.8
|
|
|
539.1
|
|
|||
Gross medical claims payable, end of year
|
$
|
3,267.0
|
|
|
$
|
4,625.6
|
|
|
$
|
7,892.6
|
|
|
Commercial
& Specialty
Business
|
|
Government
Business
|
|
Total
|
||||||
Gross medical claims payable, beginning of year
|
$
|
3,541.4
|
|
|
$
|
3,319.8
|
|
|
$
|
6,861.2
|
|
Ceded medical claims payable, beginning of year
|
(762.5
|
)
|
|
(4.9
|
)
|
|
(767.4
|
)
|
|||
Net medical claims payable, beginning of year
|
2,778.9
|
|
|
3,314.9
|
|
|
6,093.8
|
|
|||
Business combinations and purchase adjustments
|
—
|
|
|
121.8
|
|
|
121.8
|
|
|||
Net incurred medical claims:
|
|
|
|
|
|
||||||
Current year
|
26,798.5
|
|
|
33,909.9
|
|
|
60,708.4
|
|
|||
Prior years redundancies
|
(480.3
|
)
|
|
(319.9
|
)
|
|
(800.2
|
)
|
|||
Total net incurred medical claims
|
26,318.2
|
|
|
33,590.0
|
|
|
59,908.2
|
|
|||
Net payments attributable to:
|
|
|
|
|
|
||||||
Current year medical claims
|
24,145.7
|
|
|
29,922.0
|
|
|
54,067.7
|
|
|||
Prior years medical claims
|
2,191.0
|
|
|
2,940.9
|
|
|
5,131.9
|
|
|||
Total net payments
|
26,336.7
|
|
|
32,862.9
|
|
|
59,199.6
|
|
|||
Net medical claims payable, end of year
|
2,760.4
|
|
|
4,163.8
|
|
|
6,924.2
|
|
|||
Ceded medical claims payable, end of year
|
635.7
|
|
|
9.9
|
|
|
645.6
|
|
|||
Gross medical claims payable, end of year
|
$
|
3,396.1
|
|
|
$
|
4,173.7
|
|
|
$
|
7,569.8
|
|
|
Favorable Developments
by Changes in Key Assumptions
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Assumed trend factors
|
$
|
(651.3
|
)
|
|
$
|
(591.3
|
)
|
|
$
|
(467.9
|
)
|
Assumed completion factors
|
(513.3
|
)
|
|
(259.1
|
)
|
|
(332.3
|
)
|
|||
Total
|
$
|
(1,164.6
|
)
|
|
$
|
(850.4
|
)
|
|
$
|
(800.2
|
)
|
|
|
Years Ended December 31
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net incurred medical claims:
|
|
|
|
|
|
|
||||||
Commercial & Specialty Business
|
|
$
|
29,259.4
|
|
|
$
|
27,330.8
|
|
|
$
|
26,318.2
|
|
Government Business
|
|
41,448.3
|
|
|
38,190.2
|
|
|
33,590.0
|
|
|||
Total net incurred medical claims
|
|
70,707.7
|
|
|
65,521.0
|
|
|
59,908.2
|
|
|||
Quality improvement and other claims expense
|
|
1,528.5
|
|
|
1,313.4
|
|
|
1,208.7
|
|
|||
Benefit expense
|
|
$
|
72,236.2
|
|
|
$
|
66,834.4
|
|
|
$
|
61,116.9
|
|
Commercial & Specialty Business
|
|
Cumulative Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
|
||||||||||
Claim Year
|
|
2015
|
|
2016
|
|
2017
|
||||||
2015 & Prior
|
|
$
|
29,097.0
|
|
|
$
|
28,630.5
|
|
|
$
|
28,581.0
|
|
2016
|
|
|
|
27,797.3
|
|
|
27,384.1
|
|
||||
2017
|
|
|
|
|
|
29,722.1
|
|
|||||
Total
|
|
|
|
|
|
$
|
85,687.2
|
|
Commercial & Specialty Business
|
|
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
|
||||||||||
Claim Year
|
|
2015
|
|
2016
|
|
2017
|
||||||
2015 & Prior
|
|
$
|
26,336.7
|
|
|
$
|
28,562.8
|
|
|
$
|
28,546.9
|
|
2016
|
|
|
|
25,119.3
|
|
|
27,329.9
|
|
||||
2017
|
|
|
|
|
|
26,481.8
|
|
|||||
Total
|
|
|
|
|
|
$
|
82,358.6
|
|
Government Business
|
|
Cumulative Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
|
||||||||||
Claim Year
|
|
2015
|
|
2016
|
|
2017
|
||||||
2015 & Prior
|
|
$
|
37,026.7
|
|
|
$
|
36,642.9
|
|
|
$
|
36,594.3
|
|
2016
|
|
|
|
38,574.1
|
|
|
37,920.8
|
|
||||
2017
|
|
|
|
|
|
42,226.0
|
|
|||||
Total
|
|
|
|
|
|
$
|
116,741.1
|
|
Government Business
|
|
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
|
||||||||||
Claim Year
|
|
2015
|
|
2016
|
|
2017
|
||||||
2015 & Prior
|
|
$
|
32,862.9
|
|
|
$
|
36,572.0
|
|
|
$
|
36,572.0
|
|
2016
|
|
|
|
34,037.3
|
|
|
37,843.2
|
|
||||
2017
|
|
|
|
|
|
37,767.9
|
|
|||||
Total
|
|
|
|
|
|
$
|
112,183.1
|
|
|
Commercial
& Specialty
Business
|
|
Government
Business
|
|
Total
|
||||||
Cumulative incurred claims and allocated claim adjustment expenses, net of reinsurance
|
$
|
85,687.2
|
|
|
$
|
116,741.1
|
|
|
$
|
202,428.3
|
|
Less: cumulative paid claims and allocated claim adjustment expenses, net of reinsurance
|
82,358.6
|
|
|
112,183.1
|
|
|
194,541.7
|
|
|||
Net medical claims payable, end of year
|
3,328.6
|
|
|
4,558.0
|
|
|
7,886.6
|
|
|||
Ceded medical claims payable, end of year
|
78.0
|
|
|
26.9
|
|
|
104.9
|
|
|||
Gross medical claims payable, end of year
|
$
|
3,406.6
|
|
|
$
|
4,584.9
|
|
|
$
|
7,991.5
|
|
|
2017
|
|
2016
|
||||
Senior unsecured notes:
|
|
|
|
||||
2.375%, due 2017
|
$
|
—
|
|
|
$
|
400.1
|
|
5.875%, due 2017
|
—
|
|
|
528.3
|
|
||
1.875%, due 2018
|
625.5
|
|
|
624.3
|
|
||
2.300%, due 2018
|
649.1
|
|
|
647.5
|
|
||
2.250%, due 2019
|
847.2
|
|
|
845.6
|
|
||
7.000%, due 2019
|
—
|
|
|
439.4
|
|
||
2.500%, due 2020
|
894.9
|
|
|
—
|
|
||
4.350%, due 2020
|
692.9
|
|
|
700.0
|
|
||
3.700%, due 2021
|
697.6
|
|
|
696.9
|
|
||
2.950%, due 2022
|
745.9
|
|
|
—
|
|
||
3.125%, due 2022
|
844.9
|
|
|
843.8
|
|
||
3.300%, due 2023
|
994.4
|
|
|
993.3
|
|
||
3.350%, due 2024
|
845.0
|
|
|
—
|
|
||
3.500%, due 2024
|
792.9
|
|
|
791.9
|
|
||
3.650%, due 2027
|
1,589.2
|
|
|
—
|
|
||
5.950%, due 2034
|
334.0
|
|
|
444.7
|
|
||
5.850%, due 2036
|
395.6
|
|
|
768.3
|
|
||
6.375%, due 2037
|
366.3
|
|
|
639.9
|
|
||
5.800%, due 2040
|
123.5
|
|
|
193.9
|
|
||
4.625%, due 2042
|
886.7
|
|
|
886.3
|
|
||
4.650%, due 2043
|
986.3
|
|
|
985.9
|
|
||
4.650%, due 2044
|
791.1
|
|
|
790.8
|
|
||
5.100%, due 2044
|
593.8
|
|
|
593.6
|
|
||
4.375%, due 2047
|
1,385.5
|
|
|
—
|
|
||
4.850%, due 2054
|
246.8
|
|
|
246.8
|
|
||
Remarketable subordinated notes:
|
|
|
|
||||
1.900%, due 2028
|
1,238.7
|
|
|
1,237.6
|
|
||
Surplus note:
|
|
|
|
||||
9.000%, due 2027
|
24.9
|
|
|
24.9
|
|
||
Senior convertible debentures:
|
|
|
|
||||
2.750%, due 2042
|
260.5
|
|
|
334.1
|
|
||
Variable rate debt:
|
|
|
|
||||
Commercial paper program
|
803.6
|
|
|
629.0
|
|
||
Total long-term debt
|
18,656.8
|
|
|
15,286.9
|
|
||
Current portion of long-term debt
|
(1,274.6
|
)
|
|
(928.4
|
)
|
||
Long-term debt, less current portion
|
$
|
17,382.2
|
|
|
$
|
14,358.5
|
|
Outstanding principal amount
|
$
|
396.1
|
|
Unamortized debt discount
|
$
|
131.4
|
|
Net debt carrying amount
|
$
|
260.5
|
|
Equity component carrying amount
|
$
|
143.6
|
|
Conversion rate (shares of common stock per $1,000 of principal amount)
|
13.7467
|
|
|
Effective conversion price (per $1,000 of principal amount)
|
$
|
72.7441
|
|
|
Number of
Shares
|
|
Weighted-Average
Option Price per
Share
|
|
Weighted-Average
Remaining
Contractual Life
(Years)
|
|
Aggregate
Intrinsic
Value
|
|||||
Outstanding at January 1, 2017
|
5.6
|
|
|
$
|
102.80
|
|
|
|
|
|
||
Granted
|
1.1
|
|
|
167.57
|
|
|
|
|
|
|||
Exercised
|
(2.2
|
)
|
|
89.88
|
|
|
|
|
|
|||
Forfeited or expired
|
(0.2
|
)
|
|
142.51
|
|
|
|
|
|
|||
Outstanding at December 31, 2017
|
4.3
|
|
|
124.31
|
|
|
6.15
|
|
$
|
433.0
|
|
|
Exercisable at December 31, 2017
|
2.6
|
|
|
107.07
|
|
|
4.72
|
|
$
|
312.3
|
|
|
Restricted
Stock Shares
and Units
|
|
Weighted-Average
Grant Date
Fair Value
per Share
|
|||
Nonvested at January 1, 2017
|
2.1
|
|
|
$
|
127.68
|
|
Granted
|
0.8
|
|
|
174.44
|
|
|
Vested
|
(0.8
|
)
|
|
110.39
|
|
|
Forfeited
|
(0.1
|
)
|
|
148.77
|
|
|
Nonvested at December 31, 2017
|
2.0
|
|
|
152.20
|
|
|
2017
|
|
2016
|
|
2015
|
|||
Risk-free interest rate
|
2.31
|
%
|
|
1.76
|
%
|
|
1.96
|
%
|
Volatility factor
|
32.00
|
%
|
|
32.00
|
%
|
|
31.00
|
%
|
Dividend yield (annual)
|
1.60
|
%
|
|
2.00
|
%
|
|
1.70
|
%
|
Weighted-average expected life (years)
|
4.00
|
|
|
4.10
|
|
|
4.00
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Options granted during the year
|
$
|
40.88
|
|
|
$
|
30.56
|
|
|
$
|
33.97
|
|
Restricted stock awards granted during the year
|
174.44
|
|
|
131.81
|
|
|
147.00
|
|
|
January 1, 2018
through February 9, 2018 |
|
Year Ended December 31, 2017
|
||||
|
|||||||
Shares repurchased
|
0.7
|
|
|
10.5
|
|
||
Average price per share
|
$
|
237.35
|
|
|
$
|
189.93
|
|
Aggregate cost
|
$
|
156.6
|
|
|
$
|
1,997.7
|
|
Authorization remaining at end of year
|
$
|
7,021.5
|
|
|
$
|
7,178.1
|
|
|
2017
|
|
2016
|
||||
Investments:
|
|
|
|
||||
Gross unrealized gains
|
$
|
939.7
|
|
|
$
|
748.6
|
|
Gross unrealized losses
|
(104.9
|
)
|
|
(180.9
|
)
|
||
Net pretax unrealized gains
|
834.8
|
|
|
567.7
|
|
||
Deferred tax liability
|
(301.1
|
)
|
|
(206.5
|
)
|
||
Net unrealized gains on investments
|
533.7
|
|
|
361.2
|
|
||
Non-credit components of OTTI on investments:
|
|
|
|
||||
Gross unrealized losses
|
(0.3
|
)
|
|
(7.2
|
)
|
||
Deferred tax asset
|
0.1
|
|
|
2.6
|
|
||
Net unrealized non-credit component of OTTI on investments
|
(0.2
|
)
|
|
(4.6
|
)
|
||
Cash flow hedges:
|
|
|
|
||||
Gross unrealized losses
|
(358.6
|
)
|
|
(259.1
|
)
|
||
Deferred tax asset
|
125.6
|
|
|
90.7
|
|
||
Net unrealized losses on cash flow hedges
|
(233.0
|
)
|
|
(168.4
|
)
|
||
Defined benefit pension plans:
|
|
|
|
||||
Deferred net actuarial loss
|
(624.7
|
)
|
|
(655.8
|
)
|
||
Deferred prior service cost
|
(1.0
|
)
|
|
(0.5
|
)
|
||
Deferred tax asset
|
244.1
|
|
|
257.2
|
|
||
Net unrecognized periodic benefit costs for defined benefit pension plans
|
(381.6
|
)
|
|
(399.1
|
)
|
||
Postretirement benefit plans:
|
|
|
|
||||
Deferred net actuarial loss
|
(77.5
|
)
|
|
(146.6
|
)
|
||
Deferred prior service credits
|
46.1
|
|
|
59.7
|
|
||
Deferred tax asset
|
12.3
|
|
|
34.0
|
|
||
Net unrecognized periodic benefit costs for postretirement benefit plans
|
(19.1
|
)
|
|
(52.9
|
)
|
||
Foreign currency translation adjustments:
|
|
|
|
||||
Gross unrealized losses
|
(2.1
|
)
|
|
(6.3
|
)
|
||
Deferred tax asset
|
0.8
|
|
|
2.2
|
|
||
Net unrealized losses on foreign currency translation adjustments
|
(1.3
|
)
|
|
(4.1
|
)
|
||
Accumulated other comprehensive loss
|
$
|
(101.5
|
)
|
|
$
|
(267.9
|
)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Investments:
|
|
|
|
|
|
||||||
Net holding gain (loss) on investment securities arising during the period, net of tax (expense) benefit of ($152.6), ($118.9), and $180.4, respectively
|
$
|
280.1
|
|
|
$
|
186.0
|
|
|
$
|
(336.1
|
)
|
Reclassification adjustment for net realized gain on investment securities, net of tax expense of $58.0, $36.6, and $25.9, respectively
|
(107.6
|
)
|
|
(68.1
|
)
|
|
(48.2
|
)
|
|||
Total reclassification adjustment on investments
|
172.5
|
|
|
117.9
|
|
|
(384.3
|
)
|
|||
Non-credit component of OTTI on investments:
|
|
|
|
|
|
||||||
Non-credit component of OTTI on investments, net of tax (expense) benefit of ($2.8), ($2.8), and $3.0, respectively
|
4.4
|
|
|
5.4
|
|
|
(5.6
|
)
|
|||
Cash flow hedges:
|
|
|
|
|
|
||||||
Holding loss, net of tax benefit of $34.9, $47.0, and $24.4, respectively
|
(64.6
|
)
|
|
(87.3
|
)
|
|
(45.2
|
)
|
|||
Other:
|
|
|
|
|
|
||||||
Net change in unrecognized periodic benefit costs for defined benefit pension and postretirement benefit plans, net of tax (expense) benefit of ($34.8), $5.7, and $13.4, respectively
|
51.3
|
|
|
(13.4
|
)
|
|
(26.0
|
)
|
|||
Foreign currency translation adjustment, net of tax (expense) benefit of ($1.4), ($1.1), and $1.8, respectively
|
2.8
|
|
|
2.1
|
|
|
(3.4
|
)
|
|||
Net gain (loss) recognized in other comprehensive loss, net of tax (expense) benefit of ($98.7), ($33.5), and $248.9, respectively
|
$
|
166.4
|
|
|
$
|
24.7
|
|
|
$
|
(464.5
|
)
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||
Written
|
|
Earned
|
|
Written
|
|
Earned
|
|
Written
|
|
Earned
|
|||||||||||||
Direct
|
$
|
83,974.3
|
|
|
$
|
83,417.8
|
|
|
$
|
78,200.4
|
|
|
$
|
78,726.2
|
|
|
$
|
72,925.5
|
|
|
$
|
73,259.2
|
|
Assumed
|
274.6
|
|
|
274.6
|
|
|
217.4
|
|
|
217.3
|
|
|
221.8
|
|
|
221.9
|
|
||||||
Ceded
|
(43.7
|
)
|
|
(44.7
|
)
|
|
(79.8
|
)
|
|
(83.4
|
)
|
|
(95.8
|
)
|
|
(96.0
|
)
|
||||||
Net premiums
|
$
|
84,205.2
|
|
|
$
|
83,647.7
|
|
|
$
|
78,338.0
|
|
|
$
|
78,860.1
|
|
|
$
|
73,051.5
|
|
|
$
|
73,385.1
|
|
Percentage—assumed to net premiums
|
0.3
|
%
|
|
0.3
|
%
|
|
0.3
|
%
|
|
0.3
|
%
|
|
0.3
|
%
|
|
0.3
|
%
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||
Written
|
|
Earned
|
|
Written
|
|
Earned
|
|
Written
|
|
Earned
|
|||||||||||||
Reportable segments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial & Specialty Business
|
$
|
35,683.1
|
|
|
$
|
35,804.3
|
|
|
$
|
33,355.6
|
|
|
$
|
33,831.5
|
|
|
$
|
33,016.9
|
|
|
$
|
33,078.0
|
|
Government Business
|
48,522.1
|
|
|
47,843.4
|
|
|
44,982.4
|
|
|
45,028.6
|
|
|
40,034.6
|
|
|
40,307.1
|
|
||||||
Net premiums
|
$
|
84,205.2
|
|
|
$
|
83,647.7
|
|
|
$
|
78,338.0
|
|
|
$
|
78,860.1
|
|
|
$
|
73,051.5
|
|
|
$
|
73,385.1
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Direct
|
$
|
72,135.0
|
|
|
$
|
67,221.7
|
|
|
$
|
61,674.0
|
|
Assumed
|
216.7
|
|
|
184.9
|
|
|
192.2
|
|
|||
Ceded
|
(115.5
|
)
|
|
(572.2
|
)
|
|
(749.3
|
)
|
|||
Net benefit expense
|
$
|
72,236.2
|
|
|
$
|
66,834.4
|
|
|
$
|
61,116.9
|
|
|
2017
|
|
2016
|
||||
Policy liabilities, assumed
|
$
|
54.3
|
|
|
$
|
47.2
|
|
Unearned income, assumed
|
0.6
|
|
|
0.6
|
|
||
Premiums payable, ceded
|
9.3
|
|
|
5.2
|
|
||
Premiums receivable, assumed
|
32.9
|
|
|
25.9
|
|
2018
|
$
|
154.5
|
|
2019
|
145.5
|
|
|
2020
|
123.9
|
|
|
2021
|
100.4
|
|
|
2022
|
88.2
|
|
|
Thereafter
|
286.0
|
|
|
Total minimum payments required
|
$
|
898.5
|
|
|
2017
|
|
2016
|
|
2015
|
|||
Denominator for basic earnings per share—weighted-average shares
|
261.5
|
|
|
262.9
|
|
|
263.0
|
|
Effect of dilutive securities—employee stock options, non-vested restricted stock awards and convertible debentures
|
6.3
|
|
|
5.2
|
|
|
9.9
|
|
Denominator for diluted earnings per share
|
267.8
|
|
|
268.1
|
|
|
272.9
|
|
|
Commercial & Specialty Business
|
|
Government Business
|
|
Other
|
|
Total
|
||||||||
Year ended December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Operating revenue
|
$
|
40,754.1
|
|
|
$
|
48,276.2
|
|
|
$
|
30.9
|
|
|
$
|
89,061.2
|
|
Operating gain (loss)
|
2,876.1
|
|
|
1,430.2
|
|
|
(130.9
|
)
|
|
4,175.4
|
|
||||
Depreciation and amortization of property and equipment
|
—
|
|
|
—
|
|
|
601.0
|
|
|
601.0
|
|
||||
Year ended December 31, 2016
|
|
|
|
|
|
|
|
||||||||
Operating revenue
|
$
|
38,692.1
|
|
|
$
|
45,477.7
|
|
|
$
|
24.2
|
|
|
$
|
84,194.0
|
|
Operating gain (loss)
|
3,195.2
|
|
|
1,784.3
|
|
|
(177.8
|
)
|
|
4,801.7
|
|
||||
Depreciation and amortization of property and equipment
|
—
|
|
|
—
|
|
|
576.0
|
|
|
576.0
|
|
||||
Year ended December 31, 2015
|
|
|
|
|
|
|
|
||||||||
Operating revenue
|
$
|
37,570.8
|
|
|
$
|
40,813.0
|
|
|
$
|
21.0
|
|
|
$
|
78,404.8
|
|
Operating gain (loss)
|
2,854.0
|
|
|
1,978.5
|
|
|
(79.4
|
)
|
|
4,753.1
|
|
||||
Depreciation and amortization of property and equipment
|
—
|
|
|
—
|
|
|
515.6
|
|
|
515.6
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Commercial & Specialty Business
|
|
|
|
|
|
||||||
Managed care products
|
$
|
34,272.1
|
|
|
$
|
32,369.8
|
|
|
$
|
31,676.9
|
|
Managed care services
|
4,821.0
|
|
|
4,710.1
|
|
|
4,344.8
|
|
|||
Dental/Vision products and services
|
1,218.1
|
|
|
1,182.3
|
|
|
1,111.7
|
|
|||
Other
|
442.9
|
|
|
429.9
|
|
|
437.4
|
|
|||
Total Commercial & Specialty Business
|
40,754.1
|
|
|
38,692.1
|
|
|
37,570.8
|
|
|||
Government Business
|
|
|
|
|
|
||||||
Managed care products
|
47,843.4
|
|
|
45,028.5
|
|
|
40,307.0
|
|
|||
Managed care services
|
432.8
|
|
|
449.2
|
|
|
506.0
|
|
|||
Total Government Business
|
48,276.2
|
|
|
45,477.7
|
|
|
40,813.0
|
|
|||
Other
|
|
|
|
|
|
||||||
Other
|
30.9
|
|
|
24.2
|
|
|
21.0
|
|
|||
Total product revenues
|
$
|
89,061.2
|
|
|
$
|
84,194.0
|
|
|
$
|
78,404.8
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Reportable segments operating revenues
|
$
|
89,061.2
|
|
|
$
|
84,194.0
|
|
|
$
|
78,404.8
|
|
Net investment income
|
866.5
|
|
|
779.5
|
|
|
677.6
|
|
|||
Net realized gains on financial instruments
|
144.8
|
|
|
4.9
|
|
|
157.5
|
|
|||
Other-than-temporary impairment losses recognized in income
|
(33.1
|
)
|
|
(115.4
|
)
|
|
(83.4
|
)
|
|||
Total revenues
|
$
|
90,039.4
|
|
|
$
|
84,863.0
|
|
|
$
|
79,156.5
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Reportable segments operating gain
|
$
|
4,175.4
|
|
|
$
|
4,801.7
|
|
|
$
|
4,753.1
|
|
Net investment income
|
866.5
|
|
|
779.5
|
|
|
677.6
|
|
|||
Net realized gains on financial instruments
|
144.8
|
|
|
4.9
|
|
|
157.5
|
|
|||
Other-than-temporary impairment losses recognized in income
|
(33.1
|
)
|
|
(115.4
|
)
|
|
(83.4
|
)
|
|||
Interest expense
|
(739.0
|
)
|
|
(723.0
|
)
|
|
(653.0
|
)
|
|||
Amortization of other intangible assets
|
(168.4
|
)
|
|
(192.3
|
)
|
|
(230.1
|
)
|
|||
(Loss) gain on extinguishment of debt
|
(282.4
|
)
|
|
—
|
|
|
9.3
|
|
|||
Income before income tax expense
|
$
|
3,963.8
|
|
|
$
|
4,555.4
|
|
|
$
|
4,631.0
|
|
|
For the Quarter Ended
|
||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
2017
|
|
|
|
|
|
|
|
||||||||
Total revenues
|
$
|
22,525.9
|
|
|
$
|
22,407.2
|
|
|
$
|
22,426.0
|
|
|
$
|
22,680.3
|
|
Income before income tax expense
|
1,515.0
|
|
|
1,205.7
|
|
|
1,118.9
|
|
|
124.2
|
|
||||
Net income
|
1,009.9
|
|
|
855.3
|
|
|
746.9
|
|
|
1,230.7
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic net income per share
|
$
|
3.82
|
|
|
$
|
3.23
|
|
|
$
|
2.87
|
|
|
$
|
4.80
|
|
Diluted net income per share
|
3.73
|
|
|
3.16
|
|
|
2.80
|
|
|
4.67
|
|
||||
|
|
|
|
|
|
|
|
||||||||
2016
|
|
|
|
|
|
|
|
||||||||
Total revenues
|
$
|
20,288.5
|
|
|
$
|
21,456.2
|
|
|
$
|
21,403.9
|
|
|
$
|
21,714.4
|
|
Income before income tax expense
|
1,312.0
|
|
|
1,448.3
|
|
|
1,136.5
|
|
|
658.6
|
|
||||
Net income
|
703.0
|
|
|
780.6
|
|
|
617.8
|
|
|
368.4
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic net income per share
|
$
|
2.69
|
|
|
$
|
2.97
|
|
|
$
|
2.35
|
|
|
$
|
1.40
|
|
Diluted net income per share
|
2.63
|
|
|
2.91
|
|
|
2.30
|
|
|
1.37
|
|
/
S
/ G
AIL
K. B
OUDREAUX
|
|
/
S
/ J
OHN
E. G
ALLINA
|
President and Chief Executive Officer
|
|
Executive Vice President and Chief Financial Officer
|
Exhibit
Number
|
|
Exhibit
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
Exhibit
Number
|
|
Exhibit
|
||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
||
|
|
|||
|
|
|
||
|
|
|||
|
|
|
||
|
|
|||
|
|
|
||
|
|
|||
|
|
|
||
|
|
|||
|
|
|
||
|
|
|||
|
|
|
||
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
Exhibit
Number
|
|
Exhibit
|
||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
||
4.8
|
|
|
Upon the request of the Securities and Exchange Commission, the Company will furnish copies of any other instruments defining the rights of holders of long-term debt of the Company or its subsidiaries.
|
|
|
|
|
||
|
*
|
|||
|
|
|
||
|
|
|||
|
|
|
||
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
Exhibit
Number
|
|
Exhibit
|
||
|
|
|
|
|
|
|
|||
|
|
|
||
|
*
|
|
||
|
|
|
||
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
||
|
|
|
||
|
|
|
||
|
*
|
|||
|
|
|||
|
*
|
|||
|
|
|||
|
|
|||
|
|
|
||
|
|
|
||
|
|
|
||
|
*
|
.
|
||
|
|
|||
|
*
|
|||
|
|
|||
|
*
|
|||
|
|
|||
|
*
|
|||
|
|
|||
|
*
|
|||
|
|
|
||
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
*
|
|||
|
|
|
|
|
|
*
|
|||
|
|
|
|
|
|
|
(In millions, except share data)
|
December 31,
2017 |
|
December 31,
2016 |
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
956.0
|
|
|
$
|
882.7
|
|
Investments available-for-sale, at fair value:
|
|
|
|
||||
Fixed maturity securities (amortized cost of $341.7 and $463.4)
|
345.5
|
|
|
477.6
|
|
||
Equity securities (cost of $1,400.9 and $35.7)
|
1,458.3
|
|
|
85.5
|
|
||
Other invested assets, current
|
5.5
|
|
|
4.6
|
|
||
Other receivables
|
60.6
|
|
|
47.8
|
|
||
Income taxes receivable
|
75.4
|
|
|
69.0
|
|
||
Net due from subsidiaries
|
2,428.5
|
|
|
1,394.6
|
|
||
Securities lending collateral
|
14.5
|
|
|
39.7
|
|
||
Other current assets
|
227.8
|
|
|
277.0
|
|
||
Total current assets
|
5,572.1
|
|
|
3,278.5
|
|
||
Long-term investments available-for-sale, at fair value:
|
|
|
|
||||
Fixed maturity securities (amortized cost of $0.4 and $0.0)
|
0.4
|
|
|
—
|
|
||
Equity securities (cost of $6.3 and $6.4)
|
6.3
|
|
|
6.4
|
|
||
Other invested assets, long-term
|
644.2
|
|
|
632.4
|
|
||
Property and equipment, net
|
117.6
|
|
|
142.8
|
|
||
Deferred tax assets, net
|
161.8
|
|
|
107.5
|
|
||
Investments in subsidiaries
|
40,211.2
|
|
|
37,378.8
|
|
||
Other noncurrent assets
|
88.5
|
|
|
87.6
|
|
||
Total assets
|
$
|
46,802.1
|
|
|
$
|
41,634.0
|
|
Liabilities and shareholders’ equity
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
1,232.5
|
|
|
$
|
690.2
|
|
Security trades pending payable
|
11.1
|
|
|
18.2
|
|
||
Securities lending payable
|
14.5
|
|
|
39.7
|
|
||
Current portion of long-term debt
|
1,274.6
|
|
|
928.4
|
|
||
Other current liabilities
|
219.0
|
|
|
301.4
|
|
||
Total current liabilities
|
2,751.7
|
|
|
1,977.9
|
|
||
Long-term debt, less current portion
|
17,356.7
|
|
|
14,333.6
|
|
||
Other noncurrent liabilities
|
190.8
|
|
|
222.1
|
|
||
Total liabilities
|
20,299.2
|
|
|
16,533.6
|
|
||
Commitments and contingencies—Note 5
|
|
|
|
|
|
||
Shareholders’ equity
|
|
|
|
||||
Preferred stock, without par value, shares authorized - 100,000,000; shares issued and outstanding - none
|
—
|
|
|
—
|
|
||
Common stock, par value $0.01, shares authorized - 900,000,000; shares issued and outstanding - 256,084,913 and 263,747,395
|
2.6
|
|
|
2.6
|
|
||
Additional paid-in capital
|
8,547.4
|
|
|
8,805.1
|
|
||
Retained earnings
|
18,054.4
|
|
|
16,560.6
|
|
||
Accumulated other comprehensive loss
|
(101.5
|
)
|
|
(267.9
|
)
|
||
Total shareholders’ equity
|
26,502.9
|
|
|
25,100.4
|
|
||
Total liabilities and shareholders’ equity
|
$
|
46,802.1
|
|
|
$
|
41,634.0
|
|
|
Years ended December 31
|
||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues
|
|
|
|
|
|
||||||
Net investment income
|
$
|
64.3
|
|
|
$
|
74.7
|
|
|
$
|
99.7
|
|
Net realized losses on financial instruments
|
(18.2
|
)
|
|
(195.0
|
)
|
|
(3.8
|
)
|
|||
Other-than-temporary impairment losses on investments:
|
|
|
|
|
|
||||||
Total other-than-temporary impairment losses on investments
|
(7.6
|
)
|
|
(65.0
|
)
|
|
(49.2
|
)
|
|||
Portion of other-than-temporary impairment losses recognized in other comprehensive income
|
0.1
|
|
|
17.2
|
|
|
10.0
|
|
|||
Other-than-temporary impairment losses recognized in income
|
(7.5
|
)
|
|
(47.8
|
)
|
|
(39.2
|
)
|
|||
Other revenue
|
—
|
|
|
—
|
|
|
3.5
|
|
|||
Total revenues (losses)
|
38.6
|
|
|
(168.1
|
)
|
|
60.2
|
|
|||
Expenses
|
|
|
|
|
|
||||||
General and administrative expense
|
437.2
|
|
|
270.0
|
|
|
77.9
|
|
|||
Interest expense
|
726.5
|
|
|
719.3
|
|
|
649.7
|
|
|||
Loss (gain) on extinguishment of debt
|
282.4
|
|
|
—
|
|
|
(9.3
|
)
|
|||
Total expenses
|
1,446.1
|
|
|
989.3
|
|
|
718.3
|
|
|||
Loss before income tax credits and equity in net income of subsidiaries
|
(1,407.5
|
)
|
|
(1,157.4
|
)
|
|
(658.1
|
)
|
|||
Income tax credits
|
(215.5
|
)
|
|
(438.5
|
)
|
|
(270.1
|
)
|
|||
Equity in net income of subsidiaries
|
5,034.8
|
|
|
3,188.7
|
|
|
2,948.0
|
|
|||
Net income
|
$
|
3,842.8
|
|
|
$
|
2,469.8
|
|
|
$
|
2,560.0
|
|
|
Years ended December 31
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Net income
|
$
|
3,842.8
|
|
|
$
|
2,469.8
|
|
|
$
|
2,560.0
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Change in net unrealized gains/losses on investments
|
172.5
|
|
|
117.9
|
|
|
(384.3
|
)
|
|||
Change in non-credit component of other-than-temporary impairment losses on investments
|
4.4
|
|
|
5.4
|
|
|
(5.6
|
)
|
|||
Change in net unrealized gains/losses on cash flow hedges
|
(64.6
|
)
|
|
(87.3
|
)
|
|
(45.2
|
)
|
|||
Change in net periodic pension and postretirement costs
|
51.3
|
|
|
(13.4
|
)
|
|
(26.0
|
)
|
|||
Foreign currency translation adjustments
|
2.8
|
|
|
2.1
|
|
|
(3.4
|
)
|
|||
Other comprehensive income (loss)
|
166.4
|
|
|
24.7
|
|
|
(464.5
|
)
|
|||
Total comprehensive income
|
$
|
4,009.2
|
|
|
$
|
2,494.5
|
|
|
$
|
2,095.5
|
|
|
Years ended December 31
|
||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Operating activities
|
|
|
|
|
|
||||||
Net income
|
$
|
3,842.8
|
|
|
$
|
2,469.8
|
|
|
$
|
2,560.0
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Undistributed earnings of subsidiaries
|
(2,436.7
|
)
|
|
(502.4
|
)
|
|
(287.8
|
)
|
|||
Net realized losses on financial instruments
|
18.2
|
|
|
195.0
|
|
|
3.8
|
|
|||
Other-than-temporary impairment losses recognized in income
|
7.5
|
|
|
47.8
|
|
|
39.2
|
|
|||
Loss (gain) on extinguishment of debt
|
282.4
|
|
|
—
|
|
|
(9.3
|
)
|
|||
Loss on disposal of assets
|
—
|
|
|
2.3
|
|
|
0.2
|
|
|||
Deferred income taxes
|
(32.5
|
)
|
|
(7.0
|
)
|
|
55.0
|
|
|||
Amortization, net of accretion
|
25.4
|
|
|
33.5
|
|
|
40.8
|
|
|||
Depreciation expense
|
69.2
|
|
|
70.4
|
|
|
68.1
|
|
|||
Share-based compensation
|
169.6
|
|
|
164.6
|
|
|
148.2
|
|
|||
Excess tax benefits from share-based compensation
|
—
|
|
|
(53.5
|
)
|
|
(95.8
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Receivables, net
|
(17.1
|
)
|
|
17.5
|
|
|
(17.9
|
)
|
|||
Other invested assets, current
|
(0.9
|
)
|
|
1.3
|
|
|
(0.2
|
)
|
|||
Other assets
|
(102.0
|
)
|
|
213.2
|
|
|
(106.9
|
)
|
|||
Amounts due from/to subsidiaries
|
(1,033.9
|
)
|
|
(1,487.8
|
)
|
|
420.5
|
|
|||
Accounts payable and accrued expenses
|
490.5
|
|
|
43.9
|
|
|
103.4
|
|
|||
Other liabilities
|
(61.0
|
)
|
|
(30.7
|
)
|
|
(231.4
|
)
|
|||
Income taxes
|
(6.4
|
)
|
|
198.4
|
|
|
47.2
|
|
|||
Other, net
|
(2.3
|
)
|
|
5.1
|
|
|
(10.2
|
)
|
|||
Net cash provided by operating activities
|
1,212.8
|
|
|
1,381.4
|
|
|
2,726.9
|
|
|||
Investing activities
|
|
|
|
|
|
||||||
Purchases of investments
|
(3,814.3
|
)
|
|
(2,874.9
|
)
|
|
(2,130.7
|
)
|
|||
Proceeds from sales, maturities, calls and redemptions of investments
|
2,594.7
|
|
|
3,309.8
|
|
|
3,076.6
|
|
|||
Changes in collateral and settlement of non-hedging derivatives
|
64.9
|
|
|
(34.5
|
)
|
|
(36.5
|
)
|
|||
Capitalization of subsidiaries
|
(124.2
|
)
|
|
(295.0
|
)
|
|
(939.7
|
)
|
|||
Changes in securities lending collateral
|
25.0
|
|
|
91.8
|
|
|
94.0
|
|
|||
Purchases of property and equipment, net of sales
|
(44.0
|
)
|
|
(98.7
|
)
|
|
(51.1
|
)
|
|||
Other, net
|
18.7
|
|
|
(7.9
|
)
|
|
1.5
|
|
|||
Net cash (used in) provided by investing activities
|
(1,279.2
|
)
|
|
90.6
|
|
|
14.1
|
|
|||
Financing activities
|
|
|
|
|
|
||||||
Net proceeds from (repayments of) commercial paper borrowings
|
174.6
|
|
|
(53.2
|
)
|
|
682.2
|
|
|||
Proceeds from long-term borrowings
|
5,457.8
|
|
|
—
|
|
|
1,226.5
|
|
|||
Repayments of long-term borrowings
|
(2,815.1
|
)
|
|
—
|
|
|
(2,697.2
|
)
|
|||
Changes in securities lending payable
|
(25.2
|
)
|
|
(90.9
|
)
|
|
(94.2
|
)
|
|||
Changes in bank overdrafts
|
51.8
|
|
|
30.8
|
|
|
(89.3
|
)
|
|||
Premiums paid on equity call options
|
—
|
|
|
—
|
|
|
(16.7
|
)
|
|||
Proceeds from sale of put options
|
0.9
|
|
|
—
|
|
|
16.6
|
|
|||
Repurchase and retirement of common stock
|
(1,997.7
|
)
|
|
—
|
|
|
(1,515.8
|
)
|
|||
Change in collateral and settlements of debt-related derivatives
|
(149.0
|
)
|
|
(360.4
|
)
|
|
—
|
|
|||
Cash dividends
|
(737.2
|
)
|
|
(715.1
|
)
|
|
(686.5
|
)
|
|||
Proceeds from issuance of common stock under employee stock plans
|
225.3
|
|
|
119.4
|
|
|
186.0
|
|
|||
Taxes paid through withholding of common stock under employee stock plans
|
(46.5
|
)
|
|
(65.7
|
)
|
|
(95.9
|
)
|
|||
Excess tax benefits from share-based compensation
|
—
|
|
|
53.5
|
|
|
95.8
|
|
|||
Net cash provided by (used in) financing activities
|
139.7
|
|
|
(1,081.6
|
)
|
|
(2,988.5
|
)
|
|||
Change in cash and cash equivalents
|
73.3
|
|
|
390.4
|
|
|
(247.5
|
)
|
|||
Cash and cash equivalents at beginning of year
|
882.7
|
|
|
492.3
|
|
|
739.8
|
|
|||
Cash and cash equivalents at end of year
|
$
|
956.0
|
|
|
$
|
882.7
|
|
|
$
|
492.3
|
|
ANTHEM, I
NC
.
|
|
|
|
By:
|
/s/ GAIL K. BOUDREAUX
|
|
Gail K. Boudreaux
President and Chief Executive Officer
|
Signature
|
|
Title
|
Date
|
/s/ GAIL K. BOUDREAUX
|
|
President and Chief Executive Officer, Director
(Principal Executive Officer)
|
February 21, 2018
|
Gail K. Boudreaux
|
|
|
|
/s/ JOHN E. GALLINA
|
|
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
|
February 21, 2018
|
John E. Gallina
|
|
|
|
/s/ RONALD W. PENCZEK
|
|
Senior Vice President and Chief Accounting Officer (Principal Accounting Officer)
|
February 21, 2018
|
Ronald W. Penczek
|
|
|
|
/s/ JOSEPH R. SWEDISH
|
|
Executive Chairman of the Board
|
February 21, 2018
|
Joseph R. Swedish
|
|
|
|
/s/ R. KERRY CLARK
|
|
Director
|
February 21, 2018
|
R. Kerry Clark
|
|
|
|
/s/ ROBERT L. DIXON, JR.
|
|
Director
|
February 21, 2018
|
Robert L. Dixon, Jr.
|
|
|
|
/s/ LEWIS HAY III
|
|
Director
|
February 21, 2018
|
Lewis Hay III
|
|
|
|
/s/ JULIE A. HILL
|
|
Director
|
February 21, 2018
|
Julie A. Hill
|
|
|
|
/s/ BAHIJA JALLAL
|
|
Director
|
February 21, 2018
|
Bahija Jallal
|
|
|
|
/s/ ANTONIO F. NERI
|
|
Director
|
February 21, 2018
|
Antonio F. Neri
|
|
|
|
/s/ RAMIRO G. PERU
|
|
Director
|
February 21, 2018
|
Ramiro G. Peru
|
|
|
|
/s/ GEORGE A. SCHAEFER, JR.
|
|
Director
|
February 21, 2018
|
George A. Schaefer, Jr.
|
|
|
|
/s/ ELIZABETH E. TALLETT
|
|
Director
|
February 21, 2018
|
Elizabeth E. Tallett
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income Scale
|
For the Cumulative Net Income performance measure, you will earn between 0% and [•]% (share amounts will be interpolated) of three-fourths of the number of Performance Stock Units originally covered by the Grant. The total number of Performance Stock Units, as adjusted for achievement of the Adjusted Net Income performance measure, will vest on the date listed in the Vesting Date column above. If achievement of any performance measure results in a number of shares awarded that is more or less than 75%, then the number of Dividend Equivalents payable upon the Vesting Date shall be adjusted accordingly.
|
|||
|
|
Threshold
|
Target
|
Maximum
|
|
Cumulative Operating Revenue (2017-2019)
|
|
|
|
|
Percent of Shares Vesting
|
|
|
|
|
|
|
|
|
|
In the event that a Change of Control (as defined in the Plan) occurs before the end of the Performance Period, the Compensation Committee of the Board of Directors of Anthem, Inc. will determine the extent to which the performance measures described above have been achieved as of the date of the Change of Control, and the number of Performance Stock Units earned will be based on such level of achievement. If the successor company does not assume the Performance Stock Unit Grant, the number of earned Performance Stock Units as so determined shall immediately vest upon the Change of Control and the Shares covered by the award shall be immediately delivered upon the Change of Control, provided that in the event that the Performance Stock Units are deferred compensation within the meaning of Code Section 409A, such Stock Units shall only be delivered upon the Change of Control if such Change of Control is a “change in control event” within the meaning of Code Section 409A and the delivery is made in accordance with Treasury Regulation 1.409A-3(j)(ix).
If the successor does assume the Performance Stock Unit Grant and your employment continues with the successor, the number of earned Performance Stock Units as so determined will be paid on the Vesting Date, provided that you continue to be employed through the Vesting Date (subject to earlier payment on a termination without Cause, Good Reason (or due to Retirement), or by reason of death or Disability as provided in the Award Agreement).
|
|||
Acceptance:
|
In order to accept your Performance Stock Units, you must electronically accept this Agreement through the Company’s broker at any time within ninety (90) days after the Grant Date. To effect your acceptance, please follow the instructions included with your grant materials. Acceptance of the Agreement includes acceptance of the terms and conditions of the Plan. If you do not timely and electronically accept this Agreement, this Agreement will be null and void as of the 90th day after the Grant Date and you will have no right or claim to the Performance Stock Units described above.
|
Date of Retirement
|
Maximum Percentage of Performance Stock Units
(% multiplied by the number of Performance Stock Units originally covered by the Grant) |
Prior to July 1, 2018
|
|
July 1, 2018 through December 31, 2018
|
|
January 1, 2019 through June 30, 2019
|
|
July 1, 2019 through December 31, 2019
|
|
January 1, 2020 through March 1, 2020
|
|
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Year Ended December 31,
|
||||||||||||||||||
(Dollars in millions)
|
|
2017
|
|
2016
|
|
2015
|
|
2014
1
|
|
2013
1
|
||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from continuing operations before income tax expense
|
$
|
3,963.8
|
|
|
$
|
4,555.4
|
|
|
$
|
4,631.0
|
|
|
$
|
4,368.1
|
|
|
$
|
3,840.2
|
|
|
Fixed charges
|
|
807.2
|
|
|
792.2
|
|
|
724.0
|
|
|
664.9
|
|
|
664.7
|
|
|||||
Total earnings available for fixed charges
|
|
$
|
4,771.0
|
|
|
$
|
5,347.6
|
|
|
$
|
5,355.0
|
|
|
$
|
5,033.0
|
|
|
$
|
4,504.9
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
|
$
|
739.0
|
|
|
$
|
723.0
|
|
|
$
|
653.0
|
|
|
$
|
600.7
|
|
|
$
|
602.7
|
|
Estimated interest portion of of rental expense
|
|
68.2
|
|
|
69.2
|
|
|
71.0
|
|
|
64.2
|
|
|
62.0
|
|
|||||
Total fixed charges
|
|
$
|
807.2
|
|
|
$
|
792.2
|
|
|
$
|
724.0
|
|
|
$
|
664.9
|
|
|
$
|
664.7
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges
|
|
5.91x
|
|
|
6.75x
|
|
|
7.40x
|
|
|
7.57x
|
|
|
6.78x
|
|
1.
|
The operating results of 1-800 CONTACTS, Inc. are reported as discontinued operations at December 31, 2014 and 2013 as a result of the divestiture completed on January 31, 2014.
|
Legal Name
|
|
State or Country
|
American Imaging Management, Inc. (d/b/a AIM Specialty Health)
|
|
Illinois
|
America's 1st Choice of South Carolina, Inc.
|
|
South Carolina
|
America's Health Management Services, Inc.
|
|
South Carolina
|
AMERIGROUP Community Care of New Mexico, Inc.
|
|
New Mexico
|
AMERIGROUP Corporation (d/b/a AMERIGROUP CORPORATION; AGP Corporation; AMGP; AMGP Corporation; AMGP Missouri; Amerigroup)
|
|
Delaware
|
America Delaware, Inc.
|
|
Delaware
|
AMERIGROUP District of Columbia, Inc.
|
|
District of Columbia
|
AMERIGROUP Health Plan of Louisiana, Inc.
|
|
Louisiana
|
AMERIGROUP Health Plan of Oregon, Inc.
|
|
Oregon
|
Amerigroup Insurance Company
|
|
Texas
|
Amerigroup Iowa, Inc.
|
|
Iowa
|
Amerigroup IPA of New York, LLC
|
|
New York
|
Amerigroup Kansas, Inc.
|
|
Kansas
|
AMERIGROUP Maryland, Inc. (d/b/a AMERIGROUP Community Care)
|
|
Maryland
|
AMERIGROUP Michigan, Inc.
|
|
Michigan
|
AMERIGROUP Mississippi, Inc.
|
|
Mississippi
|
AMERIGROUP New Jersey, Inc. (d/b/a AMERIGROUP Community Care)
|
|
New Jersey
|
AMERIGROUP Ohio, Inc. (d/b/a AMERIGROUP Community Care)
|
|
Ohio
|
AMERIGROUP Oklahoma, Inc.
|
|
Oklahoma
|
Amerigroup Partnership Plan, LLC
|
|
Illinois
|
AMERIGROUP Pennsylvania, Inc.
|
|
Pennsylvania
|
AMERIGROUP Tennessee, Inc. (d/b/a AMERIGROUP Community Care)
|
|
Tennessee
|
AMERIGROUP Texas, Inc. (d/b/a AMERIGROUP Community Care)
|
|
Texas
|
AMERIGROUP Washington, Inc.
|
|
Washington
|
AMGP Georgia Managed Care Company, Inc. (d/b/a AMERIGROUP; AMERIGROUP Community Care; AMERIGROUP Georgia; AMGP Georgia)
|
|
Georgia
|
Anthem Blue Cross Life and Health Insurance Company
|
|
California
|
Anthem Financial, Inc.
|
|
Delaware
|
Anthem Health Insurance Company of Nevada
|
|
Nevada
|
Anthem Health Plans of Kentucky, Inc. (d/b/a Anthem Blue Cross and Blue Shield)
|
|
Kentucky
|
Anthem Health Plans of Maine, Inc. (d/b/a Anthem Blue Cross and Blue Shield and Associated Hospital Service)
|
|
Maine
|
Anthem Health Plans of New Hampshire, Inc. (d/b/a Anthem Blue Cross and Blue Shield)
|
|
New Hampshire
|
Anthem Health Plans of Virginia, Inc. (d/b/a Anthem Blue Cross and Blue Shield)
|
|
Virginia
|
Anthem Health Plans, Inc. (d/b/a Anthem Blue Cross and Blue Shield)
|
|
Connecticut
|
Anthem Holding Corp. (d/b/a Anthem Properties, Inc.)
|
|
Indiana
|
Anthem Insurance Companies, Inc. (d/b/a Anthem Blue Cross and Blue Shield; Anthem Blue Cross Blue Shield)
|
|
Indiana
|
Anthem Kentucky Managed Care Plan, Inc. (d/b/a Anthem Blue Cross and Blue Shield Medicaid)
|
|
Kentucky
|
Anthem Life & Disability Insurance Company
|
|
New York
|
Anthem Life Insurance Company
|
|
Indiana
|
Anthem Partnership Holding Company, LLC
|
|
Indiana
|
Anthem Southeast, Inc.
|
|
Indiana
|
Legal Name
|
|
State or Country
|
Anthem UM Services, Inc.
|
|
Indiana
|
Anthem Workers' Compensation, LLC
|
|
Indiana
|
Anthem, Inc.
|
|
Indiana
|
APPLIED PATHWAYS LLC
|
|
Illinois
|
Arcus Enterprises, Inc.
|
|
Delaware
|
Associated Group, Inc.
|
|
Indiana
|
ATH Holding Company, LLC
|
|
Indiana
|
Blue Cross and Blue Shield of Georgia, Inc. (d/b/a Anthem Blue Cross and Blue Shield)
|
|
Georgia
|
Blue Cross Blue Shield Healthcare Plan of Georgia, Inc. (d/b/a Anthem Blue Cross and Blue Shield)
|
|
Georgia
|
Blue Cross Blue Shield of Wisconsin (d/b/a Anthem Blue Cross and Blue Shield)
|
|
Wisconsin
|
Blue Cross of California (d/b/a Anthem Blue Cross)
|
|
California
|
Blue Cross of California Partnership Plan, Inc.(d/b/a Anthem Blue Cross Partnership Plan)
|
|
California
|
CareMore Health Plan
|
|
California
|
CareMore Health Plan of Arizona, Inc.
|
|
Arizona
|
CareMore Health Plan of Nevada
|
|
Nevada
|
CareMore Health Plan of Texas, Inc.
|
|
Texas
|
CareMore Health System
|
|
California
|
CareMore Services Company, LLC
|
|
Indiana
|
CareMore, LLC
|
|
Indiana
|
Cerulean Companies, Inc.
|
|
Georgia
|
Claim Management Services, Inc.(d/b/a Anthem Blue Cross and Blue Shield)
|
|
Wisconsin
|
Community Care Health Plan of Louisiana, Inc.
|
|
Louisiana
|
Community Care Health Plan of Nevada, Inc. (d/b/a Anthem Blue Cross and Blue Shield Healthcare Solutions; AMERIGROUP Community Care)
|
|
Nevada
|
Community Insurance Company (d/b/a Anthem Blue Cross and Blue Shield)
|
|
Ohio
|
Compcare Health Services Insurance Corporation (d/b/a Anthem Blue Cross and Blue Shield)
|
|
Wisconsin
|
Crossroads Acquisition Corp.
|
|
Delaware
|
DeCare Analytics, LLC
|
|
Minnesota
|
DeCare Dental Health International, LLC
|
|
Minnesota
|
DeCare Dental Insurance Ireland, Ltd.
|
|
Ireland
|
DeCare Dental Networks, LLC
|
|
Minnesota
|
DeCare Dental, LLC
|
|
Minnesota
|
DeCare Operations Ireland, Limited
|
|
Ireland
|
Delivery Network, LLC
|
|
Florida
|
Designated Agent Company, Inc.
|
|
Kentucky
|
EasyScripts, LLC
|
|
Florida
|
EasyScripts Hialeah LLC
|
|
Florida
|
EHC Benefits Agency, Inc.
|
|
New York
|
Empire HealthChoice Assurance, Inc. (d/b/a Empire Blue Cross; Empire Blue Cross Blue Shield HMO)
|
|
New York
|
Empire HealthChoice HMO, Inc. (d/b/a Empire Blue Cross HMO; Empire Blue Cross Blue Shield HMO)
|
|
New York
|
Federal Government Solutions, LLC
|
|
Wisconsin
|
Freedom Health, Inc.
|
|
Florida
|
Global TPA, LLC
|
|
Florida
|
Golden West Health Plan, Inc.
|
|
California
|
Legal Name
|
|
State or Country
|
Greater Georgia Life Insurance Company (d/b/a Anthem Life)
|
|
Georgia
|
Health Core, Inc.
|
|
Delaware
|
Health Management Corporation (d/b/a LiveHealth Online; HMC of Virginia; Health Management of Virginia)
|
|
Virginia
|
Health Ventures Partner, L.L.C.
|
|
Illinois
|
HealthKeepers, Inc.
|
|
Virginia
|
HealthLink HMO, Inc. (d/b/a HealthLink HMO)
|
|
Missouri
|
HealthLink, Inc.
|
|
Illinois
|
HealthPlus HP, LLC (d/b/a Empire BlueCross BlueShield HealthPlus)
|
|
New York
|
Healthy Alliance Life Insurance Company (d/b/a Anthem Blue Cross and Blue Shield)
|
|
Missouri
|
HealthSun Blocker Corp. I
|
|
Delaware
|
HealthSun Blocker Corp. II
|
|
Delaware
|
HealthSun Health Plans, Inc.
|
|
Florida
|
HealthSun Holdings, LLC
|
|
Florida
|
HealthSun Management, LLC
|
|
Florida
|
HealthSun Physicians Network I, LLC
|
|
Florida
|
HealthSun Physicians Network, LLC
|
|
Florida
|
Healthware Solutions, LLC
|
|
Florida
|
Healthy Alliance Life Insurance Company (d/b/a Anthem Blue Cross and Blue Shield)
|
|
Missouri
|
HEP AP Holdings, Inc.
|
|
Delaware
|
Highland Acquisition Holdings, LLC
|
|
Delaware
|
Highland Holdco, Inc.
|
|
Delaware
|
Highland Investor Holdings, LLC
|
|
Delaware
|
HMO Colorado, Inc. (d/b/a HMO Colorado; HMO Nevada)
|
|
Colorado
|
HMO Missouri, Inc. (d/b/a Amerigroup Missouri; Anthem Blue Cross and Blue Shield)
|
|
Missouri
|
Human Resource Associates, LLC
|
|
Florida
|
Imaging Management Holdings, LLC
|
|
Delaware
|
IngenioRx, Inc.
|
|
Indiana
|
Legato Health Technologies, LLP
|
|
India
|
Legato Holdings I, Inc.
|
|
Indiana
|
Legato Holdings II, LLC
|
|
Indiana
|
Living Complete Technologies, Inc.
|
|
Maryland
|
Marketing in Motion Group, LLC
|
|
Florida
|
Matthew Thornton Health Plan, Inc.
|
|
New Hampshire
|
Meridian Resource Company, LLC
|
|
Wisconsin
|
National Government Services, Inc. (d/b/a NGS of Indiana)
|
|
Indiana
|
National Telehealth Network, LLC
|
|
Delaware
|
New England Research Institutes, Inc. (d/b/a Summit Community Care)
|
|
Massachusetts
|
Newco Holdings, Inc.
|
|
Indiana
|
NGS Federal, LLC
|
|
Indiana
|
OPTIMUM HEALTHCARE, INC.
|
|
Florida
|
Park Square Holdings, Inc.
|
|
California
|
Park Square I, Inc.
|
|
California
|
Park Square II, Inc.
|
|
California
|
Pasteur Medical Bird Road, LLC
|
|
Florida
|
Pasteur Medical Center, LLC
|
|
Delaware
|
Legal Name
|
|
State or Country
|
Pasteur Medical Cutler Bay, LLC
|
|
Florida
|
Pasteur Medical Group, LLC
|
|
Florida
|
Pasteur Medical Hialeah Gardens, LLC
|
|
Florida
|
Pasteur Medical Holdings, LLC
|
|
Florida
|
Pasteur Medical Kendall, LLC
|
|
Florida
|
Pasteur Medical Management, LLC
|
|
Florida
|
Pasteur Medical Miami Gardens, LLC
|
|
Florida
|
Pasteur Medical North Miami Beach, LLC
|
|
Florida
|
Pasteur Medical Partners, LLC
|
|
Florida
|
Pasteur Pharmacy II, LLC
|
|
Florida
|
Pasteur Pharmacy III, LLC
|
|
Florida
|
Pasteur Pharmacy IV, LLC
|
|
Florida
|
Pasteur Pharmacy V, LLC
|
|
Florida
|
Resolution Health, Inc.
|
|
Delaware
|
RightCHOICE Managed Care, Inc. (d/b/a RightCHOICE Benefit Administrators; Anthem Blue Cross and Blue Shield)
|
|
Delaware
|
Rocky Mountain Hospital and Medical Service, Inc.(d/b/a Anthem Blue Cross and Blue Shield)
|
|
Colorado
|
SellCore, Inc. (d/b/a SellCore Insurance Services, Inc.)
|
|
Delaware
|
Simply Healthcare Plans, Inc. (d/b/a Clear Health Alliance; Bettter Health and Amerigroup Florida)
|
|
Florida
|
Southeast Services, Inc.
|
|
Virginia
|
State Sponsored DM Services, Inc.
|
|
Indiana
|
The Anthem Companies of California, Inc.
|
|
California
|
The Anthem Companies, Inc.
|
|
Indiana
|
TPX, LLC
|
|
Florida
|
TrustSolutions, LLC
|
|
Wisconsin
|
UNICARE Health Plan of West Virginia, Inc.
|
|
West Virginia
|
UNICARE Illinois Services, Inc.
|
|
Illinois
|
UniCare Life & Health Insurance Company
|
|
Indiana
|
UNICARE National Services, Inc.
|
|
Delaware
|
UniCare Specialty Services, Inc.
|
|
Delaware
|
Valus, Inc.
|
|
Indiana
|
Wellmax Health Medical Centers, LLC
|
|
Florida
|
Wellmax Health Physicians Network, LLC
|
|
Florida
|
WellPoint Acquisition, LLC
|
|
Indiana
|
WellPoint Behavioral Health, Inc.
|
|
Delaware
|
WellPoint California Services, Inc.
|
|
Delaware
|
WellPoint Dental Services, Inc.
|
|
Delaware
|
WellPoint Health Solutions, Inc.
|
|
Indiana
|
WellPoint Holding Corp.
|
|
Delaware
|
WellPoint Information Technology Services, Inc.
|
|
California
|
WellPoint Insurance Services, Inc.
|
|
Hawaii
|
WellPoint Military Care Corporation
|
|
Indiana
|
WPMI (Shanghai) Enterprise Service Co., Ltd.
|
|
China
|
WPMI, LLC
|
|
Delaware
|
|
•
|
|
Form S-8 No. 333-84906 and Form S-8 No. 333-129334 pertaining to the Anthem 401(k) Plan;
|
|
•
|
|
Form S-8 No. 333-156099 pertaining to the Anthem, Inc. Employee Stock Purchase Plan;
|
|
•
|
|
Form S-8 No. 333-159830 pertaining to the Anthem Incentive Compensation Plan;
|
|
•
|
|
Form S-8 No. 333-218190 pertaining to the Anthem 2017 Incentive Compensation Plan; and
|
|
•
|
|
Form S-3 No. 333-221824 pertaining to the Anthem, Inc. registration of senior debt securities, subordinated debt securities, preferred stock, common stock, depositary shares, warrants, rights, stock purchase contracts and stock purchase units
|
1.
|
I have reviewed this report on Form 10-K of Anthem, 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: February 21, 2018
|
|
/s/ GAIL K. BOUDREAUX
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this report on Form 10-K of Anthem, 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: February 21, 2018
|
|
/s/ JOHN E. GALLINA
|
|
|
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/ GAIL K. BOUDREAUX
|
|
Gail K. Boudreaux
|
|
President and Chief Executive Officer
|
|
February 21, 2018
|
|
(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/ JOHN E. GALLINA
|
|
John E. Gallina
|
|
Executive Vice President and Chief Financial Officer
|
|
February 21, 2018
|
|