Financials

Financial Highlights

(in millions, except EPS)2016201520152016
GAAP revenue$6,408$6,662
Adjusted revenue1$6,491$6,778
Gross margin14.2%10.3%
Adjusted gross margin116.5%15.8%
SAG$686$699
Adjusted operating income1$354$323
Adjusted operating margin15.5%4.8%
Pre-tax loss$(1,227)$(574)
GAAP EPS loss$(4.85)$(1.65)
Adjusted net income1$223$174
Adjusted EPS1$1.06$0.83

1 Please refer to the table below for the reconciliation of this financial measure that is not in compliance with Generally Accepted Accounting Principles (GAAP).

Segments and Service Offerings

Commercial Industries 42% of Total 2016 Revenue 2.2% Segment Margin Other 30% Customer Care 35% Human Resource Services & Learning 35% Public Sector 27% of Total 2016 Revenue 12.9% Segment Margin State, Local, Federal 50% Transportation 50% Healthcare 26% of Total 2016 Revenue 9.4% Segment Margin Pharma & Lifesciences 10% Other 5% Payer 40% Government 35% Provider 10% Other 5% of Total 2016 Revenue Negative Margin Businesses Student Loan 30% Transportation 70%

Performance

Revenue
  • $6,938 2014
  • $6,662 $6,778
    2015
  • $6,408 $6,491
    2016
Adjusted Operating Income
  • $433 2014
  • $323 2015
  • $354 2016
6.2% 4.8% 5.5%

Non-GAAP Measures

Net (Loss) Income and EPS Reconciliation    Year Ended December 31,
Year Ended December 31,201420152016
 2016 2015 2014 
(in millions, except per share amounts)Net Income
(Loss)
EPSNet Income
(Loss)
EPSNet Income
(Loss)
EPS
Reported from continuing operations$(983)$(4.85)$(336)$(1.65)$(34)$(.17)
Adjustments:      
Goodwill impairment935   
Amortization of intangible assets280 250 250 
NY Medicaid Management Information System (NY MMIS)161   
Restructuring and related costs101 159 21 
Health Enterprise charge 389  
Separation costs44   
Other expenses, net excluding third party interest120 30 34 
Income tax adjustments2(335) (318) (114) 
Adjusted$223$1.06$174$0.83$225$1.07
Weighted average shares for adjusted EPS3 210,774 210,774 210,774

1 Excludes third party interest expense of $14 million, $8 million and $11 million for the years ended December 31, 2016, 2015 and 2014, respectively.
2 Reflects the income tax (expense) benefit of the adjustments.
3 Average shares for the calculations of adjusted EPS include shares associated with our Series A convertible preferred stock and our stock compensation plan.
Operating Income / Margin Reconciliation (in millions)     Year Ended December 31,
Year Ended December 31,201420152016
 2016  2015  2014  
 Pre-Tax
Profit
(Loss)
RevenueMarginPre-Tax
Profit
(Loss)
RevenueMarginPre-Tax
Profit
(Loss)
RevenueMargin
Reported from continuing operations$(1,227)$6,408(19.1)%$(574)$6,662(8.6)%$10$6,9380.1%
Adjustments:         
Goodwill impairment935      
Amortization of intangible assets280  250  250  
NY Medicaid Management Information System (NY MMIS)16183     
Restructuring and related costs101  159  21  
Separation costs44      
Related party interest44  61  107  
Health Enterprise charge20  389116   
Other expenses, net(335)  38  45  
Adjusted Operating Income / Margin$354$6,4915.5%$323$6,7784.8%$433$6,9386.2%

Gross Margin ReconciliationYear Ended December 31,
Year Ended December 31,2016201520152016
Gross Margin reported from continuing operations14.2%10.3%
Adjustments:  
NY Medicaid Management Information System (NY MMIS)2.3%
Health Enterprise charge5.5%
Adjusted Gross Margin16.5%15.8%

Form 10-K

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