Aetna 2009 Annual Report Download - page 10

Annual Report – Page 4
Segment Results and Use of Non-GAAP Measures in this Document
The discussion of our results of operations that follows is presented based on our reportable segments in accordance
with the accounting guidance for segment reporting and consistent with our segment disclosure included in Note 19 of
Notes to Consolidated Financial Statements beginning on page 80. Each segment’ s discussion of results is based on
operating earnings, which is the measure reported to our Chief Executive Officer for purposes of assessing the
segment’ s financial performance and making operating decisions, such as allocating resources to the segment. Our
operations are conducted in three business segments: Health Care, Group Insurance and Large Case Pensions. Our
Corporate Financing segment is not a business segment. It is added to our business segments to reconcile our
consolidated results. The Corporate Financing segment includes interest expense for our outstanding debt and,
beginning in 2009, the financing components of our pension plan and other post-retirement benefit plans (“OPEB”)
expense (the service cost and prior service cost components of this expense are allocated to our business segments).
Prior periods have been reclassified to reflect this change.
Our discussion of the results of operations of each business segment is based on operating earnings, which exclude net
realized capital gains and losses as well as other items, if any, from net income reported in accordance with GAAP.
We believe excluding realized capital gains and losses from net income to arrive at operating earnings provides more
meaningful information about our underlying business performance. Net realized capital gains and losses arise from
various types of transactions, primarily in the course of managing a portfolio of assets that support the payment of
liabilities; however, these transactions do not directly relate to the underwriting or servicing of products for our
customers and are not directly related to the core performance of our business operations. We also may exclude other
items that do not relate to the ordinary course of our business from net income to arrive at operating earnings. In each
segment discussion in this MD&A, we present a table that reconciles operating earnings to net income reported in
accordance with GAAP. Each table details the net realized capital gains and losses and any other items excluded from
net income, and the footnotes to each table describe the nature of each other item and why we believe it is appropriate
to exclude that item from net income.
HEALTH CARE
Health Care consists of medical, pharmacy benefits management, dental, behavioral health and vision plans offered on
both an Insured basis and an ASC basis. Medical products include point-of-service (“POS”), preferred provider
organization (“PPO”), health maintenance organization (“HMO”) and indemnity benefit plans. Medical products also
include health savings accounts and Aetna HealthFund®, consumer-directed health plans that combine traditional POS
or PPO and/or dental coverage, subject to a deductible, with an accumulating benefit account. We also offer Medicare
and Medicaid products and services and specialty products, such as medical management and data analytics services,
and stop loss insurance, as well as products that provide access to our provider network in select markets. We
separately track premiums and health care costs for Medicare and Medicaid products. The grouping referred to as
Commercial includes all medical, dental and other insured products, except Medicare and Medicaid.