PART II ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations Global Health Care Segment Segment Description Results of Operations As discussed in the Introduction section of this MD&A and Note 23 to the Consolidated Financial Statements, effective December 31, 2012, the Company changed its reporting segments. The Global Health Care segment now includes the Company’s international health care business, previously reported in the former International segment and excludes certain disability and life business that is now reported in the Group Disability and Life segment. Prior year information has been conformed to the new segment presentation. The international health care business is included in the Commercial operating segment. Global Health Care aggregates the following two operating segments: U.S. Virgin Islands, Canada, Europe, the Middle East, and Asia. Cigna services its globally mobile customers virtually everywhere in the world. These products and services are offered through a variety of funding arrangements such as administrative services only (ASO), guaranteed cost and retrospectively experience rated. The Company measures the operating effectiveness of the Global Health Care segment using the following key factors: Segment earnings increased 28% in 2012 compared with 2011, due to higher adjusted income from operations, partially offset by the special items related to the realignment and efficiency plan charge, the costs associated with the acquisition of HealthSpring and a litigation matter. Segment earnings increased 18% in 2011 compared with 2010, due to higher adjusted income from operations. The Global Health Care segment’s adjusted income from operations increased 34% in 2012, as compared with 2011 reflecting: The  Commercial  operating segment includes both the U.S. commercial and international health care businesses that offer insured and self-insured medical, dental, behavioral health, vision, and prescription drug benefit plans, health advocacy programs and other products and services that may be integrated to provide comprehensive global health care benefit programs to employers and their employees, including globally mobile individuals. Cigna, either directly or through its partners, offers some or all of these products and services in all 50 states, the District of Columbia, the GLYPH<127> The  Government  operating segment offers Medicare Advantage plans to seniors in 13 states and the District of Columbia, Medicare Part D plans in all 50 states and the District of Columbia and Medicaid plans. Results for the Government operating segment include HealthSpring from the date of acquisition, January 31, 2012. GLYPH<127> segment earnings and adjusted income from operations; GLYPH<127> customer growth; GLYPH<127> sales of specialty products; GLYPH<127> other operating expense as a percentage of segment revenues (operating expense ratio); and GLYPH<127> medical expense as a percentage of premiums (medical care ratio) in the guaranteed cost and Medicare businesses. GLYPH<127> strong earnings contributions from the government segment, primarily attributable to the acquired HealthSpring business reflecting effective medical cost and pharmacy management programs; GLYPH<127> CIGNA CORPORATION -  2012 Form  10-K 41 Financial Summary (In millions) 2012 2011 2010 Premiums and fees $ 20,973 $ 14,443 $ 14,134 Net investment income 259 263 230 Mail order pharmacy revenues 1,623 1,447 1,420 Other revenues 225 236 269 Segment revenues 23,080 16,389 16,053 Mail order pharmacy cost of goods sold 1,328 1,203 1,169 Benefits and other operating expenses 19,541 13,465 13,424 Benefits and expenses 20,869 14,668 14,593 Income before taxes 2,211 1,721 1,460 Income taxes 793 616 520 SEGMENT EARNINGS 1,418 1,105 940 Less: special items (after-tax) included in segment earnings: Charge for realignment and efficiency plan (See Note 6 to the Consolidated Financial Statements) (42) - - Costs associated with the HealthSpring acquisition (See Note 3 to the Consolidated Financial Statements) (7) - - Completion of IRS examination (See Note 20 to the Consolidated Financial Statements) - 1 - Charge related to litigation matter (See Note 24 to the Consolidated Financial Statements) (13) - - ADJUSTED INCOME FROM OPERATIONS $ 1,480 $ 1,104 $ 940 Realized investment gains, net of taxes $ 9 $ 23 $ 25