Last10K.com

Anthem, Inc. (ANTM) SEC Filing 8-K Material Event for the period ending Wednesday, July 21, 2021

Anthem, Inc.

CIK: 1156039 Ticker: ANTM

Exhibit 99.1

PRESS RELEASE

 

LOGO

ANTHEM REPORTS SECOND QUARTER 2021 RESULTS,

RAISES FULL YEAR OUTLOOK

 

   

Second quarter GAAP net income was $7.25 per share, including net positive adjustment items of $0.22 per share. Adjusted net income was $7.03* per share.

 

   

Operating revenue grew by 14.1% over the prior quarter to $33.3 billion, or 15.8% adjusted for the repeal of the health insurance tax.

 

   

Medical enrollment increased by 1.9 million members year over year and 820 thousand members in the second quarter to 44.3 million members.

 

   

Third quarter 2021 dividend of $1.13 per share declared to shareholders.

 

   

Raising full year adjusted net income outlook from greater than $25.10* per share to greater than $25.50* per share.

Indianapolis, Ind. - July 21, 2021 - Anthem, Inc. (NYSE: ANTM) reported second quarter 2021 results reflecting strong financial performance.

“We continued to deliver on our commitments to our stakeholders while making considerable progress against our long-term strategy during the second quarter, all while navigating an uncertain environment due to the pandemic,” said Gail Boudreaux, President and CEO. “Our continued success is a function of our relentless focus on the needs of our clients and customers and an unwavering commitment to improve the health of humanity, starting with our members, their communities and our own associates.”

 

*

Refer to GAAP reconciliation tables on page 15.

 

1


CONSOLIDATED HIGHLIGHTS

Earnings Per Share: GAAP net income was $7.25 per share in the second quarter, including net positive adjustment items of $0.22 per share. Adjusted net income was $7.03* per share.

 

*

Please refer to the GAAP reconciliation tables on page 15.

Membership: Medical enrollment totaled approximately 44.3 million members at June 30, 2021, an increase of 1.9 million lives, or 4.4 percent from the prior year quarter. Government Business enrollment increased by 2.1 million lives compared to the prior year quarter, driven by Medicaid, reflecting organic growth, aided by the temporary suspension of eligibility recertification efforts in our markets, and growth in Medicare Advantage. In addition, the acquisition of MMM during the second quarter added 315 thousand Medicaid members and 273 thousand Medicare Advantage members. Commercial & Specialty Business enrollment decreased by 174 thousand lives compared to the prior year quarter primarily attributable to in-group attrition in the group fee-based business as a result of the economic environment, partially offset by growth in our risk-based businesses.

During the second quarter of 2021, medical enrollment increased sequentially by 820 thousand lives, primarily driven by the acquisition of MMM, organic growth in the Medicaid business, higher BlueCard activity, and sales in excess of lapses in our Commercial risk-based businesses, partially offset by higher in-group attrition in the group fee-based business.

Operating Revenue: Operating revenue was $33.3 billion in the second quarter of 2021, an increase of $4.1 billion, or 14.1 percent, versus the prior year quarter and 15.8 percent after adjusting for the repeal of the health insurance tax in 2021. The increase was driven by higher premium revenue due to growth in Medicaid and Medicare and, to a lesser extent, rate increases to cover overall cost trend. The increase was further attributable to growth in pharmacy product revenue related to IngenioRx, partially offset by the repeal of the health insurance tax.

Benefit Expense Ratio: The benefit expense ratio was 86.8 percent in the second quarter of 2021, an increase of 890 basis points versus the prior year quarter and an increase of 750 basis points after adjusting for the repeal of the health insurance tax in 2021. The increase was driven by an increase in non-COVID and COVID-related healthcare costs as compared to relatively depressed levels in the same quarter a year ago.

Medical claims reserves established at December 31, 2020 developed better than the Company’s expectations during the second quarter of 2021.

Days in Claims Payable: Days in Claims Payable was 48.1 days as of June 30, 2021, an increase of 1.2 days from March 31, 2021 and an increase of 2.1 days as compared to June 30, 2020. The acquisitions of MMM and myNEXUS increased Days in Claims Payable by 1.6 days sequentially.

SG&A Expense Ratio: The SG&A expense ratio was 11.5 percent in the second quarter of 2021, a decrease of 240 basis points from 13.9 percent in the second quarter of 2020, primarily driven by growth in operating revenue and the repeal of the health insurance tax in 2021, partially offset by increased spend to support growth.

 

2


Operating Cash Flow: Operating cash flow was $1.7 billion, or 0.9 times net income in the second quarter of 2021, a decrease of $3.8 billion when compared year-over-year. The year-on-year decrease was driven by tax payments made during the second quarter that were deferred out of the same period in the prior year, as was permitted by the IRS, in addition to the negative impact of the repeal of the health insurance tax in 2021 on second quarter revenues.

Share Repurchase Program: During the second quarter of 2021, the Company repurchased 1.3 million shares of its common stock for $480 million, at a weighted average price of $380.59. As of June 30, 2021, the Company had approximately $5.2 billion of Board-approved share repurchase authorization remaining.

Cash Dividend: During the second quarter of 2021, the Company paid a quarterly dividend of $1.13 per share, representing a distribution of cash totaling $278 million.

On July 20, 2021, the Audit Committee declared a third quarter 2021 dividend to shareholders of $1.13 per share. On an annualized basis, this equates to a dividend of $4.52 per share. The third quarter dividend is payable on September 24, 2021 to shareholders of record at the close of business on September 10, 2021.

Investment Portfolio & Capital Position: During the second quarter of 2021, the Company recorded net realized gains of $172 million. During the second quarter of 2020, the Company recorded net realized gains of $29 million. These amounts are excluded from adjusted earnings per share.

As of June 30, 2021, the Company’s net unrealized gain position in the investment portfolio was $1.0 billion, consisting primarily of fixed maturity securities. As of June 30, 2021 cash and investments at the parent company totaled approximately $980 million.

 

3


REPORTABLE SEGMENTS

Anthem, Inc. has four reportable segments: Commercial & Specialty Business (comprised of Individual, Group risk-based, Group fee-based, and BlueCard businesses); Government Business (comprised of the Medicaid, Medicare, and Federal Health Products & Services businesses); IngenioRx, and Other (comprised of the Diversified Business Group and corporate expenses not allocated to our other reportable segments).

Anthem, Inc.

Reportable Segment Highlights

(Unaudited)

 

(In millions)    Three Months Ended June 30     Six Months Ended June 30  
     2021     2020     Change     2021     2020     Change  

Operating Revenue

            

Commercial & Specialty Business

   $ 9,550     $ 8,789       8.7   $ 19,041     $ 18,150       4.9

Government Business

     20,066       17,242       16.4     39,349       34,708       13.4

IngenioRx

     6,219       5,269       18.0     12,081       10,466       15.4

Other

     2,517       1,452       73.3     4,887       2,479       97.1

Eliminations

     (5,073     (3,574     41.9     (9,981     (7,177     39.1
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Operating Revenue1

   $ 33,279     $ 29,178       14.1   $ 65,377     $ 58,626       11.5

Operating Gain (Loss)

            

Commercial & Specialty Business

   $ 791     $ 1,372       (42.3 )%    $ 2,059     $ 2,792       (26.3 )% 

Government Business

     868       1,618       (46.4 )%      1,346       2,029       (33.7 )% 

IngenioRx

     405       304       33.2     812       653       24.3

Other

     17       66       (74.2 )%      25       80       (68.8 )% 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Operating Gain1

   $ 2,081     $ 3,360       (38.1 )%    $ 4,242     $ 5,554       (23.6 )% 

Operating Margin

            

Commercial & Specialty Business

     8.3     15.6     (730 ) bp      10.8     15.4     (460 ) bp 

Government Business

     4.3     9.4     (510 ) bp      3.4     5.8     (240 ) bp 

IngenioRx

     6.5     5.8     70   bp      6.7     6.2     50   bp 

Total Operating Margin1

     6.3     11.5     (520 ) bp      6.5     9.5     (300 ) bp 

 

(1)

See “Basis of Presentation” on page 7 herein.

(2)

“NM” = calculation not meaningful.

Commercial & Specialty Business: Operating gain in the Commercial & Specialty Business segment totaled $791 million in the second quarter of 2021, a decrease of $581 million from an operating gain of $1,372 million in the second quarter of 2020. The decrease was primarily attributable to an increase in non-COVID related utilization as compared to relatively depressed levels in the prior year quarter, costs associated with COVID-19 including vaccine administration and testing, as well as investments to support growth. The decrease was partially offset by the non-recurring premium credits provided to members enrolled in select employer group and Individual health plans in the second quarter of 2020, as well as growth in our risk-based membership.

Government Business: Operating gain in the Government Business segment was $868 million in the second quarter of 2021, a decrease of $750 million from $1,618 million in the second quarter of 2020. The decrease was primarily attributable to an increase in non-COVID related utilization as compared to relatively depressed levels in the prior year quarter and costs associated with COVID-19. The decrease was partially offset by membership growth in the Medicaid and Medicare businesses.

 

4


IngenioRx: Operating gain was $405 million in the second quarter of 2021, an increase of $101 million, or 33.2 percent, from $304 million in the second quarter of 2020. The increase was driven by growth in integrated medical and pharmacy membership.

Other: The Company reported an operating gain of $17 million in the Other segment for the second quarter of 2021, compared with an operating gain of $66 million in the prior year quarter. The decrease was driven by an increase in non-COVID utilization impacting the risk-sharing arrangements within the Diversified Business Group, as utilization was depressed in the second quarter of 2020. This decrease was partially offset by a decline in unallocated corporate expenses.

 

5


OUTLOOK

Full Year 2021:

 

   

GAAP net income is now expected to be greater than $24.89 per share, including approximately $0.61 per share of net unfavorable items. Excluding these items, adjusted net income is expected to be greater than $25.50* per share.

 

   

Medical membership is now expected to be in the range of 44.8 - 45.3 million. Risk-based membership is now expected to be in the range of 19.3 - 19.6 million. Fee-based membership is expected to be in the range of 25.5 - 25.7 million.

 

   

Operating revenue is now expected to be approximately $137.1 billion, including premium revenue of $116.5 billion - $117.5 billion.

 

   

Operating cash flow is now expected to be greater than $5.8 billion.

 

   

Investment income is now expected to be approximately $1.1 billion.

 

   

Effective tax rate is now expected to be between 22.0 - 24.0%

 

*

Refer to the GAAP reconciliation tables on page 15.

 

6


Basis of Presentation

 

1.

Operating revenue and operating gain/loss are the key measures used by management to evaluate performance in each of its reporting segments, allocate resources, set incentive compensation targets and to forecast future operating performance. Operating gain/loss is calculated as total operating revenue less benefit expense, cost of products sold and selling, general and administrative expense. It does not include net investment income, net realized gains/losses on financial instruments, interest expense, amortization of other intangible assets, gains/losses on extinguishment of debt or income taxes, as these items are managed in a corporate shared service environment and are not the responsibility of operating segment management. Refer to page 15 for the GAAP reconciliation tables.

 

2.

Operating margin is defined as operating gain divided by operating revenue.

Conference Call and Webcast

Management will host a conference call and webcast today at 8:30 a.m. Eastern Daylight Time (“EDT”) to discuss the company’s second quarter results and outlook. The conference call should be accessed at least 15 minutes prior to the start of the call with the following numbers:

 

888-947-9963 (Domestic)    800-813-5529 (Domestic Replay)
312-470-0178 (International)    203-369-3826 (International Replay)

The access code for today’s conference call is 8339667. The replay will be available from 11:30 a.m. EDT today, until the end of the day on August 20, 2021. The call will also be available through a live webcast at www.antheminc.com under the “Investors” link. A webcast replay will be available following the call.

 

Anthem Contacts:   
Investor Relations    Media
Stephen Tanal    Leslie Porras
Stephen.Tanal@anthem.com    Leslie.Porras@anthem.com

 

7


About Anthem, Inc.

Anthem is a leading health benefits company dedicated to improving lives and communities, and making healthcare simpler. Through its affiliated companies, Anthem serves more than 117 million people, including more than 44 million within its family of health plans. We aim to be the most innovative, valuable and inclusive partner. For more information, please visit www.antheminc.com or follow @AnthemInc on Twitter.

 

8


Anthem, Inc.

Membership Summary

(Unaudited and in Thousands)

 

                          Change from  

Medical Membership

   June 30,
2021
     June 30,
2020
     March 31,
2021
     June 30,
2020
    March 31,
2021
 

Commercial & Specialty Business

             

Individual

     738      711      731      3.8     1.0

Group Risk-Based

     3,851      3,789      3,837      1.6     0.4
  

 

 

    

 

 

    

 

 

      

Commercial Risk-Based

     4,589      4,500      4,568      2.0     0.5

BlueCard®

     6,235      6,171      6,166      1.0     1.1

Group Fee-Based

     19,372      19,699      19,515      (1.7 )%      (0.7 )% 
  

 

 

    

 

 

    

 

 

      

Commercial Fee-Based

     25,607      25,870      25,681      (1.0 )%      (0.3 )% 
  

 

 

    

 

 

    

 

 

      

Total Commercial & Specialty Business

     30,196      30,370      30,249      (0.6 )%      (0.2 )% 

Government Business

             

Medicare Advantage

     1,824      1,366      1,538      33.5     18.6

Medicare Supplement

     936      921      930      1.6     0.6
  

 

 

    

 

 

    

 

 

      

Total Medicare

     2,760      2,287      2,468      20.7     11.8

Medicaid

     9,754      8,180      9,172      19.2     6.3

Federal Employees Health Benefits

     1,631      1,616      1,632      0.9     (0.1 )% 
  

 

 

    

 

 

    

 

 

      

Total Government Business

     14,145      12,083      13,272      17.1     6.6
  

 

 

    

 

 

    

 

 

      

Total Medical Membership

     44,341      42,453      43,521      4.4     1.9
  

 

 

    

 

 

    

 

 

      

Other Membership

             

Life and Disability Members

     4,732      5,110      4,766      (7.4 )%      (0.7 )% 

Dental Members

     6,606      6,400      6,599      3.2     0.1

Dental Administration Members

     1,497      1,318      1,488      13.6     0.6

Vision Members

     7,819      7,457      7,798      4.9     0.3

Medicare Part D Standalone Members

     433      392      450      10.5     (3.8 )% 

 

9


Anthem, Inc.

Consolidated Statements of Income

(Unaudited)

 

(In millions, except per share data)    Three Months Ended
June 30
       
     2021     2020     Change  

Revenues

      

Premiums

   $ 28,533   $ 25,092     13.7%  

Product revenue

     3,042     2,543     19.6%  

Administrative fees and other revenue

     1,704     1,543     10.4%  
  

 

 

   

 

 

   

Total operating revenue

     33,279     29,178     14.1%  

Net investment income

     400     57     601.8%  

Net realized gains on financial instruments

     172     29     493.1%  
  

 

 

   

 

 

   

Total revenues

     33,851     29,264     15.7%  

Expenses

      

Benefit expense

     24,763     19,547     26.7%  

Cost of products sold

     2,614     2,225     17.5%  

Selling, general and administrative expense

     3,821     4,046     (5.6)%  

Interest expense

     205     201     2.0%  

Amortization of other intangible assets

     90     93     (3.2)%  

Loss on extinguishment of debt

     5     3     66.7%  
  

 

 

   

 

 

   

Total expenses

     31,498     26,115     20.6%  
  

 

 

   

 

 

   

Income before income tax expense

     2,353     3,149     (25.3)%  

Income tax expense

     552     873     (36.8)%  
  

 

 

   

 

 

   

Net income

     1,801     2,276     (20.9)%  

Net income attributable to noncontrolling interests

     (8)       —         NM  
  

 

 

   

 

 

   

Shareholders’ net income

   $ 1,793   $ 2,276     (21.2)%  
  

 

 

   

 

 

   

Shareholders’ net income per diluted share

   $ 7.25   $ 8.91     (18.6)%  
  

 

 

   

 

 

   

Diluted shares

     247.4     255.4     (3.1)%  

Benefit expense as a percentage of premiums

     86.8     77.9     890bp  

Selling, general and administrative expense as a percentage of total operating revenue

     11.5     13.9     (240)bp  

Income before income taxes as a percentage of total revenue

     7.0     10.8     (380)bp  

 

“NM”

= calculation not meaningful

 

10


Anthem, Inc.

Consolidated Statements of Income

(Unaudited)

 

(In millions, except per share data)    Six Months Ended
June 30
       
     2021     2020     Change  

Revenues

      

Premiums

   $ 56,209   $ 50,609     11.1%  

Product revenue

     5,779     4,887     18.3%  

Administrative fees and other revenue

     3,389     3,130     8.3%  
  

 

 

   

 

 

   

Total operating revenue

     65,377     58,626     11.5%  

Net investment income

     691     311     122.2%  

Net realized gains (losses) on financial instruments

     168     (52)       NM  
  

 

 

   

 

 

   

Total revenues

     66,236     58,885     12.5%  

Expenses

      

Benefit expense

     48,462     41,036     18.1%  

Cost of products sold

     4,927     4,209     17.1%  

Selling, general and administrative expense

     7,746     7,827     (1.0)%  

Interest expense

     397     395     0.5%  

Amortization of other intangible assets

     170     176     (3.4)%  

Loss on extinguishment of debt

     5     4     25.0%  
  

 

 

   

 

 

   

Total expenses

     61,707     53,647     15.0%  
  

 

 

   

 

 

   

Income before income tax expense

     4,529     5,238     (13.5)%  

Income tax expense

     1,061     1,439     (26.3)%  
  

 

 

   

 

 

   

Net income

     3,468     3,799     (8.7)%  

Net income attributable to noncontrolling interests

     (10)       —         NM  
  

 

 

   

 

 

   

Shareholders’ net income

   $ 3,458   $ 3,799     (9.0)%  
  

 

 

   

 

 

   

Shareholders’ net income per diluted share

   $ 13.95   $ 14.85     (6.1)%  
  

 

 

   

 

 

   

Diluted shares

     247.8     255.9     (3.2)%  

Benefit expense as a percentage of premiums

     86.2     81.1     510bp  

Selling, general and administrative expense as a percentage of total operating revenue

     11.8     13.4     (160)bp  

Income before income taxes as a percentage of total revenue

     6.8     8.9     (210)bp  

 

“NM”

= calculation not meaningful

 

11


Anthem, Inc.

Consolidated Balance Sheets

 

(In millions)    June 30,
2021
    December 31,
2020
 
Assets      (Unaudited)    

Current assets:

    

Cash and cash equivalents

   $ 5,258   $ 5,741

Fixed maturity securities

     25,848     23,433

Equity securities, current

     1,746     1,559

Premium receivables

     5,834     5,279

Self-funded receivables

     3,605     2,849

Other receivables

     3,246     2,830

Other current assets

     4,701     4,060
  

 

 

   

 

 

 

Total current assets

     50,238     45,751

Long-term investments:

    

Fixed maturity securities

     581     562

Other invested assets

     4,917     4,285

Property and equipment, net

     3,733     3,483

Goodwill

     24,399     21,691

Other intangible assets

     10,540     9,405

Other noncurrent assets

     1,689     1,438
  

 

 

   

 

 

 

Total assets

   $ 96,097   $ 86,615
  

 

 

   

 

 

 

Liabilities and equity

    

Liabilities

    

Current liabilities:

    

Medical claims payable

   $ 13,076   $ 11,359

Other policyholder liabilities

     5,285     4,590

Unearned income

     1,081     1,259

Accounts payable and accrued expenses

     5,598     5,493

Short-term borrowings

     175     —    

Current portion of long-term debt

     849     700

Other current liabilities

     7,730     6,052
  

 

 

   

 

 

 

Total current liabilities

     33,794     29,453

Long-term debt, less current portion

     22,217     19,335

Reserves for future policy benefits

     774     794

Deferred tax liabilities, net

     2,397     2,019

Other noncurrent liabilities

     1,869     1,815
  

 

 

   

 

 

 

Total liabilities

     61,051     53,416
  

 

 

   

 

 

 

Shareholders’ equity

    

Common stock

     2     3

Additional paid-in capital

     9,109     9,244

Retained earnings

     25,874     23,802

Accumulated other comprehensive (loss) income

     (17     150
  

 

 

   

 

 

 

Total shareholders’ equity

     34,968     33,199

Noncontrolling interests

     78     —    
  

 

 

   

 

 

 

Total equity

     35,046     33,199
  

 

 

   

 

 

 

Total liabilities and equity

   $ 96,097   $ 86,615
  

 

 

   

 

 

 

 

12


Anthem, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

 

(In millions)    Six Months Ended June 30  
     2021     2020  

Operating activities

    

Net income

   $ 3,468     $ 3,799  

Adjustments to reconcile net income to net cash provided by operating activities:

    

Net realized (gains) losses on financial instruments

     (168     52

Depreciation and amortization

     591     556

Deferred income taxes

     (8     60

Share-based compensation

     133     134

Changes in operating assets and liabilities:

    

Receivables, net

     (1,632     (313

Other invested assets

     (44     24

Other assets

     (247     (486

Policy liabilities

     1,912     1,024

Unearned income

     (180     (110

Accounts payable and other liabilities

     560     1,868

Income taxes

     106     1,313

Other, net

     (303     104
  

 

 

   

 

 

 

Net cash provided by operating activities

     4,188     8,025

Investing activities

    

Purchases of investments

     (11,221     (11,135

Proceeds from sale of investments

     6,345     4,724

Maturities, calls and redemptions from investments

     2,246     1,836

Changes in securities lending collateral

     (642     (764

Purchases of subsidiaries, net of cash acquired

     (3,442     (1,906

Purchases of property and equipment

     (489     (437

Other, net

     (29     (36
  

 

 

   

 

 

 

Net cash used in investing activities

     (7,232     (7,718

Financing activities

    

Net proceeds from (repayments of) commercial paper borrowings

     300     (400

Net proceeds from (repayments of) short-term borrowings

     175     (700

Net proceeds from long-term borrowings

     2,510     2,329

Changes in securities lending payable

     642     764

Repurchase and retirement of common stock

     (927     (584

Cash dividends

     (555     (482

Proceeds from issuance of common stock under employee stock plans

     141     92

Taxes paid through withholding of common stock under employee stock plans

     (93     (111

Other, net

     375     (124
  

 

 

   

 

 

 

Net cash provided by financing activities

     2,568     784

Effect of foreign exchange rates on cash and cash equivalents

     (7     —    
  

 

 

   

 

 

 

Change in cash and cash equivalents

     (483     1,091

Cash and cash equivalents at beginning of period

     5,741     4,937
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 5,258     $ 6,028  
  

 

 

   

 

 

 

 

13


Anthem, Inc.

Reconciliation of Medical Claims Payable

 

     Six Months Ended
June 30
    Years Ended December 31  
     2021     2020     2020     2019     2018  
(In millions)    (Unaudited)     (Unaudited)                    

Gross medical claims payable, beginning of period

   $ 11,135   $ 8,647   $ 8,647   $ 7,266   $ 7,814

Ceded medical claims payable, beginning of period

     (46     (33     (33     (34     (105
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net medical claims payable, beginning of period

     11,089     8,614     8,614     7,232     7,709
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Business combinations and purchase adjustments

     420     339     339     —         199

Net incurred medical claims:

          

Current year

     48,343     39,978     85,094     78,695     69,581

Prior years redundancies(1)

     (1,772     (700     (637     (500     (930
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net incurred medical claims

     46,571     39,278     84,457     78,195     68,651
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net payments attributable to:

          

Current year medical claims

     37,533     31,625     74,629     70,294     62,748

Prior years medical claims

     7,767     7,041     7,692     6,519     6,579
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net payments

     45,300     38,666     82,321     76,813     69,327
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net medical claims payable, end of period

     12,780     9,565     11,089     8,614     7,232

Ceded medical claims payable, end of period

     41     90     46     33     34
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross medical claims payable, end of period

   $ 12,821   $ 9,655   $ 11,135   $ 8,647   $ 7,266
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Current year medical claims paid as a percentage of current year net incurred medical claims

     77.6     79.1     87.7     89.3     90.2

Prior year redundancies in the current year as a percentage of prior year net medical claims payable less prior year redundancies in the current year

     19.0     8.8     8.0     7.4     13.7

Prior year redundancies in the current year as a percentage of prior year net incurred medical claims

     2.1     0.9     0.8     0.7     1.3

 

(1) 

Negative amounts reported for net incurred medical claims related to prior years result from claims being settled for amounts less than originally estimated.

 

14


Anthem, Inc.

GAAP Reconciliation

(Unaudited)

Anthem, Inc. has referenced “Adjusted Net Income” and “Adjusted Net Income Per Share,” which are non-GAAP measures, in this document. These non-GAAP measures are not intended to be alternatives to any measure calculated in accordance with GAAP. In addition to these non-GAAP measures, references are made to the measures “Operating Revenue” and “Operating Gain.” Each of these measures is provided to further aid investors in understanding and analyzing the company’s core operating results and comparing Anthem, Inc.’s financial results. A reconciliation of Operating Revenue to Total Revenue is set forth in the Consolidated Statements of Income herein. A reconciliation of the non-GAAP measures to the most directly comparable measures calculated in accordance with GAAP, together with a reconciliation of reportable segments operating gain to income before income tax expense, is reported below. Prior amounts may be grouped differently to conform to current presentation.

 

     Three Months Ended
June 30
          Six Months Ended
June 30
       
(In millions, except per share data)    2021     2020     Change     2021     2020     Change  

Shareholders’ net income

   $ 1,793   $ 2,276     (21.2 )%    $ 3,458   $ 3,799     (9.0 )% 

Add / (Subtract):

            

Net realized (gains) losses on financial instruments

     (172     (29       (168     52  

Amortization of other intangible assets

     90     93       170     176  

Loss on extinguishment of debt

     5     3       5     4  

Transaction and integration related costs

     12     11       21     23  

Litigation expenses

     6     21       12     29  

Tax impact of non-GAAP adjustments

     6     (25       (19     (71  
  

 

 

   

 

 

     

 

 

   

 

 

   

Net adjustment items

     (53     74       21     213  
  

 

 

   

 

 

     

 

 

   

 

 

   

Adjusted shareholders’ net income

   $ 1,740   $ 2,350     (26.0 )%    $ 3,479   $ 4,012     (13.3 )% 
  

 

 

   

 

 

     

 

 

   

 

 

   

Shareholders’ net income per diluted share

   $ 7.25   $ 8.91     (18.6 )%    $ 13.95   $ 14.85     (6.1 )% 

Add / (Subtract):

            

Net realized (gains) losses on financial instruments

     (0.70     (0.11       (0.68     0.20  

Amortization of other intangible assets

     0.36     0.36       0.69     0.69  

Loss on extinguishment of debt

     0.02     0.01       0.02     0.02  

Transaction and integration related costs

     0.05     0.04       0.08     0.09  

Litigation expenses

     0.02     0.08       0.05     0.11  

Tax impact of non-GAAP adjustments

     0.02     (0.10       (0.08     (0.28  

Rounding impact

     0.01     0.01       0.01     —      
  

 

 

   

 

 

     

 

 

   

 

 

   

Net adjustment items

     (0.22     0.29       0.09     0.83  
  

 

 

   

 

 

     

 

 

   

 

 

   

Adjusted shareholders’ net income per diluted share

   $ 7.03   $ 9.20     (23.6 )%    $ 14.04   $ 15.68     (10.5 )% 
  

 

 

   

 

 

     

 

 

   

 

 

   
     Full Year 2021 Outlook                          

Shareholders’ net income per diluted share

     Greater than $24.89          

Add / (Subtract):

          

Net realized gains on financial instruments

     ($0.68)          

Loss on extinguishment of debt

     $0.02        

Transaction and integration related costs

     $0.08        

Litigation expenses

     $0.05        

Amortization of other intangible assets

     Approximately $1.42          

Tax impact of non-GAAP adjustments

     Approximately $(0.28)          
  

 

 

         

Net adjustment items

     Approximately $0.61          
  

 

 

         

Adjusted shareholders’ net income per diluted share

     Greater than $25.50          
  

 

 

         
     Three Months Ended
June 30
          Six Months Ended
June 30
       
(In millions)    2021     2020     Change     2021     2020     Change  

Reportable segments operating gain

   $ 2,081   $ 3,360     (38.1 )%    $ 4,242   $ 5,554     (23.6 )% 

Net investment income

     400     57       691     311  

Net realized gains (losses) on financial instruments

     172     29       168     (52  

Interest expense

     (205     (201       (397     (395  

Amortization of other intangible assets

     (90     (93       (170     (176  

Loss on extinguishment of debt

     (5     (3       (5     (4  
  

 

 

   

 

 

     

 

 

   

 

 

   

Income before income tax expense

   $ 2,353   $ 3,149     (25.3 )%    $ 4,529   $ 5,238     (13.5 )% 
  

 

 

   

 

 

     

 

 

   

 

 

   

 

15


Forward-Looking Statements

This document contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect our views about future events and financial performance and are generally not historical facts. Words such as “expect,” “feel,” “believe,” “will,” “may,” “should,” “anticipate,” “intend,” “estimate,” “project,” “forecast,” “plan” and similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to: financial projections and estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to future operations, products and services; and statements regarding future performance. Such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking statements. You are cautioned not to place undue reliance on these forward- looking statements that speak only as of the date hereof. You are also urged to carefully review and consider the various risks and other disclosures discussed in our reports filed with the U.S. Securities and Exchange Commission from time to time, which attempt to advise interested parties of the factors that affect our business. Except to the extent otherwise required by federal securities laws, we do not undertake any obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof. These risks and uncertainties include, but are not limited to: the impact of large scale medical emergencies, such as public health epidemics and pandemics, including COVID-19, and catastrophes; trends in healthcare costs and utilization rates; our ability to secure sufficient premium rates, including regulatory approval for and implementation of such rates; the impact of federal and state regulation, including ongoing changes in the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010, as amended; changes in economic and market conditions, as well as regulations that may negatively affect our liquidity and investment portfolios; our ability to contract with providers on cost-effective and competitive terms; competitive pressures and our ability to adapt to changes in the industry and develop and implement strategic growth opportunities; reduced enrollment; unauthorized disclosure of member or employee sensitive or confidential information, including the impact and outcome of any investigations, inquiries, claims and litigation related thereto; risks and uncertainties regarding Medicare and Medicaid programs, including those related to non-compliance with the complex regulations imposed thereon; our ability to maintain and achieve improvement in Centers for Medicare and Medicaid Services Star ratings and other quality scores and funding risks with respect to revenue received from participation therein; a negative change in our healthcare product mix; costs and other liabilities associated with litigation, government investigations, audits or reviews; risks and uncertainties related to our pharmacy benefit management (“PBM”), business including non-compliance by any party with the PBM services agreement between us and CaremarkPCS Health, L.L.C.; medical malpractice or professional liability claims or other risks related to healthcare and PBM services provided by our subsidiaries; general risks associated with mergers, acquisitions, joint ventures and strategic alliances; changes in U.S. tax laws; possible impairment of the value of our intangible assets if future results do not adequately support goodwill and other intangible assets; possible restrictions in the payment of dividends from our subsidiaries and increases in required minimum levels of capital; our ability to repurchase shares of our common stock and pay dividends on our common stock due to the adequacy of our cash flow and earnings and other considerations; the potential negative effect from our substantial amount of outstanding indebtedness; a downgrade in our financial strength ratings; the effects of any negative publicity related to the health benefits industry in general or us in particular; failure to effectively maintain and modernize our information systems; events that may negatively affect our licenses with the Blue Cross and Blue Shield Association; the impact of international laws and regulations; intense competition to attract and retain employees; and various laws and provisions in our governing documents that may prevent or discourage takeovers and business combinations.

 

16

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 21, 2021

 

 

ANTHEM, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Indiana   001-16751   35-2145715
(State or other jurisdiction
of incorporation)
  (Commission
File Number)
  (IRS Employer
Identification No.)

 

220 Virginia Ave
Indianapolis, IN 46204
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (800) 331-1476

N/A

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading
Symbol(s)

 

Name of each exchange
on which registered

Common Stock   ANTM   NYSE

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 


Item 2.02 Results of Operations and Financial Condition.

On July 21, 2021, Anthem, Inc. issued a press release reporting its financial results for the quarter ended June 30, 2021. A copy of the press release is furnished as Exhibit 99.1 to this report and incorporated herein by reference.

None of the information furnished in Item 2.02 or Exhibit 99.1 hereto shall be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. Unless expressly set forth by specific reference in such filings, none of the information furnished in this report shall be incorporated by reference in any filing under the Securities Act of 1933, as amended, whether made before or after the date hereof and regardless of any general incorporation language in such filings.

 

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit

No.

  

Exhibit

99.1    Press Release, dated July 21, 2021, reporting Anthem, Inc. financial results for the quarter ended June 30, 2021.
104    Cover Page Interactive Data File (embedded within the Inline XBRL document)

FORWARD-LOOKING STATEMENTS

This document contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect our views about future events and financial performance and are generally not historical facts. Words such as “expect,” “feel,” “believe,” “will,” “may,” “should,” “anticipate,” “intend,” “estimate,” “project,” “forecast,” “plan” and similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to: financial projections and estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to future operations, products and services; and statements regarding future performance. Such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking statements. You are cautioned not to place undue reliance on these forward- looking statements that speak only as of the date hereof. You are also urged to carefully review and consider the various risks and other disclosures discussed in our reports filed with the U.S. Securities and Exchange Commission from time to time, which attempt to advise interested parties of the factors that affect our business. Except to the extent otherwise required by federal securities laws, we do not undertake any obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof. These risks and uncertainties include, but are not limited to: the impact of large scale medical emergencies, such as public health epidemics and pandemics, including COVID-19, and catastrophes; trends in healthcare costs and utilization rates; our ability to secure sufficient premium rates, including regulatory approval for and implementation of such rates; the impact of federal and state regulation, including ongoing changes in the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010, as amended; changes in economic and market conditions, as well as regulations that may negatively affect our liquidity and investment portfolios; our ability to contract with providers on cost-effective and competitive terms; competitive pressures and our ability to adapt to changes in the industry and develop and implement strategic growth opportunities; reduced enrollment; unauthorized disclosure of member or employee sensitive or confidential information, including the impact and outcome of any investigations, inquiries, claims and litigation related thereto; risks and uncertainties regarding Medicare and Medicaid programs, including those related to non-compliance with the complex regulations


imposed thereon; our ability to maintain and achieve improvement in Centers for Medicare and Medicaid Services Star ratings and other quality scores and funding risks with respect to revenue received from participation therein; a negative change in our healthcare product mix; costs and other liabilities associated with litigation, government investigations, audits or reviews; risks and uncertainties related to our pharmacy benefit management (“PBM”), business including non-compliance by any party with the PBM services agreement between us and CaremarkPCS Health, L.L.C.; medical malpractice or professional liability claims or other risks related to healthcare and PBM services provided by our subsidiaries; general risks associated with mergers, acquisitions, joint ventures and strategic alliances; changes in U.S. tax laws; possible impairment of the value of our intangible assets if future results do not adequately support goodwill and other intangible assets; possible restrictions in the payment of dividends from our subsidiaries and increases in required minimum levels of capital; our ability to repurchase shares of our common stock and pay dividends on our common stock due to the adequacy of our cash flow and earnings and other considerations; the potential negative effect from our substantial amount of outstanding indebtedness; a downgrade in our financial strength ratings; the effects of any negative publicity related to the health benefits industry in general or us in particular; failure to effectively maintain and modernize our information systems; events that may negatively affect our licenses with the Blue Cross and Blue Shield Association; the impact of international laws and regulations; intense competition to attract and retain employees; and various laws and provisions in our governing documents that may prevent or discourage takeovers and business combinations.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: July 21, 2021

 

ANTHEM, INC.
By:  

/s/ Kathleen S. Kiefer

Name:   Kathleen S. Kiefer
Title:   Corporate Secretary

View differences made from one to another to evaluate Anthem, Inc.'s financial trajectory

Compare SEC Filings Year-over-Year (YoY) and Quarter-over-Quarter (QoQ)
Sample 10-K Year-over-Year (YoY) Comparison

Compare this 8-K Corporate News to its predecessor by reading our highlights to see what text and tables were  removed  ,   added    and   changed   by Anthem, Inc..

Continue

Assess how Anthem, Inc.'s management team is paid from their Annual Proxy

Definitive Proxy Statement (Form DEF 14A)
Screenshot example of actual Proxy Statement

Anthem, Inc.'s Definitive Proxy Statement (Form DEF 14A) filed after their 2021 10-K Annual Report includes:

  • Voting Procedures
  • Board Members
  • Executive Team
  • Salaries, Bonuses, Perks
  • Peers / Competitors

Continue

Tools

Financial Statements, Disclosures and Schedules

Inside this 8-K Corporate News

Material Contracts, Statements, Certifications & more

Anthem, Inc. provided additional information to their SEC Filing as exhibits

Ticker: ANTM
CIK: 1156039
Form Type: 8-K Corporate News
Accession Number: 0001193125-21-220025
Submitted to the SEC: Wed Jul 21 2021 6:05:02 AM EST
Accepted by the SEC: Wed Jul 21 2021
Period: Wednesday, July 21, 2021
Industry: Hospital And Medical Service Plans
Events:
  1. Earnings Release
  2. Financial Exhibit

External Resources:
Stock Quote
Social Media

Bookmark the Permalink:
https://last10k.com/sec-filings/antm/0001193125-21-220025.htm