Aetna 2015 Annual Report Download - page 106
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Annual Report- Page 100
The unaudited pro forma consolidated results for the year ended December 31, 2013 reflect the following pro forma
adjustments:
• Elimination of intercompany transactions between Aetna and Coventry, primarily related to network rental
fees.
• Foregone interest income associated with cash and cash equivalents and investments assumed to have been
used to partially fund the Coventry Merger.
• Foregone interest income associated with adjusting the amortized cost of Coventry’s investment portfolio to
fair value as of the completion of the Coventry Merger.
• Elimination of historical Coventry intangible asset amortization expense and capitalized internal-use
software amortization expense and addition of intangible asset amortization expense relating to intangibles
valued as part of the acquisition.
• Additional interest expense from the long-term debt Aetna issued in November 2012 as well as the interest
expense on short-term debt Aetna issued in March and April 2013. Interest expense was reduced for the
amortization of the fair value adjustment to long-term debt.
• Elimination of transaction-related costs incurred by Aetna and Coventry during 2013.
• Adjustment of the above pro forma adjustments for the applicable tax impact.
• Conforming adjustments to align Coventry’s presentation to Aetna’s accounting policies.
• Elimination of revenue and directly identifiable costs related to the sale of Aetna’s Missouri Medicaid
business, Missouri Care, Incorporated (“Missouri Care”), to WellCare Health Plans, Inc. on March 31,
2013.
Completed Disposition
In connection with the acquisition of Coventry, on March 31, 2013, we completed the sale of Missouri Care to
WellCare Health Plans, Inc. The sale price was not material, and the transaction did not have a material impact on
our financial position or operating results.
4. Earnings Per Common Share
Basic earnings per common share (“EPS”) is computed by dividing net income attributable to Aetna by the
weighted average number of common shares outstanding during the reporting period. Diluted EPS is computed in a
similar manner, except that the weighted average number of common shares outstanding is adjusted for the dilutive
effects of our outstanding stock-based compensation awards, but only if the effect is dilutive.
The computations of basic and diluted EPS for 2015, 2014 and 2013 are as follows:
(Millions, except per common share data) 2015 2014 2013
Net income attributable to Aetna $ 2,390.2 $ 2,040.8 $ 1,913.6
Weighted average shares used to compute basic EPS 349.3 355.5 355.4
Dilutive effect of outstanding stock-based compensation awards 3.3 3.6 3.8
Weighted average shares used to compute diluted EPS 352.6 359.1 359.2
Basic EPS $ 6.84 $ 5.74 $ 5.38
Diluted EPS $ 6.78 $ 5.68 $ 5.33