(in accordance with Generally AcceptedAccounting Principles)

       

For the year endingDecember 31, 2014 (FY14)

       

For the year endingDecember 31, 2015 (FY15)

        Comments     Diluted earnings per common share    

$7.40 to $7.60 (adjusted)^(a)

    $8.50 to $9.00     (a) Adjusted earnings per share for 2014 excludes approximately $0.15 per share associated with the early retirement of debt in the fourth quarter of 2014. The Company has included this financial measure (not in accordance with Generally Accepted Accounting Principles (GAAP)) in its summary of financial results within this earnings press release as management believes that this measure, when presented in conjunction with the comparable GAAP measure, is useful to both management and its investors in analyzing the company’s ongoing business and operating performance. The excluded item (retirement of debt) is not a recurring part of the company’s operating plan. Consequently, management uses this non-GAAP financial measure as an indicator of business performance, as well as for operational planning and decision making purposes. Non-GAAP financial measures should be considered in addition to, but not as a substitute for, or superior to, financial measures prepared in accordance with GAAP. To reconcile the non-GAAP to the GAAP amount, approximately $0.15 per share associated with the early retirement of debt in the fourth quarter of 2014 should be deducted, to arrive at GAAP                    

EPS guidance of $7.25 to $7.45.

  Revenues Revenues include expected interest Consolidated $48 billion to $49 billion $53.5 billion to $54.5 billion income.     Segments Segment-level revenues include Retail Segment $33.5 billion to $34.5 billion $38.5 billion to $40.0 billion intersegment amounts that eliminate in consolidation. Employer Group Segment $12.0 billion to $12.5 billion $12 billion to $13 billion    

Healthcare Services Segment

    $19.5 billion to $20.0 billion     $22.5 billion to $23.5 billion         Consolidated investment income $350 million to $400 million $350 million to $400 million Investment income is included in                     revenue guidance above.   Ending medical membership; and changes Retail Segment Medicare Advantage (MA)

2,443,700 to 2,453,700; Up 375,000 to

2,683,700 to 2,703,700; Up Includes MA membership sold

 385,000

235,000 to 255,000 directly to individuals as well as dual-eligible MA members from state-based contracts.

 

 

Medicare stand-alone PDPs

3,829,100 to 3,879,100; Up 650,000

4,329,100 to 4,379,100; Up Medicare stand-alone PDPs

to 700,000

475,000 to 525,000 exclude Limited Income Newly Eligible Transitions (LI-NET)

 

 

membership.

State-based Medicaid

275,500 to 295,500; Up 190,000 to

285,500 to 290,500; Flat to Up Includes Medicaid Temporary

 210,000

 5,000

Assistance for Needy Families (TANF) which contracts are generally reinsured through partnering relationships, and Long-Term Support Services (LTSS) membership from state- based contracts.   Individual commercial 980,400 to 1,030,400; Up 475,000 to 915,400 to 925,400; Down Includes membership expectations

 525,000

80,000 to 90,000 for both on-exchange and off- exchange enrollment. Medicare Supplement 129,700 to 139,700; Up 35,000 to 170,000 to 180,000; Up

 45,000

35,000 to 45,000   Employer Group Segment Medicare Advantage 479,100 to 499,100; Up 50,000 to 479,100 to 489,100; Flat to

 70,000

Down 10,000   Commercial fully-insured 1,187,000 to 1,197,000; Down 40,000 1,162,000 to 1,172,000; Down to 50,000 20,000 to 30,000     Commercial ASO 1,092,800 to 1,102,800; Down 60,000 672,800 to 697,800; Down         to 70,000     400,000 to 425,000         Benefit ratios Benefits expense as a percent of Retail Segment 83.5% to 84.5% 83.5% to 84.5%

premiums.

    Employer Group Segment     83.5% to 84.5%     83.5% to 84.5%         Operating cost ratios Operating costs as a percent of Consolidated 15.75% to 16.25% 14.5% to 15.5% total revenues excluding investment income.     Healthcare Services Segment     95.25% to 95.75%     95.5% to 96.0%         Consolidated depreciation and amortization Certain D&A is included in benefits (D&A) expense on the income statement Income statement $330 million to $340 million $350 million to $370 million but shown as a non-cash item on the cash flows statement.   Cash flows statement     $435 million to $445 million     $470 million to $490 million         Consolidated interest expense $190 million to $195 million $185 million to $190 million Interest expense for FY14 includes $0.15 per share of expenses from early retirement of debt in                     4Q14.   Pretax results Segment-level pretax results include the impact of net investment income. Retail Segment $1.13 billion to $1.18 billion $1.425 billion to $1.525 billion FY15 includes $0.30 to $0.35 per share of investment spending related to state-based contracts. Employer Group Segment $250 million to $290 million $275 million to $325 million     Healthcare Services Segment     $725 million to $775 million     $775 million to $825 million         Effective Tax Rate 46% to 47% 49.0% to 49.5% Reflects the non-deductibility of the                     industry fee.   Weighted average shares for diluted earnings per Approximately 156 million Approximately 150 million Reflects impact of repurchases.   common share                     Cash flows from operations $1.1 billion to $1.4 billion $1.5 billion to $1.8 billion Includes anticipated FY14 receivables of $700 million to $750 million and FY15 receivables of $325 million to $400 million related to health care exchange risk adjustment, reinsurance, and risk corridor                     programs.     Capital expenditures         $500 million to $525 million         $575 million to $625 million