Aetna 2013 Annual Report Download - page 13

Annual Report- Page 7
Voluntary Early Retirement Program
In July 2011, we announced a voluntary early retirement program. In connection with the voluntary early
retirement program, we recorded a one-time charge for enhanced severance and benefits of $89 million ($137
million pretax) in the third quarter of 2011.
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 135. Our operations are conducted in three business
segments: Health Care, Group Insurance and Large Case Pensions. The acquired Coventry operations are reflected
in our Health Care segment for 2013 on and after the Effective Date. 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. Operating earnings exclude from net income
attributable to Aetna 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. In
addition, as previously disclosed, beginning with 2014 projections and results, operating earnings also exclude
after-tax amortization of other acquired intangible assets (which relates to our acquisition activities, including
Coventry). Although the excluded items may recur, we believe excluding them from net income attributable to
Aetna 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. Operating earnings is the measure reported to our Chief Executive Officer
for purposes of assessing financial performance and making operating decisions, such as the allocation of resources
among our business segments. In each business segment discussion in this MD&A, we provide a table that
reconciles operating earnings to net income attributable to Aetna. Each table details the net realized capital gains or
losses and any other items excluded from net income attributable to Aetna, 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 attributable
to Aetna. Non-GAAP financial measures we disclose, such as operating earnings, should not be considered a
substitute for, or superior to, financial measures determined or calculated in accordance with GAAP.
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, workers' compensation administrative services and products that
provide access to our provider networks in select geographies. 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.