Aetna 2012 Annual Report Download - page 13

Annual Report- Page 7
Segment Results and Use of Non-GAAP Measures in this Document
The following discussion of operating results 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 128. 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 to our consolidated results. The Corporate
Financing segment includes interest expense on our outstanding debt and the financing components of our pension
and other postretirement benefit plans (“OPEB”) expense (the service cost and prior service cost components of this
expense are allocated to our business segments).
Our discussion of our operating results is based on operating earnings, which is the measure reported to our Chief
Executive Officer for purposes of assessing financial performance and making operating decisions, such as
allocating resources to each segment. Operating earnings exclude from net income reported in accordance with
GAAP net realized capital gains or losses as well as other items, if any, that neither relate to the ordinary course of
our business nor reflect our underlying business performance. We believe excluding net realized capital gains or
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. In each segment discussion in this MD&A, we provide a table that
reconciles operating earnings to net income. Each table details the net realized capital gains or 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 benefit management services, dental, behavioral health and vision plans
offered on both an Insured basis and an ASC basis and emerging businesses products and services, such as ACS,
that complement and enhance our medical products. 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 (“HSAs”) 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 (which may be funded by the plan sponsor and/or the member in the case of HSAs). We also offer
Medicare and Medicaid products and services, and other medical products, such as medical management and data
analytics services, medical stop loss insurance and products that provide access to our provider networks in select
markets. We separately track premiums and health care costs for Medicare and Medicaid products; all other
medical, dental and other Health Care products are referred to as Commercial.